06 January 2022

3 Important Points taken from Serba Dinamik's Annual Report (6 January 2022)

Finally, the audit report which all shareholders of Serba Dinamik Holdings Bhd (SDHB) are waiting anxiously for months is out today. However, the annual report comes together with other announcements which are lengthy. Confused? Lazy to read?

No worry. Let us summarise for you in 3 Important Points below:

Deviation or Variance of more than 10% 👀👀👀

There is a deviation or variance of more than 10% between SDHB and its group of companies (“Group”)’s profit after tax for the period of approximately RM758.38 million as stated in the FPE 30 June 2021 as compared to the loss after tax of the Group of approximately RM185.37 million in the audited financial statement for the financial period ended 30 June 2021 ("AFS 2021").

Disclaimer of Opinion
The company’s External Auditors, Messrs. Nexia SSY PLT had expressed a disclaimer of opinion in the Independent Auditors’ Report for the financial period ended 30 June 2021.

Key summary of the basis of disclaimer of opinion:
  • time limitations and occurrence of additional significant events impacting the completion of audit works
  • in view of the timing of Nexia's appointment, they were not in a position to observe the counting of physical inventories at the end of the period
  • there are significant matters which the auditors require that are outstanding at the date of the report and they have not been able to compile sufficient appropriate audit evidence to provide a basis for an audit opinion
  • the Group and the Company have triggered events of default for various contracts and obligations
  • these events or conditions indicate the existence of material uncertainties that may cast significant doubt on the Group’s and the Company’s ability to continue as a going concern
  • the ongoing EY Independent Review and legal suits have constrained the completion of the audit

PN17 was being Triggered
Due to the above disclaimer of opinion by external auditors, the Company has triggered the prescribed criteria pursuant to Paragraph 8.04 and Paragraph2.1(d) of Practice Note 17 of the Listing Requirements, thus, SDHB is considered as a PN17 company.

Pursuant to the PN17 of the Listing Requirements, SDHB is required to comply with a list of obligations within the next 12 months period.


What's next?

Below are the steps taken or proposed to be taken to address the key audit matters that relate to the disclaimer of opinion:
  1. The Company will formulate a comprehensive regularisation plan for submission to Bursa Securities by end of January 2023. The regularisation plan includes inter-alia, funds raising exercise to be undertaken by the Company, the proceeds raised therefrom will be used as working capital and funds for future projects;
  2. The Company will appoint a Principal Adviser to advise the Company on a regularisation plan.
  3. The Group will focus on costs saving and optimisation plans in order to remain competitive in the current business environment.
  4. The Group will closely engage with secured lenders and will discuss on options to find an amicable solution for the debt resolution.

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