Wiscon Industries Limited restatement put FY24 equity below zero

Wiscon Industries Limited restated its historical accounts after charging off costs previously capitalised or deferred and recognising customer-service and employee-benefit obligations. The most pronounced reported result was for FY24: audited net worth of Rs 1.81 crore became a deficit of Rs 33.77 lakh, and audited profit of Rs 6.44 lakh became a Rs 1.37 crore loss.

Why did Wiscon Industries restate its accounts?

Wiscon Industries restated its accounts because it concluded that some software, process-development and pre-operative expenditure did not qualify for capitalisation or deferred recognition, while certain obligations had not been provided for in earlier years. The restatement note says software and process-development costs were recorded as capital work-in-progress, or CWIP, in FY23 and FY24 before being capitalised as intangible assets in FY25. CWIP is expenditure on assets not yet ready for use.

Wiscon Industries charged the CWIP balance to the restated statement of profit and loss in the respective periods and reversed related amortisation recognised in FY25 and FY26. The consolidated opening-reserves reconciliation includes a Rs 2.77 crore charge for capitalisation work-in-progress written off and a Rs 66.31 lakh deferred-tax effect. These and other opening-balance adjustments changed the consolidated audited opening profit-and-loss balance of Rs 1.11 crore to a restated deficit of Rs 83.48 lakh.

How did the Wiscon Industries restatement change profit and net worth?

Wiscon Industries recorded its largest adverse annual profit change in FY24, when restatement converted a small audited standalone profit into a loss. The reconciliation presents FY24 and FY25 on a standalone basis, while FY26 and the period ended 30 June 2026 are consolidated. The table uses profit after tax as reported before and after the adjustments.

Wiscon Industries’ FY24 net worth fell by Rs 2.15 crore through cumulative restatement adjustments, from Rs 1.81 crore in the audited accounts to a Rs 33.77 lakh deficit. At 31 March 2025, the adjustment was Rs 1.94 crore, reducing standalone net worth from Rs 6.11 crore to Rs 4.17 crore. At 31 March 2026, the consolidated adjustment was Rs 1.64 crore, reducing net worth from Rs 32.25 crore to Rs 30.61 crore; at 30 June 2026, the adjustment was Rs 1.40 crore, reducing it from Rs 39.89 crore to Rs 38.49 crore.

Which provisions did Wiscon Industries add to its accounts?

Wiscon Industries recognised installation, warranty and repair provisions under Accounting Standard 29, or AS 29, which governs provisions, contingent liabilities and contingent assets. The company said these provisions had not been recorded in previous years and were recognised during restatement using historical experience and an actuarial valuation report. A provision is a liability for a present obligation whose amount or timing is uncertain.

The profit reconciliation shows warranty and repair adjustments reduced FY24 profit by Rs 4.84 lakh and FY25 profit by Rs 1.60 lakh, before a Rs 2.49 lakh positive adjustment in FY26. Installation was nil in FY24, reduced FY25 profit by Rs 9.85 lakh and added Rs 14.69 lakh in FY26. The different signs reflect the allocation and revision of accounting entries across years, not a disclosed measure of customer claims during those years.

Wiscon Industries also recognised gratuity obligations under Accounting Standard 15 (Revised), Employee Benefits, after saying it had not accounted for them in accordance with that standard in FY23 and FY24. The company obtained an actuarial valuation in the restatement process. Gratuity changed annual profit by nil in FY24, plus Rs 4.80 lakh in FY25, minus Rs 16.80 lakh in FY26 and plus Rs 11.88 lakh in the period ended 30 June 2026; the opening-reserves reconciliation records a Rs 3.13 lakh consolidated effect.

Why were pre-operative costs and amortisation reversed?

Wiscon Industries determined that expenditure incurred before commercial operations started did not qualify for either capitalisation or deferred recognition. Those costs were initially classified as CWIP in FY23 and FY24, then reclassified as deferred revenue expenditure in FY25, when amortisation began. Deferred revenue expenditure is a cost carried forward for recognition in later periods rather than charged immediately.

Wiscon Industries charged the pre-operative expenditure to FY23 in the restated accounts and reversed amortisation recognised later. The deferred-revenue-expense adjustment reduced FY24 profit by Rs 1.81 crore, then added Rs 5.15 lakh in both FY25 and FY26 and Rs 1.29 lakh in the period ended 30 June 2026. The timing explains why the earliest affected year carried the largest profit reduction and later years received reversals of previously booked amortisation.

Wiscon Industries also recomputed depreciation after reclassifying certain property, plant and equipment and identifying errors in depreciation rates. Depreciation reduced FY24 profit by Rs 99,000 and FY25 profit by Rs 67,000, while adding Rs 1.86 lakh in FY26. Separately, the company moved depository annual charges from security deposits to the statement of profit and loss, although the supplied reconciliation does not quantify that adjustment separately.

Are the restated periods directly comparable?

Wiscon Industries’ FY25 and FY26 results are not fully comparable because the reporting perimeter changed after the company acquired 100% of Dalmia Technologies Limited on 25 May 2025. FY24 and FY25 are presented as standalone financial statements, while FY26 and the period ended 30 June 2026 are consolidated. Therefore, the increase from Rs 1.25 crore standalone restated profit in FY25 to Rs 20.41 crore consolidated restated profit in FY26 combines a change in period performance with the addition of a subsidiary.

Wiscon Industries also says the period ended 30 June 2026 covers three months whereas the preceding years cover 12 months. Its restated accounting-ratio statement records profit after tax of Rs 7.89 crore and earnings before interest, tax, depreciation and amortisation, or EBITDA, of Rs 11.00 crore for the three-month period, compared with FY26 profit after tax of Rs 20.41 crore and EBITDA of Rs 28.09 crore. The company specifically states that ratios for the 30 June 2026 period are not directly comparable with earlier financial years because of the different period length.

Conclusion

Wiscon Industries’ restatement moved costs and obligations into the periods in which the company determined they should have been recognised. The write-off of software, process-development and pre-operative costs, together with the recognition of installation, warranty and gratuity obligations, changed both historical earnings and accumulated reserves. The FY24 movement from Rs 6.44 lakh audited profit to a Rs 1.37 crore restated loss shows that the effect was concentrated in the earliest affected period.

The next comparison point is the company’s accounting after 30 June 2026, including the continued application of the revised treatment for obligations, tax timing differences and previously capitalised expenditure. Wiscon Industries has disclosed that the reporting basis changed after the 25 May 2025 acquisition of Dalmia Technologies Limited, so future comparisons will be more informative when they cover equivalent periods using the same consolidation perimeter.