KUALA LUMPUR (Jan 31): Toyo Ventures Holdings Bhd has withdrawn its proposed dividend of one sen per share due to "insufficient retained earnings".

In a bourse filing, the loss-making printing inks and electrical discharge machining products manufacturer said the dividend, proposed on Nov 30, 2021, will not be tabled at its forthcoming annual general meeting.

In a separate filing, Toyo Ventures announced that its external auditor, KC Chia & Noor, has expressed a qualified opinion on the group's audited financial statements for the financial period ended Sept 30, 2021.

The auditor is unable to obtain "sufficient appropriate audit evidence to determine the continuity and successful outcome and reliable measurement of the expenditures" attributable to the power plant development project undertaken by Toyo Ventures' subsidiary Toyo Ink Group Bhd during the development phase.

KC Chia & Noor is also unable to carry out adequate procedures to obtain information and explanations it consideres necessary on the unaudited management financial statements of the indirect Vietnamese subsidiary, Song Hau 2 Power Co Ltd.

Another issue raised by the auditor relates to a payment made to the Vietnamese consultant of Song Hau 2 Power Co.

It noted that of the RM417.5 million of deferred expenditure, RM344.2 million was paid directly to the accounts of the consultant, which was then paid in various sums to other relevant parties.

KC Chia & Noor said some of these payments were not supported by "adequate documentary evidence", adding that it was unable to access the original source documents and perform verification procedures on the various transactions as they were held by a third party.

"We were unable to obtain sufficient appropriate audit evidence on certain payments attributable to deferred expenditure, and determine the effect of adjustments, if any, that might have been found to be necessary on the financial position of the group as at Sept 30 2021, or on its performance and cash flows of the group for the financial period then ended," the auditor said.

Toyo Ventures, which had changed its financial year end from June 30 to Sept 30, posted a net loss of RM12.92 million on revenue of RM99.88 million for the 15-month period ended Sept 30, 2021.

Last week, the group said it was unable to release its annual report for the period as it needed additional time to resolve outstanding issues.

Toyo Ventures' share price closed six sen or 6.09% lower at 92.5 sen, giving the group a market capitalisation of RM108.32 million.