KUALA LUMPUR (May 8): Annum Bhd (KL:ANNUM), formerly known as Cymao Holdings Bhd, has been categorised a Practice Note 17 (PN17) company as its new external auditor Messrs SBY Partners PLT expressed a disclaimer of opinion on its audited financial statements for the 18 months ended June 30, 2023, after they failed to obtain sufficient evidence to verify the group's assets.

The wood products manufacturer will have a year to regularise its financial condition, failing which trading in its securities could be suspended and it could be delisted, its Wednesday filing noted.

Annum said the company is taking the necessary steps to address its PN17 status. "Barring any unforeseen circumstances, the company expects to resolve the issue relating to the disclaimer of opinion within the next financial year," it added.

In its audit report, SBY said it was unable to obtain sufficient, appropriate evidence on the existence, completeness, accuracy and valuation of the group’s intangible assets that amounted to RM153.62 million. It also could not verify the existence, accuracy, completeness and valuation of Annum's Smart Agriculture IOT System (SAIOT), which the company had classified as plant and machinery that amounted to RM53.62 million — representing 44% of the group's total assets.

SBY also couldn't ascertain the group’s recognition of revenue on trading of plywood and the wholesale trading of goods that amounted to RM197.34 million and RM50.3 million, respectively.

"In addition, we were not able to obtain sufficient appropriate audit evidence on the veracity of revenue contributed from plywood amounting to RM197.34 as we were unable to satisfy the existence/movement of inventory from one party to another party despite us performing additional audit procedures," the auditor explained.

(crosshead) Annum issues annual report after delayinng over six months

Separately, Annum said it has finally managed to issue its outstanding annual report for the financial period ended June 30, 2023 (FY2023), which was initially due on Oct 31, 2023.

The group, who is facing possible delisting due to the delayed issuance of the annual report, said it had submitted written representations to Bursa Malaysia to explain why it should not be delisted after the exchange regulator issued a show-cause notice to the company last week over the outstanding report.

Back in October 2023, Annum said it was unable to release its annual report for FY2023 because the group could not find a suitable auditor — having approached 31 potential auditors — after its previous one resigned. The majority of them cited resource constraints, the group said.

It finally appointed SBY as its new auditor on March 29 this year and had aimed to issue its annual report by April 30. But come April 30, Annum said it still could not issue the report as SBY was unable to form an audit opinion, so Annum had requested SBY issue a letter to explain why.

Annum has a market capitalisation of RM21.6 million, based on the stock's last traded price of 9.5 sen. The stock has been suspended from trading since November last year, due to the annual report issue.