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Audit highlights sugar concerns

Margaret Wise
Tuesday, November 28, 2017

AN independent audit conducted into the financial affairs of the Fiji Sugar Corporation as part of the miller's 2017 Annual Report has cast significant doubt about the corporation's ability to continue as a going concern.

According to the report, the FSC continues to incur significant losses and is not able to generate adequate cash flows to meet all its financial commitments and obligations as and when they were due. This was the view of independent auditor BDO —who scrutinised the FSC's financial statements for the year ending May 31.

BDO said the miller had been "incurring significant losses during recent years".

According to the BDO independent auditor's report, during the year ended May 31, 2017, the FSC incurred a loss from operations of $39.6 million and net loss of $45m.

BDO also said the FSC's total liabilities exceeded total assets resulting in net liabilities of $217.1m with the current liabilities exceeding current assets by $94.3m. BDO noted that FSC had debt repayment commitments amounting to $89m for the financial year ending May 31, 2018.

The independent auditor said the present financial status of the FSC indicated the existence of 'a material uncertainty that cast significant doubt about the corporation's ability to continue as a going concern.'

Last year, the FSC recorded a loss from operations of $26.1m and net loss of $53.4m.

As at May 31, 2016, the liabilities of FSC exceeded assets by $41.6m with the miller recording net liabilities of $172.1m.

BDO also noted that the going concern assumption — on which the financial statements were prepared — were "critically dependent on the Government's support to the corporation and the sugarcane industry, to enable the corporation to continue in operation for at least 12 months".

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