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10
March 2017
Air
India has posted a standalone operating loss for 2015-16 of Rs 321.4 crore,
though the company has claimed an operating profit of Rs 105 crore, the
official auditor said on Friday.
The
Comptroller and Auditor General (CAG) also pointed out significant
understatement of losses by the national carrier in its financial statements.
"Air
India is claiming an operating profit of Rs 105 crore for financial year
2015-16. But based also on the statutory auditors' reports, the airline had an
operating loss of Rs 321.4 crore last year because the required provisions were
not made," Director General in the CAG's office V. Kurian told reporters
here. The Total Investment & Insurance
Solutions
Kurian
was presenting the CAG's audit report on the financial restructuring plan of
Air India tabled in Parliament on Friday. The
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He
said the airline had made inadequate provisions for payment of various
liabilities, including outstanding amounts to the Airports Authority of India
and payment to employees for encashing leave, and had also made excess
valuation of a company property in Delhi.
The
official auditor said that the understatement of losses was to the extent of Rs
1,455.8 crore for 2012-13, Rs 2,966.66 crore for 2013-14 and Rs 1,992.77 crore
for 2014-15.
"Considering
the effect of these qualifications on the financial statement, the EBITDA
(earning before interest, tax, depreciation, amortisation) of Air India would
be negative (up to March 2015)," the report said. The Total Investment & Insurance Solutions
CAG
noted that the actual working capital requirements of Air India, being far in
excess of the limits envisaged in the financial restructuring plan, had
resulted in the company taking additional short-term loans. The Total Investment & Insurance Solutions
Short-term
loans were on the rise and amounted to Rs 14,416.85 crore as of March 2015, and
Rs 14,550.88 crore as of March 2016.
"The
high volume of short-term loans had eroded the benefits of financial restructuring
exercise carried out," the report said. The Total Investment & Insurance Solutions
The
value of the airline's short-term loans was nearly four times the cash credit
laid down in the turnaround plan, it added. The Total Investment & Insurance Solutions
The
report also said Air India had incurred a book loss of Rs 671.07 crore on the
sale of five Boeing 777-200 Long Range aircraft and payment of Rs 324.67 crore
towards interest on loans availed for procurement of these aircraft.
CAG's
analysis of the routes operated by the airline showed that only 17 of its
services recovered total costs in 2015-16, while 36 services, including five
international and 31 domestic ones, did not recover the variable costs during
the year, though they met jet fuel costs.
Another
169 services (56 international and 113 domestic) did not recover total costs,
though they recovered variable costs.The Total
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