Eventions corrected FY24 GST and forex audit observations

Eventions disclosed that FY24 auditors cited Employees’ Provident Fund and Employees’ State Insurance non-compliance, a cancelled Kerala Goods and Services Tax registration and unrecorded foreign-exchange effects. Eventions subsequently accounted for Rs 8.22 lakh of Kerala GST interest and other charges and said forex transactions were recorded in FY24 and FY25 financial statements.

What FY24 audit observations did Eventions correct?

Eventions’ statutory auditors made qualifications and adverse observations for the financial year ended March 31, 2024, covering statutory compliance and accounting matters rather than one filing delay. The disclosed matters were non-compliance under Employees’ Provident Fund and Employees’ State Insurance requirements, cancellation of Eventions’ GST registration in Kerala, and non-recognition of the financial impact of foreign-exchange fluctuations on certain transactions.

The comparative disclosure lists “NA” for adverse observations in FY25 and FY26, while identifying the three specified matters in FY24. This comparison attributes the stated auditor observations to FY24, although Eventions also says deficiencies in internal controls, compliance systems and financial-reporting processes may arise again as the company grows.

The auditor-observation table states that the EPF and ESI non-compliance affected Eventions’ financial statements and that the omitted forex effects could affect reported profit or loss. Eventions grouped the FY24 matters as past qualifications and adverse observations, rather than disclosing a regulatory penalty, show-cause notice or quantified financial-statement impact for all three matters.

How much did the Kerala GST observation involve?

The Kerala GST observation involved Rs 8.22 lakh of interest and other charges that had not been provided for in Eventions’ books when the FY24 auditor reported the matter. The GST registration in Kerala had been cancelled suo motu, or on the authority’s own motion, according to the disclosure.

Eventions said the Rs 8.22 lakh outstanding amount was subsequently accounted for and that necessary GST compliance was completed. The financial-statement impact column in the FY24 comparative table was marked “NA”, so the disclosure does not quantify the effect on FY24 profit, net assets, cash flow or any later reporting period beyond the Rs 8.22 lakh amount.

The Kerala item is the only FY24 audit observation with a stated rupee amount in the supplied disclosure. Eventions’ response identifies both accounting for the Rs 8.22 lakh liability and completion of GST compliance, but does not disclose the date of the Kerala registration cancellation or a breakdown between interest and other charges.

What did the EPF and ESI finding mean for Eventions?

Eventions’ FY24 auditor stated that the company had yet to make compliance under the Employees’ Provident Fund and Employees’ State Insurance Acts, and that the non-compliance had an impact on its financial statements. The disclosure does not state an unpaid amount, number of employees affected, registration date, payment date or penalty in relation to the EPF and ESI matter.

Eventions said it had initiated ESI and EPF compliance and was in the process of making all necessary registrations and payments as of the signing of its restated financial statements. That wording differs from the Kerala GST response, which says the Rs 8.22 lakh amount had been accounted for and necessary GST compliance completed.

The FY24 observation sits alongside a separate record of 19 delayed filings with the Registrar of Companies. Those delays ranged from three days for an AOC-4 filing due on October 29, 2024, to 477 days for an INC-20A filing due on June 13, 2021; Eventions said the forms were later filed after payment of additional fees.

Eventions said no show-cause notice, penalty or fine had been received from a regulatory authority in respect of the delayed Registrar of Companies filings as of the disclosure date. On March 31, 2026, Eventions also filed an adjudication application with the Registrar of Companies through GNL-1 for contravention of Section 10A(1) of the Companies Act, 2013 because business activities commenced before the related filing.

Why did unrecorded forex affect Eventions’ FY24 reporting?

The forex observation arose because Eventions had foreign-exchange transactions during FY24 but had not recorded the financial effect of exchange-rate fluctuations in its financial statements. The auditor said these unrecorded effects could affect Eventions’ profit or loss, but the disclosure gives no rupee amount, currency, transaction value or direction of the potential effect.

Eventions said the foreign-exchange transactions were duly accounted for in the financial statements for FY24 and FY25. The stated action therefore addresses accounting treatment for the affected periods, although the supplied disclosure does not identify the entries recorded or whether the eventual effect increased or reduced reported profit.

The distinction between the findings is material to their nature. The Kerala GST and EPF/ESI issues concern statutory compliance and associated liabilities, while the forex issue concerns recognition of exchange-rate effects in financial reporting; Eventions placed all three under FY24 auditor qualifications and adverse observations.

Eventions’ restated financial information also shows a change in scale after FY24. Total revenue from operations increased from Rs 86.57 crore in FY24 to Rs 87.53 crore in FY25 and Rs 99.74 crore in FY26, making timely recognition of liabilities and transaction effects relevant as the reported business base expanded.

What has Eventions said it will do to prevent another lapse?

Eventions said it took corrective steps including statutory registrations and compliances, accounting for previously unprovided liabilities, and recognition of foreign-exchange fluctuations in financial statements for subsequent periods. For Companies Act compliance, Eventions appointed a whole-time company secretary as compliance officer and created a structured compliance calendar.

The disclosed measures depend on timely registration, payment, liability recognition and financial-statement entries. Eventions expressly says it cannot assure that internal-control deficiencies will not occur or that it will address or mitigate them promptly and effectively, leaving the possibility of regulatory actions, penalties, financial liabilities and reputational effects if comparable lapses recur.

Eventions’ working-capital requirements increased over the three reported financial years. Working capital, defined in the disclosure as current assets less current liabilities, rose from Rs 3.92 crore in FY24 to Rs 10.93 crore in FY25 and Rs 23.99 crore in FY26; short-term borrowings rose from Rs 92.66 lakh to Rs 2.82 crore and then Rs 8.03 crore across the same periods.

The company’s FY26 working capital was funded by Rs 8.03 crore of short-term borrowings and Rs 15.96 crore of internal accruals. Eventions says working-capital requirements may increase with operating scale, concurrent projects and business expansion, conditions that make the disclosed compliance calendar and financial-reporting processes relevant to future execution.

Conclusion

Eventions’ FY24 audit observations covered employee-benefit compliance, indirect tax and recognition of currency effects, rather than only delayed corporate filings. The clearest quantified correction was the accounting of Rs 8.22 lakh of Kerala GST interest and other charges; Eventions also said forex transactions were accounted for in FY24 and FY25, while EPF and ESI registrations and payments were described as being in process at the signing of restated financial statements.

The next point to watch is execution of Eventions’ disclosed remediation plan, including the compliance calendar, the whole-time company secretary’s compliance-officer role, and completion of statutory registrations and payments. The disclosure does not quantify EPF and ESI liabilities or the rupee effect of the FY24 forex adjustment, so later disclosures on those items would be needed to measure the full financial outcome.