KEY AUDIT MATTERS (CONT’D.) Assessment of the Group’s and of the Company’s liquidity position to meet short-term borrowing obligations The Group recorded a loss before tax of RM117,125,000 (2023: RM100,046,000), while the Company recorded a loss before tax of RM7,925,000 (2023: profit before tax of RM62,305,000). Further, as disclosed in Note 32 to the financial statements, the Group and the Company have obligations to repay Tranches 2, 3, and 4 of the Sukuk Wakalah amounting to RM123.5 million, RM100 million, and RM139 million in June 2025, September 2025, and October 2025 respectively. In addition, term loans amounting to RM435 million and other short-term borrowings amounting to RM487 million are due for repayment throughout the financial year ending 31 December 2025. Nevertheless, the directors are of the view that the preparation of the Group’s and of the Company’s consolidated financial statements on a going concern basis is appropriate on the basis as disclosed in Note 2.1 to the financial statements. We identified the assessment of the Group’s and of the Company’s liquidity position covering the ability to meet the short-term borrowing obligations as a key audit matter due to the inherent complexity and subjectivity of the assessment, which involves significant audit effort. The assessment is highly dependent on management’s judgement, particularly in relation to the Group’s and the Company’s ability to generate net cash inflows from their operating activities, drawdown the secured financing facilities, and sell certain assets to raise the necessary funds to repay the loans as and when they fall due. How have our audit addressed the matter In addressing this area of audit focus, we performed amongst others, the following procedures to assess the Group’s and the Company’s ability to continue meeting their payment obligations: • We had discussions with the directors to understand the business plans and their plans to address the loan repayment obligations for the next twelve months after the reporting date; • We evaluated the estimates made by the directors in respect of revenue and major operating costs against the Group’s business plans, historical results and expected selling prices; • We evaluated the ability of the Group to sell certain land held for sale to raise the necessary funds by sighting to the signed letters of intent or signed sale and purchase agreements or correspondences from identified buyers; • We evaluated the ability of the Group and of the Company to drawdown secured financing by sighting signed loan offer letters from the financial institutions; • We sighted bank documents to validate the availability of undrawn credit facilities; and • We evaluated the adequacy of disclosures in respect of this matter. INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF TROPICANA CORPORATION BERHAD (INCORPORATED IN MALAYSIA) ANNUAL REPORT 2024 230
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