KUALA LUMPUR (Oct 30): Niche Capital Emas Holdings Bhd's external auditor has issued a qualified opinion on the assessment of the company's numbers for the financial year ended June 30, 2015 (FY15).

This was due to insufficient audit evidence on the assumptions made in its cash flow forecasts, which included in the group's deposits of an amount totalling RM4.64 million, as well as the recoverability of the said deposit.

In a filing with Bursa Malaysia today, Niche Capital's external auditor Messrs Baker Tilly Monteiro Heng reported the deposits paid were intended for the procurement of jadeite stone block, weighing 38kg.

"The directors are of the opinion that the said deposits are recoverable through the cash flows to be generated from the sale of the processed jadeite. We were unable to obtain sufficient appropriate audit evidence on the assumptions made in the cash flow forecasts, and hence the recoverability of the said deposit in accordance with MFRS 139: Financial Instruments: Recognition and Measurement.

"Therefore, we could not determine the effect of adjustments, if any, on the financial position of the group as at June 30, 2015, or on its financial performance and cash flows for the period then ended," said Baker Tilly in the report.

Baker Tilly said it was also unable to obtain sufficient appropriate audit evidence on the RM243,000 paid to acquire 90,000 units shares, representing 30% stake in Niche Diamond Sdn Bhd, its wholly-owned subsidiary.
 
As at the date of this report, the transaction has not been completed, it added.

The external auditor noted on the group and company levels, Niche Capital incurred a net loss of RM4.58 million and RM3.43 million respectively, during the financial period ended June 30, 2015.

The group's and the company's accumulated losses, meanwhile, stood at RM21.48 million and RM30.06 million respectively.

It also pointed out that the group and the company recorded negative operating cash flows of RM3.43 million and RM60,068 respectively, thereby indicating the existence of a material uncertainty which may cast significant doubt about the group's and the company's abilities to continue as going concerns.

Niche Capital's shares closed up one sen or 5% at 11 sen today, bringing it to a market capitalisation of RM29.27 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.)