The auditor of Reliance Infrastructure of Anil Ambani’s Reliance Group, has cast a doubt about the company’s ability to continue as a going concern.
“Losses incurred during the year and certain loans for which the company is a guarantor indicate that a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern,” said Reliance Infrastructure auditors BSR & Co. LLP and Pathak H.D. & Associates, in their audit report.
The debt-laden infrastructure company reported its biggest-ever quarterly loss of ₹3,301 crore for the March quarter as it booked impairment and write-offs worth ₹8,500 crore.
The company, in a filing to exchanges on Friday after deferring its results twice earlier, said it booked a one-time impairment of subsidiary Reliance Naval and Engineering Limited, which it had acquired in 2016, without disclosing the amount.
“The said amount may be written back upon successful debt resolution pursuant to the updated Reserve Bank of India circular,” said the company.
Reliance Infrastructure losses widened due to losses suffered by another subsidiary Reliance Power Ltd. in which it owns a 33.11% stake. Part of the exceptional loss of ₹1,741 crore also included the loss due to the sale of investments pursuant to invocation of pledge.
Reliance Power reported a loss of ₹3,558.5 crore for the March quarter, dented by the impairment and write-off, as against a profit of ₹189.21 crore a year ago.
Reliance Power made a withdrawal of ₹1,017 crore from its general reserves, reducing the impact of the one-time impairment and write-off. Auditors of the company highlighted that the losses would have been higher without this.
Even Reliance Power auditors had questioned the ability of the company to stay afloat due to mounting losses and liquidity issues.
Reliance Group’s flagship firm Reliance Communications (RCom), which had already filed insolvency petition at the Mumbai bench of National Company Law Tribunal (NCLT), had outstanding dues of ₹47,000 crore.
Only last week, the the auditor of Reliance Capital, PwC, quit saying the company has restrained it from performing its duties as a statutory auditor.
