Auditors of Skynet (International Group) have disclaimed their opinion on whether the company's financial statements give a true and fair view of its affairs. According to its annual results which were announced yesterday, the portal operator made a net loss of HK$190.44 million for the year to March 31, down 70 per cent from HK$644.69 million a year earlier. Losses from associates contributed HK$36.9 million to the bottom-line deficit. Skynet's associates include 27.5 per cent-owned Cyber On-Air - a Growth Enterprise Market-listed Web site operator formerly known as HKcyber.com - and online stock trading site hkstock.com.hk. Skynet also made a provision of HK$20.7 million for Internet and information technology-related investments. Turnover plummeted 86 per cent to HK$46.64 million from HK$336.54 million previously. The decrease was mainly due to its shrinking marble and granite products business. Before jumping on the Internet bandwagon in March 2000, the company was known as Companion Marble Holdings. The firm mainly sold and installed marble and granite products. During the last financial year, sales from wholesaling of marble and granite products as well as marble fittings decreased 74.4 per cent, while turnover from related installation services fell 82.1 per cent. The company's liquidity and financial position has come under stress as a result of its poor performance. Skynet disclosed in its results that it was in breach of a covenant in respect of bank borrowings of HK$31.39 million as at March 31. The company's gearing ratio could not be calculated as there was a deficiency in shareholders' funds. Under such adverse operations, the company's auditors said they 'are unable to form an opinion as to whether the financial statements give a true and fair view of the [firm's] state of affairs'. The auditors also decided not to give an opinion on whether the financial statements had been properly prepared in accordance with the Companies Ordinance's disclosure requirements. The company is seeking to transform itself again to escape from its present distress. Skynet said yesterday it was negotiating with an independent party in relation to a possible acquisition of pharmaceutical-related assets. The agreement might involve placing new shares which could result in a change of management control, it said.