Reference is made to the article entitled “When little information is insufficient” published in The Star on Saturday, 23 November 2019, in relation to the amended announcement of the quarterly report on consolidated results for the financial period ended 30 June 2019 (“Q2 Results”).

UMW Holdings Berhad (“Company” or “UMW”) wishes to clarify that there was no call made on the financial guarantee, provided by the holding company to strengthen the credit standing of its borrowing subsidiary.

The Company wishes to also clarify that in compliance to MFRS9 - Financial Instruments, a provision amounting to RM27.0 million was made to reflect this liability obligation in the guarantor’s books, with a corresponding elimination adjustment made upon consolidation of the Group’s results in 2018. Hence, it is not a contingent liability.

Subsequently, following timely payment and settlement of the borrowing, as per the maturity schedule of the borrowing in June 2019, a reversal of provision was made in the guarantor’s books to reflect the release of this financial obligation. 

Unfortunately, the corresponding group elimination entry was not made in the same month, giving rise to the overstatement in the Q2 Results announcement dated 27 August 2019.

The Company further assures that there is no impairment to be made with regard to this financial arrangement and the impact of these transactions have been fully accounted for.

In upholding best practices in corporate disclosure, the Company released the revised Q2 Results on 20 November 2019, a day after discovering the overstatement in the Q2 Results.

This announcement is dated 26 November 2019.