Singapore eDevelopment auditors’ cast doubt on group’s ability to continue as going concern

SINGAPORE (April 3): Singapore eDevelopment says its independent auditor, Ernst & Young LLP, has included an emphasis of matter in its report on the audit of the financial statements of the group for the FY2016 ended December.

The auditors noted that the group incurred a loss of S$7.1 million (RM22.5 million) and negative operating cash flow of S$24.8 million for the FY2016 ended Dec and as at that date, the group has a net undiscounted financial liabilities of S$34.9 million due within the next 12 months.

“These conditions indicate the existence of a material uncertainty that may cast significant doubt about the group’s ability to continue as a going concern,” says E&Y in its report.

The auditors added that the financial statements were prepared with the assumption that the group continues to obtain the irrevocable financial support of Hengfai Business Development to provide funds to meet its financial obligations as and when they fall due.

In budgeting for the group’s cashflows and funding requirements, the group has entered into agreements with home builders for its land sub-division development as well as for certain consultancy services.

“The group expects to receive proceeds from the part delivery of these lots and services as the group does not envisage adverse events which may affect its ability to deliver the sub-divided land lots and services according to the anticipated schedule the group has projected,” says E&Y.

“If the group is unable to continue in operational existence for the foreseeable future, the group may be unable to discharge its liabilities in the normal course of business... In addition, the group may have to reclassify non-current assets and liabilities as current assets and liabilities. No such adjustments have been made to these financial statements.”

Singapore eDevelopment closed at 8 Singapore cents on Friday. — theedgemarkets.com.sg

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