IKHMAS Jaya Group Bhd’s ability to continue as a going concern has been flagged by its external auditor after the construction group and its wholly owned unit incurred losses for the financial year ended 2019.
Auditor KPMG drew attention to the losses worth RM159.5 mil and RM161.8 mil for the group and company respectively as well as current liabilities that had exceeded current assets by RM21.6 mil, Ikhmas Jaya said in a bourse filing yesterday.
KPMG said these conditions indicated that material uncertainty existed which could cast doubt on the group’s ability to continue as a going concern.
Further, Ikhmas Jaya said its shareholders’ equity on a consolidated basis is 25% or less of the share capital (excluding treasury shares) and such shareholders’ equity is less than RM40 mil.
These two developments, said Ikhmas Jaya, had triggered the Practice Note 17 (PN17) criteria of the Main Market Listing Requirements, reserved for financially distressed companies on Bursa Malaysia.
But the bourse said in an April 16 letter that it had granted to the affected listed issuers relief from complying with the obligations under the rules from April 17, 2020, to June 30, 2021.
Companies that have triggered the criteria will be exempted for the period and offered PN17 relief measures. Bursa said Ikhmas Jaya would not be classified as a PN17 company and it would not be required to regularise its condition.
“Ikhmas Jaya will reassess its condition and announce whether it continues to trigger any of the criteria for PN17 of the Main Market Listing Requirements upon the expiry of 12 months from the date of this announcement,” the group said. – July 1, 2020