NewsEarningsEvoq Remedies Reports Mixed Half-Year Results Amid Regulatory Scrutiny and Compliance IssuesEvoq Remedies Reports Mixed Half-Year Results Amid Regulatory Scrutiny and Compliance Issues
Evoq Remedies Limited reported revenue of ₹1,175.67 lakhs and profit after tax of ₹5.43 lakhs for the half-year ended September 30. Total assets increased to ₹5,221.50 lakhs. The company faces significant regulatory challenges including a SEBI investigation, failure to implement audit trail software, GST demand of ₹655.03 lakhs, income tax disputes, unconfirmed advances, and non-compliant related party transactions. The auditor, H Thakkar & Co. LLP, has raised concerns about these issues and their potential financial impact.
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Evoq Remedies Limited has released its unaudited financial results for the half-year ended September 30, revealing a mixed performance amidst significant regulatory challenges and compliance issues.
Financial Performance
The company reported revenue from operations of ₹1,175.67 lakhs for the half-year, with a profit after tax of ₹5.43 lakhs. Total assets increased to ₹5,221.50 lakhs from ₹5,000.94 lakhs in March.
Key financial highlights:
| Particulars | Half-Year Ended Sept 30 (₹ in lakhs) |
|---|---|
| Revenue from Operations | 1,175.67 |
| Total Revenue | 1,416.07 |
| Total Expenses | 1,240.81 |
| Profit Before Tax | 175.26 |
| Profit After Tax | 5.43 |
| Total Assets | 5,221.50 |
Regulatory Challenges and Compliance Issues
Evoq Remedies faces several regulatory and compliance challenges:
SEBI Investigation: The company is under scrutiny from the Securities and Exchange Board of India (SEBI) regarding the preparation of its financial statements and the utilization of ₹9.21 crore raised through preferential allotment.
Audit Trail Software: The company has failed to implement mandatory audit trail software as required by the Companies Act, 2013.
GST Demand: An outstanding GST demand of ₹655.03 lakhs for the financial year 2017-18 is currently under litigation.
Income Tax Disputes: The company faces disputed income tax demands of ₹39.99 lakhs, which are not fully reflected in its accounts.
Unconfirmed Advances: Advances to suppliers amounting to ₹1,250.87 lakhs are subject to confirmation, raising concerns about their recoverability.
Related Party Transactions: The company has given loans totaling ₹668.86 lakhs to two related parties without adhering to relevant provisions of the Companies Act, 2013.
TDS and TCS Issues: The company has deducted/collected TDS and TCS amounting to ₹38.23 lakhs but has not paid it to the government.
Auditor's Concerns
The company's auditor, H Thakkar & Co. LLP, has raised several concerns in their limited review report, highlighting the regulatory issues and compliance failures mentioned above. The auditor has stated that they are unable to determine the financial impact of these issues on the company's financial position.
Management Response
Evoq Remedies' management has stated that they are in the process of responding to SEBI's summons and show cause notice. The company is also working on reconciling outstanding debtor balances and addressing the compliance issues raised by the auditor.
Company Overview
Evoq Remedies operates in agro commodity trading and has a paid-up share capital of ₹2,490 lakhs.
Outlook
While Evoq Remedies has shown some growth in total assets, the numerous regulatory challenges and compliance issues pose significant risks to the company's operations and financial stability. The company's ability to address these issues promptly and effectively will be crucial for maintaining investor confidence and ensuring long-term stability.
Historical Stock Returns for Evoq Remedies
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +4.69% | +14.67% | +24.40% | +63.99% | -42.17% | -80.25% |
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