Auditors Identify Major Red Flags in BoAt’s Financial Statement

The statutory auditors of BoAt Lifestyle, a well-known Indian consumer electronics brand, have recently identified some big red flags in the company’s financials and mentioned several operational lapses across the subsidiaries. Here are the key issues identified by the auditor, BSR & Co LLP

Financial Statement Mismatch: The Auditor, in its audit report for the company, mentioned that the quarterly returns or statements filed with the banks or the financial institutions did not match the books of account for the Financial Years 2023, 2024, and 2025.

Misuse of Short-Term Funds: Secondly, the auditors noted that the short-term borrowings were used for the long-term purposes of one of the company’s subsidiaries for FY 2024 and 2023.

Cash Losses: The auditors flagged cash losses incurred by the company and its 5 entities. For the financial years 2024 and 2023, the company had incurred cash losses along with its joint venture, Califonix Tech and Manufacturing Pvt Ltd (Financial year 2023), its associate Kimirica Lifestle Pvt Ltd (FY 2024 and 2023), its subsidiary Dive Marketing Pvt Ltd (FY 2025) and HOB Ventures Private Limited (FYs 2024 and 2023).

Excess Payment to Directors: It was found that the directors of the company were paid remuneration more than the limit specified under section 197 of the Companies Act, 2013, for the financial year 2023.

No Backups for Accounting Records: BoAt did not maintain any backups for the books of accounts and papers of two of their subsidiaries for the financial year 2023.

Red Flags in BOAT’s Auditor Report:

• Financials filed with banks not matching books of accounts (FY23–25)
• Short-term funds used for long-term goals
• Cash losses in co. + 5 entities (FY23–25)
• Directors paid beyond Companies Act limit
• No backups of financial records… pic.twitter.com/SOjPe6LhI6

— CA Akhil Pachori (@akhilpachori) December 10, 2025

Improper Verification of Physical Assets: The company did not do verification of some of its physical assets, including Plant, property, and equipment, for the Financial Year 2023.