Pursuant to Paragraph 9.19(37) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the Board of Directors of Cuscapi Berhad ("Cuscapi" or "the Company") wishes to announce that the Company's External Auditor, Messrs. Mazars PLT had expressed the following qualified opinion in the Company's Audited Financial Statements for the financial period ended 30 June 2020.
1.QUALIFIED OPINION
The details of qualified opinion as disclosed in the Independent Auditors' Report is reproduced as below:
"Qualified Opinion
We have audited the financial statements of Cuscapi Berhad, which comprise the statements of financial position as at 30 June 2020 of the Group and of the Company, and the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial period from 1 January 2019 to 30 June 2020, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 14 to 117.
In our opinion, except for the possible effects of the matter described in the Basis for Qualified Opinion section of our report, the accompanying financial statements give a true and fair view of the financial position of the Group and of the Company as at 30 June 2020, and of their financial performance and their cash flows for the financial period from 1 January 2019 to 30 June 2020 in accordance with Malaysian Financial Reporting Standards ("MFRS"), International Financial Reporting Standards ("IFRS") and the requirements of the Companies Act 2016 in Malaysia.
Basis for Qualified Opinion
Referring to Note 34 to the financial statements, the assets involved in the litigation case include property, plant and equipment of the Group at carrying amount of RM6,615,101 and inventories of the Group at carrying amount of RM15,451,976 as at 30 June 2020.
Due to the circumstances and consideration described in Note 34 to the financial statements,
- The physical existence of property, plant and equipment with the carrying amount of RM6,615,101 could not be ascertained and the impairment assessment on these assets has not been made in accordance with MFRS 136 Impairment of Assets.
- The measurement of the inventories including the net realisable value has not been appropriately assessed in accordance with MFRS 102 Inventories.
Management is of the view that no impairment is required on the carrying amounts of property, plant and equipment and inventories.
We were unable to obtain sufficient appropriate audit evidence about the carrying amounts of property, plant and equipment of RM6,615,101 and inventories of RM15,451,976. Therefore, we could not determine the effect of adjustment, if any, on the financial statements of the Group.
We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing ("ISA"). Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion."
2.STEPS TAKEN OR PROPOSED TO BE TAKEN TO ADDRESS THE KEY AUDIT MATTERS THAT RELATES TO THE MODIFIED OPINION
The Directors of the Company will continue to monitor the legal suit (Suit No. WA-22NCC-399-09/2018) outcome closely and make the necessary adjustment on the recoverable amount of the said Property, Plant and Equipment in accordance with MFRS 136: Impairment of Assets and the net realisable values of the inventories in accordance with MFRS 102: Inventories based on the Courts' decision once available.
3.TIMELINE
Barring any unforeseen circumstances, the Group expects to resolve the issue relating to the Modified Opinion above within 12 months from the date of this announcement.
4.ALL KEY AUDIT MATTERS DISCLOSED IN THE EXTERNAL AUDITORS' REPORT
Please refer to pages 9 to 10 of the attached Appendix I.
This announcement is dated 23 October 2020.