New Delhi: The auditors of Vodafone Idea Ltd have raised serious doubts over the company’s ability to continue as a going concern, saying that it has lost its entire net worth, as of June 30, as a result of the payment of levies and AGR dues.
In its notes on the April-June quarterly earnings of the company, the auditors said that the assumption of going concern is dependent upon a positive outcome of the company’s and DoT’s application with respect to deferred payment of its AGR liability, waiver of debt covenant breaches and its ability to generate or arrange the cash flow that it needs to settle or refinance its liabilities and guarantees as they fall due.
Owing to its financial performance and financial condition, the company has breached its debt covenants as at March 31, 2020 for which it is in discussions with various lenders.
“During the quarter ended June 30, 2020 based on Supreme Court judgment of July 20, 2020, the company has further provided Rs 194,405 million and its entire net worth is eroded as at June 30, 2020,” the notes said in Vodafone Idea’s regulatory filing said.
In the April-June quarter, Vodafone Idea has recognised an additional charge of Rs 19,440.5 crore as exceptional item towards the total estimated liability based on the DoT’s demand amounting to Rs 58,254 crore.
The auditors said that the telecom operator’s ability to generate the cash flow has been impacted, which it needs to settle, refinance its liabilities and guarantees as they fall due, resulting in “material uncertainty that casts significant doubt on the company’s ability to make the payments mentioned therein and continue as a going concern”.
Thursday, the company reported a massive consolidated net loss of Rs 25,460 crore for the April-June quarter.
(IANS)
