MUMBAI:Auditors of Jet Airways have flagged concerns and prepared the financial statements for FY18 on a ‘going concern basis.’The full-service carrier, which is considering bidding for debt-ridden Air India, posted a massive quarterly net loss of Rs 1,036 crore on Wednesday, which analysts said was largely on account of rising oil prices, weakening rupee and the airline’s inability to rein in costs. For the full fiscal FY18, the Naresh Goyal-led carrier reported a standalone net loss of Rs 768 crore as against a net profit of Rs 1,482 crore a year before. The carrier also had a negative net worth as on March, 2018.
Consequently, the company’s shares plunged over 12 per cent on Thursday on bourses. While on NSE, they slumped 12.12 per cent to hit a one-year low of Rs 370, on BSE the scrip fell to a 52-week low of Rs 376.60. A ‘going concern’ is when the company will remain in business for the foreseeable future without being forced to halt operations and liquidate its assets. According to the carrier’s independent auditors, the ‘appropriateness of assumption of going concern’ for the company depends on its ability to raise necessary funds among other factors.
“The appropriateness of assumption of going concern is dependent upon realisation 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,” the auditors said in their report besides noting that the company’s negative net worth as on March, 2018 may create uncertainties.
However, the company said initiatives were undertaken to save costs, optimize revenue management opportunities and enhance ancillary revenues, which are expected to result in improved operating performance. “Further, our continued thrust to improve operational efficiency and initiatives to raise funds are expected to result in sustainable cash flows addressing any uncertainties,” Jet Airways said.