Asia Brands' auditors say losses and net current liabilities hurt 'going concern' status

PETALING JAYA : Asia Brands Bhd's external auditors Messrs. UHY, have expressed concern over the company's ability to continue as a going concern due to losses and net current liabilities the group and company posted for the financial year ended March 31, 2017.
The group and company incurred a net loss of RM58.5 million and RM32.9 million respectively during the financial year ended March 31, 2017 and net current liabilities of RM47.3 million and RM26.3 million for the group and company, respectively.
"The group had a net current liabilities due to the reclassification of Islamic Medium Term Notes (IMTN) to current liability as a results of non-compliance with financial covenants as required in IMTN. The non-compliance of financial covenants as required is mainly due to losses incurred. These conditions indicate that there is a material uncertainty on the group's and the company's ability to continue as a going concern," the auditors said. They have an unqualified opinion of the financial statements.
The group's board said Asia Brands has started showing positive results and generating positive cash flow as a result of streamlining our business by disposing off loss making divisions and re-channelling management time and energy to turnaround the remaining two divisions.
It has also put in place initiatives to temporary lease 'pop-up' stores in order to take advantage of retail oversupply and availability of space in shopping malls.
The stock was untraded.