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China Environment responds to SGX queries, says assets are greater than liabilities
CHINA Environment, which manufactures air pollution control and treatment systems in China, said on Tuesday that the group's current assets are greater than its current liabilities after taking in an impairment charge of 356 million yuan (S$72.3 million).
It said that it is in the process of chasing up on overdue receivables and restructuring short-term borrowings, and that its suppliers have not ceased credit lines to its operations in China.
"It is the board's opinion that the group will be able to pay its debts as and when they fall due and continue as a going concern."
China Environment was responding to queries from Singapore Exchange (SGX) on the group's financials, particularly on its tradings with Anhui Shengyun Mechanical Co and Nanning Youji Technology Co, for which the impairment allowance had been provided.
The group said that it is no longer trading with the two companies, and that its management in China has since tightened up credit control and credit risk assessment for all projects present and future.
When asked by SGX what actions the group has taken to recover the trade receivables prior to provision of impairment allowance, China Environment said its employees have to-date liaised with customers via tele-conversation to chase up on the outstanding receivables.
"Employees have also visited the offices of the customers whose receivables are overdue. Legal representation has also been made by the group lawyers to the customers whose receivables are long outstanding."
The group added in the response that its board has been briefed by the management on the actions taken to recover the amounts impaired, and is satisfied that the management has to the "best of their ability" attempted recovery for the amounts impaired before approving the write-down.