Focus Lighting & Fixtures Ltd Forensic Report - SOIC x StockScans Report

as of Aug 2026

Focus Lighting & Fixtures' audit record is clean on its face, five straight unqualified opinions with no qualifications or Key Audit Matters. But the consolidated balance sheet tells a different story: loans to subsidiaries ballooned from ₹2.35 crore to ₹277.15 crore in one year while revenue fell, and the statutory auditor resigned barely a year into its five-year term.

Key findings

  1. Related-party loans to subsidiaries jumped 118x in one year, with no interest or impairment Critical - Loans and advances to subsidiaries outstanding in the consolidated financial statements rose from ₹2.35 crore as at March 31, 2025 to ₹277.15 crore as at March 31, 2026, with no interest payable and no impairment recorded. Consolidated revenue fell from ₹224 crore in FY24 to ₹183 crore in FY25 and ₹188 crore in FY26, against a PAT of just ₹5.07 crore. Every AOC-2 form from FY2020-21 through FY2025-26 states no related-party transactions were not at arm's length.
  2. Statutory auditor resigned under a year into five-year term Major - Patwa and Shah, appointed at the 20th AGM on September 22, 2025 for five years, resigned effective August 11, 2026 citing pre-occupation, creating a casual vacancy under Section 139(8). The Board appointed N. A. Shah Associates LLP the same day, subject to member approval at the 21st AGM. The resignation letter stated no other material reason, and the Singapore subsidiary's auditor had resigned on May 6, 2026.
  3. Promoter family holds all three executive/non-independent seats and is set to draw up to ₹4.74 crore annually Major - MD Amit Vinod Sheth, his wife Deepali (Executive Director) and daughter Khushi (Non-Executive Non-Independent Director) together hold the two executive directorships and the sole non-independent non-executive seat on the six-member board as of March 31, 2026. The FY2025-26 AGM seeks approval for aggregate managerial remuneration of ₹8 crore per year, with MD remuneration up to ₹3 crore annually and a 74% hike for subsidiary director Jigar Ghelani to ₹20.83 lakh per month. Managerial remuneration rose 41.75% in FY2025-26 against 0.36% for other employees.
  4. Receivables stretch to 112-140 days while collections lag management's own targets Major - Receivable days stood at 140 in FY24, 138 in FY25, and 112 in FY26, with CFO/PAT at 0.16x in FY24, 2.14x in FY25, and 5.10x in FY26 on a PAT of only ₹5.07 crore. Management said in September 2024 that 75-80% of Middle East and Southeast Asia payments would clear in 1-2 months, and the CFO assured investors "by December we will be able to cover 70%-80% and our target is to collect the entire 100%". No impairment was recorded on related-party receivables for the year ended March 31, 2022.
  5. Cash flow has not consistently backed profit, and dividends were skipped twice in three years Minor - CFO swung from -₹13.79 crore in FY23 against PAT of ₹22.69 crore to +₹32.45 crore in FY25 against PAT of ₹15.16 crore, with cumulative CFO/EBITDA of just 0.42x over ten years. Other income was 38.7% of PBT in the latest period. No dividend was recommended for FY2025-26 or FY2024-25, following a final dividend of Re. 0.50 per share for FY2023-24.
  6. Company disclosed an ESOP accounting error left unrecognized "through oversight" Minor - In FY2024-25, the company disclosed that 75,000 ESOP options were forfeited due to non-fulfilment of vesting conditions, with the financial impact not recognized in P&L "through oversight". The net unrecognized impact on profit was ₹5.71 lakh, to be recognized in the subsequent year. Annual reports for FY2020-21 through FY2024-25 each state previous-year figures were regrouped for comparability.
  7. Contingent liabilities dropped to Nil after a multi-year run of disclosed tax litigation Minor - The company reported total contingent liability of Nil as at March 31, 2026 in both standalone and consolidated financial statements, stating no tax litigations are pending. This follows disclosed contingencies of ₹82.41 lakh as at March 31, 2023 and ₹12.39 lakh as at March 31, 2024. Auditors had reported disputed TDS dues of ₹5.5 lakh and ₹76.91 lakh pending with the Assessing Officer for rectification as at March 31, 2023.
  8. Working capital facilities are secured against the entire current asset base and all immovable properties Minor - The standalone Working Capital Demand Term Loan rose from ₹36 lakh as on March 31, 2022 to ₹10.58 crore for FY ended March 31, 2025, while short-term loans rose from 2.2 crore to ₹103.61 crore over the same period. Banking facilities are secured by hypothecation of stock and book debts, with term loans secured by pari-passu charge on all immovable properties. CARO for FY2024-25 confirms quarterly returns filed with banks agree with books of accounts.
  9. Clean audit opinions for FY2025-26 and FY2024-25 Clean - For FY2025-26, the statutory auditor issued an unqualified opinion on both standalone and consolidated financial statements, with no Key Audit Matters and no material-uncertainty paragraphs. CARO confirmed no default in repayment of loans, no fraud noticed, and an operating audit trail in the accounting software throughout the year. The auditor issued an unmodified opinion on internal financial controls.

What to watch

Bottom line: This is an audited record with five years of unqualified opinions and confirmed audit trails. The risk sits in the related-party loan book, which grew to 1.5x annual revenue in a single year with no interest, no impairment, and no arm's-length confirmation, and in the auditor's resignation barely a year into its term. Read the subsidiary receivables line with that in mind, and watch whether the ₹277.15 crore balance gets a price, a repayment date, and an independent check.