Business

Wednesday October 28, 2009

MEMS told to adjust accounts


PETALING JAYA: For the second time in less than three months, the Securities Commission (SC) has instructed MEMS Technology Bhd to make changes to its accounts for the financial years (FY) ended July 31, 2007, and July 31, 2008.

Yesterday, the SC gave MEMS 14 days to adjust the financial statements re-issued on Oct 7 as well as the quarterly report for the period ended Jan 31, 2009.

The company is also required to announce to Bursa Malaysia on the adjustments made, the reasons for the adjustments and the detailed effects on the financial statements.

In a statement yesterday, the SC said the directive was made following MEMS’ admission in its re-issued financial statements that they are not in compliance with FRS 118, the financial reporting standard on the accounting treatment for revenue.

On Aug 4, the SC ordered MEMS to rectify and re-issue its financial statements for FY07 and FY08. MEMS was also required to rectify and re-announce its unaudited condensed consolidated income statements for the six months ended Jan 31, 2009.

The regulator asked the company to exclude a total of RM49.18mil from the revenue originally posted in these financial statements.

The SC’s investigation revealed that the amount was derived from transactions that never took place in the respective financial years and period. This relates to sales recorded in the financial statements of MEMS’ wholly-owned subsidiary, Senzpak (M) Sdn Bhd.

“The company, while purportedly removing the transactions in question from its financial statements, had, in its reissued financial statements, which were announced to Bursa on Oct 7, 2009, stated that the reissued financial statements were not in compliance with FRS 118 due to SC’s directive,” the SC said.

“The SC views MEMS’ non-compliance with FRS 118 very seriously.”


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