Bursa Malaysia Securities Berhad (635998-W) (Bursa Malaysia Securities) has publicly reprimanded MTD ACPI Engineering Berhad (MTDACPI) for failing to ensure that the company’s announcement dated 28 May 2013 on the fourth quarterly report for the financial year ended (FYE) 31 March 2013 (4th QR 2013) took into account the adjustments as stated in the company’s announcement dated 31 July 2013.
The failure to take into account the adjustments was in contravention of paragraph 9.16(1)(a) of the Bursa Malaysia Securities Main Market Listing Requirements (Main LR) where a listed issuer must ensure that each announcement made is factual, clear, unambiguous, accurate, succinct and contains sufficient information to enable investors to make informed investment decisions.
The public reprimand was imposed pursuant to paragraph 16.19(1) of the Main LR after taking into consideration all facts and circumstances of the matter and upon completion of due process.
MTDACPI 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 31 March 2015. In addition, MTDACPI must ensure all its directors and relevant personnel attend a training programme on compliance with the Main LR pertaining to financial statements.
While Bursa Malaysia Securities has not found any of MTDACPI’s directors to have caused or permitted the breach by MTDACPI, Bursa Malaysia Securities wishes to highlight that it is the duty of the directors to maintain appropriate standards of responsibility and accountability in ensuring compliance of the Main LR. The Board of Directors at the material time were as follows:
(i) Tan Sri Dr. Nik Hussain bin Abdul Rahman
(ii) Dato’ Ir. A. Rashid bin Omar
(iii) Dato’ Dr. Azmil Khalili bin Dato’ Khalid
(iv) Keith George Cowling
(v) Md.Shukor bin Mohamed
(vi) Dato’ Ir. Kalid bin Alias
(vii) Nik Din bin Nik Sulaiman
(viii) Lee Leong Yow
Bursa Malaysia Securities views the contravention seriously and has reminded MTDACPI and its Board of Directors of their obligation to uphold appropriate standards of responsibility and accountability to shareholders and the investing public.
BACKGROUND
MTDACPI had reported an unaudited profit after taxation and minority interest of RM36.7 million in the 4th QR 2013 compared to an audited profit after taxation and minority interest of RM14.88 million in its annual audited accounts for the FYE 31 March 2013 (AAA 2013) which was announced on 31 July 2013. The difference of RM21.8 million between the unaudited and audited results represented a variance of 59%.
The main adjustments in the AAA 2013 were in relation to the following:
- under provision of tax payable and deferred tax liabilities and over recognition of profit which were due to the company’s error/oversight in the 4th QR 2013; and
- additional provision of slow moving stock and bad debts which were not taken up in the 4th QR 2013 without any reasonable explanation.
The company has an obligation to ensure that there are adequate resources and to put in place all the necessary controls and governance to enable it to adhere to its obligations under the Main LR at all material time.
