CMX Holdings Reports ₹750.72 Thousand Loss in Q1, Faces Ongoing Financial Challenges

Siel Financial Services (now known as CMX Holdings Limited) has reported a net loss of ₹750.72 thousand for the quarter ended June 30, according to the company's latest financial results. This loss represents a significant increase compared to the ₹25.94 thousand loss reported in the same quarter of the previous year.

Financial Performance

The company's financial results for Q1 reveal several key points:

• Total income stood at ₹450.00 thousand, entirely from other income sources.
• No revenue was generated from operations during the quarter.
• Total expenses increased to ₹1,200.72 thousand, primarily due to:
  • Employee benefits expense of ₹666.74 thousand
  • Other expenses of ₹476.21 thousand
  • Finance cost of ₹57.77 thousand

Accumulated Losses and Going Concern

CMX Holdings continues to face significant financial challenges:

• Accumulated losses have reached ₹1,70,813.94 thousand as of June 30.
• The company's net worth has been completely eroded by these losses.
• Negative operating cash flows in recent years have contributed to working capital constraints.

Despite these challenges, the company's management has prepared the accounts on a "going concern" basis, expressing hope that adequate finances and opportunities will become available in the foreseeable future to enable profitable operations.

Regulatory and Operational Constraints

The company faces several operational limitations:

• CMX Holdings is not allowed to carry out Non-Banking Financial Business due to the rejection of its application by the Reserve Bank of India.
• Operations are currently restricted to income from services, realization of debtors, and advances.
• The company has severely curtailed its operations due to a lack of funds and adverse market conditions.

Corporate Actions and Governance

Recent developments in the company include:

• An acquirer has entered into a Share Purchase Agreement to acquire 51.75% of the company's voting share capital at ₹7.00 per share.
• An open offer is in progress for an additional 26% of the equity share capital at ₹9.70 per share.
• The board has reappointed M/s Ajay & Ajay Co. as Internal Auditor.

Auditor's Review

S.K. MEHTA & CO., Chartered Accountants, conducted a limited review of the financial results and highlighted several concerns:

• The auditors noted the company's inability to carry out Non-Banking Financial Business.
• They pointed out the lack of confirmation and reconciliation for certain financial items.
• The auditors emphasized the material uncertainty regarding the company's ability to continue as a going concern.

As CMX Holdings navigates through these financial difficulties, the outcome of the ongoing share acquisition and open offer may have significant implications for the company's future direction and control.