Mcleod Russel's liabilities exceed assets, says auditor

The auditor to debt-laden tea producer Mcleod Russel has said the company's current liabilities have exceeded its assets, flagging an "uncertainty about its ability to continue as a going concern".

"The company's current liabilities exceeded its current assets. Funds obtained by borrowing and utilised for providing funds to other companies have become unserviceable primarily due to non-repayment of outstanding amounts by those companies where funds were given," the auditor Lodha & Co said in its review report in the tea producer's first-quarter results statement.

The auditor also said that this has resulted in "insufficiency" of McLeod's resources for meeting its obligations.

"These conditions indicate the existence of a material uncertainty about the company's ability to continue as a going concern," it said.

The Williamson Magor Group company had on Monday reported widening of its consolidated net loss to Rs 90.5 crore in the April-June quarter of the current fiscal from Rs 11.6 crore in the year-ago period.

The auditor also said that the company has taken various measures to overcome the financial constraints, which inter-alia include reduction in operational costs and monetising the company's or the group's assets.

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