New Delhi: Amid continuing difficulties in airline space to generate profits and raise funds, independent auditors of at least two Indian carriers have raised red-flags over their 'going concern' status claims.
Typically, a company is known as a 'going concern' if it has sufficient resources to continue to operate indefinitely and to avoid any potential bankruptcy risks.
While auditors of now-grounded Kingfisher Airlines have been raising red flags for a long time, auditors of low-cost carrier SpiceJet have pointed out in their latest quarterly review report the airline's total liabilities exceeded its total assets by Rs 1,145.58 crore as on June 30, 2014.
"These conditions, along with other matters...Indicate the existence of a material uncertainty that may cast doubt about the company's ability to continue as a going concern," SpiceJet's auditor SR Batliboi and Associates LLP said.
No provision has been made for interest of Rs 7.5 crore up to June 30, 2014, relating to earlier years on the outstanding inter-corporate deposits taken by Spicejet.
If these amounts had been accounted for, SpiceJet's first quarter net loss, as also accumulated losses, would have been higher, the auditor noted. SpiceJet reported a net loss of Rs 124.10 crore for the April-June 2014 quarter, as against a net profit of Rs 50.56 crore in the year-ago period.
17/08/14 PTI/Business Standard
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Typically, a company is known as a 'going concern' if it has sufficient resources to continue to operate indefinitely and to avoid any potential bankruptcy risks.
While auditors of now-grounded Kingfisher Airlines have been raising red flags for a long time, auditors of low-cost carrier SpiceJet have pointed out in their latest quarterly review report the airline's total liabilities exceeded its total assets by Rs 1,145.58 crore as on June 30, 2014.
"These conditions, along with other matters...Indicate the existence of a material uncertainty that may cast doubt about the company's ability to continue as a going concern," SpiceJet's auditor SR Batliboi and Associates LLP said.
No provision has been made for interest of Rs 7.5 crore up to June 30, 2014, relating to earlier years on the outstanding inter-corporate deposits taken by Spicejet.
If these amounts had been accounted for, SpiceJet's first quarter net loss, as also accumulated losses, would have been higher, the auditor noted. SpiceJet reported a net loss of Rs 124.10 crore for the April-June 2014 quarter, as against a net profit of Rs 50.56 crore in the year-ago period.
17/08/14 PTI/Business Standard
