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 issued a qualified audit opinion on the audited financial statements for the financial period ended 31 March 2020 on the basis they are unable to determine whether any expected credit loss was necessary in accordance to MFRS 9 Financial Instruments, pertaining to an amount of RM31.82 million owing by an associate of the Group as at 31 March 2020 in relation to a property development project.

“Basis for Qualified Opinion

As disclosed in Note 9(b) to the financial statements, the amount owing by an associate of the Group of RM31.82 million as at 31 March 2020 is in relation to a property development project. The assessment of impairment losses on these balances requires significant judgment to be made by the directors on the expected credit losses. The Group is of the view that no impairment was required for the amount owing by the associate.

We were unable to obtain sufficient appropriate audit evidence in relation to their assessment that no expected credit loss was required for the amount owing by this associate. Therefore, we could not determine whether any expected credit loss was necessary in accordance to MFRS 9 Financial Instruments.”

The Board’s Opinion

The Board wishes to clarify that this associate has a joint venture project with the Group for 100 units of superlink houses in Ulu Kelang and the Group is confident that this debt will be fully recoverable from the associate once they implement their project to coincide with when the country’s economy recovers from the global Covid-19 pandemic and property prices have better value, especially since the development land is located in a choice location. The board of the associate company had presented the feasibility study and the Group has assessed the recoverability based on the feasibility study presented.

This announcement is dated 28 August 2020.