Finanstilsynet has reviewed certain aspects of the 2013 financial statements and interim reports for 2014 of Scana Industrier ASA ("Scana"). The review focused primarily on disclosures related to the going concern assumption and accompanying required information.
Weak profitability in combination with a relatively high debt to assets ratio has led to significant uncertainty with regard to the company's ability to continue as a going concern. Scana has informed Finanstilsynet that it is in breach of several loan covenants, and that its liquidity situation poses a challenge. Given Scana's demanding financial situation, there is a particular need for adequate and proper financial reporting.
Interim reports are required to include information on any uncertainties related to the going concern assumption and details of the judgements made by management in that regard. Scana failed to provide a sufficient and complete assessment of these matters in its interim reports for Q1 and Q2 2014.
Scana included some additional information in its interim report for Q3 2014, but in Finanstilsynet's view the information disclosed is still incomplete and inaccurate in certain areas. The company must disclose more information on management assessments regarding the going concern assumption. Information must also be provided on how the various restructuring measures are likely to affect continued operations, as well as more detailed and precise information on how the company intends to meet its future liquidity needs.
Scana has informed Finanstilsynet that its reporting of these matters will be amended in the interim report for Q4 2014. Finanstilsynet notes this for the record.