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MUMBAI: Auditors of debt-ridden Kingfisher Airlines have said that the company will have to infuse more funds if its wants to stay afloat, even as the carrier hoped that government would reduce ATF prices and taxes which will help it improve its finances.
The carrier's ability to meet its financial obligations depends on fresh infusion of funds, its auditors B K Ramadhyani & Co said.
Referring to a statement by Kingfisher that although its networth has eroded the financial results have been prepared on a "going concern basis", the auditors said, "The appropriateness of the said basis is inter alia dependent on the company's ability to infuse the requisite funds for meeting its obligations."
Kingfisher has reported a loss of Rs 468.66 crore in the quarter ended September 30, 2011, against Rs 230.81 crore in the same period last year. The company attributed the loss mainly to higher fuel prices.
The company, however, hoped that the government will reduce aviation turbine fuel prices and sales tax, which in turn would help the cash-strapped carrier improve finances.
"The reduction of prices of aviation fuel and reduction of sales tax on such fuel, which is under active consideration of the government with introduction of stringent cost reduction and control measures, will have positive impact on the working results of the company," the airline said while responding to the 'Limited Review' by its auditors.
It further said that in future, the airlines will have sufficient income to take care of deferred tax liabilities.
The airline was forced to cancel many flights because of mounting losses and has also sought help from banks to meet their short-term capital needs.
In the footnote to its financial results, Kingfisher had said that "having regard to improvement in the economic sentiment, rationalisation measures adopted by the company...the request made by the company to its bankers for further credit facilities..."
"...these interim financial statements have been prepared on the basis that the company is a going concern and that no adjustments are required to the carrying value of assets and liabilities."
Kingfisher had suffered a loss of Rs 1,027 crore in 2010-11 and is estimated to have debt of over Rs 7,000 crore.
The carrier's ability to meet its financial obligations depends on fresh infusion of funds, its auditors B K Ramadhyani & Co said.
Referring to a statement by Kingfisher that although its networth has eroded the financial results have been prepared on a "going concern basis", the auditors said, "The appropriateness of the said basis is inter alia dependent on the company's ability to infuse the requisite funds for meeting its obligations."
Kingfisher has reported a loss of Rs 468.66 crore in the quarter ended September 30, 2011, against Rs 230.81 crore in the same period last year. The company attributed the loss mainly to higher fuel prices.
The company, however, hoped that the government will reduce aviation turbine fuel prices and sales tax, which in turn would help the cash-strapped carrier improve finances.
"The reduction of prices of aviation fuel and reduction of sales tax on such fuel, which is under active consideration of the government with introduction of stringent cost reduction and control measures, will have positive impact on the working results of the company," the airline said while responding to the 'Limited Review' by its auditors.
It further said that in future, the airlines will have sufficient income to take care of deferred tax liabilities.
The airline was forced to cancel many flights because of mounting losses and has also sought help from banks to meet their short-term capital needs.
In the footnote to its financial results, Kingfisher had said that "having regard to improvement in the economic sentiment, rationalisation measures adopted by the company...the request made by the company to its bankers for further credit facilities..."
"...these interim financial statements have been prepared on the basis that the company is a going concern and that no adjustments are required to the carrying value of assets and liabilities."
Kingfisher had suffered a loss of Rs 1,027 crore in 2010-11 and is estimated to have debt of over Rs 7,000 crore.
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