The auditors of state-owned Mahanagar Telephone Nigam (MTNL) have stated that the company’s net worth has been fully eroded, and that the current liabilities of the company have exceeded the current assets substantially.
The auditors’ report said that while the firm’s standalone Ind-AS financial statements have been prepared on a going concern basis keeping in view the majority stake of the government of India, it is doubtful that the company can continue as a going concern.
“The company has accumulated losses and its net worth has been fully/ substantially eroded, the company has incurred net loss/net cash loss during the current and previous year(s) and the company’s current liabilities exceeded its current assets as at the balance date. These events or conditions, along with other matter…indicate that a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern,” the auditor report states.
According to the independent auditor’s report on the company’s standalone financial statements, the company has incurred net cash loss during the year ended March 31, 2019 as well as the previous year.
Reporting its highest net loss in the last five years, MTNL posted a net loss of over Rs 3,390 crore for the full year ended March 31, 2019. The company had reported its last net profit of over Rs 7,838 crore in the financial year 2013-2014. The revenues during the year came in lower by 16 per cent at Rs 1,987.80 versus last year, and were the lowest in six years. The company’s Ebitda (earning before interest tax depreciation and amortisation) which has been in the negative since 2014, declined further to a negative Rs 2,305.93 crore in FY19.
The firm’s total liabilities during the financial year 2018-2019 stood at Rs 14,601.82 crore, while the net worth of the company is negative Rs 9,918.33 crore. —FE