Evexia Lifecare's record has deteriorated from qualified audit opinions to an adverse opinion in FY2024-25, with the auditor identifying eight material and pervasive accounting failures. The company has repeatedly failed to account for its FCCB liability correctly, overstating profit after tax by a combined ₹50.54 crore. A multi-year pattern of interest-free related-party loans without repayment terms, revenue booked without matching costs, and large write-offs of old balances further undermines the financial statements, while the group has cycled through four auditors in three years and carries subsidiaries it cannot or will not consolidate.
Key findings
- Audit opinions have escalated from qualified to adverse over six years
Critical- M. A. Shah & Co. issued an adverse opinion on the FY2024-25 standalone and consolidated financial statements, citing eight material and pervasive failures including unimpaired investments of ₹708.81 crore and non-consolidation of three subsidiaries. The internal financial controls opinion also turned adverse for the first time in FY2024-25. Earlier years carried qualified opinions or a disclaimer, with recurring qualifications on expected credit loss assessments and interest-free loans without repayment terms. - The company fails to account for its FCCB liability under Ind AS
Major- The auditor qualified the FY2023-24 opinion because the FCCB liability of Rs. 68,836.11 lakhs was not carried at amortised cost, overstating profit after tax by Rs. 3,882.52 lakhs, and not restated for foreign exchange, overstating profit by a further Rs. 1,171.82 lakhs. The company's own notes acknowledge both impacts. The FCCBs were issued on 3 February 2023 with a 37-month maturity, and 504 bonds remained outstanding as of 31 March 2025. - Revenue quality is undermined by multi-year receivables without impairment provisions
Major- Trade receivables of 41.65 crore were outstanding for more than two to three years as of 30 September 2024 with no expected credit loss provision. In FY2023-24, the company recognised revenue of 1.5 crore for solar installation but did not account for the corresponding expenses. In FY2022-23, trade receivables of 74.41 crore and payables of 72.34 crore were written off, with the net impact credited to Other Income. - Write-offs of old trade balances and FCCB non-compliance have masked profit charges
Major- In FY20, the company wrote off trade balances and credited a net ₹3.95 crore to Other Income; without this, profit would have been lower by that amount. In FY24, the FCCB liability was not recognised at amortised cost or restated for forex, overstating profit after tax by a combined 50.54 crore. The company's authorised capital has exceeded the filed limit since 2015, with an estimated ₹30 lakhs in stamp duty and late-filing fees unprovided for in any year. - Promoter MD remuneration tripled despite weak profitability, and board independence is thin
Major- Mr. Jayesh Thakkar's monthly salary rose from ₹1,00,000 to ₹3,00,000 in November 2020 under a minimum-remuneration clause for years of inadequate profit. The company failed to maintain the required board composition under SEBI LODR as of 31 March 2025 due to the absence of a woman director. Two independent directors appointed in February 2024 were aged 27 and 24, with backgrounds in cinematography and automobile engineering respectively.
What to watch
- FCCB maturity. The 504 FCCBs outstanding as of 31 March 2025, issued on 3 February 2023 with a 37-month tenor, mature on 3 March 2026.
Bottom line: This is a record of escalating audit failure, where the latest auditor has declared the financial statements do not present a true and fair view. The core mechanics are visible across multiple years: a large foreign-currency liability left unaccounted for under Ind AS, interest-free loans flowing to related parties without repayment terms, and receivables that age without provision until they are written off. The subsidiary structure is opaque, and board oversight is thin. Watch whether the FY2025-26 financial statements address the eight adverse-opinion matters, whether the FCCBs are settled or converted at maturity, and whether the excluded subsidiaries produce audited financials.