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Independent auditors include disclaimer of opinion on Ipco International's financial statements; material differences reported in bottom-line numbers

IPCO International's independent auditors have included a disclaimer of opinion on financial statements for the year to April 30, the group disclosed on Tuesday, adding that a full annual report will be sent out on Oct 15.

Separately, the board also issued a list of material differences between its unaudited and audited statements for the same period, including a S$14.97 million adjustment to its full-year losses.

The independent auditors from Baker Tilly TFW said, in an Oct 3 report that was released by Ipco, that they had been unable to get "sufficient appropriate audit evidence to provide a basis for an audit opinion".

One issue flagged was the validity of the going-concern basis for the statements. Whether or not the firm is a going concern is "dependent on certain assumptions" that are "premised on future events, the outcome of which are inherently uncertain", the auditors said.

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Other reasons given for their disclaimer of opinion include their inability to determine whether the opening balances as at May 1, 2017 are fairly stated; whether the carrying value of land held for sale, which was reclassified from inventory to department property, may contain misstatements; and whether provisions for additional liabilities are needed over three sets of legal claims against the company.

Ipco had previously reported a net loss of S$43.44 million, widening from S$209,000 in the year before.

But it now says that it over-stated its expenses by almost S$22.95 million, reporting costs of S$109.65 million instead of the audited figure of S$86.71 million.

The group also registered an income tax credit of S$7.21 million in its unaudited statements, which has been changed to a tax expense of S$761,000.

Other discrepancies include under-stated figures for net assets and over-stated figures for accumulated losses in the statement of financial position.

The auditors' report drew attention to a probe by the Commercial Affairs Department.

It added that the financial statements for the previous year, to April 30, 2017, had been audited by a different firm, which also expressed a disclaimer of opinion.

Meanwhile, the board said that it was of the opinion that it was appropriate to continue using a going-concern assumption in preparing the group's financial statements.

Ipco added on Monday that it was "actively studying the prospect of fund-raising" through a rights issue and/or a share placement to third parties interested in three subsidiaries: property unit Capri Investments, ESA Electronics and utility company Hubei Zonglianhuan Energy Investment Management.

The counter ticked up by 0.2 Singapore cent to 0.3 Singapore cent, before the announcements.