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Chaswood Resources says it expects to report half-year loss
CHASWOOD Resources Holdings, whose shares have been suspended from trading since last June, is expected to report a loss for the half-year ended June 30.
The net loss after tax arose mainly due to "lower revenue amid the challenging market conditions of the industry", said Chaswood in an exchange filing on Wednesday.
However, the net loss in HY2019 is lower as compared to a year ago due to lower administrative expenses, after closing non-profitable outlets and cost-cutting measures, the company noted.
The group will report its financial results by Aug 14.
In July, Moore Stephens, the independent auditor of Chaswood Resources Holdings, had issued a disclaimer of opinion on the group's financial statements for the financial year ended Dec 31, 2018.
It said it did not have sufficient appropriate evidence to provide a basis for an audit opinion on the financial statements.
Moore Stephens said that Chaswood's management had prepared the financial statements on the assumption that the group will continue as a going concern - this is because the directors believe they can carry out a restructuring exercise.
However, the auditor highlighted that the ability of the group to continue as a going concern is dependent on certain assumptions and the successful outcome of the various efforts by the group, of which the outcome is inherently uncertain.
It also highlighted that the group's subsidiaries are facing various legal proceedings brought against them, and that Chaswood has also received a statutory demand for payment of S$3 million relating to a corporate guarantee provided for redeemable exchangeable bonds issued by a subsidiary.
"These conditions indicate the existence of material uncertainties which may cast significant doubt on the ability of the group and Chaswood to continue as going concerns and to realise their assets and discharge their liabilities in the ordinary course of business," Moore Stephens added.
"In light of the material uncertainties, we do not have sufficient audit evidence regarding the use of the going concern assumption in the preparation of the financial statements."