KUALA LUMPUR (May 9): Annum Bhd (KL:ANNUM), formerly known as Cymao Holdings Bhd, says it is going to hire a new audit firm to conduct a special audit on its revenue, after its external auditor Messrs SBY Partners PLT said it cannot verify the figures Annum reported despite performing additional audit procedures.

Annum, which is involved in the manufacturing of wood-based products, just hired SBY in March this year after approaching 31 other auditors who turned down the job. Most had cited resource constraints, according to the group.

SBY, however, had expressed a disclaimer of opinion on Annum's financial statements for the 18 months ended June 30, 2023, after it failed to obtain sufficient evidence to verify the group's intangible assets of RM153.62 million; the value of its Smart Agriculture IOT System (SAIOT) of RM53.62 million; and revenue from its trading of plywood of RM197.34 million, as well as its wholesale goods of RM50.3 million.

Annum, in a bourse filing on Thursday detailing its response to SBY's findings, said it will appoint an auditor to audit the management accounts of subsidiaries that form part of the group's financial statements for the period under review.

The group will also be engaging a business valuer to evaluate SAIOT. It said it had previously provided SBY with supporting documents that included the detailed cost breakdown of SAIOT, as well as arranged for SBY to visit the smart farming project site to see SAIOT, and provided them a real-time demo session of the system, together with a progress report of the smart farming project, and a feasibility study on it that included a detailed cash flow projection.

As for its trading revenues, for which it is planning a special audit, Annum said it had provided SBY with evidence and information on its sales, including payment confirmation such as receipts, invoices and bank statements, as well as proof of transparent and consistent communication between buyer and seller.

The group insisted that it had adhered to legal requirements.

Annum was categorised as a Practice Note 17 company on May 8 after SBY expressed its disclaimer of opinion. It now has a year to regularise its financial condition, failing which it could be delisted.

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, after it failed to submit its annual report on time.