Kinsteel Bhd worker using a forklift to load steel billets into a reheating furnace in its factory in Gebeng Industrial Estate in Kuantan.
KUALA LUMPUR: Kinsteel Bhd has become the latest steel company to be classified as a Practice Note 17 (PN17) issuer, as its auditors have expressed a disclaimer opinion in its latest audited financial statements for the year ended June 30, 2016 (FY16).
In a filing with Bursa Malaysia, the long steel product manufacturer said external auditor Crowe Horwath based the disclaimer on, among others, the group/company incurring losses while its current liabilities exceeded its current assets.
The attached Crowe Horwath report said the group and the company posted a net loss of RM91.7mil and RM78.7mil respectively for FY16. (The group had incurred a net loss of RM93mil the preceding year.)
It added that as of June 30, the group and the company’s current liabilities exceeded current assets by RM701.7mil and RM462mil respectively.
The auditor said it was unable to get sufficient audit evidence to determine the appropriateness of preparing the group’s consolidated financial statements on a going concern basis.
The statements have been prepared assuming that the group is a going concern. However, the going concern assumption is “highly dependent” on, among others, the successful implementation of its debt restructuring scheme and the group’s ability to attain profitable operations to generate sufficient cash flows to fulfill its obligations when they fall due.
Kinsteel is the controlling shareholder of upstream steel product manufacturer Perwaja Holdings Bhd, itself a PN17 issuer since late 2013.
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