Material uncertainty about company’s ability to continue as a going concern: McLeod Russel auditors

By Sanjeev Sharma New Delhi, Nov 11 : The auditors of McLeod Russel, Lodha & Co., have given qualifications and adverse conclusions on the financial statements for the half year ended September 2020.
“Attention is drawn to the following Notes of the Statement which are subject matter of adverse conclusion as given in Para 5,” the auditors said in their review of the financial results.
The auditors have pointed out that the statements have not been prepared fairly in all material respect in accordance with the Indian Accounting Standards.
“Based on our review conducted as above, we report that because of the significance of the matters stated in Para 4 above, especially those relating to non-provision of amount given as Inter-Corporate Deposits which as stated in Para 4(a) have been considered doubtful of recovery, together with the consequential impact of these matters on the unaudited financial results for the period which are expected to be material, we have come to the conclusion that the Statement read with notes thereon have not been prepared fairly in all material respect in accordance with aforesaid Indian Accounting Standards and other recognised accounting practices and policies generally accepted in India and has not disclosed fairly the information required to be disclosed in terms of the Listing Regulations, 2015, including the manner in which it is to be disclosed,” the auditors said.
The auditors have cited inter-corporate deposits of Rs 2,855 crore, which are doubtful of recovery and prejudicial to the interest of the company.
“Note No. 5 dealing with Inter Corporate Deposits (ICD) aggregating to Rs. 2,85,515 lakhs as on September 30,2020 (including Interest of Rs. 1,969 lakhs accrued till March 31, 2019) given to certain companies which are doubtful of recovery and considering recoverability etc. are prejudicial to the interest of the company. In absence of provision there against, the profit for the period is overstated to that extent. Impact in this respect have not been ascertained by the management and recognised in the statement,” the auditors said.