APB ADDRESSES AUDITOR’S MODIFIED OPINION ON FINANCIAL STATEMENTS, REASSURES BUSINESS AS USUAL

Group Ensures Transparency and Integrity Amid Ongoing Reviews of Specific Transactions

SHAH ALAM, 31 JULY 2024 – APB Resources Berhad ("APB" or the "Group"), a leading fabricator of design engineering equipment, acknowledges and would like to address to the Modified Opinion issued by the auditors in the financial statements, pertaining to specific deposits amounting to RM22.78 million.

As disclosed in Note 10 to the financial statements, the Group's had made several deposit payments to various parties. These payments consist of 50% advance payments for the contract sum related to the upgrading and construction of office premises and factories, payments for ERP software consultation and implementation services, advance payments for the supply of pipes, 25% partial payments towards the purchase consideration for acquiring a company, and advance payments for project tenders.

However, due to economic considerations, these transactions were subsequently aborted, and the entire deposits were fully refunded. Despite the refunds, the auditors have recommended that the Group undertake extensive procedures to verify the business rationale of these transactions and assess any potential non-compliance with applicable laws and regulations.

To address these concerns, APB has engaged a professional firm to conduct a thorough review of these transactions and has appointed a legal firm to determine if there were any instances of non-compliance with applicable laws and regulations. As of the date of authorization of the financial statements, the outcomes of both reviews are still pending.

APB remains committed to maintaining the highest standards of integrity and transparency in its financial reporting and disclosures. The Group emphasises that these transactions, which were initiated under the direction of a former director, will not impact the operational performance or cash flow of the Company.

The management team of APB commented: "APB is dedicated to upholding the trust of our shareholders and stakeholders by ensuring rigorous compliance with all regulatory requirements. The modified opinion issued by our auditors is being taken very seriously, and we are committed to conducting a thorough and comprehensive review of the transactions in question. We have already taken proactive measures by engaging independent professionals to assess the business rationale and legal compliance of these transactions. We believe that transparency and accountability are the cornerstones of our operations, and we are working diligently to address these concerns.”

To conclude, APB continues to operate its business as usual, with a steadfast focus on its core competencies and strategic growth initiatives. The Group remains optimistic about its future prospects and is well-positioned to capitalise on emerging opportunities in the fabrication sector, semiconductor and beyond.