Department store operator Parkson Retail Asia said on Friday it obtained an undertaking from Parkson Holdings Bhd. to provide financial support for around a year after its auditor issued a “going concern” note.
The independent auditor, Ernst & Young, said in the audited financial statements for the fiscal year ended 30 June that there was “a material uncertainty that may cast significant doubt about the group’s ability to continue as a going concern,” the company noted in the filing to SGX after the market close on Friday.
That was due to the net loss of S$43.93 million for the fiscal year, which led to the group’s liabilities exceeding its current assets by S$70.89 million, it said.
“The ability of the group to continue as a going concern is dependent on the group generating sufficient cash flows from its operations and the continued financial support from the ultimate holding company, Parkson Holdings,” Parkson Retail Asia said in the statement.
Malaysia-listed Parkson Holdings owns 67.96 percent of Parkson Retail Asia.
The auditor said the financial statements were properly drawn up and gave a “true and fair view” of the company’s financial position as of 30 June, according to the filing.
The company noted that it prepared its financial statements on a going-concern basis due to the support from Parkson Holdings. But it added that if it becomes unable to continue its operational existence, it may need to make adjustments, with assets potentially realized at amounts which could differ “significantly” from their current values on the balance sheet.
Parkson Retail Asia said its next annual general meeting would be in October.
The department store operator, which was established in 1987 and listed on SGX in 2011, has 44 stores in Malaysia, seven stores in Vietnam, 16 in Indonesia and one in Myanmar, according to its website.