They wear professional dresses and bully the accounts department with their big name tag.. But when it comes to owning up the responsibility, they are not confident of whatever they have done...
Just a day before Financial Technologies (FT), the MCX Group's flagship company, planned to meet its shareholders at the annual general meeting in Mumbai, its auditor Deloitte Haskins and Sells has withdrawn its audit report saying that the company's standalone and consolidated results are not to be relied upon. FT is the promoter of the National Spot Exchange (NSEL) which defaulted on 5,500 crore of payments to investors.
On Tuesday, FT informed the BSE that it has postponed its shareholders' vote on adoption of the company's balance sheet and profit and loss accounts for the fiscal year ended March 31, 2013. FT has also put on hold the ratification of payment of interim and final dividend to shareholders and re-appointment of Deloitte as its auditor. "As per our consistent policy, we do not comment on client proprietary matters,'' a Deloitte spokesperson said to a specific query on why it took 45 days to express its reservations about FT balance sheet for FY13.
A source close to Deloitte, however, said NSEL auditor's decision to withdraw its report prompted them to do the same on FT. In FY12, an affiliate of Ernst & Young was the auditor to NSEL and Mukesh P Shah audited it in FY13. FT said that Deloitte had to withdraw its report as the auditors of NSEL withdrew their report on September 21. The audit report was signed before NSEL payment crisis broke out. NSEL's revenues are regrouped in the FT's balance sheet.
"It is unusual in India and anywhere that auditor has withdrawn its report after it was signed by them," said Mukund Chitale, chairman of National Advisory Committee on Accounting Standards. "Given the circumstances involving NSEL and its parent FT, the auditor's move can be termed as practical. The Standard on Accounting 560 talks about auditor's responsibility relating to subsequent events in an audit of financial statements."
After the NSEL crisis broke out, FT, in August, used $107 million from its accounts to prepay its foreign currency and ECB loans and fund the working capital needs of its overseas ventures. "FT Group pre-paid $76 million of its foreign currency & ECB loans to various lenders and $14 million is in the process of pre-payment with respective lenders out of the total amount remitted to FTGIPL, being the SPV for investments in overseas ventures.
The balance $10 million is kept for working capital for its overseas stock exchanges. With regards to remittance of $10 million to FTSPL, being SPV for investments at the Singapore Mercantile Exchange, was for maintaining the minimum capital adequacy as required," FT said.
Meanwhile, on Tuesday, NSEL stared at the sixth straight default. Details on NSEL website showed that the exchange had received just 11.28 crore until Monday against the 174 crore it required towards payments to investors.
http://economictimes.indiatimes.com/markets/stocks/market-news/deloitte-withdraws-financial-technologies-audit-report/articleshow/23015024.cms
Just a day before Financial Technologies (FT), the MCX Group's flagship company, planned to meet its shareholders at the annual general meeting in Mumbai, its auditor Deloitte Haskins and Sells has withdrawn its audit report saying that the company's standalone and consolidated results are not to be relied upon. FT is the promoter of the National Spot Exchange (NSEL) which defaulted on 5,500 crore of payments to investors.
On Tuesday, FT informed the BSE that it has postponed its shareholders' vote on adoption of the company's balance sheet and profit and loss accounts for the fiscal year ended March 31, 2013. FT has also put on hold the ratification of payment of interim and final dividend to shareholders and re-appointment of Deloitte as its auditor. "As per our consistent policy, we do not comment on client proprietary matters,'' a Deloitte spokesperson said to a specific query on why it took 45 days to express its reservations about FT balance sheet for FY13.
A source close to Deloitte, however, said NSEL auditor's decision to withdraw its report prompted them to do the same on FT. In FY12, an affiliate of Ernst & Young was the auditor to NSEL and Mukesh P Shah audited it in FY13. FT said that Deloitte had to withdraw its report as the auditors of NSEL withdrew their report on September 21. The audit report was signed before NSEL payment crisis broke out. NSEL's revenues are regrouped in the FT's balance sheet.
"It is unusual in India and anywhere that auditor has withdrawn its report after it was signed by them," said Mukund Chitale, chairman of National Advisory Committee on Accounting Standards. "Given the circumstances involving NSEL and its parent FT, the auditor's move can be termed as practical. The Standard on Accounting 560 talks about auditor's responsibility relating to subsequent events in an audit of financial statements."
After the NSEL crisis broke out, FT, in August, used $107 million from its accounts to prepay its foreign currency and ECB loans and fund the working capital needs of its overseas ventures. "FT Group pre-paid $76 million of its foreign currency & ECB loans to various lenders and $14 million is in the process of pre-payment with respective lenders out of the total amount remitted to FTGIPL, being the SPV for investments in overseas ventures.
The balance $10 million is kept for working capital for its overseas stock exchanges. With regards to remittance of $10 million to FTSPL, being SPV for investments at the Singapore Mercantile Exchange, was for maintaining the minimum capital adequacy as required," FT said.
Meanwhile, on Tuesday, NSEL stared at the sixth straight default. Details on NSEL website showed that the exchange had received just 11.28 crore until Monday against the 174 crore it required towards payments to investors.
http://economictimes.indiatimes.com/markets/stocks/market-news/deloitte-withdraws-financial-technologies-audit-report/articleshow/23015024.cms
No comments:
Post a Comment