KUALA LUMPUR (May 4): Industronics Bhd (KL:ITRONIC) has triggered Practice Note 17 (PN17) status after its external auditor issued a disclaimer of opinion on the group’s audited financial statements for the 15-month period ended Dec 31, 2025 (FY2025).
External auditor UHY Malaysia PLT flagged the group’s inventories, which stood at RM21 million and RM1 million as at June 30, 2024 and Dec 31, 2025 respectively, as well as trade and other receivables of RM42 million and RM71 million over the same periods, according to Industronics' filing with Bursa Malaysia on Monday.
The auditor also said it could not verify revenue and cost of sales of RM40 million and RM38 million recorded for the period from July 1, 2024 to Dec 31, 2025.
The auditor further noted that Industronics has ceased its principal watch trading operations in Hong Kong after the financial period and warned that its ability to continue as a going concern hinges on successfully executing new ventures and securing financial support from related parties.
UHY issued the disclaimer of opinion as it was unable to form an opinion amid multiple unresolved audit issues, including documentation gaps, an incomplete audit scope and restricted access to key financial information.
Following its PN17 classification, Industronics is required to submit a regularisation plan to Bursa Malaysia Securities within 12 months. Failure to do so could result in suspension of trading and eventual delisting, subject to appeal.
The board said it is in the process of formulating the plan and will provide updates in due course.
In the meantime, Industronics said it has initiated corrective measures, including reconstructing accounting records, verifying transactions and strengthening documentation. It is also undertaking alternative procedures to substantiate inventory balances, confirming receivables and payables, and reviewing recoverability and impairment provisions.
Other steps include obtaining bank confirmations, enhancing internal controls, improving financial reporting processes, exploring restructuring initiatives, new business opportunities and funding options to support its financial position.
Industronics has been in the red since FY2024. For FY2025, it posted a net loss of RM10.6 million on revenue of RM40.52 million.
Shares in the group closed unchanged at 2.5 sen on Monday, giving it a market capitalisation of RM14.74 million.