Jay Shree Tea auditor qualifies September tax treatment

Jay Shree Tea & Industries Limited received a qualified conclusion on its standalone results for the quarter and half year ended September 30, 2026, because current and deferred income tax were neither ascertained nor provided; the auditor said the effect on the reported Rs 11.36 crore half-year profit before tax is presently unascertainable.

Why did Jay Shree Tea receive a qualified conclusion?

Jay Shree Tea received the qualification because Singhi & Co. found that non-ascertainment and non-provisioning of current and deferred income-tax liability for the September 2026 quarter and six months did not comply with Indian Accounting Standard 12, Income Taxes, or Ind AS 12. The review report dated November 13, 2026 identifies this issue as the basis for its qualified conclusion on the standalone financial results.

Management said in Note 5 that the tea and sugar industries are seasonal, meaning quarterly results are not indicative of likely results for the full year. On that basis, Jay Shree Tea said annual taxable profit was difficult to estimate and that current and deferred tax would be provided at year-end. The filing does not disclose an estimated tax charge for either the quarter or the six months ended September 30, 2026.

Singhi & Co. said the impact of the non-ascertainment or non-provisioning, including any consequential effect in the standalone financial results, was presently not ascertainable. Except for the possible effects of this matter, the auditor said nothing had come to its attention to indicate that the September 2026 standalone statement failed to make required disclosures or contained a material misstatement.

What September 2026 profit figures does the tax issue affect?

Jay Shree Tea reported standalone profit before tax of Rs 17.54 crore for the quarter ended September 30, 2026 and Rs 11.36 crore for the half year ended that date. Since management did not ascertain or provide current and deferred tax in the interim period, the auditor could not quantify the effect that a tax provision could have on the standalone financial statements.

The September 2026 quarter changed from a standalone loss before tax of Rs 6.18 crore in the quarter ended June 30, 2026, but profit before tax was below Rs 19.05 crore in the quarter ended September 30, 2025. For the half year, standalone profit before tax increased to Rs 11.36 crore from Rs 9.62 crore a year earlier. These are pre-tax comparisons and do not resolve the unprovided tax issue.

Jay Shree Tea’s consolidated statement also shows no current or deferred tax expense for the September 2026 quarter and half year. Consolidated profit before tax was Rs 16.62 crore for the quarter and Rs 10.68 crore for the six months. However, the supplied qualified review report specifically covers the standalone results, so it does not state an auditor’s conclusion on the consolidated figures.

What does Jay Shree Tea say about deferred tax assets?

Jay Shree Tea reported net standalone deferred-tax assets of Rs 52.22 crore as at September 30, 2026, primarily related to unabsorbed depreciation and business losses incurred through March 31, 2026. The balance was unchanged from Rs 52.22 crore as at March 31, 2026, according to the standalone assets and liabilities statement.

Management said it was confident that sufficient future taxable profits would be available to adjust these deferred-tax assets, based on projections of future book profits and tax profits. That is management’s stated assessment, rather than a quantified tax provision for the September 2026 quarter or half year. The filing does not provide the projected profit figures, an expected utilisation period, or a split between depreciation-related and loss-related tax assets.

The deferred-tax asset was included in non-current standalone assets of Rs 589.61 crore at September 30, 2026, compared with Rs 559.25 crore at March 31, 2026. Total standalone assets increased to Rs 1,011.92 crore from Rs 933.19 crore, while total equity rose to Rs 391.19 crore from Rs 380.48 crore. Those reported balances remain subject to the effect that the auditor said it could not ascertain.

Which businesses drove Jay Shree Tea’s pre-tax performance?

Jay Shree Tea’s tea segment reported a standalone segment result of Rs 28.13 crore in the September 2026 quarter, compared with Rs 10.30 crore in June 2026 and Rs 34.91 crore a year earlier. Tea segment revenue was Rs 148.48 crore, up from Rs 98.88 crore in the preceding quarter but below Rs 166.88 crore in the September 2025 quarter.

The P&K Fertilisers manufacturer segment reported a Rs 7.88 crore result, compared with a Rs 0.41 crore loss in June 2026 and a Rs 3.11 crore profit in September 2025. Segment revenue rose to Rs 52.88 crore from Rs 32.60 crore a year earlier. Sugar recorded a segment loss of Rs 6.71 crore on revenue of Rs 67.98 crore, against losses of Rs 3.10 crore in June 2026 and Rs 6.66 crore in September 2025.

For the six months ended September 30, 2026, tea segment result was Rs 38.43 crore versus Rs 37.07 crore a year earlier, while P&K Fertilisers increased to Rs 7.47 crore from Rs 3.06 crore. Sugar’s segment loss narrowed to Rs 9.81 crore from Rs 10.49 crore. Net interest of Rs 19.34 crore and unallocable expenditure of Rs 5.39 crore reduced the combined segment result to standalone profit before tax of Rs 11.36 crore.

Conclusion

Jay Shree Tea reported improved standalone half-year profit before tax of Rs 11.36 crore, compared with Rs 9.62 crore a year earlier, supported by higher P&K Fertilisers segment results and a narrower sugar loss. However, Singhi & Co. concluded that the absence of current and deferred tax ascertainment and provisioning was not in accordance with Ind AS 12, and it could not determine the financial-statement effect.

The next item to watch is the year-end provision that management says it will record once taxable profit for the full year can be estimated in the seasonal tea and sugar businesses. Subsequent disclosures will also show whether management continues to support the Rs 52.22 crore standalone deferred-tax asset through projections of future book profits and taxable profits.