SEC gives Softlogic more time to address Auditor’s ‘going concern’ emphasis

Thursday, 20 February 2025 05:40 - - {{hitsCtrl.values.hits}}

The Securities and Exchange Commission (SEC) has given Softlogic Holdings PLC more time to address the ‘going concern’ emphasis by the independent Auditor’s Report for FY22.

In a filing to the Colombo Stock Exchange, Softlogic said that the SEC has granted a deferment for the suspension of trading of shares that was due to take place with effect from 3 March 2025.

The company’s shares were transferred to the Watch List on 28 November 2024 due to the emphasis of matter on going concern contained in the independent Auditor’s Report for the year ended on 31 March 2022.

“The SEC has allowed the company from 28 February 2025 until 31 August 2025 to remedy the emphasis of matter on going concern,” Softlogic Holdings PLC said.

Auditors Ernst & Young (EY) in its FY22 Annual Report stated that financial statements indicate that the Group has made a net loss of Rs. 5,277.79 million for the year ended 31 March 2022 and has accumulated losses amounting to Rs. 26,397.40 million as at 31 March 2022. The Group’s current liabilities exceeded its current assets by Rs. 45,857.51 million as at 31 March 2022.

“These events or conditions, along with other matters, indicate that a material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern without the proposed activities by management and continued support of lenders.”

EY in its report on FY24 of Softlogic Holdings PLC also said the company and Group incurred a loss after tax of Rs. 9,137 million and Rs. 15,200 million, respectively, for the year ended 31 March 2024 and as of that date, the company and Group’s current liabilities exceeded its current assets by Rs. 25,503 million and Rs. 76,957 million, respectively. The reported accumulated losses of the company and Group amounted to Rs. 13,723 million and Rs. 69,594 million, respectively, and the Group reported a negative net assets position of Rs. 30,199 million as of the reporting date.

These events and conditions indicate that a material uncertainty exists which may cast significant doubt on the company’s and Group’s ability to continue as a going concern.

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