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 today, also showed a net loss loss of RM8.96 million at group level, and RM53.31 million net loss at company level due to the project cancellation.
This was the finding of independent auditor Crowe Malaysia PLT, which was hired by Prestariang to audit its accounts for the financial year ended June 30 2019.
Crowe highlighted material uncertainty on the IT software distributor's ability to continue as a going concern, following the negative cahsh flows and net loss.
Prestariang, however, said there was no material uncertainty over its ability to continue as a going concern.
In its report, Crowe said besides the negative cash flows, Prestariang had accepted advances of RM1.5 million and RM5 million from a director and a former director of the company 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 this year filed a legal claim of RM732.86 million from the government for the termination of the SKIN project.
Prestariang, via subsidiary Prestariang Skin Sdn Bhd, had secured a 15-year concession on August 9, 2017 to design and manage a new immigration and border control system for the Immigration Department to replace the older system.
Prestariang said its negative operating cashflow 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 cashflow would have been positive.
The compay said it would implement strategic business initiatives to grow its revenue to address the going concern issues mentioned in its auditors’ report.