PETALING JAYA: Prestariang Bhd’s independent auditors, Messrs. Crowe Malaysia PLT has included a statement of material uncertainty related to going concern in its independent auditors’ report dated Sept 19, 2019 with respect to its financial statements for the financial period ended June 30, 2019.
In an excerpt of the auditor’s report filed with Bursa Malaysia, Crowe Malaysia drew attention to the termination of the Sistem Kawalan Imigresen Nasional (SKIN) project, which led to the group undertaking a legal suit against the government to recover the sums due.
“During the financial period ended June 30, 2019, the group and the company recorded negative operating cash flows of RM72.25 million and RM12.37 million respectively; and loss after taxation of RM8.96 million and RM53.31 million respectively.
“The group has accepted advances of RM1.5 million and RM5 million from a director and a former director of the company respectively for working capital purposes,” it said.
Crowe Malaysia said the above matters indicate that a material uncertainty exists that may cast significant doubt on the group’s ability to continue as a going concern and whether it has sufficient cash flows to meet the obligations as and when they fall due.
On April 15 this year, Prestariang SKIN Sdn Bhd (PSKIN) filed an originating summons against the government claiming the amount of RM733 million in relation to the termination of the SKIN project.
Crowe Malaysia also raised other key audit matters in its report, which included: revenue and cost recognition for the SKIN project, valuation of other investments, impairment assessment of trade receivables, and development costs.
With respect to the going concern of the trade receivables from the SKIN project, Crowe Malaysia said without SKIN’s increase in trade receivables, the group’s operating cashflow would have been positive.
“The group’s negative operating cashflow of RM72.25 million is after taking into account the increase in SKIN’s trade receivable from the government of RM175.46 million.
“In addition, the group will be implementing strategic business initiatives to grow its revenue to address the going concern issues as mentioned in the independent auditors’ report,” it said.
The auditors also noted that Prestariang is ideally placed to play a critical role in bringing together technology and talent for the country’s manufacturing sector, by providing end-to-end solutions.
At 2.55pm, the stock was trading 1.5 sen lower at 49 sen on 3.49 million shares done.
