CSL to be suspended on May 9 if it fails to submit AFS

by **Cals** Tue 29 Apr 2014, 22:11

Business & Markets 2014

Written by Charlotte Chong of theedgemalaysia.com

Tuesday, 29 April 2014 10:38

KUALA LUMPUR: The trading of China Stationery Ltd (CSL) shares will be suspended on May 9 if it fails to issue the audited financial statements (AFS) for the financial year ended Dec 31, 2013 (FY13) within five market days from April 30.

Delisting procedures will be commenced against CSL, an integrated plastic stationery firm, if it fails to issue the AFS within six months from April 30.

In a statement to Bursa Malaysia yesterday, CSL said it had on April 17 submitted an application to Bursa Malaysia for a two-month extension from April 30 to issue its AFS.

The company said it had failed to release its AFS as the external auditors of the company, Messrs RT LLP, are unable to complete their audit fieldwork following a fire at one of the company’s plants in Fujian Province in China on April 4 this year.

Messrs RT LLP had noted in an audit summary memorandum for FY13 that CSL’s management had not been able to provide it with the post balance sheet financial information and make the necessary arrangements to fulfil the procedures, “as the financial records and company legal stamps that were stored in the administration office were destroyed by the fire as advised by management”.

The auditors said as a result of the fire, it was unable to proceed with its planned schedule to obtain walk-in bank confirmations and sight of fixed assets, as well as complete its audit fieldwork.

“The aforementioned procedures are crucial for us to issue an audit opinion on the group’s financial statements for FY13,” said the auditors. CSL pointed out that the company’s legal stamps could only be reissued by the Chinese authorities after receiving the police report.

The China-based company said the fire had seriously affected its production capacity, causing interruption to some of the group’s operations.

“The incident had ravaged approximately 10,000 sq m of the total floor area of 15,422.59 sq m at the production plant at 1:30am on April 4, 2014.”

CSL said the plant, which is an individually designed five-storey detached factory building, was used for the production of polypropylene (PP) sheets as well as a warehouse for PP resin, PP sheets and recycled PP resin.

The counter was the fifth most traded stock on the local bourse yesterday, dropping 15.79% to close at 16 sen yesterday. It has been trading between 19 sen and 21.5 sen since November last year to April 25 this year.

CSL’s unaudited financial statement released in February this year showed that the firm registered a net profit of RM207 million for FY13, a decrease of 8.7% from RM226.7 million in FY12. Revenue came in 1.6% lower at RM949.5 million from RM964.6 million previously.

This article first appeared in The Edge Financial Daily, on April 29, 2014.