KUALA LUMPUR: The external auditor of Meridian Bhd
has expressed a disclaimer of opinion on the company's annual audited financial statement for the financial period ended May 31, 2025.
In a report on the audit submitted to Bursa Malaysia, Messrs. Morison LC PLT said it has been unable to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion.
It noted that there were material uncertainties that cast doubt on the company's ability to continue as a going concern, including the group's record of net losses over the the past three financial periods, with a net loss of RM57.19mil and RM1.45mil respectively in the latest audited period.
The auditor noted also that the group's and the company's current liabilities - mainly consisting of loans and borrowings and other payables and accrued expenses - exceeded its current assets by RM45.54mil and RM6.41mil respectively.
Meridian, a Practice Note 17 listed issuer, is yet to submit a regularisation plan to Bursa Securities and is awaiting approval from Bursa Securities for an extension of time.
The company had failed to meet its original deadline for the submission on Sept 22, 2024, following which it was given an extension of time to Sept 25, 2025. It is currently in the process of its third application of extension of time.
To remain a going concern, the auditor noted that the company has to obtain approval from all the relevant parties on the proposed regularisation plan as well as successfully implement the key components of the regularisation plan in a timely manner.
The company also has to achieve sustainable and viable operations to generate sufficient cash flows to meet its obligations when they fall due.
"If these events are not forthcoming, the group and the company may be unable to realise their assets and discharge their liabilities in the normal course of business.
"Accordingly, we were unable to obtain sufficient appropriate audit evidence to support the validity of the assumption adopted by the directors in preparing the financial statements on a going concern basis," said the auditor.
In other basis for the disclaimer of opinion, the auditor said it was unable to obtain sufficient audit evidence to verify the opening balances of assets, liabilities, equity, income and expenses.
"As a result of these matters, we were unable to determine whether adjustments might have been necessary in respect of the opening balances, the comparative information presented, and the elements making up the statement of profit or loss and other comprehensive income, the statement of financial position, the statement of changes in equity, the statement of cash flows and any related disclosures," it said.
With respect to legal titles to properties that were registered under a former subsidiary, the company recognised impairment losses on investment properties amounting to RM38.8mil and the write-down of the value of related inventories amounting to RM10.22mil.
However, the auditor was unable to obtain audit evidence to determine whether the amount of impairment losses and write-downs recognised was appropriate, or whether further adjustments might be necessary.
Additionally, the auditor was unable to verify the details of a settlement transaction pertaining to an outstanding loan of RM3.13mil, as well as necessary supporting documents to perform an audit of ZKP Development Sdn Bhd, a wholly-owned subsidiary of the company.
