PETALING JAYA: Konsortium Transnasional Bhd’s independent auditors Messrs, Al Jafree Salihin Kuzaimi PLT has expressed material uncertainty related to going concern in its independent auditors’ report dated April 3 for the group’s financial statements for the financial year ended Dec 31, 2018 (FY18).
Al Jafree said for FY18, Konsortium Transnasional’s current liabilities exceeded its current assets by RM63.07 million and RM14.1 million respectively. These conditions indicate the existence of a material uncertainty which may cast significant doubt about the ability of the group and the company to continue as going concern.
“The ability of the group and the company to continue as going concern are dependent upon the group obtaining the support from the group’s penultimate holding company, obtaining support from the Land Public Transport Agency (APAD) to be disbursed to the private stage bus operators including the group, the ability of the group and the company to generate adequate positive cash flows and future profits from its ongoing reorganisation of its operations and obtaining the continuing support of creditors and lenders,” it said.
The auditor said the financial statements of the group and the company do not include any adjustments relating to the amount and classification of assets and liabilities that might be necesssary, should the going concern basis of preparation of the group’s and the company’s financial statements be inappropriate.
Konsortium Transnasional said the group has already started the process of addressing the net current liabilites by continuing to negotiate with the creditors for extension/converting debts into few years repayment period of the existing short term debts until completion of the group’s turnaround exercise.
It said that it has successfully negotiated lower monthly installment for the group’s hire purchase facility which is one of the group’s main monthly commitment; and out of the RM14.1 million net current liabilities of the company, RM12.41 million represent net amount of the amount due to related companies and the company’s penultimate holding company which are maintaining their commitments to continue their supports for the operations of the group and the company.
The group has two separate agreements with APAD to provide bus services under the MYBUS and ISBSF programs. The revenue and financial supports, respectively, from both programmes are significant and enable the group to continue servicing its current financial commitments.
Konsortium Transnasional had in 2018, ceased the operations of a few loss-making subsidiaries. The decision and action was made in line with the group’s rationalisation programme to focus the limited resources on feasible business operations.
“The group will continue to focus on cost optimisation and stringent cash flow management and maintaining safety and quality services to remain competitive,“ it said.
