JOIN USSuzlon's auditors raise concerns over co health
Notwithstanding the stake sales that it did in the recent past, the chartered accountants of wind turbine maker Suzlon have raised concerns over the ability of the company to continue as a going concern.
“We draw attention to Note 2 of the accompanying unaudited standalone financial results which indicates that the company has overdue amounts payable to vendors and lenders and has been facing liquidity issues. These conditions, along with other matters as set forth in Note 2 of the accompanying unaudited standalone financial results, indicate the existence of a material uncertainty that may cast a significant doubt about the company's ability to continue as a going concern. Our conclusion is not qualified in respect of this matter,” chartered accountants SNK & Co and SR Batliboi & Co said in its limited review report to the board of directors of the company.
Note 2 refers to the recently concluded sale by Suzlon of its step-down subsidiary Senvion SE for a consideration of €1 billion.
According to the note, the foreign currency bonds were restructured in July 2014 and the company has taken various steps to improve its business, optimise cost and have better operational efficiencies to make its operations sustainable and profitable. “Pending the financial closure of the deal and final outcome of the measures undertaken by the company, there continues to be an uncertainty that may cast significant doubt regarding the company's ability to continue as a going concern. Accordingly, the consolidated results have been prepared on the basis that the company will continue as a going concern and no adjustments have been made to the classification of assets and liabilities.”
Just last week, DilipShanghviFamily and Associates (DSA) had signed agreements with Suzlon Group for equity investments of Rs 1,800 crore in Suzlon. Post the stake sale, DSA's shareholding would be 23 per cent (based on current shareholding), while the Tanti Family will hold 24 per cent.
Suzlon had posted a consolidated net loss of Rs 6,538.68 crore for the quarter ended December 31, 2014 compared with a loss of Rs 1,075.25 crore in the comparable quarter of the previous fiscal.