SGX RegCo issues compliance notice to USP over failure to audit recent financial statements

The regulator requested the company to appoint new auditors before the end of May.

USP Group has received a notice of compliance from SGX RegCo after failing to submit an audited set of full-year financial statements, which is required of the company to exit the watch-list.

The company has been on watch-list since December 2019.

Under Listing Rule 1314, issuers under the watch-list may appeal to be removed if they record consolidated pre-tax profit for the most recently completed financial year, based on audited full-year consolidated accounts, and has an average daily market capitalisation of $40m or more over the last six months.”

One of the listing rules also indicates that an issuer must take active steps to meet the requirements of rule 1314 within a 36-month cure period.

The 36-month cure period given to USP Group ended on 2 December 2022.

In a bourse filing, USP Group said it failed to appoint a new auditor during its general meeting on 28 February 2022 and therefore was unable to “ demonstrate that it has recorded consolidated pre-tax profit and healthy cash flow from its operating activities based on its audited full year consolidated accounts for the most recently completed financial year.”

“Accordingly, the Company has not demonstrated to the Exchange that it has fulfilled the Exit Criteria and/or provide basis to enable the Exchange to consider if an extension to the Cure Period is warranted,” USP added.

Given the situation, SGX RegCo has required USP to appoint new auditors to undertake an audit of the company’s financial statements for the most recently completed financial year i.e. financial year ended 31 March (FY2023) by 31 May.

The bourse regulator also requested that USP announce the audited financial statements for FY2023 by a deadline which should be agreed upon by both parties. 

USP should also submit to SGX RegCo an application for either its removal from the Watch-list; or an extension of time to extend the Cure Period, by a deadline to be agreed upon with the exchange.