Kanohar Reports Repeated Lender-Return Reconciliation Gaps

Kanohar Electricals Limited disclosed repeated differences between quarterly statements submitted to working-capital lenders and its restated books. Kanohar’s largest reported lender-return reconciliation gap was Rs 24.927 crore at 31 March 2025, when a Rs 28.477 crore trade-payables difference was partly offset by a Rs 4.407 crore trade-receivables difference.

Why did Kanohar report lender-return reconciliation gaps?

Kanohar attributed the lender-return reconciliation gaps to different treatment of some sales in restated financial information and to inventory deployed at customer project sites. Note 43 states that inventory and trade-receivable differences arose from sales included in restated financial information where risks and rewards had not transferred, in compliance with Indian Accounting Standard 115, or Ind AS 115, which governs revenue from customer contracts.

Kanohar also said that substation projects are performed at customers’ sites, meaning actual movement of inventory cannot be exactly reconciled with both books and lender returns. The company said the returns do not reflect that inventory, and its explanation covers inventory, trade receivables and trade payables, the three items reconciled in every disclosed quarterly statement from 30 June 2022 to 30 September 2025.

Kanohar’s Ind AS transition note says its previous accounting policy recognised revenue upon transfer of risks and obligations to customers, while Ind AS 115 requires recognition only when related performance obligations are satisfied. Where performance obligations remained unsatisfied at a reporting date, Kanohar said revenue previously recognised was reversed; its 31 March 2024 Indian GAAP-to-Ind AS equity reconciliation included a Rs 5.307 crore sale reversal under Ind AS 115.

How large were Kanohar’s lender-return reconciliation gaps?

Kanohar’s reported net difference reached Rs 24.927 crore at 31 March 2025, compared with Rs 11.831 crore at 31 December 2024 and Rs 4.218 crore at 30 June 2024. The reported gap then declined to Rs 15.639 crore at 30 June 2025 and Rs 6.612 crore at 30 September 2025, the latest quarter in the disclosure.

The table shows the net-total rows in Kanohar’s reconciliation of quarterly returns to working-capital lenders. Amounts are converted from the disclosed million-rupee figures into crore, and the difference is the figure reported by Kanohar.

The pattern was not confined to the 2024-25 period. Kanohar disclosed net differences of negative Rs 3.795 crore at 30 June 2023, Rs 4.864 crore at 30 September 2023, Rs 10.017 crore at 31 December 2023 and Rs 1.190 crore at 31 March 2024; in contrast, each of the four disclosed quarters in 2024-25 carried a positive reported net difference.

Which balances accounted for Kanohar’s March 2025 gap?

Trade payables were the largest stated component of Kanohar’s Rs 24.927 crore net difference at 31 March 2025. Kanohar reported trade payables of Rs 72.518 crore in its books and Rs 44.041 crore in the lender return, producing a Rs 28.477 crore reported difference that exceeded the net total because other balances offset part of it.

At 31 March 2025, Kanohar reported inventory of Rs 43.429 crore in its books and Rs 42.572 crore in the lender return, a Rs 0.857 crore difference. Trade receivables were Rs 194.783 crore in the books and Rs 199.190 crore in the return, creating a negative Rs 4.407 crore reported difference; together, the three component differences equal the reported net figure.

The composition differed from the previous year-end. At 31 March 2024, inventory had a Rs 17.198 crore reported difference, trade receivables had a negative Rs 17.761 crore difference and trade payables differed by Rs 1.753 crore, leaving a Rs 1.190 crore net difference; by 31 March 2025, the much larger payables difference was the principal component.

Did the reconciliation result in a restatement or audit qualification?

Kanohar’s disclosed lender-return reconciliation did not result in a material restatement adjustment or audit qualification for the periods presented. Its statement of adjustments records nil material restatement adjustments and nil audit qualifications for the six months ended 30 September 2025 and for the years ended 31 March 2025, 2024 and 2023.

The adjustment statement says the auditor drew attention to Note 43, which describes the quarterly reconciliation and the Ind AS 115 and customer-site inventory explanations. At 31 March 2025, Kanohar reported total equity of Rs 243.132 crore both before and after restatement, while profit after tax was Rs 65.118 crore on both bases.

The disclosure therefore presents the differences as a reconciliation matter requiring explanation rather than an adjustment to restated equity or profit. Note 43 identifies accounting for unsatisfied performance obligations and the inability to exactly reconcile inventory movements at customer sites as the stated mechanisms, but does not disclose lender action, revised borrowing terms or a remediation timetable.

What does Kanohar’s latest lender-return reconciliation show?

Kanohar’s latest disclosed quarter, 30 September 2025, showed a Rs 6.612 crore reported net difference, lower than Rs 24.927 crore at 31 March 2025 and Rs 15.639 crore at 30 June 2025. At 30 September 2025, Kanohar’s books recorded inventory of Rs 137.038 crore, trade receivables of Rs 96.112 crore and trade payables of Rs 69.615 crore.

The 30 September 2025 lender return recorded inventory of Rs 133.522 crore, trade receivables of Rs 99.912 crore and trade payables of Rs 62.729 crore. The resulting reported differences were Rs 3.516 crore for inventory, negative Rs 3.790 crore for receivables and Rs 6.886 crore for payables, so the lower net amount still depended on offsets between categories.

Conclusion

Kanohar’s disclosure shows recurring lender-return reconciliation gaps rather than a one-quarter event. The largest reported net difference, Rs 24.927 crore at 31 March 2025, was principally linked to a Rs 28.477 crore trade-payables difference, while Kanohar attributed the broader pattern to Ind AS 115 revenue timing and customer-site inventory movements.

The next disclosed quarterly lender return will show whether the Rs 6.612 crore gap at 30 September 2025 is sustained or reverses. Kanohar has not disclosed a specific reconciliation plan or timetable, leaving unresolved how inventory at customer sites and performance-obligation timing will be aligned between lender returns and restated books.