Losses for Ortel Communications Limited reduced to ₹4.85 crore in Q2FY21 from a net loss of ₹8.51 crore in Q2FY20. The cable television and broadband internet services provider has been undergoing insolvency proceedings for the last two years and continues to face financial stress leading to a complete erosion of its net worth, the company’s auditors said.
Revenue from operations reduced by 18% YoY to ₹18.8 crore in Q2FY21 from ₹22.9 crore in Q2FY20. The majority of its revenue during the quarter came from its cable TV operations at around ₹13 crore, followed by broadband services at ₹3 crore and infrastructure leasing at ₹1.4 crore. The company made around ₹2.42 crore worth of profits from its cable TV operations and ₹ 1.12 crore from broadband operations during the quarter.
Ongoing insolvency proceedings
Since November 2018, Ortel has been undergoing proceedings under the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC), 2016. While the board of the company has been suspended, the financial results of the company were approved by the resolution profession appointed to oversee the company’s CIRP process by the National Company Law Tribunal. Between April and September 2020, the company incurred a loss of ₹7.3 crore compared to ₹19.5 crore during the same period last year.
“The company’s current level of income is barely sufficient to meet all operational expenses but not the past liabilities and the debt servicing obligations regarding the financial creditors,” the notes to accounts said.
Under the CIRP, the company is granted a moratorium on repaying financial and operational creditors till a final resolution plan is approved under the IBC. As a result, the company has not recognised the interest payable to banks and financial institutions in its financial accounts. If there had been a recognition of these ‘finance costs’ the total expenses and loss for the year would be higher, it said.
Download: Financial Results