Deep industries Exceptional Item note
Exceptional Item on the Balance Sheet: Deep Industries Ltd (FY 2024-25)
Summary
Deep Industries Ltd reported a significant net exceptional loss of ₹25,105.51 lakhs (₹251.1 crores) on its consolidated financials for FY25. This exceptional item was a result of a post-acquisition clean-up exercise for the newly acquired subsidiaries, specifically Kandla Energy and Chemicals Ltd (acquired from liquidation) and Dolphin Offshore Shipping Ltd (acquired via insolvency), as detailed in their FY25 Annual Report and earnings conference calls.
Details and Breakdown
Source: Annual Report for FY25 (dated 31 March 2025; Note 36 and Board's Report)
Nature of Exceptional Item
The Board's Report states:
“Exceptional Item represents one-time loss due to cleaning up exercise post acquisition of Kandla Energy and Chemicals Limited from liquidation and Dolphin Offshore Shipping Limited from CIRP.”
This involved recognizing various assets and liabilities at their realizable value, writing off assets that did not exist physically, and recording other one-time post-acquisition adjustments.
Amount
As per the Consolidated Statement of Profit and Loss:
Exceptional Items Gain/(Loss) (Net): ₹(25,105.51) lakhs (net loss)
(Source: AR FY25, page 149)There is NO exceptional item reported in the standalone statements—these pertain entirely to the consolidated group due to the new subsidiaries.
Detailed Components (Annual Report, Note 36, page 187):
ComponentAmount (₹ lakhs)Payment to Operational Creditors1,621.98Written back of Other Current & Non-Current Liab.1,595.28Written off of Trade Receivable(231.11)Written back of Other Current & Non-Current Assets(2,483.83)Impairment of Inventories(25,607.83)Net Exceptional Loss(25,105.51)
Interpretation:
Positive figures represent expenses/losses added (e.g., payments to creditors).
Amounts in parentheses represent gains/reversals, but the overall context and descriptions in the report indicate these were write-offs/impairments (non-cash, write-downs of assets, unrecoverable inventory, etc.).
The largest component was the “Impairment of Inventories” (₹25,607.83 lakhs), representing recognition that inventory assets in the subsidiary's books did not exist physically.
Management Commentary (Q1 FY26 Concall, 5 Aug 2025):
“That was a onetime exceptional item. The loss was primarily because of some write-off in a company which we acquired from insolvency called Kandla Energy & Chemicals. And we had to write it off inventory which were not there physically, and it was showing in the books. So that was an exceptional item of onetime loss, which was primarily a noncash loss because we acquired that company in just ₹2 crores.”
(Concall, 9 Aug 2025)
Conclusion
The exceptional loss of ₹251 crore (consolidated) for FY25 represents a one-time, primarily non-cash adjustment related to cleaning up asset and liability records after Deep Industries acquired its new subsidiaries from distressed situations. The most material part was inventory impairment/write-off in Kandla Energy, i.e., assets shown in prior books that did not exist physically. The company, as per latest management guidance, does not expect further large exceptional write-offs in FY26 following this clean-up.
References:
Annual Report (31 March 2025; Note 36 & Board's Report)
Concall Transcript (9 August 2025)
Concall Transcript (8 August 2025)