Meridian falls under PN17 because the auditor refrained from expressing an opinion on the financial statements

KUALA LUMPUR (April 8): Meridian Bhd on Monday announced its practice after the property developer’s external auditor issued a disclaimer of opinion on its audited financial statements for the period ending September 30, 2023. Classified as a listed issuer affected by Note 17 (PN17).

Waiver of opinion simply means that the auditor does not express an opinion. This is one of four conclusions an audit firm makes when expressing whether a set of financial statements provides a true and fair view of the company’s financial condition; The three are unqualified opinions, qualified opinions, and dissenting opinions.

In an audit report submitted by Meridian to Bursa Malaysia, auditor Jamal Amin & Partners said the company was unable to obtain sufficient appropriate audit evidence regarding the estimates and assumptions made in its cash flow forecasts. , said it had announced a waiver of opinion. This was prepared by Meridian’s management on the basis that the group would continue as a going concern.

This includes the group incurring a total net loss of RM108.24 million over the past three financial years and the situation where the group’s current liabilities exceed its current assets, the auditor said.

Furthermore, the Group’s cash reserves are low for both companies as the Group’s bank overdrafts exceed credit limits, and a significant portion of the Group’s inventory is encumbered by private alerts, complicating its disposal. ing.

Auditors also noted that tax authorities have taken legal action against the group due to unpaid taxes and penalties.

Jamal of Amin & Partners said: “The events and circumstances described above indicate the existence of significant uncertainties that cast serious doubt on the ability of the Group and the company to continue as a going concern.”

The auditor also noted that Meridian’s assets with a total book value of RM50.43 million, representing 28% of the group’s total assets, are still registered under the former subsidiary that was previously disposed of, but the ownership has not been transferred. said. group.

The company noted that its former subsidiary, which was responsible for transferring real estate ownership, had been liquidated by the High Court and is now under receivership, raising uncertainty regarding the financial impact on the group.

“Accordingly, we cannot determine whether any potential adjustments are necessary and, if so, we cannot confirm the truth of any relevant information that may be required to be disclosed in the Group’s financial statements. “No,” the auditor said.

It also said it could not confirm the amount and existence of the RM2.97 million term loan, nor could it obtain any other audit evidence regarding its accuracy and existence.

Meridian, which is famous for having completed several facilities such as The Summit Subang USJ, The Summit Bukit Mertajam, and The Ark@Cyberjaya, will sell its shares and new shares past the March 31st deadline. It finally filed its 2023 annual report last week to avoid a suspension of trading rights. Submit annual audited financial statements included in the annual report.

In the company’s most recent quarter (three months ended Nov 30, 2023), the company’s revenue of RM321,000 dwarfed its cost of goods sold of RM602,000 and administrative expenses of RM739, resulting in a revenue of RM1.22 million. The company recorded a net loss of RM2. ,000 and financial cost RM242,000.

For the 17-month financial year ended Nov 30, 2023, Meridian posted a net loss of RM16.41 million on revenue of RM3.8 million.

Meridian shares rose 1.5 sen or 33.33% to close at 6 sen on Monday, taking the group’s market capitalization to RM13.71 million.

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