Anand Seamless Limited Restated Accounts After FY24 Qualification

Anand Seamless Limited restated financial information for FY24, FY25 and FY26 after an FY24 qualified audit opinion over missing inventory quantity records and other accounting adjustments. FY24 profit after tax increased by Rs 23.76 lakh, from Rs 3.1261 crore in the audited accounts to Rs 3.3638 crore in the restated statements.

Why did Anand Seamless restate accounts after the FY24 qualification?

Anand Seamless restated three financial years for its proposed small and medium enterprise initial public offering, or SME IPO, after incorporating accounting-policy changes, material adjustments and regrouping. The restated financial information covers the years ended March 31, 2024, March 31, 2025 and March 31, 2026, and the board approved it on May 26, 2026 for inclusion in the offer documents.

The previous auditor qualified its FY24 opinion because Anand Seamless had not maintained quantitative inventory information. The auditor described the failure as a material weakness in internal controls that could affect financial results, but said it could not ascertain the possible effect without the necessary records. A qualified opinion identifies a material issue within financial statements without rejecting the accounts as a whole.

The examining auditor said the qualification was restricted to non-maintenance of quantity records and did not concern inventory valuation. It stated that closing inventory had been determined through physical verification and related procedures, was valued under applicable accounting standards and reflected fair value at the reporting date. On that basis, the restated statements did not make an inventory-valuation adjustment for the FY24 qualification.

What changed in Anand Seamless's restated profit after tax?

Anand Seamless increased FY24 and FY26 profit after tax through restatement, while reducing FY25 profit after tax. The largest adjustment was the Rs 23.76 lakh increase in FY24, whereas FY25 profit fell by Rs 12.45 lakh and FY26 profit rose by Rs 7.36 lakh.

The restated profit trend differed from revenue growth across the three years. Revenue from operations declined to Rs 33.5463 crore in FY25 from Rs 36.9002 crore in FY24, then rose to Rs 56.0036 crore in FY26. Restated profit after tax similarly fell to Rs 2.6506 crore in FY25 before reaching Rs 5.4776 crore in FY26.

Finance costs increased over the period, rising from Rs 1.5608 crore in FY24 to Rs 1.9354 crore in FY25 and Rs 2.42 crore in FY26. The restated cash-flow statement reported net cash used in operating activities of Rs 3.11 crore in FY25 and Rs 5.5706 crore in FY26, compared with net cash generated from operating activities of Rs 1.5072 crore in FY24.

Which costs and tax effects did Anand Seamless recognise?

Anand Seamless recognised gratuity, outstanding expenses and associated current-tax and deferred-tax effects in its restated financial statements. The prospectus says gratuity had not been provided in the audited financial statements and was subsequently recognised on the basis of an actuarial valuation.

Gratuity is a defined-benefit employee obligation, meaning the employer is responsible for the benefit determined under its plan. Anand Seamless's policy measures the obligation using the projected unit credit method at each year-end. The restated long-term gratuity provision was Rs 21.23 lakh at March 31, 2024, Rs 24.65 lakh at March 31, 2025 and Rs 27.81 lakh at March 31, 2026.

The company also said interest provisions for bank borrowings and dues to micro, small and medium enterprises, or MSMEs, had not been recognised in the audited accounts. The restatement recomputed current tax for interest on long-term bank borrowings, prior-period tax provisions adjusted directly in reserves and the disallowance of outstanding micro and small enterprise dues beyond the permitted period under Section 43B(h) of the Income-tax Act, 1961.

The FY24 reconciliation shows a Rs 0.65 lakh reduction from the outstanding-expenses adjustment, a Rs 6.90 lakh increase from deferred-tax calculation and a Rs 6.09 lakh reduction from current-tax calculation. These stated components, together with the gratuity-related treatment, resulted in the net Rs 23.76 lakh increase in FY24 restated profit after tax.

How do Anand Seamless's inventory controls and cash flow connect?

Anand Seamless's accounting policy requires inventory quantity and value to be recorded and reconciled monthly using a predetermined formula consistent with industry practice. That stated control is relevant to the FY24 qualification because the previous auditor found that quantitative inventory information had not been maintained for the year ended March 31, 2024.

The policy values raw materials, spares and packing materials on a first-in, first-out, or FIFO, basis, which assumes the earliest acquired stock is used first. Work-in-progress and finished goods are valued using weighted-average cost, including conversion and other costs needed to bring inventory to its present location and condition. Inventory is stated at the lower of cost and net realisable value, which is expected selling proceeds less completion and selling costs.

The FY26 cash-flow statement reported a Rs 13.3975 crore increase in inventories and a Rs 3.3046 crore increase in trade receivables. These working-capital movements occurred while operating cash flow was negative Rs 5.5706 crore in FY26, compared with negative Rs 3.11 crore in FY25. The cash-flow statement was prepared under the indirect method required by Accounting Standard 3.

Trade receivables rose to Rs 13.6518 crore at March 31, 2026 from Rs 10.3227 crore at March 31, 2025 and Rs 2.7522 crore at March 31, 2024. Cash and cash equivalents declined to Rs 0.4653 crore at March 31, 2026 from Rs 1.5685 crore a year earlier, while the company reported Rs 19.6786 crore of net cash from financing activities in FY26.

How did borrowings and equity change in the restated statements?

Anand Seamless's short-term borrowings were Rs 16.8278 crore at March 31, 2026, up from Rs 12.0958 crore at March 31, 2025 and Rs 11.9541 crore at March 31, 2024. The FY26 amount included Rs 12.3262 crore of working-capital facilities and Rs 4.5017 crore of current maturities of long-term debt.

Working-capital facilities are secured by inventories, debtors and other current movable assets, and are also secured by mortgage of factory land and buildings and personal guarantees from directors. Long-term borrowings rose to Rs 11.197 crore at March 31, 2026 from Rs 9.0367 crore at March 31, 2025 and Rs 2.1773 crore at March 31, 2024. The prospectus states that there had been no rescheduling or default in loan repayment.

Share capital was Rs 8.4255 crore at March 31, 2026, compared with Rs 0.104 crore at March 31, 2025, following an 80:1 bonus issue of 83,21,440 equity shares in FY26. Reserves and surplus were Rs 11.0991 crore at March 31, 2026, down from Rs 13.943 crore in FY25 because Rs 6.0935 crore from the profit and loss balance and Rs 2.228 crore of securities premium were used for the bonus issue.

Conclusion

Anand Seamless's FY24 qualification identified a material weakness in quantitative inventory record-keeping, while the examining auditor said the matter did not require an inventory-valuation adjustment after physical verification and related procedures. The IPO restatement nevertheless changed reported earnings because it recognised gratuity, unprovided expenses, borrowing interest and tax effects that had not been fully reflected in the audited statements.

The next disclosed matter to watch is whether Anand Seamless maintains the monthly inventory quantity-and-value reconciliation set out in its accounting policy. The company also reported negative operating cash flow of Rs 5.5706 crore in FY26 alongside a Rs 13.3975 crore inventory increase, while short-term borrowings reached Rs 16.8278 crore at March 31, 2026.