Infrax Renewable FY25 profit falls 31% in restatement

Infrax Renewable’s FY2024-25 profit after tax was restated to Rs 2.85 crore from Rs 4.13 crore, a decline of Rs 1.27 crore, or about 31%. The largest adjustment was Rs 1.11 crore for current and prior-period income tax, while employee-benefit, depreciation, tax-interest and expense corrections also changed the reported result.

Why did Infrax Renewable’s FY25 profit restatement reduce earnings by 31%?

Infrax Renewable’s FY2024-25 restatement reduced profit after tax by Rs 1.27 crore. Audited profit after tax before adjustments was Rs 4.13 crore, compared with Rs 2.85 crore in the restated accounts. The company said it made regroupings, reclassifications and adjustments to ensure consistency with the Companies Act, 2013 and applicable Accounting Standards.

FY2024-25 had the largest profit effect among the three reported years. The FY2025-26 net adjustment was Rs 1.51 lakh, reducing profit after tax from Rs 10.22 crore to Rs 10.20 crore, while the FY2023-24 adjustment was Rs 64.79 lakh, reducing profit from Rs 1.61 crore to Rs 95.76 lakh. The comparison shows that the FY2024-25 outcome was primarily affected by the restatement rather than by a uniform adjustment across every year.

The restatement is a reconciliation of previously audited figures rather than a new operating-period result. Infrax Renewable stated that amounts in the restated financial statements may differ from the respective audited financial statements because of the regroupings and adjustments made during the restatement process.

What was the largest item in Infrax Renewable’s FY25 profit restatement?

The largest FY2024-25 item was a Rs 1.11 crore reduction from the restated provision for current and prior-period income tax. This item represented about 87% of the Rs 1.27 crore net reduction in FY2024-25 profit after tax. Infrax Renewable recalculated income-tax provision on each year’s restated profit or loss using the prevailing tax rates and assigned short or excess provisions to the relevant year.

Interest on income tax was the next largest negative item at Rs 12.28 lakh. Infrax Renewable stated that income-tax interest was restated and presented in the year to which it pertained, rather than retained in another reporting period. Other expenses lowered FY2024-25 profit by Rs 99,000 after costs were reconsidered based on the year to which they related.

A Rs 60,000 adjustment for deferred tax assets partly offset the tax-related reductions. Infrax Renewable recalculated deferred tax assets and liabilities at the normal tax rate applicable at each relevant year-end, considering employee-benefit provisions and other temporary timing differences under the Companies Act and Income Tax Act. The offset was smaller than the current and prior-period income-tax adjustment, leaving the overall tax effect negative.

How did employee-benefit accounting change Infrax Renewable’s FY25 results?

Infrax Renewable reduced FY2024-25 profit by Rs 2.59 lakh for gratuity and Rs 37,000 for leave encashment. The company said it had previously accounted for both benefits on a cash basis, but recorded them during restatement using actuarial valuations under Accounting Standard 15 (Revised 2005), the employee-benefits accounting standard.

Cash-basis accounting records a cost when it is paid, while an actuarial valuation measures an obligation associated with employee service. Infrax Renewable’s gratuity obligation at the FY2024-25 year-end was Rs 3.34 lakh, with no plan assets and therefore a matching net liability. The FY2024-25 gratuity expense comprised Rs 75,000 of current service cost, Rs 5,000 of interest cost and Rs 1.79 lakh of net actuarial loss.

The gratuity valuation used a 5% annual future salary-rise assumption, a 7% annual discount rate and a 10% annual attrition rate for FY2024-25. The arrangement was unfunded, with a retirement age of 60 years and a five-year vesting period. The reported gratuity obligation rose from Rs 75,000 in FY2023-24 to Rs 3.34 lakh in FY2024-25 and Rs 4.74 lakh in FY2025-26.

Leave encashment was also unfunded, with a Rs 43,000 defined-benefit obligation and no plan assets at the FY2024-25 year-end. Its Rs 37,000 FY2024-25 expense consisted of Rs 18,000 of service cost and Rs 19,000 of net actuarial loss. Future reported employee-benefit charges depend on continuing use of actuarial measurement as well as changes in service cost, assumptions and actuarial gains or losses.

What other accounting changes affected Infrax Renewable’s restated profit?

Infrax Renewable reduced FY2024-25 profit by Rs 39,000 through restated depreciation. The company stated that its predecessor partnership firm had recorded depreciation under the Income Tax Act, 1961, whereas the restatement recalculated depreciation using useful lives and depreciation rates set out in the Companies Act, 2013.

The individual FY2024-25 entries reconcile to the Rs 1.27 crore net decrease. Income tax reduced profit by Rs 1.11 crore, tax interest by Rs 12.28 lakh, gratuity by Rs 2.59 lakh, leave encashment by Rs 37,000, depreciation by Rs 39,000 and other expenses by Rs 99,000, partly offset by Rs 60,000 for deferred tax assets.

Infrax Renewable reported no auditor qualifications requiring adjustment in FY2023-24, FY2024-25 or FY2025-26. It also reported no auditor qualifications that did not require adjustment in those years. The disclosed absence of qualifications does not eliminate the restatement differences, as the company’s FY2024-25 reconciliation records a Rs 1.27 crore change in profit after tax.

How did the restatement affect Infrax Renewable’s shareholder funds?

Infrax Renewable’s shareholder funds at March 31, 2025 were restated to Rs 1.89 crore from Rs 1.94 crore, a net reduction of Rs 5.28 lakh. This differs from the Rs 1.27 crore FY2024-25 profit adjustment because shareholder funds include cumulative profit-and-loss corrections, opening-reserve adjustments and partnership-related entries.

The March 31, 2025 reconciliation included Rs 1.92 crore of cumulative adjustments in the profit-and-loss account, a Rs 2.08 lakh opening-reserve adjustment, Rs 1.86 crore of earlier partnership-firm income tax adjusted through partners’ capital accounts, and Rs 2.57 lakh of partners’ withdrawals not accounted for in the firm. These entries resulted in a smaller net balance-sheet adjustment than the annual profit reconciliation.

At March 31, 2026, shareholder funds were Rs 15.77 crore after a Rs 1.97 lakh net restatement adjustment from Rs 15.79 crore. At March 31, 2024, shareholder funds were Rs 1.40 crore after a Rs 65.85 lakh adjustment. Infrax Renewable was formed through the conversion of M/s Infrax International from a partnership firm into a public limited company effective September 23, 2024, making the earlier partnership entries relevant to the restated balance-sheet presentation.

Conclusion

Infrax Renewable’s FY2024-25 restatement lowered reported profit after tax from Rs 4.13 crore to Rs 2.85 crore, with the Rs 1.11 crore current and prior-period income-tax correction driving most of the Rs 1.27 crore change. Actuarial accounting for gratuity and leave encashment, Companies Act depreciation, tax interest and period-based expense allocation completed the reconciliation.

The next disclosures to watch are the stated applications of actuarial employee-benefit measurement, income-tax calculations at prevailing rates and Companies Act depreciation rates. Infrax Renewable’s FY2025-26 restated profit was only Rs 1.51 lakh below the pre-restatement figure, compared with Rs 1.27 crore in FY2024-25, so later financial statements will show whether material adjustments recur.