FSBM slips into PN17 on disclaimer of opinion

PETALING JAYA: FSBM Holdings Bhd has triggered the Practice Note 17 (PN 17) criteria, following a report issued by its auditors expressing a disclaimer of opinion on the group’s audited financial statements for the financial year ended June 30, 2018.

The information technology service and systems provider is required to submit a regularisation plan to the Securities Commission Malaysia or Bursa Securities Bhd within 12 months.

“The company is looking into formulating a regularisation plan to address its PN17 status. The company will make the necessary announcement on the regularisation plan in due course,” it said in a Bursa filing.

In a separate filing, FSBM’s auditors Moore Stephens Associates PLT said it had been appointed to audit the group’s financial statements on Oct 21 upon the resignation of the previous auditors on Sept 13.

However, it said it was not able to obtain enough appropriate audit evidence to provide a basis for an audit opinion.

“During the course of the audit, the group and company’s management represented they did not have sufficient time to locate the very old historical records to provide us with the requisite documentation and information.

“Consequently, we were unable to perform the opening balances verification of the group and company which had resulted in the inability to obtain sufficient audit evidence of the following account balances, transactions and related disclosures as at July 1, 2017,” it said.

Moore Stephens also noted that it was unable to obtain sufficient audit evidence on the carrying amounts on the items specified under the opening balances paragraph of the group and company for its financial statements for FY18.

Other items the auditor said it did not have adequate audit evidence for included: amounts due from Technitium Sdn Bhd, unreconciled differences, recoverability of amounts due from Technitium, recoverability of other receivables, and liabilities, contingent liabilities & commitments.

Stephen Moores also said the financial statements for the group and company were prepared on the assumption that it would continue to operate as going concerns, despite the group and company incurring a net loss of RM669,000 and RM4.66 million respectively for the year ended June 30, 2018.

The company’s current liabilities also exceeded its current assets by RM8.23 million, while its shareholders’ equity posted a deficit of RM8.17 million.

“The ability of the group and company to continue as going concerns is dependent on the formalisation and successful implementation of the regularisation plan of the company to restore its financial position and achieve sustainable and viable operations,” said Moore Stephens.