KUALA LUMPUR (July 14): Practice Note 17 company Konsortium Transnasional Bhd’s (KTB) external auditor has pointed out a material uncertainty with regard to its financial statements for the financial year ended Dec 31, 2019 (FY19), which could raise doubt over the group's ability to continue as a going concern.
In a filing, the auditor, Messrs Al Jafree Salihin Kuzaimi PLT, said KTB’s current liabilities had exceeded its current assets by RM70.33 million in FY19.
“The ability of the group and the company to continue as going concern are dependent upon the group obtaining the support from the group's penultimate holding company, obtaining support from the Land Public Transport Agency (APAD) to be disbursed to the private stage bus operators including the group, the ability of the group and the company to generate adequate positive cash flows and future profits from its ongoing reorganisation of its operations and obtaining the continuing support of creditors and lenders.
“On July 1, 2020, the company submitted a monthly announcement in regard to the first announcement as the company had yet to finalise the regularisation plan for submission to the relevant authorities for approval in which it is being due in 21 months.
“As at the date of this report, as the company is currently in the midst of formalising the regularisation plan, we are unable to determine whether the regularisation plan will be approved by the relevant authorities and whether it will be successfully implemented for the group and the company to achieve sustainable and viable operations.
"The financial statements of the group and the company do not include any adjustment relating to the amount and classification of assets and liabilities that might be necessary should the going concern basis of preparation of the group's and the company's financial statements be inappropriate. Our opinion is not modified in respect of this matter," the auditor noted.
In response, KTB said it had continued the process of addressing the net current liabilities by negotiating with the creditors for extension or converting debts into a few years repayment period of the existing short term debts until completion of the group's turnaround exercise.
It also said: “The group has two separate agreements with APAD to provide bus services under the MYBUS and ISBSF programs. The revenue and financial support, respectively, from both programs are significant and enable the group to continue servicing its current financial commitments.”
KTB also said it has continued to receive support from its penultimate holding company and it will continue to rightsize its operations especially on the express bus services due to the difficult market conditions.