New Delhi:The auditors of financially struggling SpiceJet have raised doubts on the low-cost carrier's (LCC) claims to be a "going concern" - a business term used to denote that an organization has the ability to generate resources for operating. The auditor has pointed out that on June 30, 2014, the LCC's "total liabilities exceeded its total assets by Rs 1,145.5 crore".
Auditors of Kingfisher give similar warnings with results, both before Vijay Mallya's failed airline got grounded in October 2012 and after that too.
The red flag for SpiceJet was raised in the audit report along with its result for the quarter ended June 30, 2014, in which the LCC reported losses of Rs 124 crore against a profit of Rs 50.6 crore a year ago. In the notes, SpiceJet's managing director S Natrajhen said the company's accumulated losses added up to Rs 2,648 crore at the end of June 30, 2014.
"These conditions (overall financial health).... indicate the existence of a material uncertainty that may cast doubt about the company's ability to continue as a going concern," auditor S R Batliboi and Associates LLP's limited review report with the LCC's Q1 result says. The auditor has also added that SpiceJet's Q1 loss - its fourth straight quarterly loss - would have been higher by almost Rs 7.5 crore had the airline made a provision for interest of like amount.
16/08/14 Times of India
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Auditors of Kingfisher give similar warnings with results, both before Vijay Mallya's failed airline got grounded in October 2012 and after that too.
The red flag for SpiceJet was raised in the audit report along with its result for the quarter ended June 30, 2014, in which the LCC reported losses of Rs 124 crore against a profit of Rs 50.6 crore a year ago. In the notes, SpiceJet's managing director S Natrajhen said the company's accumulated losses added up to Rs 2,648 crore at the end of June 30, 2014.
"These conditions (overall financial health).... indicate the existence of a material uncertainty that may cast doubt about the company's ability to continue as a going concern," auditor S R Batliboi and Associates LLP's limited review report with the LCC's Q1 result says. The auditor has also added that SpiceJet's Q1 loss - its fourth straight quarterly loss - would have been higher by almost Rs 7.5 crore had the airline made a provision for interest of like amount.
16/08/14 Times of India
