Auditors qualify Metal Reclamation's financial statements

PETALING JAYA: Metal Reclamation Bhd's auditors have issued a disclaimer of opinion on the company's financial statements for the year ended June 30, 2014.
In a statement to Bursa Malaysia yesterday, Crowe Horwarth said it was not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion and therefore could not express an opinion on Metal Reclamation's financial statements.
Metal Reclamation has been a Practice Note 17 (PN17) and PN1 status company since Aug 29 and Sept 2, 2014 respectively.
As at June 30 this year, the group and company posted a net loss of RM5.19 million and RM4.43 million, respectively. Its current liabilities of RM107.14 million exceeds its current assets at RM379,000. The company had also defaulted on its bank borrowings.
Metal Reclamation is currently working towards formulating a regularisation plan to address its PN1 and PN17 status. It has 12 months to do so.
Crowe Horwarth said Metal Reclamation's ability to continue as a going concern "remain uncertain" at this stage.
"The ability of the group and the company to continue as going concerns is dependent upon the timely and successful formulation, approval and implementation of the company's regularisation plan and continuing support from its lenders, achieving sustainable and viable operations and generating adequate cash flows for its operating activities," the auditor said.
"The timely formulation, approval and implementation of the company's proposed regularisation plan, including obtaining support from the lenders remain uncertain at this stage," it said.
It added that should the going concern basis of preparing the financial statements be no longer appropriate, adjustments would have to be made to reduce the value of all assets to its estimated realisable values, and to provide further estimated liabilities that may arise.
It would also need to reclassify its property, plant and equipment and other non-current assets and non-current liabilities as current assets and current liabilities respectively.