Aditya Consumer reverses Rs 56.33 lakh tax liability

Aditya Consumer Marketing Limited reversed a Rs 56.33 lakh deferred-tax liability carried at March 31, 2026 and recognised a Rs 51.65 lakh cumulative depreciation shortfall as a prior-period item for the half year ended September 30, 2026. The auditor drew attention to both accounting treatments but did not modify its review conclusion.

Why did Aditya Consumer reverse the deferred-tax liability?

Aditya Consumer reversed the Rs 56.33 lakh deferred-tax liability because it said no taxable timing differences existed as at March 31, 2026. The liability had been carried in its books at that date and was credited to deferred tax as a prior-period item under Accounting Standard 5, which governs net profit or loss for the period, prior-period items and changes in accounting policies.

The reversal is also reflected in the balance sheet. Net deferred-tax liabilities were Rs 56 lakh at March 31, 2026 and nil at September 30, 2026, with the difference from Rs 56.33 lakh reflecting the balance sheet's presentation in crore units. Aditya Consumer reported total equity and liabilities of Rs 38.45 crore at September 30, compared with Rs 36.18 crore at March 31.

Aditya Consumer did not recognise a deferred-tax asset against unabsorbed depreciation, carried-forward business losses or other timing differences. It said Accounting Standard 22 requires virtual certainty supported by convincing evidence before such an asset can be recognised in these circumstances. The filing does not quantify the potential deferred-tax asset that was not recorded.

What was Aditya Consumer's depreciation correction?

Aditya Consumer recorded a Rs 51.65 lakh cumulative short charge of depreciation up to March 31, 2026 as a prior-period item under exceptional items. The correction followed the company's computation of depreciation on property, plant and equipment using the straight-line method, the useful lives prescribed in Schedule II to the Companies Act, 2013, and a 5% residual value.

Depreciation for the half year itself was Rs 72.59 lakh. The cash-flow statement rounds depreciation to Rs 73 lakh and separately presents a Rs 52 lakh non-cash prior-period depreciation adjustment under Accounting Standard 5. The difference between Rs 51.65 lakh in the notes and Rs 52 lakh in the cash-flow statement reflects the latter's reporting in crore units and rounding.

The correction was included in the reported half-year result before tax. Segment losses before finance cost totalled Rs 1.06 crore, finance cost was Rs 20 lakh, and the prior-period depreciation item was Rs 52 lakh in the segment-results presentation, producing a reported loss before tax of Rs 1.78 crore. In the corresponding half year ended September 30, 2025, the reported loss before tax was Rs 2.17 crore and no equivalent prior-period depreciation item was shown.

How did the accounting items relate to Aditya Consumer's operations?

Aditya Consumer's revenue across Salon, Food & Beverages and Retail Store operations was Rs 44.99 crore for the half year ended September 30, 2026, compared with Rs 45.19 crore a year earlier. Food & Beverages revenue rose to Rs 12.98 crore from Rs 11.88 crore and Salon revenue increased to Rs 3.02 crore from Rs 2.74 crore, while Retail Store revenue declined to Rs 28.99 crore from Rs 30.57 crore.

All three operating segments reported losses before tax and interest in the latest half year. Retail Store recorded a Rs 70 lakh loss, compared with a Rs 1.35 crore loss in the prior-year half, while Food & Beverages narrowed its loss to Rs 30 lakh from Rs 52 lakh. Salon's loss narrowed to Rs 6 lakh from Rs 12 lakh. These segment movements preceded the Rs 20 lakh finance cost and the Rs 52 lakh prior-period depreciation shown in the reported result.

Property, plant and equipment stood at Rs 7.99 crore at September 30, down from Rs 8.94 crore at March 31. That decline came after Rs 29 lakh of purchases of property, plant and equipment during the half year, while the depreciation charge was Rs 72.59 lakh. The filing does not allocate the depreciation correction among Salon, Food & Beverages and Retail Store.

What did Aditya Consumer's auditor conclude on the adjustments?

Aditya Consumer's statutory auditor, S Kumar Mishra and Company, included both the depreciation shortfall and deferred-tax reversal in an emphasis-of-matter section of its limited review report dated October 30, 2026. The auditor specifically noted the Rs 51.65 lakh depreciation short charge, the Rs 56.33 lakh liability reversal, and the absence of a deferred-tax asset on losses and unabsorbed depreciation.

The auditor's conclusion was not modified in respect of either matter. Its limited review, conducted under Standard on Review Engagements 2410, stated that nothing had come to its attention to indicate that the financial statement failed to make disclosures required under Regulation 33 of the Securities and Exchange Board of India listing regulations or contained a material misstatement.

A limited review provides moderate assurance and is narrower in scope than an audit, according to the report. The predecessor auditor had issued an unmodified limited-review conclusion on November 7, 2025 for the relevant earlier interim figures, while the predecessor auditor's report on the year ended March 31, 2026 carried an unmodified opinion dated May 8, 2026.

Conclusion

The half-year filing records two prior-period accounting items: a Rs 51.65 lakh depreciation shortfall charged under exceptional items and a Rs 56.33 lakh deferred-tax liability credited because no taxable timing differences existed at March 31, 2026. The reported loss before tax was Rs 1.78 crore, compared with Rs 2.17 crore a year earlier, while revenue was Rs 44.99 crore.

The unresolved matter to watch in subsequent financial reporting is whether Aditya Consumer recognises any deferred-tax asset on unabsorbed depreciation, carried-forward losses and other timing differences. The September 30, 2026 balance sheet shows no net deferred-tax liability and no deferred-tax asset, while property, plant and equipment were Rs 7.99 crore after the revised depreciation treatment.