KUALA LUMPUR (May 5): The auditors of Ire-Tex Corp Bhd, UHY Chartered Accountants, has issued a qualified opinion on the company's financial statements for the year ended December 31, 2014, concerning related party transactions entered into during the financial period.

In a filing with the exchange, Ire-Tex (fundamental: 0.85; valuation: 1.7) said the qualified opinion is due to the sale of goods by its wholly-owned subsidiary Zoomic Automation (M) Sdn Bhd to two related parties amounting to RM5 million.

"The trade receivables arising from these sales amounting to RM50 million and advances of RM800,000 were subsequently impaired by the management as at financial year end.

"Due to insufficient appropriate audit evidence, we are unable to satisfy ourselves as to the validity and existence of these sales and whether there were other consequential adjustments to be made to the accompanying financial statements including cost of sales and gross profit," said the auditors.

However, this issue aside, the auditors said the financial statements give a true and fair view of the financial position of the group as at Dec 31 and is in line with reporting standards and requirements.

Meanwhile, the financial statements for the preceding year ended Dec 31, 2013, were audited by another auditor who expressed an unqualified opinion for those statements.

Nexgram Holdings Bhd co-founder cum managing director and chief executive Tey Por Yee was listed as the biggest shareholder in Ire-Tex, according to Bloomberg data, as at May 30, 2014. However, Tey ceased to be a shareholder of Ire-Tex, according to Bursa filings, on July 10, 2014.

He also resigned as Ire-Tex's executive director on Feb 25 this year.

As at 3.18pm, Ire-Tex was down 5 sen or 1.35% at 36.5 sen, with a market capitalisation of RM48.10 million.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)