Now Reading: Ola Electric auditor flags Rs 57 crore PLI penalty reversal
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Ola Electric auditor flags Rs 57 crore PLI penalty reversal
Ola Electric Mobility Ltd's auditor, BSR & Co (KPMG affiliate), has issued a qualified report on the company's June quarter results, flagging a Rs 57 crore reversal of a penalty provision under…
The Story in Brief
Ola Electric Mobility Ltd's auditor, BSR & Co (KPMG affiliate), has issued a qualified report on the company's June quarter results, flagging a Rs 57 crore reversal of a penalty provision under the battery cell PLI scheme. The company had created the provision after missing investment milestones, but reversed it after applying for an extension and waiver from the ministry of heavy industries, even though no formal approval was received by June 30.
The reversal helped narrow Ola's net loss to Rs 336 crore from Rs 428 crore a year earlier, though without it the loss would have been Rs 393 crore. Revenue fell 45% to Rs 455 crore. The auditor stated it could not determine whether the move was justified without ministry approval. Ola said it is confident of obtaining the waiver based on discussions with the ministry.
The Indian Opinion
Ola's reversal of a penalty provision before getting a formal waiver looks like counting chickens before they hatch. The narrative that the government will surely oblige ignores the risk that it may not, leaving investors with restated numbers. The real test is not Ola's confidence but the ministry's pending decision. Watch for whether the waiver comes through by the next quarterly filing, or if the provision has to be reinstated with interest.
Sources (2): livemint.com, ndtvprofit.com
This story was synthesised by AI from the 2 sources linked above.
Updated: this story now draws on 2 sources.
