Kingfisher’s Q3 loss figure questioned

Kingfisher Airlines reported a net loss of Rs.755 crore for the third quarter ended December 31, 2012, as compared to a net loss of Rs.444 crore in the corresponding period of the previous year. The company’s auditors have, however, disputed these figures.

The airline said the losses widened despite operating no flight throughout the quarter. The airline did not earn any revenue for the quarter as compared to Rs.1,368 crore in the corresponding period of the previous year. According to the airline, the losses were primarily on account of finance cost of Rs.401 crore, and aircraft re-delivery cost of Rs.274 crore during the quarter.

Accounting standards

The auditors, in their limited review report, have stated that the airline’s third quarter net loss would have been much higher at Rs.1,090 crore had it followed the “generally accepted accounting standards” in the realisation of aircraft-related costs, taxation and loans.

The losses for the nine months should have been Rs.3,063 crore, the auditors said. The airline has reported a net loss of Rs.2,159 crore for the nine months.

The auditors, B. K. Ramadhyani & Co., said that the accounting method used by the airline to calculate costs incurred for maintenance and repairs of aircraft was “not in accordance with generally accepted accounting standards prevalent in India”.

Besides, the company’s reserves as on March 31, 2012, would have been a debit of Rs.10,461 crore compared to the reported debit of Rs.6,213 crore, the auditors said.

They have also drawn attention to Kingfisher’s financial statements being prepared on a ‘going concern’ basis, notwithstanding the fact that the company’s net worth has eroded.

http://www.thehindu.com/todays-paper/tp-business/kingfishers-q3-loss-figure-questioned/article4384158.ece

Boeing Dreamliner battery suffered 'thermal runaway': Japanese officials

TOKYO: Japanese officials probing the emergency landing of a Boeing Dreamliner said today its lithium-ion battery was damaged by a build up of heat that resulted in uncontrollably high temperatures.

"The battery was destroyed in a process called thermal runaway, in which the heat builds up to the point where it becomes uncontrollable," said a Japan Transport Safety Board (JTSB) official.

"But it is still not known what caused the uncontrollable high temperature," he added.

Pictures released by the JTSB showed the wire that was intended to earth the pack to avoid problems with static had severed.

"This means the wire suffered unusual levels of electric current, which it should never experience in a normal state," said an investigator.

A fire risk from overheating powerpacks emerged as a major concern after pilots were forced to land the domestic All Nippon Airways flight in western Japan on January 16 due to smoke thought to be linked to the plane's battery.

Investigators had already released a picture showing the blackened remains of the battery in the ANA plane.

And the JTSB on today revealed more photos showing details of the damaged powerpack, including those of eight individual lithium-ion cells.

Officials have said there were no signs of a battery fire, while data gleaned from the flight's digital data recorder showed the powerpack did not suffer a rapid surge in voltage.

The pack's voltage, in fact, had been at normal levels before it rapidly plunged just before the system alert that forced the emergency landing, the JTSB said.

The carrier and rival All Nippon Airways (ANA) have been hit hard by the worldwide grounding of the Dreamliner.

The global no-fly order imposed by US regulators has seen Japan's two biggest carriers -- major customers of the aircraft, with more than 100 combined orders -- slash hundreds of flights, affecting tens of thousands of passengers.

http://economictimes.indiatimes.com/news/international-business/boeing-dreamliner-battery-suffered-thermal-runaway-japanese-officials/articleshow/18352096.cms

KFA posts Rs 755-cr loss, but auditors put it at Rs 1,090 cr

Vijay Mallya's comatose Kingfisher Airlines on Tuesday reported a net loss of Rs 755 crore for the third quarter-ended December 31. The loss during the corresponding period last year was Rs 444 crore. During the quarter, the airline did not fly. Hence, it did not report any revenues.

However, the airline's auditors, B K Ramadhyani & Co, said the loss during the third quarter should be Rs 1,090 crore. This is because Kingfisher had adopted a peculiar accounting method for the costs incurred on major repairs and maintenance of aircraft taken on operating lease, the auditors said in the Limited Review Report.

"In our opinion, this treatment is not in accordance with (the) generally accepted accounting standards prevalent in India, and ought to have been recognised in the statement of profit and loss as and when incurred," the auditors said. They added they were not satisfied with how Kingfisher had recognised deferred tax credit aggregating to Rs 362 crore. "In our opinion, the virtual certainty test for recognition of deferred tax credit as laid down by AS 22 is not satisfied."

The airline, with a debt of Rs 8,000 crore and accumulated losses and liabilities of a similar amount, has been grounded since October 1, after its pilots and engineers went on a strike on non-payment of dues.

"During the quarter, Kingfisher did not have any operations. The company filed a revival plan to the directorate general of civil aviation for renewal of its scheduled operator's permit and for restart of operations," the airline said.

They lost more money on redelivery of aircraft at Rs 275 crore.

"After announcing finance costs of Rs 401 crore, a one-time cost of Rs 275 crore on re-delivery of aircraft (which will reduce lease rentals and other related costs), the net loss was Rs 755 crore," the carrier said.

