KUALA LUMPUR, Nov 23, 2015:
The overall financial performance of PNSB Development Sdn Bhd (PDSB) between 2012 and 2014 is unsatisfactory and needs improvement based on audit carried out from May to July 2015, says Auditor-General Tan Sri Ambrin Buang.
This was pointed out by the National Audit Department in the Third Series of the 2014 Auditor-General’s Report released today.
PDSB, a wholly owned subsidiary of Permodalan Negeri Selangor Bhd (PNSB) with property development as its main activity, was established on Oct 30 1993 under the Companies Act 1965 with an authorised and paid-up capital of RM10 million.
The report stated that the loss before tax increased drastically by RM19.94 million (621.2%) in 2014 as compared to 2013.
Besides, PDSB incurred an accumulated loss of RM10.74 million in 2014.
Based on PDSB’s audited 2014 financial statements, the current liabilities exceeded the current assets by a total of RM62.64 million and the auditor has expressed doubts over the company’s ability to continue operation (going concern).
The report also added that PDSB’s corporate governance was unsatisfactory, with several audit findings that need to be given attention.
Despite having started 20 years ago in 1995, the overall physical performance of the Housing Development Joint Venture Project in the Petaling District was only 44.2% as of May 2015, and there was a delay in completion of certain category of development between 167 days and 998 days.
Meanwhile, a total of 506 Phase 1 Alam Perdana Project house buyers have yet to settle the progressive payments of RM11.99 million, despite PDSB having spent RM41.59 million on repairs.
The audit report recommends that PDSB, in collaboration with PNSB, revaluate PDSB’s original incorporation objectives of developing all PNSB’s property development projects since only two projects are in the process of implementation from the year 2012 to 2015.
“Specific Short Term and Long Term Strategic Plan need to be drawn up so that PDSB’s incorporation targets can be fully achieved and at the same time generate more competitive growth,” the audit report stated.
PDSB has been advised to enhance the performance of property development by ensuring that projects are managed more efficiently and reap returns within the specified period in order to strengthen the company’s financial position and continue operation.
PDSB must also take proactive measures to improve corporate governance and ensure excellent operations in order to enhance the financial performance as well as provide sustainable returns to PNSB and Menteri Besar Incorporated (MBI).