Auditor qualifies Stone Master’s financial statements

PETALING JAYA: Stone Master Corp Bhd’s external auditors Messrs Baker Tilly Monteiro Heng (BTMH) has expressed a qualified opinion in the company’s audited financial statements for the financial year ended Sept 30, 2016 (FY16).
As at Sept 30, 2016, Stone Master’s current liabilities exceeded its current assets by RM12.5 million and RM12.12 million at the group and company level respectively, with accumulated losses of RM23.6 million and RM33.69 million each. This indicates the existence of a material uncertainty, which may cast significant doubt about the group’s ability to continue as a going concern, said the external auditors.
“The external auditors are not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion,” Stone Master said in a stock exchange filing yesterday.
The Practice Note 17 (PN17) company is currently in the midst of formalising a regularisation plan. It has also defaulted in the repayment of loans.
“The external auditors were unable to obtain sufficient appropriate audit evidence regarding the ability of the group to achieve sustainable and viable operations. The timely formulation and implementation of a regularisation plan, including obtaining the support from lenders remain uncertain at this stage,” it said.
The external auditors recommended that an investigative audit be commissioned to obtain explanations on the Securities Commission Malaysia’s (SC) suit against the company’s deputy managing director Datin Chan Chui Mei for allegedly causing wrongful loss to the company, complete information on all matters and to ascertain the veracity of all the transactions that may have potentially affected the company.
The company had on Dec 14, 2016 engaged Ferrier Hodgson MH Sdn Bhd to conduct a review of the allegations by SC against the company’s deputy managing director of the RM11.54 million, which was subsequently paid by local subsidiaries of the 23 foreign companies to the company’s deputy managing director’s personal account. The investigation is still ongoing.