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Falcon Energy company auditors say material uncertainties may cast significant doubt on going-concern ability

FALCON Energy Group's company auditors have flagged the existence of material uncertainties that could cast significant doubt on its ability to continue as a going concern in their report on the company's financial statements for the year to June 30, the board said on Tuesday.

Citing the group's net current liabilities position, incurred loss before tax and net capital deficiency, the auditors said that Falcon Energy is "exposed to an increased liquidity risk" that could hurt its ability to negotiate with lenders and finalise a debt restructuring plan.

Separately, the group's board released an announcement on Tuesday over key differences in figures from its preliminary results and the audited financial statements.

The discrepancies include an over-stating of revenue, which was knocked down by US$928,000 to US$44.54 million over changes to results from two subsidiaries, and a restating of net losses from US$80.88 million to US$76.44 million.

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Meanwhile, Deloitte & Touche have also issued a qualified opinion over an outstanding trade receivable balance of some US$63.4 million, saying that auditors were not given enough appropriate audit evidence on the basis of the allowance for doubtful debts.

As such, they cannot come to a conclusion on whether the balance can be recovered and cannot determine whether any adjustments might be needed, they wrote.