Oceanus auditor qualifies opinion of statements

The auditor of Oceanus Group has qualified its opinion of the abalone supplier's 2017 financial statements because it was unable to verify the numbers for certain payables, loans and biological assets.

Auditor Foo Kon Tan said documents were unavailable for trade and other payables amounting to eight million yuan (S$1.7 million) last year and in 2016.

Foo Kon Tan said it could not satisfy itself that the trades and other payables were valid and accurate. It also could not verify one million yuan of payables to an executive director - who had paid that sum on behalf of a subsidiary. The money was paid to a third party to restore control of a farm seized by the subsidiary's contract security and protection services provider.

Foo Kon Tan said Oceanus, which is on the Singapore Exchange's watch list, did not adhere to accounting rules on the treatment of convertible loans.

In terms of biological assets, the auditor noted that although management had done a physical count as of end-2017, it had not done so at the end of 2016, so it was not clear if retrospective adjustments had to be made.

Foo Kon Tan was unable to assess an impairment of a 17.1 million yuan investment in Oceanus Australia Abalone World.

Notwithstanding the qualifications, adjustments as a result of the audit led Oceanus to post an 8 per cent higher net profit for last year than previously reported. The group's audited net profit for the year was 189.3 million yuan.

A version of this article appeared in the print edition of The Straits Times on April 14, 2018, with the headline 'Oceanus auditor qualifies opinion of statements'. Print Edition | Subscribe