KUALA LUMPUR: Konsortium Transnasional Bhd’s independent auditor is concerned that the group’s current liabilities, which have exceeded its current assets, will hinder the group’s ability to continue as a going concern. Konsortium Transnansional filed the emphasis of matter that drew attention to the material uncertainty, as disclosed in its independent auditor’s report, with Bursa Malaysia yesterday.

The auditor, Messrs Al Jafree Salihin Kuzaimi PLT, said the group and company’s current liabilities, shown in the financial statements for the year ended Dec 31, 2018 (FY18), exceeded current assets by RM63.07 million and RM14.1 million respectively.

“The ability of the group and the company to continue as going concerns are dependent upon the group obtaining support from the group’s penultimate holding company, obtaining support [from] the Land Public Transport Agency (APAD) to be disbursed to 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 ongoing reorganisation of operations, and obtaining continuing support of creditors and lenders.

“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,” the auditor noted.

In response, the group said it had started the process of addressing the net current liability issue by negotiating with creditors for the extension or conversion of short-term debts.

“Out of the RM14.104 million net current liabilities of the company, RM12.407 million represents [the] net amount of the amount due to related companies and the company’s penultimate holding company, which are maintaining their commitments to continue their support for the operations of the group and the company,” it said, adding that it has two agreements with APAD to provide services under the Mybus and Interim Stage Bus Support Fund programmes. “The revenue and financial support from both programmes are significant and enable the group to continue servicing its current financial commitments.”

It also said it had stopped the operations of some loss-making units, and that it will continue to focus on cost optimisation and stringent cash flow management. Regardless of the auditor’s emphasis of matter, the group added that the unqualified opinion on its financial statements for FY18 remains unchanged.