CAP’s auditor expresses disclaimer of opinion on FY18 financial statements as group appeals delisting

TheEdge Mon, Dec 20, 2021 07:40pm - 2 years View Original


KUALA LUMPUR (Dec 20): The external auditor of China Automobile Parts Holdings Ltd (CAP), CAS Malaysia PLT has expressed a disclaimer of opinion in the group’s financial statements for the financial year ended June 30, 2018 (FY18).

CAS Malaysia also issued a disclaimer of opinion on the China-based group’s financial statements for FY17, last Friday (Dec 17).

In a bourse filing by CAP on Monday (Dec 20), CAS Malaysia PLT said it could not obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on FY18 financial statements.

The auditor said a number of factors indicated that a material uncertainty existed that may cast significant doubt on CAP’s’ ability to continue as a going concern.

The group incurred a net loss of 450,000 yuan for FY18. As at June 30, 2018, the current liabilities of CAP exceeded its current assets by 1,713,000 yuan and the group also recorded a deficit in shareholders’ funds of 1,713,000 yuan.

During the financial period ended June 30, 2017, CAP has deconsolidated its subsidiaries, Quanzhou FenSun Automobile Parts Co Ltd. (FenSun) and China Automobile Parts (Hong Kong) Holding Ltd (CAP HK) as the management has determined that control over the subsidiaries, FenSun and CAP HK, has been lost.

“We are unable to obtain sufficient appropriate audit evidence on management’s assessment as the company continues to have power over FenSun and CAP HK by virtue of the fact that the company continues to hold 100% equity interest in both of the subsidiaries as at June 30, 2017 and 2018 and as of the date of this report,” said the auditor.

Among other reasons for the disclaimer of opinion are assertions concerning opening balances and insufficient documentary evidence pertaining to FY18's transactions including the existence of cash and bank balances, correctness of negative reserves balance, other payable balances, other operating income and administration expenses.

“There are material uncertainties that may cast significant doubt on the ability of the group to continue as a going concern. Accordingly, we were unable to obtain sufficient appropriate audit evidence to ascertain the appropriateness of the preparation of the financial statements of the group on a going concern basis,” added CAS Malaysia.

Meanwhile in a separate filing, CAP said it has submitted an appeal on Monday, against Bursa Securities’ decision to de-list the group and remove its securities from the official list on Dec 27.

CAP's shares have been suspended from trading since June 8, 2017, after it failed to release its financial reports within the stipulated time.

Subsequently, the group slipped into Practice Note 17 status in January 2018, after its external auditor Messrs PFK expressed an audit disclaimer of opinion on its audited financial statements for FY15 on undisclosed material liabilities.

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