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China Gaoxian gives details of financial differences after termination of disposal

FOLLOWING the termination of a proposed disposal, China Gaoxian Fibre Fabric Holdings on Friday announced details of the material differences between its adjusted unaudited and original unaudited financial statements for the year ended Dec 31, 2018.

As announced on May 8, its plans to dispose of loss-making subsidiary Huaxiang China Gaoxian International Holdings were shelved after it could not obtain shareholder approval. With the termination of this disposal, China Gaoxian's loss from discontinued operations, net of tax, has widened to 157.1 million yuan (S$31.35 million), from the previously announced 63.9 million yuan.

Accordingly, net loss attributable to shareholders has widened to 166.6 million yuan from 73.3 million yuan.

Without the disposal of Huaxiang, assets associated with the disposal group and classified as "held for sale" stand at 2.55 billion yuan, up from the previously announced 1.74 billion yuan.

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Liabilities associated with the disposal group are 3.01 billion yuan, widening from 1.86 billion yuan. Accumulated losses are up 3.99 per cent at 2.43 billion yuan, from 2.34 billion yuan, previously.

The terminated disposal is also expected to have a material impact on the financial results for the current year ending Dec 31, 2019.

China Gaoxian cautioned that its management has "to devote considerable amount of time and effort to consolidate and finalise theunaudited financial results for FY2018 and 1QFY2019".

Its audit committee is also seeking advice from auditors for the appropriate accounting treatment on its consolidated financial statements for the past and current financial years, it added. In response to enquiries from the audit committee on the probable material impact, the management has requested more time for assessment.

China Gaoxian was directed to delist on Feb 27, 2019 as it did not meet the criteria to exit the financial watch list. Its shares have been suspended from trading since April 2.