Info-tech

Auditors raise concerns over Vodafone Idea's ability to remain a 'going concern'

Our Bureau Mumbai | Updated on June 30, 2021

Operator reports Rs 6,985-crore loss in Q4

Vodafone Idea (Vi)’s auditors have expressed concerns about the company’s ability to continue as a going concern due to poor cash flows

“The company’s financial performance has impacted its ability to generate the cash flow it needs to settle/ refinance its liabilities and guarantees as they fall due, which, along with its financial condition, has resulted in material uncertainty that casts significant doubt on the company’s ability to make the payments mentioned therein and continue as a going concern,” the auditor said.

“The said assumption of a going concern is essentially dependent on its ability to raise additional funds as required in line with the approval by the company’s board of directors in its meeting on September 4, 2020, successful negotiations with lenders on continued support, refinancing of debts, monetisation of certain assets, outcome of the modification application filed with the Hon’ble Supreme Court and clarity of the next instalment amount, acceptance of its deferment request by DoT, and generation of cash flow from operations that it needs to settle / renew its liabilities / guarantees as they fall due. Our conclusion is not modified in respect of this matter,” it added.

This comes even as the telecom operator has narrowed down its losses to Rs 6,985 crore in the fourth quarter of FY 2021 compared to a loss of Rs 11,627 crore in the corresponding quarter last year. Sequentially, however, Vodafone Idea’s losses have climbed from Rs 4,540.8 crore in the third quarter ended December 2020.

Ravinder Takkar, MD & CEO, Vodafone Idea Ltd, said: “We enter FY22 with a renewed focus on executing our strategy to keep our customers ahead, and our cost optimisation plan remains on track to deliver the targeted savings. We are in active discussion with potential investors for fundraising, to achieve our strategic intent.”

Published on June 30, 2021

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