Auditor: Material uncertainty may cast doubt on YFG as going concern

PETALING JAYA: Practice Note 17 (PN 17) company YFG Bhd's external auditor, Messrs UHY, has issued a statement of "material uncertainties related to going concern" in respect of the group's financial statements ended Sept 30, 2017.
According to Messrs UHY, the financial statements have been prepared on the historical cost basis and on the assumption that the group and the company are going concern.
"The going concern assumption is highly dependent upon the successful approval and implementation of the regularisation plan, and the ability of the group and of the company to attain profitable operations to generate sufficient cash flows to fulfil their obligations as and when they fall due," it said.
In the event that these are not forthcoming, Messrs UHY said the group and the company may be unable to realise their assets and discharge their liabilities in the normal course of business.
Accordingly, it said the financial statements may require adjustments relating to the recoverability and classification of recorded assets and liabilities should the group and company be unable to continue as going concerns.
During the financial year ended Sept 30, 2017, YFG incurred a net losses of RM29 million and RM7.3 million at the group and company level respectively.
As of that date, it had a net current liabilities of RM83.6 million and RM5.08 million at the group and company respectively, with a deficit of RM80.4 million in shareholders' equity.
YFG has submitted its proposed regularisation plan to Bursa Malaysia Securities on Oct 31, 2017 and still awaiting the authority's approval.
Its shares closed half a sen or 20% higher to three sen today with some 113,500 shares done.