KUALA LUMPUR: The auditors of Caely Holdings Bhd has raised doubts whether the company would be able to fully recover RM11.995mil due to a subsidiary for construction work done at a Felcra Bhd housing project.
"We are uncertain of the full recovery of certain trade receivables of the Group amounting to RM11.995mil as at financial year end, as a substantial amount on the completed constructions payments that have not been received," the auditors told Bursa Malaysia today.
"We were unable to obtain sufficient and appropriate audit evidence on the impairment assessment of the above mentioned carrying amount of the said receivables in accordance with MFRS 9 Financial Instruments. Consequently, we were unable to determine whether any adjustments to these amounts were necessary," they said.
Caely, through its subsidiary, Caely (M) Sdn Bhd (CMSB) has trade receivables with a carrying amount of approximately RM11.995mil as at March 31, 2020 including the retention sum of RM4.863mil.
On Feb 28, 2018 CMSB had completed the construction work, however only RM250,000 repayment received since then due to change of government and the Covid-19 pandemic in Malaysia.
During the intervening period, all the payment of the construction had been delayed.
The Board of Directors of the Company, based on information/facts available, has assessed and concluded that there should not be any impairment loss on the trade receivables in its existing condition and/or realised at a value close to its carrying amount as at financial year end.
CMSB is the main sub-contractor to Koperasi Peserta-peserta Felcra Malaysia Bhd (debtor), who is the main contractor of a residential house development project which Felcra Bhd is the developer.
Delay in applying for the Certificate of Completion and Compliance (CCC) of the project is said to be the root cause of all the issue arose.
"CMSB is working closely with the Debtor and the Developer, by assisting them in fulfilling the new CCC requirements in order to expedite the CCC’s application and approval," the statement said.
Felcra is targeting to complete and meeting all the requirements of CCC by end of year 2020. "CMSB is expecting to receive the outstanding payments gradually from the Debtor in the first quarter of year 2021, barring any unforeseen circumstances, full payment of the outstanding debts will be received from the Debtor in the financial year ending 31 March 2022," i
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