Kingfisher Airlines reported a net loss of Rs.755 crore for the third quarter ended December 31, 2012, as compared to a net loss of Rs.444 crore in the corresponding period of the previous year. The company’s auditors have, however, disputed these figures.
The airline said the losses widened despite operating no flight throughout the quarter. The airline did not earn any revenue for the quarter as compared to Rs.1,368 crore in the corresponding period of the previous year. According to the airline, the losses were primarily on account of finance cost of Rs.401 crore, and aircraft re-delivery cost of Rs.274 crore during the quarter.
The auditors, in their limited review report, have stated that the airline’s third quarter net loss would have been much higher at Rs.1,090 crore had it followed the “generally accepted accounting standards” in the realisation of aircraft-related costs, taxation and loans.
The losses for the nine months should have been Rs.3,063 crore, the auditors said. The airline has reported a net loss of Rs.2,159 crore for the nine months.
The auditors, B. K. Ramadhyani & Co., said that the accounting method used by the airline to calculate costs incurred for maintenance and repairs of aircraft was “not in accordance with generally accepted accounting standards prevalent in India”.
Besides, the company’s reserves as on March 31, 2012, would have been a debit of Rs.10,461 crore compared to the reported debit of Rs.6,213 crore, the auditors said.
They have also drawn attention to Kingfisher’s financial statements being prepared on a ‘going concern’ basis, notwithstanding the fact that the company’s net worth has eroded.