Memories Group can continue as going concern, says board, despite auditor's uncertainty

CATALIST-LISTED tourism operator Memories Group faces material uncertainty over whether it can continue as a going concern amid the Covid-19 pandemic.

But its board believes that a going-concern assumption remains appropriate, it said on Tuesday, citing fund-raising and a shift in business focus.

Independent auditor Nexia TS Public Accounting Corp flagged uncertainty in its report on the financial statements for the 18 months to Sept 30, 2020. The auditor noted that Myanmar, where Memories operates, has curbed international arrivals and imposed movement controls within the country.

"There is significant uncertainty as to the timing of the expected recovery and the extent of the impact of the Covid-19 pandemic on the group's operations and performance," it said, citing a net loss of US$35.97 million and current liabilities of US$16.85 million, among other figures.

Still, the board noted that Memories is in talks to issue up to US$10 million in convertible loans. Since the end of its reporting period, the group has also obtained more borrowings of US$6.39 million and permission to draw down an extra US$2 million from its loan facilities with a bank, the board added.

Meanwhile, it has shifted its marketing focus to the domestic tourism market, which the board said is expected to generate "some cash flow from operating activities" in the next financial year.

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Based on these and other factors, the directors said that they believe it was appropriate to use the going-concern assumption in preparing the group's consolidated financial statements for the period to Sept 30, 2020.