Update from 24th October - 50 days ago.... Plus, a comment on use of wording.
Financial Reporting "The Company will now also over the coming weeks work in parallel to finalise the outstanding financial reports to keep shareholders informed in line with the Company’s disclosure obligations under the ASX Listing Rules."
Comment:-So these would be the 'Listing Rules' for Financial Reporting that have been ignored and flaunted with, throughout all of this Calendar Year.
"The Company will progressively release the reports as they are finalised."
Comment :- There was a further update a week later (1st Dec) with no indication that they've secured a new auditor to even commence the missing reports !
"The Company wishes to inform shareholders that the delay in the release of its outstanding financial reports is primarily due to the process of considering a change of auditor and internal staffing restructuring."
Comment :- I fail to see what 'internal staffing restructuring' has anything to do with the delays in financial reporting...
"The need for a change of auditor has been a mutual decision between the Company and the Company’s current auditor due to not being able to come to an agreement for the remuneration following the last audit being charged at more than double what was originally estimated. The Company is currently in the process of securing a replacement auditor."
Comment :- The use of wording here is what grabs my interest. So their books/audit services had been done by Nexus for a long time. I outlined in another post what their charges had been for the previous two financial years and it actually shows a reduction in their fee by $7,000-ish for 2021/2022 v 2020/2021...dyor On the face of it, Nexus have been very fair and consistent with their charges.
Ok so, with CGB saying "the last audit being charged at more than DOUBLE what was originally ESTIMATED" There are two parties at play here to which an 'estimate' can be attributed. Furthermore, it hasn't been clarified which period 'the last audit' covered which attracted this double-estimate.
Either Nexus gave CBG an estimate but they actually charged double this estimate....this would be very, very bad for business..
Or, CGB estimated that they would be charged HALF of what has been shown to be a consistent amount, but that amount remained consistent so they turned the wording around to make it look like they were being charged double (imo)...make sense ??
If it's related to CGB's own estimate, it would beg the question of 'how did this estimate arise ?' and, more to the point...'what actual $$$ figure was attached within that 'estimate'.
Based on the charges for the last two FY's of circa $130k, if Nexus were to have audited 2022/2023 FY then you're looking at +$250,000 for their service. Then on the flip-side, for the same service, could CGB have estimated circa $65,000 ??
Many, many variables and one that shouldn't be dismissed is the potential that Nexus charged double so as to wash their hands of CGB (for whatever reason) knowing they wouldn't be paid that amount going forward so their services would be 'mutually' terminated.
CGB Price at posting:
2.1¢ Sentiment: Hold Disclosure: Held
