Kingfisher Airlines Ltd., controlled by liquor baron Vijay Mallya, needs to infuse required funds to continue as a going concern, its auditor has said, raising concerns about the future of the loss-making carrier.

The auditors, B.K. Ramadhyani & Co, in its report, which is part of the company's annual report for the fiscal year that ended March 31, 2011, has mentioned that the company's accumulated losses at the end of the financial year were more than fifty percent of its net worth.

Kingfisher shares fell Thursday more than 5 percent to a low of 24.8 rupees, hovering close to its year-low of 23.35 rupees.

The airline has not posted a profit since its inception in 2005. For the quarter ended June, Kingfisher widened its net loss by 43 percent to 2.64 billion rupees.

The term going concern, in accounting parlance, refers to a company's ability to continue operations in the near future.

The annual report has been posted on the Bombay Stock Exchange website.

The auditor's comments come at a juncture when Indian carriers are struggling despite a booming aviation market. All three major carriers Kingfisher, Air India and Jet Airways are loss-making as prices of key inputs like crude remain volatile, and consequently unable to raise equity.

Earlier this month, the Comptroller and Auditor General (CAG) criticised the country's national airline Air India Ltd's (AIL) decision to buy 111 Boeing and Airbus planes in 2005, a move which was approved by the government, saying it imposed an undue long term financial burden on the carrier.

In late August, Kingfisher Airlines Ltd said its board had approved a rights issue of shares to raise up to 20 billion rupees ($434 million).

The company gave no timing or details of the proposed issue, but analysts say raising funds for an airline company is not going to be easy.

Resolutions have been taken, but its been three years since the airline industry has not been able to raise funds at all, said Mahantesh Sabarad, sector analyst at Fortune Equity Brokers.

Kingfisher Airlines said lenders have independently assessed that the airline is viable as a going concern.

During the year, RBI had directed the banks to independently assess the viability of KFA and this was in fact, carried out by the lenders with the assistance of SBI Capital Markets confirming that KFA is viable i.e. as a going concern, the airline said in an e-mail to Reuters.

The auditor said Kingfisher has also defaulted in repayment of loans and interest to banks and financial institutions.

Delays were noticed in payment of interest and principal on several occasions during the year.

The CAG also said there have been some delays in remitting some statutory dues, pertaining to provident fund, fringe benefit tax, investor education and protection fund and employees' state insurance.

Earlier this year, the carrier had cut its debt through a debt restructuring process in which the airline issued 116.3 million shares to a consortium of 13 banks led by State Bank of India, after conversion of compulsory convertible preference shares at 64.48 rupees a share.

The airline had restructured its debt by converting almost 12 billion rupees of loans into equity and its debt stands at about 60 billion rupees at end April.