BUSINESS NEWS - Steinhoff imploded in December 2017. Deloitte Accountants BV, which had been appointed as auditor of the group on May 30, 2016, was kept on as auditor – but 18 months later was still not able “to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on the consolidated and separate financial statements”.
To paraphrase, the 2017 and 2018 reports were prepared under exceptional circumstances, and management was required to make significant judgements.
However, multiple uncertainties remain, and these can have a significant impact on the financial statements as a whole. The annual report contains forward-looking statements based on management’s current views and assumptions. Factor in the unlimited multitude of risks and uncertainties … and it appears that no one will take responsibility for anything. Hot-to-the-touch, radioactive, treat-with-caution, readers of the report are cautioned “not to place undue reliance on these forward-looking statements”.
Deloitte, in issuing a disclaimer of audit opinion, cited the following problem areas:
- Material uncertainty related to going concern.
- Material uncertainty with respect to litigation.
- Material uncertainty with respect to taxation effects on the restatements and adjustments made in the 2017 annual report.
- Material uncertainty with respect to the control conclusion on certain entities.
- Material uncertainty with respect to the share in the investment in [European retail chain] Conforama.
- Material uncertainty with respect to the timing of the results of certain prior year real estate transactions.
- Material uncertainty with respect to the foreign currency translation reserve.
- Material uncertainty with respect to not having access to information [regarding Austrian retail chain Kika-Leiner).
Key financial results
Revenue for the year to September 30, 2018, is €12.8 billion (2017: €12.5 billion), gross profit is €4.9 billion (2017: €4.9 billion), the loss for the period is €1.2 billion (2017: €4 billion), and the total comprehensive loss for the period is €1.2 billion (2017: €4.2 billion). International Financial Reporting Standards (IFRS) 15 will be applied the following year, and the group has not intimated what the impact will be.
