PETALING JAYA: Sarawak Cable Bhd’s independent auditor Messrs Ernst & Young PLT (EY) has issued an unqualified audit opinion with emphasis of matter on material uncertainty relating to going concern, in respect of Sarawak Cable’s audited financial statements for the financial year ended Dec 31, 2019 (FY19).
EY said the financial statements describe that the group and the company incurred a net loss of RM86.6 million and RM104.2 million respectively during FY19 and, as of that date, the group’s and the company’s current liabilities exceeded their current assets by RM169.9 million and RM229.1 million respectively.
In addition, on Sept 11, 2019, the company announced that it had, on Aug 7, 2019, received a letter issued by the Corporate Debt Restructuring Committee (CDRC) under the purview of Bank Negara Malaysia, approving the company’s application for assistance to mediate between the company and certain of its subsidiaries with their respective financiers.
The company received the approval from the CDRC on Aug 7, 2019 and a standstill letter was issued by CDRC to the lenders on the same date. On Dec 19, 2019, the company successfully discharged several of its subsidiaries from CDRC’s purview.
“These events or conditions indicate that a material uncertainty exists that may cast significant doubt on the group’s and the company’s ability to continue as going concerns,” EY said.
“The company is formulating a proposed debts restructuring scheme to address the financial conditions of the group and of the company, and believes that the restructuring scheme will enable the group and the company to achieve sustainable and viable operations which will generate sufficient cash flows to meet their obligations,” the group’s exchange filing stated.
Three key audit matters were identified in the independent auditors’ report. Firstly, revenue from long-term transmission lines construction contracts. Secondly, impairment assessment of property, plant and equipment, involving an idle helicopter with a carrying amount of RM32.7 million.
Finally, there is a impairment assessment of concessions financial assets. The group has applied for extension of time from Perusahaan Listrik Negara Persero, North Sumatera, Indonesia to complete the construction of the mini hydro plant by Oct 30, 2020 citing the lockdown measures in Indonesia as reasons.
At the reporting date, the carrying value of the concession financial asset stood at RM99.9 million. The group said it will finalise its debts restructuring scheme before end of FY2020 ending Dec 31 in response to the key audit matters and will continue as a going concern.
