PLEASE FIND THE OUTCOME OF THE BOARD MEETING HELD ON 30TH MAY, 2025.
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Hem Holdings and Trading reported audited results for FY25 with a sharp swing to loss. Total revenue rose modestly to Rs. 37.46 lakh (vs Rs. 35.10 lakh), but PAT plunged to a loss of Rs. 120.31 lakh versus a profit of Rs. 15.16 lakh last year, with EPS at Rs. (50.13). The loss was driven by a one-time write-off of a Rs. 144.30 lakh unrecoverable receivable booked under 'other expenses' (Rs. 155.72 lakh vs Rs. 13.69 lakh). The board also reappointed Meena Naidu & Associates as Secretarial Auditor for five years (FY26–FY30) and appointed M D N & Associates as Internal Auditor. The auditor issued an unmodified opinion but flagged an Emphasis of Matter on the company's negative Net Owned Fund of Rs. (458.10) lakh, its non-compliance with the RBI's Rs. 5 crore minimum NOF requirement for NBFCs, and the receivable write-off. The company also sold Simplex Casting shares to a related party for Rs. 97.20 lakh and received Rs. 5.41 crore as advance against sale of its Mumbai land & building, which has been reclassified as 'held for sale'.
Despite an unmodified audit opinion, the results reveal serious red flags — the company is an NBFC with a negative Net Owned Fund, is non-compliant with RBI capital norms, and has stated it has no plans to infuse fresh capital, raising material going-concern doubts. Shareholders should weigh the loss, asset-stripping via related-party transactions, and regulatory compliance risk before holding or adding to positions.