In an amended statement to Bursa Malaysia yesterday, Nam Fatt said it represented a deviation of 193% due to an over-realisation of revenue Audited net loss deviated by RM356.7 million (RM15.36 million), provision for foreseeable losses overseas and locally (RM279.9 million), allowance for doubtful debts from debtors and other debtors (RM77.32 million), additional other operating expenses (RM1.97 million) and minority interest added back (RM17.84 million).
It said the lower revenue realisation was due to the revision of profi t estimates of the construction division.
Nam Fatt said the provision for foreseeable losses of RM136.27 million for an overseas construction project was made pending the outcome of negotiations for the settlement.
The provision for foreseeable losses of RM143.63 million for local contracts related to pending fi nalisation of accounts, dispute and contract terminations by certain contract customers.
It said the allowance for doubtful debts from debtors was RM41.39 million which could not be recovered due to contract terminations and disputes by certain contract customers, while a further provision of RM35.93 million was made for doubtful debts on other receivables.
Nam Fatt said due to the company’s Practice Note 17 (PN17) status, it had, on the basis of prudence, made further provisions to the audited fi - nancial statements that led to the material deviation. Companies are required under regulations to make announcements if their audited and unaudited fi gures deviated by more than 10%.
On April 30, in an announcement to Bursa, it was disclosed that Nam Fatt’s independent auditor Deloitte & Touche had declined to express an opinion on its fi nancial statements for the fi nancial year ended Dec 31, 2009. In a letter attached to the announcement, Deloitte & Touche highlighted eight points as the basis of its disclaimer of opinion on Nam Fatt’s fi nancial statements.
Nam Fatt triggered one of the conditions under PN17 on March 15 following its failure to meet its principal and interest payment of RM13.2 million due and payable on the same day in respect of an asset sale agreement dated Dec 4, 2007 between itself and Bank Kerjasama Rakyat Malaysia Bhd.
This article appeared in The Edge Financial Daily, May 7, 2010.
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