The Company FY25 profit rose Rs 88.94 lakh on restatement

The Company’s FY 2024-25 restatement increased profit after tax by Rs 88.94 lakh to Rs 8.22 crore from Rs 7.33 crore in audited accounts. The largest reconciliation item was a Rs 85.61 lakh gratuity adjustment after The Company applied actuarial accounting for employee benefits, alongside tax, delayed-payment interest to micro and small enterprises, and corporate social responsibility adjustments.

How did The Company’s FY25 restatement change profit?

The Company reported restated FY 2024-25 profit after tax of Rs 8.22 crore, compared with Rs 7.33 crore before restatement, producing the disclosed Rs 88.94 lakh increase. The adjustment appears in the material-adjustments annexure prepared under the Issue of Capital and Disclosure Requirements, or ICDR, regulations. The Company says regroupings and adjustments were made to support consistency with the Companies Act, 2013, and applicable Accounting Standards.

FY 2024-25 was the largest profit adjustment among the three periods presented. Restated profit after tax for FY 2025-26 was Rs 7.60 crore, up Rs 8.94 lakh from audited profit of Rs 7.51 crore, while FY 2023-24 restated profit was Rs 7.42 crore, down Rs 14.68 lakh from Rs 7.57 crore. The restatement therefore changed the reported year-on-year comparison: FY 2024-25 restated profit of Rs 8.22 crore exceeded both FY 2025-26 and FY 2023-24 restated profit.

The Company’s shareholder-funds outcome differed from its FY 2024-25 profit outcome because the shareholder-funds reconciliation also included an opening-reserves adjustment. Shareholder funds at the end of FY 2024-25 were restated to Rs 57.40 crore from Rs 57.59 crore, a reduction of Rs 19.05 lakh. That movement reflected a Rs 74.25 lakh cumulative adjustment in the statement of profit and loss and a Rs 93.31 lakh adjustment to opening reserves.

Which items produced The Company’s Rs 88.94 lakh FY25 increase?

The Company’s Rs 88.94 lakh FY 2024-25 profit increase was led by a Rs 85.61 lakh gratuity adjustment. The reconciliation also recorded a Rs 24.82 lakh impact for interest on delayed payments to micro and small enterprises, or MSEs, and Rs 4.18 lakh for corporate social responsibility, or CSR, expenses. These effects were partly offset by a Rs 21.59 lakh deferred-tax-assets adjustment and a Rs 4.09 lakh income-tax adjustment.

The Company states that deferred tax assets and deferred tax liabilities were recalculated for employee-benefit provisions and other temporary timing differences. Deferred tax is tax accounting for differences between accounting income and taxable income that arise in one period and reverse in another. The Company used the normal tax rate applicable at each relevant year-end, then recalculated current and prior-period income-tax provisions on the restated profit or loss using prevailing tax rates.

The non-gratuity expense lines varied across the three years, showing that the restatement was based on the period to which each cost related. The MSE-interest adjustment was Rs 24.82 lakh in FY 2024-25, versus Rs 8.72 lakh in FY 2025-26 and negative Rs 9.46 lakh in FY 2023-24. The CSR adjustment was Rs 4.18 lakh in FY 2024-25, compared with negative Rs 0.32 lakh in FY 2025-26 and Rs 13.10 lakh in FY 2023-24.

Why was gratuity central to The Company’s FY25 restatement?

The Company says retirement benefits were accounted for on a cash basis in FY 2023-24, which was not in line with Accounting Standard 15 (Revised), Employee Benefits. During FY 2024-25, The Company accounted for retirement benefits using an actuarial valuation certificate. The FY 2024-25 reconciliation consequently included the Rs 85.61 lakh gratuity line, which was the principal contributor to the Rs 88.94 lakh net profit adjustment.

Gratuity is described as a defined-benefit plan, meaning The Company must estimate the benefit earned by employees for current and prior service rather than record only cash payments. An independent actuary determines the obligation at each period or year-end using the projected unit credit method, which estimates future benefits and discounts them to present value. The Company records actuarial gains and losses immediately in its statement of profit and loss and includes defined-benefit expenses within salaries, allowances and welfare.

The disclosed gratuity arrangement was unfunded, with no plan assets at either 31 March 2024 or 31 March 2026. The defined-benefit obligation was Rs 80.53 lakh at 31 March 2024, including Rs 12.82 lakh current and Rs 67.71 lakh non-current, and rose to Rs 86.64 lakh at 31 March 2026. The valuation uses a 5.00% annual future-salary-rise assumption, a 7.50% annual discount rate and 10% annual attrition; changes in these assumptions or employee experience can affect later valuations.

What do the MSE and CSR changes say about expense timing?

The Company says it reconsidered other expenses according to the year to which they pertained and charged them to the relevant year in the restated statement of profit and loss. The two specified categories were CSR expenditure and interest on delayed payments to MSEs. In FY 2024-25, their reported reconciliation impacts were Rs 4.18 lakh and Rs 24.82 lakh, respectively.

The MSE disclosure is limited by the information available to The Company. Amounts due to entities covered by the Micro, Small and Medium Enterprises Development Act, 2006, were reported only to the extent that suppliers had provided information memorandums. The supplied financial information does not provide supplier-level balances, identify individual delayed payments, or separately state cash settlement related to the Rs 24.82 lakh FY 2024-25 adjustment.

The Company reported no audit qualifications requiring adjustment in FY 2023-24, FY 2024-25 or FY 2025-26, and no qualifications that did not require adjustment in those years. However, the restatement note says amounts in restated financial statements may differ from the respective audited financial statements because of the regroupings and adjustments. The reported changes are therefore accounting restatements, not a statement that all underlying expenses were newly incurred in FY 2024-25.

Conclusion

The Company’s FY 2024-25 restatement increased reported profit after tax by Rs 88.94 lakh, taking it to Rs 8.22 crore, while shareholder funds declined by Rs 19.05 lakh after the separate Rs 93.31 lakh opening-reserves adjustment. The profit reconciliation was primarily driven by the Rs 85.61 lakh gratuity entry, with recalculated taxes and the reassignment of MSE-interest and CSR costs also affecting the result.

What to watch next is the recurring valuation of The Company’s unfunded gratuity obligation, which was Rs 86.64 lakh at 31 March 2026 and had no associated plan assets. The Company’s stated policy requires an independent actuarial valuation at each period or year-end, so later employee-benefit charges will depend on the disclosed salary-growth, discount-rate and attrition assumptions as well as actual workforce experience.