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KPMG questions ability of Kitchen Culture Holdings to continue as a going concern
THERE are material uncertainties which may cast significant doubt on the ability of Kitchen Culture Holdings to continue as a going concern, according to independent auditor KPMG.
If the group is unable to continue as a going concern, it could have an impact on the group's and the company's classification of assets and liabilities, and the group and the company may be unable to realise its assets and discharge is liabilities in the normal course of business at the amounts stated in the financial statements, said the auditor.
Kitchen Culture reported a net loss of S$6.0 million and operating cash outflow of S$1.7 million for the current year. As of Dec 31, the group had breached a loan covenant for a bank and triggered cross default on other banking facilities. It has since fully repaid the bank and terminated that facility on June 30 this year. Credit facilities from other banks continue to be available to the group, and a director has provided short-term advances amounting to S$3.0 million to meet the group's short-term working capital requirements.
The financial statements have been prepared on a going concern basis, and their validity is premised on the continuing availability of credit facilities and that the group generates sufficient cash flows from its operations by fulfilling its order books and meeting its retail sales target.
Should the order books be subjected to variation, modification or cancellation by customers or the group is unable to meet the targeted amounts of retail sales, the group's cash flows would be impacted. In addition, guarantees issued by the company may be called upon.