"Kingfisher has made significant progress in complying with the DGCA requirements," the statement noted.

The airline's employee costs dropped from Rs 175 crore to Rs 67 crore. The aircraft lease rentals also dipped to Rs 182 crore from Rs 272 crore. The fuel costs plunged to Rs 2 crore from Rs 738 crore. Meanwhile, Ebitdar (earnings before interest, taxes, depreciation, amortization and rent) saw a loss of Rs 429 crore, as against Rs 310 crore for the corresponding period of previous year.

On January 16, Kingfisher had informed the DGCA that it had secured no-objection certificates from aircraft leasing and oil marketing companies. However, the DGCA maintained that the airline should get no-objection certificates from lenders and airport operators as well.

Four days later, a core group of lenders asked the grounded airline to pump in at least Rs 800 crore before the banks could consider any further loan recast and extension of no-objection certificates.

The airline has managed to hold creditors and employees at bay for several months by holding out the promise of a revival, infusion of funds by promoters, and the entry of a foreign investor. However, none of these has happened so far.

http://www.sify.com/finance/kfa-posts-rs-755-cr-loss-but-auditors-put-it-at-rs-1-090-cr-news-airlines-ncgjQefdjgh.html

Kingfisher Q3 net loss at Rs 755 cr

Kingfisher Airlines today reported a net loss of Rs 755.17 crore for the third quarter ended December 31, 2012, a period when it did not operate a single flight.

The company had a net profit of Rs 444.26 crore in the quarter ended December 2011, Kingfisher said in a filing to the BSE.

"During the quarter under review, Kingfisher did not have any operations. The company submitted a revival plan to the DGCA for renewal of its scheduled operator's permit and for restart of operations," it said.

Following the results, shares of the company fell by 3.83 per cent to Rs 12.06 on the BSE in late morning trade.

"After announcing finance costs of Rs 401 crore, a one-time cost of Rs 275 crore due to re-delivery  of aircraft (which will reduce lease rentals and other related costs going forward), the net loss was Rs 755 crore," the Vijay Mallya-promoted carrier said.

"Kingfisher has made significant progress in complying with the DGCA requirement," the airline added.

Kingfisher, which has debt of nearly Rs 8,000 crore and accumulated loss and liabilities of a similar amount, has been grounded since October 1 after its pilots and engineers went on a strike over non-payment of salaries.

http://www.deccanherald.com/content/310016/kingfisher-q3-net-loss-rs.html

Kingfisher Airlines posts Rs 755-cr loss in Q3

Bangalore, Feb. 5:  

The auditors of Vijay Mallya-owned Kingfisher Airlines have said that the carrier’s third quarter losses would have been Rs 1,090.34 crore, against the reported loss of Rs 755.17 crore had it followed “generally accepted accounting standards.”

The auditors, in their review report for the third quarter of 2012-13, have repeatedly questioned certain practices followed by the airline which, they said, falls foul of accounting standards prevalent in the country.

The airline, in a statement to the Bombay Stock Exchange on Tuesday, said its third quarter losses grew 70 per cent to Rs 755.17 crore (Rs 444.26 crore similar previous period) for the current fiscal.

Accumulated debt

This was largely because of higher finance costs of Rs 401 crore and a one-time cost of Rs 275 crore on re-delivery of aircraft (which will reduce lease rentals and other related costs going forward, the company claimed).

Following the results, the airline’s share closed at Rs 12.24 on the BSE, down 2.39 per cent.

The airline, which has never reported profits since its inception, did not report any revenues for the quarter as it has suspended its operations. For the October-December quarter in 2011-12, it reported revenues of Rs 1,367.71 crore. The airline’s accumulated debt is around Rs 8,000 crore, with a similar amount as net loss. It has also not paid salaries to its over 3,000 employees since last June. Meanwhile, Kingfisher Airlines has said it has made significant progress towards complying with the DGCA requirements.

In their limited review report, auditors B.K. Ramadhyani & Co said the methods of accounting for costs incurred on major repairs and maintenance of aircraft is not in accordance with generally accepted accounting standards prevalent in India and “ought to have been recognised in the statement of profit and loss as and when incurred.”

The auditors said the company has prepared the financial results “on a going concern basis,” notwithstanding the fact that the company’s net worth is eroded.

They noted that the revival of the airline depends on its ability to renew its licence with the DGCA, infuse the funds necessary to meet its obligations, rescheduling of debt/other liabilities and resuming normal operations.

Reserves amount

The reserves as of March 31, 2012 should have been a debit of Rs 10,460.90 crore, against the reported figure of debit of Rs 6213.14 crore, the auditors pointed out.

They said the estimated of number of unflown tickets and their average value, based on which the management has reportedly estimated the amount of unearned revenue, not being drawn from accounting records, could not be reviewed by them.

http://www.thehindubusinessline.com/todays-paper/tp-corporate/kingfisher-airlines-posts-rs-755cr-loss-in-q3/article4383383.ece