JET’S AUDITORS FLAG ‘GOING CONCERN’ RISKS AFTER Q4 LOSS
With Jet Airways incurring a huge fourth quarter loss of over ₹1,000 crore, its auditors have said the “appropriateness of assumption of going concern” for the company depends on its ability to raise necessary funds, among other factors.
In accounting parlance, the ‘going concern assumption’ means that the company will remain in business for the foreseeable future without being forced to halt operations and liquidate its assets. The airline posted a whopping ₹1,036 crore net loss for the March quarter due to rise in oil prices and weaker rupee, compared to a profit of ₹602.4 crore in the corresponding period of FY17. The Naresh Goyal-owned full service carrier reported a quarterly loss for the first time in eleven quarters. For financial year 2017-18, the airline reported a standalone net loss of ₹767.62 crore, against a net profit of ₹1,482.52 crore earlier, according to the filing.
Jet Airways’ auditors said the financial statement was prepared on a “going concern basis”.
“The appropriateness of assumption of going concern is dependent upon realization of the various initiatives undertaken by the company and/or the company’s ability to raise requisite finance/generate cash flows in future to meet its obligations, including financial support to its subsidiary companies,” according to the independent auditors’ report.
The auditors made these observations in reference to one of the ‘notes’ attached to the company’s financial results wherein Jet said it has incurred losses for the last fiscal and had a negative net-worth as on March 31, 2018 “that may create uncertainties”.
MUMBAI: