Auditors maintain opinion on Damansara Realty

PETALING JAYA: Damansara Realty Bhd’s external auditors, Messrs Jamal Amin and Partners, have expressed an unqualified opinion on the company’s financial statements for the financial year ended Dec 31, 2016.

In a filing with Bursa Malaysia yesterday, the property developer said its auditors had not modified its opinion pertaining to a “material uncertainty” whereby its current liabilities exceeded its current assets by RM155mil in 2016.

“We draw attention to Note 2.1 in the financial statements, which indicates that the group incurred a net loss of RM27mil during the year ended Dec 31, 2016 and, as of that date, the group’s current liabilities exceeded its current assets by RM155mil.

“As stated in Note 2.1, these events or conditions, along with other matters as set forth in Note 2.1, indicate that a material uncertainty exists that may cast significant doubt on the group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.”

Damansara Realty said the audit procedures included, among others, assessed internal control designed for identification of impairment indicators, as well as an evaluation of the adequacy of disclosure in respect of the impairment.

The company said the discrepancy between its liabilities and assets was due to a development rights agreement payable to Johor City Development Sdn Bhd (JCDSB) on Dec 31, 2016.

Damansara Realty said it had on April 11, 2017, obtained shareholders’ approval on the proposed settlement of amount owing to JCDSB. “The group has entered into an agreement to address the group’s net current liabilities position,” said Damansara Realty.

“The finalisation of the settlement agreement is pending approval from the Economic Planning Unit. We expect this settlement agreement to be finalised by end of the third quarter of 2017.”

Damansara Realty pointed out that the group is currently exploring options of fund raising to improve its net current liabilities position.