City Online Services Limited has announced its unaudited financial results for the quarter and nine months ended December 31, 2025, showing a challenging performance with the company slipping into losses during the third quarter of fiscal year 2026.

Financial Performance Overview

The company's financial performance deteriorated significantly during Q3FY26, with key metrics showing a downward trend compared to the previous year.

Nine-Month Performance Analysis

The nine-month period ending December 31, 2025, reflected the company's ongoing challenges, with cumulative losses mounting compared to the previous year's profitable performance.

Expense Structure and Operational Metrics

The company's expense management showed mixed results during the quarter. Total expenses for Q3FY26 stood at ₹205.79 lakhs compared to ₹190.55 lakhs in Q3FY25, representing an increase of 8.00%. Operating expenses rose to ₹128.02 lakhs from ₹122.66 lakhs, while employee benefit expenses increased to ₹43.31 lakhs from ₹37.79 lakhs year-over-year.

Auditor Qualifications and Compliance Issues

The independent auditor's review report issued a qualified opinion highlighting several significant concerns:

• GST Reporting Discrepancy: A difference of ₹11.27 lakhs between revenue reported in books and GST returns for December 2025 quarter
• Outstanding Statutory Liabilities: ₹26.61 lakhs in unpaid statutory obligations, including ₹1.47 lakhs in Employees' Provident Fund and ₹25.14 lakhs in unremitted TDS
• Unbilled Revenue: ₹18.00 lakhs in services rendered but not invoiced as of December 31, 2025
• GST Compliance: GSTR 3B filing for Andhra Pradesh pending for December 2025

Corporate Governance and Board Approval

The financial results were reviewed by the Audit Committee and approved by the Board of Directors at their meeting held on February 13, 2026. The meeting commenced at 3:00 PM and concluded at 7:30 PM at the company's registered office. The results were prepared in accordance with Indian Accounting Standards (Ind AS) and comply with SEBI listing regulations.

City Online Services Limited operates primarily in internet solutions and related services, with no other reportable business segments as per Indian Accounting Standard 108 on Operating Segments.

City Online Services Limited , an internet solutions and services provider, has released its financial results for the quarter ended June 30, revealing a narrowed loss but facing significant audit qualifications.

Financial Performance

The company reported a net loss of Rs 3.68 lakhs for the quarter, an improvement from the Rs 8.09 lakhs loss in the same period last year. However, revenue from operations decreased to Rs 199.20 lakhs from Rs 218.52 lakhs in the previous year's quarter.

Audit Qualifications

The company's auditors, Komandoor & Co LLP, issued a qualified opinion highlighting three key issues:

1. A discrepancy of Rs 11.47 lakhs between revenue reported in books and GST returns for the quarter, resulting in under-reporting of revenue to GST authorities.
2. Outstanding statutory liabilities of Rs 11.41 lakhs, including Rs 2.58 lakhs in Employee Provident Fund and Rs 8.83 lakhs in unremitted TDS.
3. Unbilled revenue of Rs 22.51 lakhs for services rendered but not invoiced as of June 30.

Management Response

The management of City Online Services Limited acknowledged the audit qualifications and stated they would take necessary steps to resolve these issues. However, specific details on the planned actions were not provided in the financial report.

Other Financial Highlights

• Total income, including other income, stood at Rs 199.91 lakhs for the quarter.
• Total expenses increased to Rs 204.12 lakhs, up from Rs 227.34 lakhs in the same quarter last year.
• The company's net worth as of June 30 was reported at negative Rs 11.19 lakhs.

City Online Services Limited's board of directors approved these unaudited financial results at their meeting held on August 13. The company primarily operates in the internet solutions and services sector, with no other reportable segments as per Indian Accounting Standard 108 on 'Operating Segments'.

Investors and stakeholders will likely be watching closely to see how the company addresses the audit qualifications and improves its financial position in the coming quarters.