SINGAPORE - Auditors for Informatics Education's have questioned its ability to continue as a going concern in their report on the group's financial statements for the year ended March 2018.
However, Informatics' board said in a filing to the Singapore Exchange on Tuesday (July 3) that it is of the view that the group is able to continue as a going concern since the group has received a letter of undertaking from an indirect controlling shareholder, Tan Sri Dato' Seri Vincent Tan Chee Yioun, to provide financial support of up to $5 million until June 30 June next year to meet the group's cash flow needs.
In addition, the board pointed out that the group has been taking steps to seek new and profitable revenue streams to generate cash flow growth, and to streamline processes as well as leverage on technology for a leaner, more cost-efficient structure.
"Based on the abovementioned, the board is of the view it is appropriate the audited FY2018 financial statements be prepared on a going concern basis," they said.
In their report, independent auditors Ernst & Young flagged that the education group had incurred a net loss of over $5.82 million and recorded a cash outlow of over $5.03 million from its operating activities for FY2018. As at end March, the company had net current liabilities and a net liabilities position of around $5.28 million and $5.26 million respectively.
The auditors also noted that as at March 31, Informatics had trade receivables amounting to $1.53 million, against which the allowance for doubtful debts of $746,000 had been made.