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New Silkroutes auditors issue qualified opinion on financial statements

THE independent auditor for New Silkroutes Group has issued a qualified opinion on the group's financial statements for the year to June 30, said the board on Wednesday night.

Auditors from Foo Kon Tan LLP gave their qualified opinion based on both the opening balance and an available-for-sale investment in the group's consolidated financial statements.

Foo Kon Tan issued a qualified opinion on New Silkroutes's opening balance as at July 1, based on two pre-payments for some US$4.9 million that were made by subsidiaries for iron ore fines.

"We were unable to obtain sufficient appropriate audit evidence on the recoverability or the utilisation of the pre-payments to the supplier," the auditors wrote.

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The auditors also flagged the valuation of New Silkroutes's 4.53 per cent stake in Thai General Nice Coal and Coke, which was pegged at US$21.7 million using an income approach involving assumptions on matters such as forecast revenue, growth rates and profit margins.

The auditors said that they were unable to obtain historical data or supporting materials to evaluate whether what was used to prepare the forecasts was reliable, or whether the assumptions used to prepare the forecasts were reasonable.

The rest of the statements - aside from those two issues - are properly drawn up, in their opinion, they said.

The New Silkroutes board said that the company's annual report would be sent to shareholders on Oct 16.