"For completeness, SIL also notes that it received notification...

"For completeness, SIL also notes that it received notification from ASIC under section 1274 of the Corporations Act regarding the non-lodgement of the 31 December 2019 half-year financial report. ASIC have not granted an extension for SIL to lodge the accounts and have advised of their intention to submit an application to the court in respect of SIL’s default."

That's ugly.

Tomorrow will be their year end balance date but Smiles Inc haven't lodged their half year accounts from December 2019. The CFO has departed and the Appendix 4C for the quarters December 2019 and March 2020 was wrong

"Dec 2019: Item 4.1 shows an incorrect opening cash balance of nil, which differs to the closing cash balance reported for the previous quarter. In addition, item 4.6 should show the same balance however the values were different.

Mar 2020: Item 3.10 showed an incorrect subtotal of $242k, however item 4.4 showed the correct value of $(118)k. In addition, Item 4.1 showed an incorrect opening cash balance of nil and was different to the closing cash balance reported in the previous quarter."

"As noted in the response provided in 1b above, the original Appendix 4C for the March quarter incorrectly showed an opening cash balance (ie as at 31 December 2019) of nil. Following on from the review of the cash flow calculations, and the reconciliation of the cash balances to the bank statements noted in the response to question 2 above, it was discovered that $1,114k of cost was not recorded for the quarter. From analysing the cash flow workings, the costs were related to staff expenses."

I note that the Smiles Inc advised to the ASX on 24th February 2020 (https://hotcopper.com.au/threads/ann-response-to-asx-query.5244232/?post_id=43119394) that NAB granted a waiver on their covenant breaches last year - as part of the conditions of these waivers, NAB required:

• an investigating accountant be engaged to provide ongoing review and regular reporting.
• the temporary increase that had been provided of $675,000 in the outstanding balance of facilities, was to be repaid, by October 21, 2020.
• SIL providing ongoing financial information and a 3-way financial forecast; and
• modified covenants be developed in due course.

These were the complete list of terms associated with the waiver. SIL confirms that:
• Deloitte were appointed as an investigating accountant and reviews were conducted.
• the $675,000 temporary increase in the company’s facilities, was repaid by the 21 October 2020 deadline.
• a 3-way financial forecast was provided to the NAB in November 2019 and financial information continues to be provided on an ongoing basis; and
• at the time of writing, the modified covenants have not been developed with the NAB, though discussions are ongoing (including in respect of the expiry date of the facilities).