Receipt of an audit report stating that no audit opinion would be expressed on the financial statements and consolidated financial statements in the annual securities report for the fiscal year ending March 2026, and receipt of an internal control audit report stating that no audit opinion would be expressed on the internal control audit as of 31 March 2026.
Abalance Corporation and its consolidated subsidiaries
The wafer manufacturing process within the solar panel manufacturing processes of overseas subsidiaries (paid provision transactions involving polysilicon)
Inappropriate accounting treatment relating to past transactions involving the paid provision of materials; the absence of group-wide internal controls over transactions involving the paid provision of materials; the inability to obtain a comprehensive understanding of transactions due to complex capital structures and transaction structures involving multiple subsidiaries; the incomplete implementation and ongoing verification of improvements to the internal management system and measures to prevent recurrence; and insufficient audit evidence to assess the feasibility of the cash-flow plan relating to the going concern assumption.
Company response
A third-party committee consisting of external experts was established on 2 September 2025, and its investigation report was received on 17 December 2025. Subsequently, a verification committee consisting of external experts was established on 8 January 2026, and its verification report was received on 20 February 2026. The committee chair was Not disclosed.
Strengthening management oversight functions, rebuilding group governance, strengthening the internal control system, raising compliance awareness, improving the financial reporting process, improving the internal management system, and ensuring the implementation of measures to prevent recurrence.
Fiscal year ending March 2026 (1 April 2025 to 31 March 2026)
The Company will continue to monitor progress under the improvement plan and advance improvements to the internal management system and measures to prevent recurrence. It will continue discussions with the auditors, work to resolve the matters identified, and improve the effectiveness of its corrective measures. It will execute its business and funding plans, with the aim of stabilizing its financial base and enhancing corporate value.
If any matters requiring disclosure arise in the future, the Company will promptly announce them.
| Item | Details |
|---|---|
| Event name | Receipt of an audit report stating that no audit opinion would be expressed on the financial statements and consolidated financial statements in the annual securities report for the fiscal year ending March 2026, and receipt of an internal control audit report stating that no audit opinion would be expressed on the internal control audit as of 31 March 2026. |
| Date of occurrence | 18 August 2026 (the date the audit report was received) |
| Date recognized / date notice received | 18 August 2026 (the date the audit report was received) |
| Subject Entity | Abalance Corporation and its consolidated subsidiaries |
| Target Locations / Products | The wafer manufacturing process within the solar panel manufacturing processes of overseas subsidiaries (paid provision transactions involving polysilicon) |
| Cause | Inappropriate accounting treatment relating to past transactions involving the paid provision of materials; the absence of group-wide internal controls over transactions involving the paid provision of materials; the inability to obtain a comprehensive understanding of transactions due to complex capital structures and transaction structures involving multiple subsidiaries; the incomplete implementation and ongoing verification of improvements to the internal management system and measures to prevent recurrence; and insufficient audit evidence to assess the feasibility of the cash-flow plan relating to the going concern assumption. |
| Accounting period in which recognized | Fiscal year ending March 2026 (1 April 2025 to 31 March 2026) |
| Investigation structure | A third-party committee consisting of external experts was established on 2 September 2025, and its investigation report was received on 17 December 2025. Subsequently, a verification committee consisting of external experts was established on 8 January 2026, and its verification report was received on 20 February 2026. The committee chair was Not disclosed. |
| Measures to prevent recurrence | Strengthening management oversight functions, rebuilding group governance, strengthening the internal control system, raising compliance awareness, improving the financial reporting process, improving the internal management system, and ensuring the implementation of measures to prevent recurrence. |
| Outlook | The Company will continue to monitor progress under the improvement plan and advance improvements to the internal management system and measures to prevent recurrence. It will continue discussions with the auditors, work to resolve the matters identified, and improve the effectiveness of its corrective measures. It will execute its business and funding plans, with the aim of stabilizing its financial base and enhancing corporate value. |
| Planned follow-up disclosure | If any matters requiring disclosure arise in the future, the Company will promptly announce them. |
Items this document does not state (14)
These are items the company does not state in this document. We do not leave them blank, nor fill them in from other sources or by inference.
The reasons the company gives
The company's own explanation, not something inferred from the numbers.The audit firm was unable to obtain sufficient appropriate audit evidence due to inappropriate accounting treatment in past transactions involving the paid provision of materials, undeveloped group-wide internal controls, insufficient understanding of transactions resulting from complex capital and transaction structures, and the incomplete status of the improvement plan and measures to prevent recurrence. In addition, there was material uncertainty regarding the going concern assumption, and there was insufficient evidence to assess the feasibility of the cash-flow plan.