City Online Services Reports Q1 Loss Amid Audit Qualifications

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.