Bursa reprimands MTD ACPI for failing to incorporate earnings adjustment

by **Cals** Fri 13 Feb 2015, 18:49

Bursa reprimands MTD ACPI for failing to incorporate earnings adjustment

By Gho Chee Yuan / theedgemarkets.com | February 13, 2015 : 6:27 PM MYT

KUALA LUMPUR (Feb 13): Bursa Malaysia has publicly reprimanded [size=14]MTD ACPI Engineering Bhd ([You must be registered and logged in to see this image.] Financial Dashboard) for failing to incorporate adjustments which were made in the company’s annual audited account for the financial year ended March 31, 2013.

In a statement today, Bursa said failure to take into account the adjustments was in contravention of paragraph 9.16(1)(a) of the Listing Requirements (Main LR).

Bursa said the public reprimand was imposed pursuant to paragraph 16.19(1) of the Main LR, after taking into consideration all facts and circumstances of the matter and upon completion of due process.

MTD ACPI (fundamental: 0.8; valuation: 1.2) was required to review and ensure the adequacy and effectiveness of its financial reporting function, and carry out a limited review on its quarterly report submissions, Bursa said.

Bursa added the limited review must be performed by the company’s external auditors for four quarterly reports, commencing no later from the quarterly report for the financial period ended March 31 this year.

"In addition, MTD ACPI must ensure all its directors and relevant personnel attend a training programme on compliance with the Main LR pertaining to financial statements," the exchange regulator said.

Bursa noted none of MTD ACPI’s directors have caused or permitted the breach; however, the regulator highlighted it was the duty of the directors to maintain appropriate standards of responsibility and accountability in ensuring compliance of the Main LR.

To recap, MTD ACPI had reported an unaudited profit after taxation and minority interest of RM36.7 million in the fourth quarter of financial year 2013 (4QFY13), compared to an audited profit after taxation and minority interest of RM14.88 million in its annual audited accounts for the FY13, which was announced on July 31, 2013.

The difference of RM21.8 million between the unaudited and audited results, represented a variance of 59%, Bursa said.

Bursa noted the main adjustments in the annual audited account for 2013, were in relation to the provision of tax payable and deferred tax liabilities, and over recognition of profit which were due to the company’s error or oversight in the 4QFY13.

Another reason, Bursa said, was due to additional provision of slow moving stock and bad debts which were not taken up in the 4QFY13, without any reasonable explanation.

MTD ACPI closed unchanged at 33 sen, giving it a market capitalisation of RM76.23 million.

[size=12](Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)[/size]
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