Bursa Malaysia Securities Publicly Reprimands Asdion Berhad For Breach Of The ACE Market Listing Requirements

Bursa Malaysia Securities Berhad (635998-W) (Bursa Malaysia Securities) has publicly reprimanded ASDION BERHAD (ASDION) for committing the following breaches of the Bursa Malaysia Securities ACE Market Listing Requirements (ACE LR):-

(1) Rule 9.23(1) of the ACE LR for failing to issue its annual report for the financial year ended 31 March 2016 (AR 2016) by the stipulated timeframe of 31 July 2016. The AR 2016 was only issued on 18 August 2016, after a delay of 14 market days; and

(2) Rule 9.16(1)(a) of the ACE LR for failing to ensure that the company's announcement dated 31 May 2016 on the fourth quarterly report for the financial year ended (FYE) 31 March 2016 (QR 4/2016) took into account the adjustments as stated in the Company's announcement dated 12 August 2016.

ASDION is also required to review and ensure the adequacy and effectiveness of its financial reporting function and carry out a limited review on its quarterly report submissions. The limited review must be performed by the company’s external auditors for four quarterly reports commencing no later from the quarterly report for the financial period ended 30 September 2017. In addition, ASDION must ensure all its directors and relevant personnel attend a training programme in relation to compliance with the ACE LR pertaining to financial statements.

The public reprimand and directives were imposed pursuant to Rule 16.19(1) of the ACE LR upon completion of due process and after taking into consideration all facts and circumstances of the matter including materiality of the breaches and that ASDION had previously breached the ACE LR.

While Bursa Malaysia Securities has not found any of ASDION’s directors to have caused or permitted the breaches by the company, Bursa Malaysia Securities wishes to highlight and remind that it is the duty of the directors to maintain appropriate standards of responsibility and accountability in ensuring compliance of the ACE LR. The Board of Directors of ASDION at the material time were as follows:-

Datuk Seri Maglin Dennis D’Cruz
Mohamad Farid Bin Mohd Yusof
Low Jyh Sing
Jason Minos Anak Peter
Lye Siang Long
Selva Rasan a/l Dato’ Puspa Das
Datuk Raime Bin Unggi
See Poh Yee
Dato’ Hj. Zulkifli Bin Hj. Alias
Ang Chin Poo

Bursa Malaysia Securities views the aforesaid contraventions seriously and has reminded ASDION and its Board of Directors of their responsibility to maintain appropriate standards of corporate responsibility and accountability to its shareholders and the investing public and ensure that such financial reporting breach will not recur.

BACKGROUND

1. Delay in issuance of the AR 2016

ASDION had on 2 August 2016 announced that the delay in issuance of the AR 2016 was due to the delay in consolidating the accounts of its subsidiary in Singapore which was pending issuance of confirmation from the auditors in Singapore to ASDION’s external auditors. In this regard, it was noted that there was a change in the finance team in the subsidiary and the new and inexperienced finance team had to familiarize with the accounts which had resulted in the subsidiary not being able to provide the audit clearance to ASDION’s external auditors.

2. Inaccurate Announcement of the QR 4/2016

ASDION reported an unaudited loss after taxation and minority interest of RM921,219 in its QR 4/2016 compared to an audited loss after taxation and minority interest of RM1,742,103 in its audited financial statements for FYE 31 March 2016. In this regard, the difference of RM820,884 between ASDION's QR 4/2016 and audited results represented a variance of approximately 89.1%.

The deviation was mainly due to the following: -

over-recognition of gain from disposal of subsidiaries of RM629,000 where the foreign currency translation reserve should be reversed to profit and loss account instead of retained earnings in accordance with clear accounting standard; and
under-recognition of costs of goods sold of RM175,000 which was essentially due to the company’s oversight.

ASDION had failed to –

put in place the necessary and proper resources, processes, controls and checks and supervise the proper and effective implementation of the same to enable the company to adhere to its financial reporting obligations (i.e. timely and accurate financial statements) under the ACE LR; and
ensure the proper preparation and finalization of the company’s and its subsidiaries’ financial statements, which had led to the breaches.