KUALA LUMPUR (Dec 31): FSBM Holdings Bhd has lapsed into Practice Note 17 (PN17) status after its auditor expressed a disclaimer of opinion on its audited financial statements for the financial year ended June 30, 2018 (FY18).

Bursa Malaysia, which announced this in a statement today, said it will continue to monitor the progress of FSBM in respect of its compliance with the listing requirements.

FSBM's addition to the list of PN17 companies brings the total number of counters under the category to 23.

"As at Dec 31, 2019, there are a total of 23 companies under PN17 which represent 2.5% of the total number of 929 companies listed on Bursa Securities," said Bursa.

In a separate bourse filing yesterday, FSBM's external auditor Moore Stephens PLT said it was issuing a disclaimer of opinion on the IT service and system provider's FY18 audited accounts as the auditor could not obtain enough appropriate evidence to provide a basis for an audit opinion.

According to the auditor, FSBM's management said it did not have sufficient time to locate old records to provide Moore Stephens with the necessary documentation and information.

"Consequently, we were unable to perform the opening balances verification of the group and the company to comply with the requirements of ISA 510 Initial Audit Engagements — Opening Balances which had resulted in the inability to obtain sufficient appropriate audit evidence of the following account balances, transactions and related disclosures as at July 1, 2017," it added.

In particular, Moore Stephens noted that it was unable to obtain sufficient evidence on the carrying amounts pertaining to investments in subsidiaries and other investments.

Furthermore, the auditor noted that it did not have enough evidence for issues such as trade receivables due from Technitium Sdn Bhd (TSB), as well as the recoverability of amounts due from TSB.

Moore Stephens also noted the FSBM's financial statements were prepared on the assumption that the group would continue to operate as a going concern, in the face of it incurring a net loss of RM4.66 million for FY18.

In the same vein, current liabilities exceeded current assets by RM8.23 million, with a shareholder equity deficit of RM8.17 million posted as well.

"The ability of the group and company to continue as going concerns is dependent on the formalisation and successful implementation of the regularisation plan of the company to restore its financial position and achieve sustainable and viable operations," said Moore Stephens.

Shares in FSBM were not traded today and were last traded at 9.5 sen, giving the group a market capitalisation of RM13.43 million.