Auditors of Tata Sons raised doubts over the ability of Air Asia India and Tata Steel Europe to continue as a going concern
The auditors of Tata Sons have expressed concerns over the ability of Air Asia India and Tata Steel Europe to continue as “a going concern,” i.e., a company, which is in a position to continue its operations for a long period of time. In Air Asia India (where Tata sons hold 51% shareholding), the losses increased from Rs. 15 crores to Rs. 332 crores within the past one year. Further, the company’s net worth (paid up share capital plus Reserves & Surplus) has been negative and company’s current liabilities also exceeded its assets by Rs. 1208.89 crores. The management of Tata Sons had prepared the company’s financial statements on the basis that it is "a going concern.” However, actually, it is not.
Furthermore, the auditors of Tata Steel Europe have expressed doubt over its ability to continue its operations as the company was unable to raise funds for its working capital requirements (for meeting its day to day expenses) over a period of time. Also, the company’s equity has been falling from a negative Rs. 328 crores to a negative Rs. 982 crores within the last one year. On the other hand, its debt increased from Rs. 94,879 crores to Rs.1.05 lakh crores within the past one year.
