Auditor’s report cast doubt on MTNL to continue as a going concern. Company’s liabilities far exceed its net assets.
MTNL has accumulated losses and its net worth has been eroded, the company’s current liabilities exceeded its current assets as at the balance date – auditor’s report.
- The auditor’s report of MTNL states they are doubtful if the company can continue as a going concern.
- They reported its highest loss in the last five years of over Rs. 3,390 crores.
- Revenues during the year dipped by 16% compared to last year.
- The company’s net worth is negative Rs. 9,918.33 crore while the total liabilities during the financial year stood at Rs. 14,601.82 crore.
Government showing will to revive the drowning PSUs
The ministry of Finance requested the DoT in May to submit the revival proposal for MTNL & BSNL to the next government. The main issues were voluntary retirement policy and the 4g spectrum allocation.
Both PSUs have sought 4G spectrum services through equity infusion from the centre. The voluntary retirement will not cause any impact on the two companies since they are covered under government pension rules.