PETALING JAYA: Serba Dinamik Holdings Bhd announced today that its external auditor, Messrs Nexia SSY PLT, has expressed a disclaimer of opinion on the company’s financial statements for the financial period ended June 30, 2021.
Nexia said it has undertaken the audit procedures necessary to enable it to conclude on the appropriateness of, inter alia, the group’s recognition of revenue, purchases, receivables, payables and inventories for the 18-month period up to June 30, 2021. These procedures have been impeded by time limitations and occurrence of additional significant events impacting the completion of its audit.
“Other considerations were that in view of the timing of our appointment, we were not in a position to observe the counting of physical inventories at the end of the period. Alternative means to verify the inventory quantities held at June 30, 2021 is still pending. Additionally, there are significant matters which we require that are outstanding at the date of our report and we have not been able to compile sufficient appropriate audit evidence to provide a basis for our audit opinion.
“The group and the company have triggered events of default for various contracts and obligations in respect of these contracts. These events or conditions indicate existence of material uncertainties that may cast significant doubt on the group’s and the company’s ability to continue as a going concern. Be that as it may, the financial statements of the group and of the company have been prepared on a going concern basis, the validity of which is highly dependent on the successful implementation of the directors’ plans in responding to the conditions,” the auditor said.
Nexia said its scope of services in its letter of engagement makes reference to the availability of the EY Review report for the purpose of completing its audit. In addition, the outcome of the legal suits extends beyond the timeline determined by Bursa to the company for submission of the annual report.
“These actions have constrained our completion of the audit. Under these onerous circumstances and potential interaction of these uncertainties and their possible cumulative effects on the financial statements, we are unable to express an opinion.”
In response, Serba Dinamik said in its filing with Bursa Malaysia today that it will formulate a comprehensive regularisation plan for submission to Bursa Securities by end of January 2023. The regularisation plan includes, inter-alia, fundraising exercises to be undertaken by the company, and the proceeds raised will be used as working capital and funds for future projects. It will appoint a principal adviser to advise on a regularisation plan.
The group will focus on cost-saving and optimisation plans in order to remain competitive in the current business environment. It will also closely engage its secured lenders and will discuss on options to find an amicable solution to the debt issue.
The group expects to resolve the issues relating to the disclaimer of opinion within the next financial year.
In its 2021 annual report issued today, Serba Dinamik chairman Datuk Seri Mohamed Farid Abu Hassan assured shareholders that the company is still in good hands by not letting the accounting saga overwhelm its day-by-day operations.
“In essence, it is still business as usual at the group with key focus being proactively sourcing for new income streams – or expand the scope of existing ones – to enhance earnings. This is by no means an easy task given Serba Dinamik was forced at one stage to contend with an en masse resignation of its independent directors in view of their disagreement with the way the company was handling its so-called accounting saga,” said Farid.