Auditors have cast a doubt on the ability of debt-laden SpiceJet, to remain a going concern as its net worth has eroded. In the annual report for FY21, the independent auditors pointed out that SpiceJet has defaulted on tax payments, GST payments and employee provident fund dues in FY21 totalling ₹90 crore..
Loss in FY21
According to SpiceJet’s consolidated financial statements, the Group incurred a net loss (after other comprehensive income) of ₹1,028.18 crore during the year ended March 31, 2021 and, as of that date, its accumulated losses amount to ₹4,223.38 crore which resulted in the erosion of its net worth. Current liabilities exceed current assets by ₹5,18424.9 crore.
The auditors informed stakeholders that SpiceJet owed statutory dues including provident fund, employees’ state insurance, income-tax, sales-tax, service tax, customs duty, excise, value added tax, GST, cess and other material statutory dues, and there have been significant delays in a large number of cases.
The auditors said that under the Income Tax Act, 1961, the company owed TDS (tax deducted at source) of over ₹28.11 crore between April and September 2020. It also owed the Central Goods and Services Tax Department ₹30.81 crore for February-March 2020.
The company has also not deposited provident fund contribution of the staff for over a year-and-half, the auditors said. Between March 2019 and September 2020, SpiceJet is to deposit PF of ₹32 crore. It isn’t clear whether the company has paid these dues.
The company has been facing an acute cash crunch post Covid and employees said their salaries were cut, and in some cases not paid. As of March 2021, the company was left with 14,810 employees, down from 16,280 the previous year.
Reappointment as director
Meanwhile, SpiceJet had sought shareholders nod for the reappointment of the promoter’s wife, Shiwani Singh, as Director. Over 98 per cent votes were in favour. However, some 10.5 per cent of ‘public non-institution’ shareholders voted against. Over 59.46 per cent of the shares are held by the promoter/promoter group.