Auditors for Informatics Education have questioned its ability to continue as a going concern in their report on the group's financial statements for the year ended March 31.
Informatics' board, nonetheless, said in a Singapore Exchange filing yesterday that it is of the view that the group is able to continue as a going concern as the group has received a letter of undertaking from an indirect controlling shareholder, Tan Sri Datuk Seri Vincent Tan Chee Yioun, to provide financial support of up to $5 million until June 30 next year to meet the group's cash flow needs.
The board also pointed out that the group has been taking steps to seek new and profitable revenue streams to generate cash flow and to streamline processes as well as leverage technology for a leaner, more cost-efficient structure.
"Based on the above-mentioned, the board is of the view it is appropriate the audited FY2018 financial statements be prepared on a going concern basis," it 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 outflow of over $5.03 million from its operating activities for FY2018.
As of the end of 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 of March 31, Informatics had trade receivables amounting to $1.53 million, against which the allowance for doubtful debts of $746,000 had been made.
As of the end of March, the company had net current liabilities and a net liabilities position of around $5.28 million and $5.26 million, respectively.
Informatics shares yesterday fell 8 per cent to 6.9 cents.