Saturday 4 April 2009

More listed companies come under auditors’ focus

Auditors have raised concerns over more listed companies, with the latest focus falling on firms such as Firstlink Investments Corporation, KXD Digital Entertainment and ASA Group.

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Guanyu said...

More listed companies come under auditors’ focus

By JESSICA YEO
4 April 2009

Auditors have raised concerns over more listed companies, with the latest focus falling on firms such as Firstlink Investments Corporation, KXD Digital Entertainment and ASA Group.

Baker Tilly TFWLCL issued a qualified opinion on Firstlink Investment’s financial statements for the year ended Dec 31, 2008 in which it said it was unable to determine whether adjustments to the results of the current financial year and opening accumulated losses might be necessary.

It highlighted the impairment loss of $18.7 million recognised in the consolidated income statement, and that Firstlink’s directors were not able to determine the recoverable amount relating to the company’s investment in and loan to Green Salt Group Ltd (GSGL). GSGL used to be a subsidiary of Firstlink, which was placed on the SGX watch-list in its December review last year.

In its audit of KXD Digital Entertainment’s financial statements for the period ended Dec 31, 2008, Deloitte & Touche LLP reported the existence of a material uncertainty which may cast a significant doubt about the group’s ability to continue as a going concern.

KXD incurred a net loss of 436.72 million yuan (S$96.3 million) for the year ended Dec 31, 2008, with accumulated losses of 268.35 million yuan and 243.65 million yuan at the group and company level, respectively.

However, KXD management said it believed that the group has adequate resources to pay its debts and to continue to operate as a going concern for at least the next 12 months.

Deloitte also drew attention to ASA’s ability to continue as a going concern, noting that the group incurred a net loss of 231.1 million yuan in FY2008 and registered a negative cash flow from operations of 24.1 million yuan, and that the group’s current liabilities exceeded its current assets by 3.242 million yuan.

ASA responded by saying it believed that it would have adequate resources to continue in operational existence for the foreseeable future, after taking steps to strengthen its business.