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*Key takeaways from Serba Dinamik conference call:*
♦️ *Serba received the official review request in early May this year* and this is the main reason for the change of financial year end to June. *The prolonged COVID-19 pandemic has somewhat limit the ordinary audit process* despite >90% of the subsidiaries/material subsidiaries are audited by KPMG.
♦️ *No fraudulent related reports have been raised* thus far. The review are not particularly on certain transactions or subsidiaries but more on overall operations which include domestic and overseas operations. Some of these issues have been addressed by management and the independent reviews will “give comfort” to the auditors.
♦️ *No RPT is related and the additional reviews are not backdated to prior year numbers.* The additional review also not extended to Dato’ Karim’s related companies i.e. KPower and SCIB.
♦️ Serba Dinamik has identified a new independent firm to address this issue and *the review is guided to be completed by August* concurrently with the conclusion of 18MFY21 financial statements (until October 2021 for submission).
♦️ Management reiterates that *no disruption to its business operations* at this juncture. They have also engaged with financiers and *have not received any pullback of banking facilities* and credit lines.
♦️ Our view - *the explanations given by management may not be able to provide sufficient clarity and comfort to address investors doubt.* Expect share price to react negatively and it will remain a major overhang until the company is able to prove the veracity and accuracy of these matters.
SERBA DINAMIK HOLDINGS BERHAD
Old financial year end31 Dec 2020New financial year end30 Jun 2021
Remarks :The Directors of the Company is desirous to change the financial year end of the Company from 31/12/2020 to 30/6/2021 due to continuing extension of the MCO in Malaysia and lockdowns in countries in which the group have hampered the ability to finalise the Group's financial statements (FS); expansion of Groups operations in new countries further add to more ti
