KUALA LUMPUR (June 13): Comintel Corp Bhd's (Comcorp) external auditor Messrs RSM Malaysia has expressed a qualified opinion on the group's financial statement for the year ended Jan 31, 2019 (FY19).

In a filing with Bursa Malaysia today, an extract from the auditor's report revealed that the Practice Note 17 (PN17) information technology and telecommunication services provider has multiple uncertainties that may cast significant doubt about the group's ability to continue as a going concern.

For one, its wholly-owned subsidiary Comintel Sdn Bhd is unable to pay RM20.83 million with interest at 8% per year to Ansat Broadcast Sdn Bhd (UTV) as ordered by the Federal Court on Aug 18, 2017. This resulted in the Shah Alam High Court granting a winding-up petition by UTV against Comintel on April 17, which led to a liquidator being appointed.

Due to the impending winding up of Comintel, its financial statement for FY19 is prepared on break up basis.

RSM Malaysia said the FY19 financial statement of Comintel Green Technologies Sdn Bhd (CGT) was also prepared on break up basis as CGT has not been operating at a capacity sufficient to generate profits during the financial year.

Thus, the ability of Comcorp to carry on as a going concern is dependent on the timely and successful implementation of its regularisation plan, and its ability to achieve sustainable and viable operations with adequate cash flows generated from its operating activities, it added.

"In the event that these are not forthcoming, the group may be unable to realise their assets and discharge their liabilities in the normal course of business," said RSM Malaysia.

"Accordingly, the financial statements of the group may require adjustment to restate the carrying amounts of the assets to their recoverable amounts and to provide further liabilities that may arise," it added.

Comcorp is expected to submit its regularisation plan to Bursa Securities on July 10.

Comcorp shares closed half a sen or 5.56% lower at 8.5 sen today, with 211,200 shares done, bringing a market capitalisation of RM11.9 million. Its share price has fallen 15% since March when it slipped into PN17 status after its shareholder equity fell below the 25% threshold.