Auditor flags Prestariang’s ability to continue

KUALA LUMPUR: Prestariang Bhd has negative operating cash flows of RM72.25 million and RM12.36 million at group and company levels, respectively, following the termination of Sistem Kawalan Imigresen Nasional (SKIN) project by the government.

Prestariang, via a Bursa Malaysia filing yesterday, said it also posted a RM8.96 million net loss at group level and RM53.31 million net loss at company level due to the project cancellation.

This was among the findings of independent auditor Crowe Malaysia PLT, which was hired by Prestariang to audit its accounts for the financial year ended June 30.

Crowe highlighted material uncertainty on its ability to continue as a going concern following the negative cash flows and net losses.

However, Prestariang said there was no material uncertainty over its ability to continue as a going concern.

In its report, Crowe said Prestariang had accepted advances of RM1.5 million and RM5 million from a director and a former director, respectively, for working capital purpose.

“These indicate that a material uncertainty exists that may cast significant doubt on the group’s ability to continue as a going concern and whether the group and the company have sufficient cash flows to meet their obligations as and when they fall due.

“The (Prestariang) directors believe that there is no material uncertainty exists over the ability of the group and the company to continue on a going concern basis,” Crowe added.

Prestariang had in April filed a legal claim of RM732.86 million from the government for the termination of the SKIN project.

Its subsidiary, Prestariang Skin Sdn Bhd, had secured a 15-year concession on Aug 9, 2017 to design a new border control system for the Immigration Department.

Prestariang said its negative operating cash flow was after taking into account the increase in SKIN’s trade receivable from the government amounting of RM175.46 million.

Without the trade receivable, its operating cash flow would have been positive.

The company said it would implement strategic business initiatives to address the going concern issues mentioned in its auditors’ report.