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AUDIT REPORT - MODIFIED OPINION / MATERIAL UNCERTAINTY RELATED TO GOING CONCERN : QUALIFIED OPINION

TALAM TRANSFORM BERHAD

Type Announcement
Subject AUDIT REPORT - MODIFIED OPINION / MATERIAL UNCERTAINTY RELATED TO GOING CONCERN
QUALIFIED OPINION
Description
TALAM TRANSFORM BERHAD ("TTB" OR "THE COMPANY")
BASIS FOR QUALIFIED OPINION IN THE REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2022

Pursuant to Paragraph 9.19(37) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the Board of Directors of the Company wishes to announce that the Company’s external auditors, Messrs Baker Tilly Monteiro Heng PLT has expressed their basis for qualified opinion on the audit of the financial statements for financial year ended 31 March 2022 of TTB as follows:-

 

ISSUANCE OF QUALIFIED OPINION IN THE REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2022, ON THE BASIS OF BEING UNABLE TO DETERMINE THE POSSIBLE EFFECT ON THE COMPARABILITY OF THE CURRENT YEAR FIGURES AND CORRESPONDING FIGURES, RESULTING FROM THE MATTERS THAT GAVE RISE TO THE PREVIOUS FINANCIAL YEAR’S QUALIFICATION

 

1. Basis for Qualified Opinion

 

As disclosed in Note 37 to the financial statements, the amount owing by an associate and the other receivables of the Group and of the Company were qualified in the previous financial year. During the current financial year, the matter which gave rise to the above qualification have been concluded due to the events as dsiclosed in Note 9(c) and Note 12(b)(iii) to the financial statements respectively. Since the opening amount owing by an associate and the other receivable affect the determination of the results of operations, we are unable to determine whether any adjustment to the results of the operations and retained earnings might be necessary for 31 March 2021.Our audit opinion on the financial statements for the year ended 31 March 2021 was modified accordingly. Our opinion on the current year’s financial statements is also modified because of the possible effect of this matter on the comparability of the current year’s figures and corresponding figures.

 

2. Steps taken or proposed to be taken to address the matter that relates to the qualified opinion

 

As also mentioned within the qualification itself, “the matters which gave rise to the above qualification have been concluded due to the events as disclosed in Note 9(c) and Note 12(b)(iii) to the financial statements respectively”. These two notes are reproduced below for ease of reference.

 

Note 9(c) - INVESTMENT IN ASSOCIATES AND AMOUNT OWING BY ASSOCIATES

 

In the previous financial year, the amount owing by an associate of the Group and the Company then of RM29.46 million as at 31 March 2021 was in relation to advances for a property development project. The assessment of impairment losses on these balances required significant judgement to be made by the directors on the expected credit losses. The Group and the Company were of the view at that time that no impairment was required for the amount owing by the associate. During the current financial year, the Group has completed the acquisition of the remaining 50% equity interest in this associate from IJM Properties Sdn Bhd, thus enabling this associate to become a 100% wholly owned subsidiary of the Group.

 

As a result of the Covid-19 pandemic, there was minimal work progress at the site during the financial year ended 31 March 2022 due to prolonged lockdowns, frequent site-closures, workers’ Covid infections and vaccination and other compliance requirements with government issued standard operating procedures.

 

The supply chain disruptions further exacerbated the input costs inflation on overall construction costs. In the light of this new major development, the board of the company had presented a revised feasibility study of the project to the Group, with an implementation timeline to coincide with the recovery of the country’s economy from the global Covid-19 pandemic. Based on this new appraisal, the Company had accounted for the necessary expected credit losses on the amount owing by Good Debut Sdn Bhd in the current financial year accordingly.

 

Note 12(b)iii - Other receivables and deposits

 

In the previous financial year, the other current receivable of RM67.63 million by the Group was in relation to previous advances to JPMHL that was under liquidation. The assessment of expected credit losses on this balance required significant judgements to be made by the directors. The valuation of investment properties conducted by the China administrative was much higher than the net book value of the investment properties. Accordingly, the Group was then of the view that no impairment was required for this receivable.

 

During the current financial year, JPMHL’s 15% shareholder, Jilin Provincial Expressway Group Company Limited (“JPEGCL”) had proposed to the Group its intention to implement a debt restructuring exercise to safeguard the rights and interest of both parties. Since this proposal will provide certainty as to the amount of disposal proceeds and accelerate the timing of receiving the cash payment, the directors has decided to accept this offer to dispose its 85% equity interest in JPMHL and assign its creditor’s rights for a total cash consideration sum of RMB72.74 million.

 

During the financial year, the Group had completed its disposal of 85% equity investment in JPMHL to JPEGCL for a net consideration of RM45.42 million, which has already been received in full and the deficit of RM22.21 million was written off.

 

As such, no further steps need to be taken.

 

3. Timeline for the steps referred to item (2) above

 

As mentioned in Note 37(b) to the financial statements, the matters which gave rise to the qualification in the Auditors' Report on financial statements for the financial year ended 31 March 2021, have already been concluded during the financial year ended 31 March 2022, as a result of the events disclosed in Note 9(c) and Note 12(b)(iii) to the financial statements respectively. 

 

4. The Board’s Opinion

 

The Board wishes to confirm that there is no further action necessary to address this qualification.

 

 

This announcement is dated 29 July 2022.






Announcement Info

Company Name TALAM TRANSFORM BERHAD
Stock Name TALAMT
Date Announced 29 Jul 2022
Category General Announcement for PLC
Reference Number GA1-28072022-00056




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