Corporate Merchant Bankers Limited review qualified over loans

Corporate Merchant Bankers Limited received a qualified limited-review conclusion on its September 30, 2026 half-year results because Rs 51.82 crore of unsecured loans lacked formal written agreements. The reviewer said it could not independently verify repayment, tenure, interest, security or the resulting effects, if any, on CMBL’s reported financial results.

What did the auditor qualify in CMBL’s half-year results?

The auditor qualified CMBL’s standalone unaudited results for the quarter and half year ended September 30, 2026 over Rs 51.82 crore of unsecured loans outstanding at that date. DDS & Associates said the loans were not supported by formal written loan agreements executed with the respective parties, and noted that the issue had also been reported in its audit report for the year ended March 31, 2026.

The qualification does not state that the Rs 51.82 crore balance is misstated. Instead, it identifies a limitation: without formal agreements, DDS & Associates could not independently verify the contractual terms governing the loans or their consequential implications, if any, for CMBL’s September 2026 financial results. Except for the possible effects of this matter, the reviewer said nothing had come to its attention indicating that the statement failed disclosure requirements or contained a material misstatement.

The review was performed under Standard on Review Engagements 2410, issued by the Institute of Chartered Accountants of India. DDS & Associates said a limited review relies primarily on inquiries and analytical procedures and provides moderate assurance, rather than the assurance of an audit; it did not perform an audit of the interim statement for the six months ended September 30, 2026.

Why could CMBL’s unsecured loan terms not be verified?

CMBL had not formally documented repayment terms, tenure, interest rate, security, if any, or other relevant contractual obligations for the Rs 51.82 crore unsecured-loan balance at September 30, 2026. The absence of written agreements meant the reviewer could not establish the contractual framework applicable to the identified loans through documents executed with the respective parties.

The report did not calculate an adjustment arising from the missing documentation. It said the lack of agreements prevented verification of contractual terms and any consequential implications for CMBL’s reported half-year figures, including its Rs 3.14 crore loss after tax. DDS & Associates stated that the matter continued at September 30, 2026 and remained unresolved.

CMBL’s notes describe one operating segment for the quarter and half year ended September 30, 2026. As a result, the filing provides no segment-level split that would attribute the Rs 51.82 crore documentation matter, or any possible financial implications, to separate business lines.

How did CMBL’s half-year financial performance change?

CMBL reported a Rs 3.14 crore loss after tax for the half year ended September 30, 2026, against a Rs 1.60 crore profit after tax in the corresponding half year ended September 30, 2025. Total income rose to Rs 4.86 crore from Rs 3.22 crore, but total expenses increased to Rs 8.00 crore from Rs 1.08 crore, reversing the pre-tax result to a loss.

Interest income was Rs 4.86 crore in the September 2026 half year, compared with Rs 3.22 crore a year earlier. Finance cost was Rs 1.78 crore, against no finance cost reported for the corresponding 2025 half year, while other expenses rose to Rs 6.13 crore from Rs 80.31 lakh. The latest half year had no tax expense, compared with Rs 53.82 lakh in the prior-year period.

CMBL recorded total income of Rs 2.28 crore and a Rs 2.62 crore loss after tax in the quarter ended September 30, 2026. In the preceding quarter ended June 30, 2026, it reported Rs 2.58 crore of total income and a Rs 51.56 lakh loss, meaning the quarterly loss widened despite the half-year increase in income from a year earlier.

Other comprehensive income was a negative Rs 4.84 crore for the six months ended September 30, 2026, compared with no amount in the corresponding 2025 period. Total comprehensive loss was consequently Rs 7.98 crore, against total comprehensive income of Rs 1.60 crore a year earlier, while basic and diluted earnings per share were negative Rs 0.50 against Rs 4.85. CMBL said interim earnings per share were not annualised.

How did CMBL’s balance sheet change by September?

CMBL reported loans of Rs 142.52 crore as at September 30, 2026, compared with Rs 141.00 crore at March 31, 2026. The auditor’s Rs 51.82 crore unsecured-loan matter is separately described in the review report; the filing does not state that it is a portion of, or otherwise reconcile it with, the asset-side loans line.

Financial liabilities stood at Rs 51.82 crore at September 30, 2026, up from Rs 49.42 crore at March 31, 2026. The borrowing line was Rs 51.82 crore at September, compared with Rs 48.40 crore at the March year end, while non-financial liabilities increased to Rs 2.56 crore from Rs 1.84 crore.

Cash and cash equivalents rose to Rs 3.24 crore at September 30 from Rs 21.85 lakh at March 31. Investments declined to Rs 4.68 crore from Rs 13.68 crore, and total financial assets decreased to Rs 150.44 crore from Rs 155.24 crore. The cash-flow statement reported a net increase in cash and cash equivalents of Rs 3.02 crore during the half year.

CMBL’s audit committee reviewed, and its board approved, the unaudited quarter and half-year results on October 31, 2026. The company said the statement was prepared under Indian Accounting Standards, or Ind AS, prescribed under the Companies Act, 2013, and submitted under Regulation 33 of the Securities and Exchange Board of India Listing Obligations and Disclosure Requirements Regulations, 2015.

Conclusion

CMBL’s September 2026 filing combines a qualified limited-review conclusion with a change from a Rs 1.60 crore half-year profit to a Rs 3.14 crore loss. The qualification concerns the absence of written contractual terms for Rs 51.82 crore of unsecured loans, rather than an auditor-quantified revision to reported income, expenses, assets or liabilities.

The next point to watch is whether CMBL documents repayment, tenure, interest, security and other obligations for the identified loans in subsequent disclosures. DDS & Associates said the issue remained unresolved as of September 30, 2026, while the board approved the latest results on October 31, 2026.