ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 1999 - AUDITORS' QUALIFICATIONS
|HO WAH GENTING BERHAD|
|Type||Reply to query|
|Reply to Query Letter by KLSE reference ID||NS-000729-42288|
|Subject||ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 1999|
- AUDITORS' QUALIFICATIONS
Contents :We refer to your letter dated 31 July 2000. We set out below the explanations of the Directors on the qualification stated in the Auditors’ Report included in our 1999 Annual Report.
(i) The auditors reported that the ability of the Ho Wah Genting Berhad Group (“HWGB Group”) and Ho Wah Genting Berhad (“the Company”) to continue as a going concern is dependent upon the successful implementation of the Proposed Restructuring Scheme, obtaining continuous financial support from the bankers and creditors, and achieving future profitable operations. In the event that these are not forthcoming, the going concern basis on which the accounts have been prepared may not be appropriate as its ability to realise assets and discharge liabilities in the normal course of business may be uncertain.
As highlighted in the paragraph 1 of the report, the Company and certain of its subsidiary companies had been granted a restraining order from the High Court of Malaya under section 176(10) of the Companies Act, 1965, restraining the bankers and creditors from commencing proceedings or continuing to proceed with any action for the purpose of proposing a scheme of arrangement and compromise repayment. Paragraph 2 of the report highlighted the deficiencies in working capital and shareholders’ funds and the short term borrowings of which most of the facilities have been suspended.
As at the date of the report, the Company and its subsidiary, Ho Wah Genting Wire And Cable Sdn Bhd had on 18 August 1999 convened creditors' meetings in which the respective scheme creditors approved the proposed schemes of arrangement and compromise repayment. The Proposed Restructuring Scheme which includes the proposed schemes of arrangement and compromise repayment were subject to further approvals from the relevant authorities and shareholders.
The Board of Directors is of the opinion that upon the successful implementation of the Proposed Restructuring Scheme, the Group’s and Company’s financial position will be improved and strengthen and the companies will be able to continue as going concern.
(ii) Also, as stated in the Note 4 to the Annual Report, the auditors of the subsidiary company, Phnom Penh Ho Wah Genting Transport Co. Ltd., qualified the audited accounts on the disclaimer of opinion basis as a result of the company continuing to incur losses, has large negative shareholders’ funds and difficulty in obtaining financial support from the holding company.
We hope that the above explanations are sufficient to clarify the auditors’ qualifications in the Annual Report for the year ended 31 December 1999.
Query Letter Contents :
We refer to your Company's Annual Report 1999.
In accordance with the Exchange's requirements, kindly furnish the Exchange
immediately with your detailed explanation(s) on the qualifications stated in
the Auditors' Report of your Annual Report 1999 for public release.
Latifah Haji Mond Yusof Tan Yew Eng
Senior Vice President, Listing Operations Senior Manager, Listing Operations
Copy: Securities Commission
|Company Name||HO WAH GENTING BERHAD|
|Date Announced||2 Aug 2000|