Ailing Kingfisher Airlines, which hasn’t operated a single flight since October, posted a net loss of Rs.755 crore for the third quarter ended December.
Kingfisher’s auditors, BK Ramadhyani & Co, said in its quarterly review report that an accounting method used by the airline to calculate costs incurred for aircraft maintenance and repairs was “not in accordance with generally accepted accounting standards prevalent in India.”
Had it used generally accepted accounting standards, the loss for the quarter would have been Rs.1,090 crore, the auditor said in the report that was issued by the stock exchange.
Auditors also drew attention to Kingfisher’s financial statements being prepared on a ‘going concern’ basis, notwithstanding the fact that the company’s net worth is eroded.
“The appropriateness of the said basis is inter-alia dependent on the company’s ability to obtain renewal of the scheduled air operator’s permit by the DGCA, infuse requisite funds for meeting its obligations, rescheduling of debt, other liabilities and resuming normal operations,” the auditors said.
“During the quarter under review, Kingfisher did not have any operations. The company submitted a revival plan to the Directorate General of Civil Aviation (DGCA) for renewal of its scheduled operator’s permit and for restart of operations,” it said in a stock exchange filing.
“Kingfisher has made significant progress in complying with the DGCA requirement,” the airline added.
“Estimates of number of unflown tickets and their average value, based on which management has reportedly estimated the amount of unearned revenue, not being drawn from accounting records, could not be reviewed by us,” the auditors said.