This article first appeared in The Edge Financial Daily on September 6, 2019

KUALA LUMPUR: The external auditors of APFT Bhd have expressed doubts over the flight training company’s ability to continue as a going concern as they are unable to issue an opinion on the group’s financial statements for the period Feb 1, 2018 to April 30, 2019.

“As of April 30, 2019, the group’s and company’s current liabilities exceeded their current assets by RM10,159,991 and RM8,135,499 respectively and registered a shareholders’ deficit of the group and the company of RM3,723,146 and RM2,823,191. These conditions indicate that material uncertainty exists that may cast significant doubt on the group’s and company’s ability to continue as going concern,” PKF, auditor for the Practice Note 17 company, said in a bourse filing.

PKF added that the group’s ability to continue as a going concern is dependent on the timing and successful formulation and implementation of its regularisation plan, as well as it (APFT) achieving sustainable and viable operations.

In addition, the auditor said it was unable to satisfy itself over the group’s opening balances as of Feb 1, 2018 of RM5.93 million.

Moreover, the group had disposed of subsidiaries between Aug 1, 2016 and Jan 31, 2018, and the audit firm was of the view that net liabilities of those subsidiaries amounting to RM23.11 million, have not been derecognised, following their disposal.

“These net liabilities were only derecognised in the current financial period [ending April 30, 2019] as a gain on disposal of subsidiaries, included as other income in the statement of profit and loss and other comprehensive income” said PKF.

As such, it was unable to determine if any adjustments were necessary for APFT’s financial performance, cash flow and financial position for the period ending April 30.

Shares in APFT were traded half a sen or 33.33% lower to one sen yesterday, with a market capitalisation of RM13.42 million.