IT would surely be a hive of activities among Serba Dinamik Holdings Bhd’s top brass this weekend as the global oil & gas (O&G) integrated engineering services provider gears up for its D-Day a.k.a trading resumption on Monday.
Late yesterday (May 28), the company issued two announcements that together shed brighter light into Tuesday’s (May 25) flagging of some audit matters by its external auditor KPMG PLT in relation to the company’s FY2020 financials.
In its first Bursa filing, the board of Serba Dinamik said it has received a special notice from non-independent non-executive director Datuk Abdul Kadier Sahib who also holds a 15.96% stake in the company to convene an extraordinary general meeting (EGM) pursuant to Section 311 of the Companies Act (CA) 2016.
The EGM is intended to propose the appointment of BDO PLT as new auditors of the company to replace KPMG pursuant to Sections 277 and 322 of CA 2016 for its financial year ending June 30, 2021.
“A circular to shareholders containing details of the proposals together with the EGM notice will be despatched to shareholders of the company in due course,” noted the stock exchange filing.
Second Bursa filing
Meanwhile, the second announcement is a reply to Bursa Malaysia’s query with regard to Serba Dinamik’s proposal to conduct a special independent review vis-à-vis the appointment of international independent firms.
The five questions raised by the market regulators and a summary of feedback by Serba Dinamik are as follows:
Details of the matters (specific area) highlighted by the external auditors pertaining to the statutory audit and the financial amount involved in each of the matters, where applicable: Serba Dinamik said it has proposed to arrange for interviews and other means of communication between KPMG and certain debtors to clarify matters as well as requested KPMG to share the signed confirmation that was in contentious for the company’s further investigation.
“The company has responded to KPMG on all queries on May 6 and to-date, KPMG has yet to revert with the above,” Serba Dinamik pointed out.
In respect to the 11 confirmations of balance stated by KPMG, the company said they account for total sales transactions of RM2.32 bil, trade receivables balance (RM652 mil) and materials on site balance (RM569 mil).
The targeted date of independent firm appointment and the specific areas and scope of undertaking the independent review: Serba Dinamik said its board targets the appointment to happen in June 2021.
The job scope entails among others the review process and determination of appropriateness of the item as highlighted in Question 1 raised by the market regulator.
Serba Dinamik said it will make an announcement to this effect immediately upon the finalisation of the aforesaid appointment.
The financial and operational impact of the matters under review on the company: Serba Dinamik said it is not able to substantiate the impact pending the review by the independent firm.
The company further stated that it is of the view that there is no issue with regard to the legitimacy and existence of the contracts as well as the value that will render any material impact to the financial and operational aspects of the group for the financial year ending June 30, 2021.
The measures or steps taken/to be taken by the company to address the matters under review apart from the appointment of an independent firm to undertake a special independent review: Serba Dinamik said it has reverted with reply to queries to the external auditors on May 6.
Additionally, the company has taken/will take the following steps to address the issue raised:
- Provided the necessary information including contact details of the relevant parties as requested by the external auditors to satisfy their extended procedures requirements;
- Provided all outstanding audit information as requested by the external auditors; and
- Constantly attempt to engage with the external auditors to resolve matters on hand.
Whether there is any independent committee established internally by the board of directors to manage and handle matters in relation to the independent review: Serba Dinamik said the company is also setting up an independent committee – which will report to its board of directors – to manage and handle all matters in relation to the independent review.
The composition of this committee will mainly comprise of non-executive directors, legal advisors, internal auditors, company secretary and representative of the management.
Serba Dinamik was last traded at RM1.61 on May 25 with a market capitalisation of RM6 bil. – May 29, 2021
