CMI Limited reports significant Q3 FY25 losses amid ongoing insolvency; auditors issue disclaimer
CMI Limited reported significant losses for Q3 FY25 and nine months ended 31st December 2024 while under CIRP. Auditors issued a disclaimer due to substantial financial and operational uncertainties, including eroded net worth.
The ongoing Corporate Insolvency Resolution Process, coupled with severe financial losses, eroded net worth, and an auditor's disclaimer on the financial results, signifies a critical financial and operational state for the company. This situation has a high potential to negatively affect stakeholders and the company's future viability.
The company is undergoing CIRP, reported substantial net losses, has accumulated losses far exceeding its paid-up capital, and its net worth is eroded. The auditors expressed significant concerns about the going concern principle and the reliability of financial data, leading to a disclaimer, all of which are highly negative indicators.
CMI Limited announced the approval of its unaudited financial results for the quarter and nine months ended 31st December 2024 by its Board of Directors (power suspended) on 31st October 2025. This approval was authorized by the Resolution Professional (RP), Mr. Deepak Maini, as the company is undergoing a Corporate Insolvency Resolution Process (CIRP) initiated on 28th July 2023 by Canara Bank.
Key financial highlights for the quarter ended 31st December 2024: * Revenue from Operations: ₹4,399.89 lakhs * Total Income: ₹4,450.32 lakhs * Total Expenses: ₹5,268.37 lakhs * Net Loss for the Period: ₹818.05 lakhs
For the nine months ended 31st December 2024: * Revenue from Operations: ₹8,974.33 lakhs * Total Income: ₹9,083.68 lakhs * Total Expenses: ₹10,886.66 lakhs * Net Loss for the Period: ₹1,802.97 lakhs
The statutory auditors, BAGCHI & GUPTA, issued a Limited Review Report with significant concerns, stating they could not obtain sufficient appropriate audit evidence to provide an audit opinion and thus issued a disclaimer. Their concerns include: * Accumulated losses of ₹16,777.33 lakhs as of 31st December 2024, which have eroded the company's net worth against a paid-up capital of ₹1,604.74 lakhs, indicating a going concern issue. * Financial statements were not prepared in accordance with Ind AS 34. * Unascertained liabilities from litigation with income tax, TDS, and GST departments. * Lack of a fixed assets register, with values taken at book value and requiring physical verification. * Unconfirmed loan, bank, and investment accounts, with balances subject to reconciliation. * Absence of quantitative details for stock, with values taken at book value. * Balances of current assets and liabilities are subject to confirmation, and recovery from current assets is unascertained. * Certain confirmations, reconciliations, and valuations (PPE, inventories, trade receivables, and payables) were not available. * Pending litigations were not independently verified by the auditor.
The auditors relied on information and explanations furnished by the RP/management, emphasizing that the financial statements were prepared by the RP based on available books and records.
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CMI Limited filed this with the NSE as a statutory disclosure, categorised under quarterly results. It is a primary document, not a recommendation, and the desk marks it high impact, which is the band that most often changes something.
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