LMS Compliance Limited: Analysis of Material Variances between Audited and Unaudited FY2025 Financial Statements
LMS Compliance Limited has released an announcement detailing significant variances between its audited and unaudited financial statements for the financial year ended 31 December 2025 (FY2025). The company provided explanations for the material differences at both the Group and Company levels. Below is a concise analysis of the key findings, with a focus on the structure and implications for investors.
Key Financial Metrics: Statement of Financial Position
The main variances arise from reclassification and reassessment of items, especially in the areas of current and non-current assets and liabilities. The tables below summarize these key differences.
Group Level – Statement of Financial Position (as at 31 December 2025)
| Metric |
Audited Results (RM’000) |
Unaudited Results (RM’000) |
Difference (RM’000) |
% Change |
Explanation |
| Non-current liabilities: Other payables |
1,966 |
122 |
1,844 |
+1511.5% |
Reclassified payables expected to settle after 12 months |
| Current liabilities: Trade and other payables |
4,259 |
6,103 |
(1,844) |
-30.2% |
Reclassification to non-current liabilities |
Company Level – Statement of Financial Position (as at 31 December 2025)
| Metric |
Audited Results (RM’000) |
Unaudited Results (RM’000) |
Difference (RM’000) |
% Change |
Explanation |
| Non-current assets: Investment in subsidiaries |
16,099 |
160 |
15,939 |
+9961.9% |
Reclassification from receivables to investments |
| Current assets: Trade and other receivables |
7,678 |
22,907 |
(15,229) |
-66.5% |
Reclassification to investments |
| Equity: Retained earnings |
5,553 |
4,843 |
710 |
+14.7% |
Reversal of unrealised FX loss on receivables |
Errors, Inconsistencies, and Explanations
- Reclassification of Liabilities: Certain contingent and deferred consideration payables were moved from current to non-current liabilities, reflecting a more accurate timing of settlement.
- Reclassification of Assets: At the Company level, amounts due from subsidiaries previously recorded as receivables have been reclassified as investments, as repayment is not expected within 12 months. This adjustment also led to the reversal of previously recognized unrealized foreign exchange losses, improving retained earnings.
Exceptional Items
- No exceptional earnings, expenses, or asset revaluations were disclosed, aside from the significant reclassification and its impact on reported figures.
Chairman’s Statement
No separate Chairman’s Statement was provided in the announcement.
Corporate Actions & Other Events
- No information was disclosed about dividends, share buybacks, fundraising, divestments, or asset sales.
- No mention of significant legal, regulatory, or macroeconomic events impacting the business.
Conclusion and Investor Recommendations
Overall Assessment: The company’s financial performance appears neutral, with no indication of drastic changes to underlying business fundamentals. The material variances are primarily due to reclassification of balances rather than operational performance shifts. Improvements in retained earnings at the Company level are due to accounting adjustments, not operational gains.
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If you currently hold the stock: Maintain a neutral stance. There is no evidence of deteriorating financial health, but the lack of disclosed growth, dividends, or positive operational drivers suggests limited upside based on this information alone. Monitor future reports for operational improvements or dividend announcements.
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If you do not currently hold the stock: Wait for further clarity. The current financial adjustments are technical and do not provide a compelling investment case. Consider evaluating post-release of the full audited annual report for FY2025.
Disclaimer: This analysis is based strictly on the provided company announcement regarding material variances between audited and unaudited financial statements for FY2025. It does not constitute investment advice. Investors should consult their own financial advisors and review the full annual report before making any investment decisions.
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