Companies & Markets

Miyoshi gets qualified opinion from auditors on FY2020 financial statements

Published Sun, Dec 13, 2020 · 08:43 AM

MIYOSHI'S independent auditors BDO have issued a qualified opinion on the group's financial statements for the year ended Aug 31, 2020. This relates to lack of sufficient audit evidence on Miyoshi's treatment regarding its investment in electric vehicle company Core Power (Fujian) New Energy Automobile Co.

After the loss of significant influence over Core Power, the group's investment in Core Power was reclassified to financial asset designated at Fair Value through Profit or Loss (FVTPL). Accordingly, Miyoshi ceased to recognise Core Power as investment in associate from July 30, 2020.

Because an audit of Core Power could not be performed for the current financial year, BDO was unable to obtain sufficient appropriate audit evidence on Miyoshi's equity accounting which includes the share of associate's loss of S$1.1 million for the Sept 1, 2019 to July 30, 2020 period and loss arising from valuation of retained interest in Core Power of S$17.7 million before derecognition.

Furthermore, Miyoshi's management has determined that the fair value of investment in Core Power on July 30, 2020, the date of derecognition, to be nil. No fair value adjustment was made on the financial assets on FVTPL from July 30 to Aug 31 this year. The auditors were unable to obtain sufficient audit evidence on the management's fair value assessment of the financial assets at FVTPL being nil as at Aug 31, 2020.

Consequently, BDO was unable to determine whether any adjustments to the group's financial assets at FVTPL were necessary.

In its filing with the Singapore Exchange early Saturday morning, Miyoshi said that the audit of Core Power could not be performed for FY2020 due to financial difficulties and lack of resources. It said its investment in Core Power was impacted by the Covid-19 pandemic as well as changes in government rulings in China for the industry in which Core Power operates. As a result, Core Power's operations remained dormant since February this year.