Ajel's auditor issues full disclaimer, flags ₹5 cr NPA and unverifiable investments
GMK & Co LLP could not verify ₹91.21 lakh in listed investments, ₹85.96 lakh in advances, and nearly ₹85 lakh in statutory payables. Standalone net loss ₹82.79 lakh on revenue ₹396.83 lakh.
What's new
- Auditor issued full disclaimer of opinion on FY26 audited results.
- ₹5 crore Bank of Maharashtra loan turned NPA in Oct 2024.
- ₹91.21 lakh in listed investments could not be verified.
- Trade payables and receivables balances missing; ₹85.36 lakh prior-year statutory payables unconfirmed.
Why this matters
A disclaimer of opinion is the strongest signal an auditor can send that the numbers cannot be trusted. For a ₹7 crore market-cap company, a ₹5 crore NPA and ₹91 lakh in unverifiable investments are material. The FY26 accounts are effectively unauditable.
What we're watching
- Whether management can trace legacy transactions or secure fresh funding to regularise the bank loan.
- If lenders or SEBI take action given the disclaimer.
- Auditor stance for the next quarter — whether conditions repeat.
The full read
GMK & Co LLP gave a full disclaimer of opinion on Ajel's FY26 numbers. It could not verify ₹91.21 lakh in listed investments, ₹85.96 lakh in unrecovered long-term advances, or nearly ₹85 lakh in prior-year statutory payables. The ₹5 crore loan from Bank of Maharashtra went NPA in October 2024. For a company with a ₹7 crore market cap, each of these figures is material individually. Together they make the financial statements unverifiable. Management says it is tracing legacy transactions and looking for fresh funding to regularise the loan. That is a hope, not a plan. The disclaimer casts a shadow over every number in the report: revenue of ₹396.83 lakh (standalone) and a net loss of ₹82.79 lakh. The burden of proof now falls on the company to show its books are real.
Questions answered
- What does a disclaimer of opinion mean?
- It means the auditor could not obtain sufficient appropriate audit evidence to support the financial statements. The accounts are not necessarily wrong, but the auditor can't vouch for them.
- How large is the NPA loan relative to Ajel's size?
- Ajel's market cap is about ₹7 crore. A ₹5 crore NPA from Bank of Maharashtra equals roughly 71% of its equity value.
- What investments could not be verified?
- Listed investments worth ₹91.21 lakh. The auditor could not obtain independent confirmations or valuations.
- Is there any plan to fix these issues?
- Management says it is tracing legacy transactions and will regularise the NPA loan once new funding is secured. No timeline was given.