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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.
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.