Lodha & Co LLP steps down as Statutory Auditors from JHS  Svendgaard Laboratories: Know why

The Audit firm Lodha & Co LLP has resigned as the statutory auditors for JHS Svendgaard Laboratories Limited. The firm informed JHS Svendgaard Laboratories Board of Directors and Audit Committee in a letter explaining that delays in receiving the necessary information from the company made it difficult for them to complete their work.

In the letter dated November 13, 2024, the firm stated that they had faced repeated delays in getting important/ relevant information from JHS Svendgaard Laboratories. They said these delays slowed down the audit process and led to increased costs.

Lodha & Co LLP shared that this lack of timely information affected their ability to conduct their audits properly.

The Lodha & Co LLP was appointed as the auditors for JHS Svendgaard Laboratories for the financial years 2024-25 through 2028-29. They were officially assigned this role during the company’s annual meeting on September 10, 2024.

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After reviewing the company’s financial statements for the quarter and half-year ending September 30, 2024, the firm raised concerns about its ability to continue under the current conditions.

The auditors mentioned two issues

1. There were long delays in receiving the information they needed from the company, which prevented them from completing audits on time. This delay also led to higher costs for the firm.
2.  The lack of timely data made it hard for Lodha & Co LLP to carry out their work effectively impacting their ability to meet their own quality standards.

The firm observed that their internal rules require them to regularly review each client relationship. After evaluating their work with JHS Svendgaard Laboratories, they decided it was best to step down.

JHS Svendgaard Laboratories has been asked to take note of the resignation and follow the guidelines set by the Securities and Exchange Board of India ( SEBI ) for auditor resignations.

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This resignation comes at a time when India’s auditing rules are set to make big changes. The National Financial Reporting Authority ( NFRA ) has suggested important updates to improve audit quality and clarify auditors roles especially in group audits. The NFRA believes these changes are needed to improve accountability following the high-profile corporate fraud cases.

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