Brewing trouble: Auditors raise doubts if MTNL can continue as a going concern

The auditors of state-owned Mahanagar Telephone Nigam (MTNL) have stated that the company’s net worth has been fully eroded, and that the current liabilities of the company have exceeded the current assets substantially.

The auditors’ report said that while the company’s standalone Ind-AS financial statements have been prepared on a going concern
basis keeping in view the majority stake of the government of India, it is doubtful that the company can continue as a going concern.

“The company has accumulated losses and its net worth has been fully/ substantially eroded, the company has incurred net loss/net cash loss during the current and previous year(s) and the company’s current liabilities exceeded its current assets as at the balance date. These events or conditions, along with other matter…indicate that a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern,” the auditor report states.