Karambunai Corp auditors warn of going concern risk

  • Business
  • Monday, 31 Jul 2017

KUALA LUMPUR: Karambunai Corp Bhd’s independent auditors have cautioned of a material uncertainty that may cast significant doubt on the group’s ability to continue as a going concern.

In a filing to the stock exchange on Monday, the property and tourism outfit said its auditors had drawn attention to the material uncertainty related to going concern in its independent auditors’ report dated July 18, 2017 in respect of the group’s financial statements for the financial year ended March 31, 2017.

The material uncertainty is related to Note 2 (d) in the financial statements, which indicates that the group recorded negative cash flows from operating activities of RM53.42mil, current liabilities exceeded its current assets by RM98.3mil despite having a profit of RM18.89mil during the financial year.

“As stated in Note 2(d), these events or conditions, indicate that a material uncertainty exists that may cast significant doubt on the group’s ability to continue as a going concern. 

“Our opinion is not modified in respect of this matter,” the Independent Auditors’ Report stated.

In relation to this, the group’s board of directors advised that the group has started the process of addressing the material uncertainty related to going concern.

It said the financial performance of the principal operating unit of the Group, Nexus Resort and Spa Karambunai, has started showing positive results and generating positive operating cash flow. 

“The better financial performance is as a result of our continuous efforts to update the resort with a phased refurbishment exercise to drive revenue.

“The group will also exploring fund raising options such as financing to address the net current liabilities position,” it said.

Barring unforeseen circumstances, the group said it expects a timeline of 24 months from the date of the announcement to address the material uncertainty related to going concern.

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