Differences over notes to accounts and some comments that the statutory auditors of Jet Airways, BSR Company, wanted to put on record, which was resisted by the management, led the company to defer its April-June quarter results at the board meeting on Thursday evening, sources said.
By Manisha Singhal
Differences over notes to accounts and some comments that the statutory auditors of Jet Airways, BSR Company, wanted to put on record, which was resisted by the management, led the company to defer its April-June quarter results at the board meeting on Thursday evening, sources said. “Fair representation of accounts is the fiduciary responsibility of the statutory auditors and the management of the company has to assure the auditors that it has the risk mitigation capabilities, which in Jet’s case are ability to raise funds and pay off the huge liabilities. In case the auditors are not satisfied, they want to put these risks on record,” said a source.
In an intimation to the stock exchanges, Jet Airways said, “At the board meeting the chairman of the audit committee informed the members of the board that the management and the auditors required further time to finalise the accounts and that the accounts once finalised would be approved by the audit committee and then placed before the board. The members of the board readily agreed with this.”
The airline also said that contrary to reports, Srinivasan Vishvanathan, chairman of the audit committee, retired after serving his full term of office, implying that it wasn’t due to the differences with the management over notes to account. Jet Airways, which has accumulated losses of `10,772 crore, negative net worth of Rs 7,139 crore and cash and cash equivalents of merely Rs 321 crore (as on March 2018) with estimates of a projected loss of Rs 572.7 crore, finds itself in a precarious financial situation.
The March 2018 accounts were also prepared on a ‘going concern basis’ and the projected losses for Jet, which industry watchers believe are likely to be more than the Street projections, along with Jet’s statutory and long-term liabilities that add up to another Rs 10,000 crore, are all indicators that the airline needs a huge equity infusion and on an immediate basis. Meanwhile, the ministry of civil aviation said it is watching the developments in Jet Airways.
“We would not like a situation where an airline is facing financial difficulties. It is up to the company to approach the government for help. DGCA (the aviation regulator) is monitoring the situation,” civil aviation secretary RN Choubey told reporters. He added that the government has no plans to conduct financial audits of airlines.
(Arun Nayal from New Delhi contributed to the report)