SINGAPORE – Cordlife’s independent auditor KPMG will not be seeking reappointment after flagging discrepancies between the group’s unaudited and audited accounts for financial year 2023, and also issuing a disclaimer of opinion on the financial statements for the same year.
On April 25, Cordlife said KPMG had given written notice to retire as the company’s external auditor, though its disclaimer of opinion was not raised as the reason for KPMG’s decision to do so.
The cord blood bank added that it “is not aware of any other circumstances connected with KPMG’s decision not to seek reappointment as auditor of the company at the financial year 2023 annual general meeting, that should be brought to the attention of shareholders”.
KPMG issues disclaimer of opinion
Earlier, KPMG had submitted a disclaimer of opinion in its independent auditor’s report dated April 24, stating that it had not been able to obtain “sufficient appropriate audit evidence” to provide a basis for an audit opinion on several areas.
These areas included the company’s compliance with laws and regulations, given Cordlife’s ongoing investigations by the Ministry of Health (MOH) and the Commercial Affairs Department (CAD).
KPMG also addressed uncertainties in providing an audit opinion on the subject of Cordlife’s refunds and claims, after the company said it would waive all future annual fees and initiate a refund for clients affected by its recent case of damaged cord blood units.
The auditor said it was unable to obtain sufficient audit evidence over the number of affected customers with confirmed damaged cord blood arising from temperature excursions as at Dec 31, 2023 – and therefore the “quantification and significance” on any adjustments to be recorded in Cordlife’s financial statements as a result.
KPMG further highlighted that “there are no alternative audit procedures that can be performed” in applying the going concern basis of preparation for Cordlife’s financial statements.
This is because investigations by MOH and CAD remain ongoing, while Cordlife’s business in Singapore remains suspended.
“The business operations in Singapore are a significant component of the group operationally, and the financial results are material to the overall group,” it added.
As at end-June 2023, total revenue of Cordlife’s business operations in the Republic represented 45 per cent of the group’s financial year 2023 results, while total assets of the Singapore business comprised 51 per cent.
The Singapore business’ operations were also the largest contributor to the group’s profit before tax for financial year 2023, highlighted KPMG.
Lastly, the auditor said it was unable to obtain sufficient audit evidence regarding subsidiaries that require financial support from Cordlife.
