AUDIT REPORT - MODIFIED OPINION / MATERIAL UNCERTAINTY RELATED TO GOING CONCERN : DISCLAIMER OF OPINION
|BERTAM ALLIANCE BERHAD|
|Subject||AUDIT REPORT - MODIFIED OPINION / MATERIAL UNCERTAINTY RELATED TO GOING CONCERN
DISCLAIMER OF OPINION
BERTAM ALLIANCE BERHAD ("BERTAM" OR "THE COMPANY") DISCLAIMER OF OPINION ON THE AUDITED FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019
Pursuant to Paragraph 9.19(37) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the Board of Directors of Bertam Alliance Berhad (“Bertam” or “the Company”) wishes to announce wishes to announce that the Company’s External Auditors, Messrs. PKF had expressed a disclaimer of option in the Company’s Audited Financial Statement for the financial year ended 31 December 2019 (“AFS 2019”).
Disclaimer of Opinion has been disclosed in the Independent Auditors’ Report is as follows:-
We were engaged to audit the financial statements of BERTAM ALLIANCE BERHAD, which comprise the statements of financial position as at 31 December 2019 of the Group and of the Company, and the statements of profit or loss and other comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 10 to 89.
We do not express an opinion on the accompanying financial statements of the Group and the Company. Because of the significance of the matters described in the Basis of Disclaimer of Opinion section of our report, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial statements.
Basis for Disclaimer of Opinion
(1) Ability of the Group to continue as a going concern
We draw attention to Note 2 to the financial statements, which indicates that the Group and the Company incurred a net loss of RM15,810,111 and RM106,509,535, respectively during the financial year ended 31 December 2019 and, as of that date, the Group’s and the Company’s current liabilities exceeded their current assets by RM32,291,742 and RM71,570,688 respectively. The current liabilities include material obligations to Inland Revenue Board and Royal Malaysian Customs Department in relation to tax payable, tax penalty and Goods and Service Tax payable respectively. Further, the Group has defaulted in repayment of one of its bank borrowings.
The Company is an affected listed issuer pursuant to Paragraph 8.04(2) and Paragraph 2.1(c) of Practice Note 17 (“PN17”) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad and is required to submit its regularisation plan to the regulatory authorities within the stipulated timeframe under the Main Market Listing Requirements.
In forming our opinion, we have considered the adequacy of the disclosures made in the financial statements concerning the basis of their preparation by management. The use of the going concern assumption depends on: (i) the timely submission of the regularisation plan to and approval by the regulatory authorities; (ii) capital injection by prospective investors into the Company by way of proposed private placements for working capital purposes and regularisation of the defaulted loan; (iii) the ability of the Group to generate sufficient cashflows from the proposed property development to be undertaken by the Group and/or with potential joint venture partners; and (iv) approval of the application to settle tax payables including penalties on an instalment basis over Ten (10) years by the Inland Revenue Board.
These factors above indicate presence of multiple material uncertainties that are significant to the financial statements. However, notwithstanding this, the Group has prepared its financial statements based on the assumption that it would continue to operate as a going concern which contemplates the realisation of assets and settlement of liabilities in the normal course of business.
Based on our evaluation of the above factors considered by the Directors, we determined there are insufficient evidences to address the multiple material uncertainties and the financial statements do not include adjustments and reclassifications that may be necessary as a result of these uncertainties.
(2) Valuation of inventories (land held for property development)
We are unable to satisfy ourselves as to the appropriateness of the underlying basis and assumptions used by the Directors in arriving at recoverable values of inventories for the purpose of determining their net realisable values and therefore unable to ascertain if any adjustments to write down inventories with carrying amounts of RM198,244,256 would be required.
(3) Discount on loans to subsidiaries
We are unable to obtain sufficient appropriate audit evidence on the existence, completeness, accuracy and valuation of the carrying amount of discount on loans to subsidiaries of the Company amounting to RM16,412,737 as disclosed in the Note 18 to the financial statements.
Steps taken or proposed to be taken to address the Key Audit Matters that relates to the Disclaimer of Opinion
In relation to the above, the Board wishes to advise on the following:
(i) The Company will formulate a comprehensive regularisation plan for submission to Bursa Malaysia Securities Berhad by end September 2020. The regularisation plan includes inter-alia, funds raising exercise to be undertaken by the Company, the proceeds raised therefrom will be used as working capital and funds for future property development projects;
(ii) Bertam Development Sdn Bhd, the wholly-owned subsidiary of the Company will tender for construction contracts to mitigate its reliance on property development sector; and
(iii) The Group will focus on costs saving and optimisation plans in order to remain competitive in the current business environment.
Barring unforeseen circumstances, the Board expects to address the matters as mentioned above within the next financial year.
This announcement is dated 30 June 2020.
|Company Name||BERTAM ALLIANCE BERHAD|
|Date Announced||30 Jun 2020|
|Category||General Announcement for PLC|