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Tata Sons sets aside Rs 16,439 crore in provisions for Tata Teleservices

Auditors reportedly raised concerns about the ability of Tata Steel Europe and AirAsia India to continue as going concerns, since the businesses have been severely impacted by the COVID-19 outbreak.

August 28, 2020 / 12:36 PM IST

Salt-to-steel conglomerate Tata Sons has made provisions of Rs 16,439 crore for its now-closed telecom business, taking the total amount written off for the loss-making business to nearly Rs 60,000 crore.

The holding company for Tata Group's companies cited the figure in its annual report for 2019-20, according to a Business Standard report.

Tata Teleservices' (TTSL) total adjusted gross revenue (AGR) dues stand at 16,798 crore, of which the company has paid Rs 4,197 crore.

Tata Sons reported a dividend of Rs 404 crore in FY20, the same as the previous year, in order to help TTSL meet its financial obligations, the report said.

Tata Sons injected capital worth Rs 7,000 crore into TTSL, the report added.

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The report said the conglomerate's consolidated profit after tax in FY20 dropped to Rs 10,916 crore from Rs 28,463 crore the previous year, hurt by a rise in exceptional items.

Auditors raised concerns about the ability of Tata Steel Europe and AirAsia India to continue as going concerns since the businesses have been severely impacted by the COVID-19 outbreak, Business Standard reported.

The auditors cited a letter from TS Global Procurement to Tata Steel Europe, which said a working capital commitment should not be construed as a promise of future financial support to Tata Sons, the report said.

"Accordingly, there can be no certainty that the funds required by Tata Steel Europe will, in fact, be made available. These conditions, along with the other matters explained in the special purpose financial information, indicate the existence of a material uncertainty, which may cast significant doubt about Tata Steel Europe’s ability to continue as a going concern. The special purpose financial information does not include the adjustments that would result if Tata Steel Europe were unable to continue as a going concern," the auditor stated, as quoted by the publication.
Moneycontrol News
first published: Aug 28, 2020 12:36 pm

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