The auditors of Bartronics India have indicated a ‘material uncertainty’ on the absence of a concrete plan or financing arrangement to address foreign currency convertible borrowings (FCCBs) to the tune of Rs 377 crore that are coming up for redemption in February next year.
“The absence of a plan to fulfil the FCCB obligations indicates a material uncertainty and consequently casts significant doubt on the company’s ability to continue as a going concern,” Deloitte Haskins and Sells has said in their report to the board of directors of Bartronics, a provider of digital identity solutions such as RFID.
The auditors also pointed out that they were not in a position to form an opinion on the recoverability of about Rs 900 crore (including Rs 551 crore relating to the period prior to April 1, 2011). “No provision has been made for this,” the auditor report said.
‘there’s still time’
Sudhir Rao, Managing Director, Bartronics, however, said that the company was confident of recovering the receivables. “There have been delays in recovery because of the economic slowdown and consequent recessionary conditions in the global markets,” he said, commenting on the auditor’s qualification.
He also defended the plan to address the FCCBs redemption issue. “While collection of receivables remains on the forefront, other alternative arrangements such as re-negotiating terms with the bond holders and other sources of financing are also pursued. We still have five months and are confident of addressing this issue,” he said.
loss in Q1
Bartronics India posted a loss of Rs 25.60 crore in the quarter ended June 30, as against a profit of Rs 31 crore in the same quarter last year.
The consolidated revenue for the period fell down to Rs 100 crore (Rs 262 crore). Total expenses came down to Rs 152 crore ( Rs 223 crore).
The total expenses for the standalone Bartronics nearly doubled to Rs 110 crore ( Rs 69 crore), while the total revenue dipped to Rs 54 crore (Rs 99 crore). The loss was put at Rs 16 crore (Rs 15 crore).
Meanwhile, the company appointed Pundarika Bibi Reddy as its Chief Executive Officer.
The shares of the firm were down 6.32 per cent on the Bombay Stock Exchange at Rs 25.20.