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Deloitte flags 'going-concern' uncertainty in IEV Holdings financial statements

THE independent auditor for oil-and-gas engineering group IEV Holdings has flagged a material uncertainty on the company being a going concern, the Catalist-listed firm’s board disclosed on Monday night.

Still, the IEV board noted that the opinion of the auditor was not modified over the matter, and also said in its statement that the directors believe it is appropriate for the audited statements to be prepared and presented on a going-concern basis.

Deloitte & Touche had raised its eyebrows at how IEV’s current liabilities, as at Dec 31, 2019, exceeded its current assets by RM13.8 million (S$4.58 million), as well as its net loss from continuing operations for the year, and a net operating cash outflow of RM3.5 million.

The ability of the group to fulfill its obligations depends on sufficient cash flows from its asset-integrity management sector and its ability to raise new capital via private share placements for its new healthcare business,” the auditor wrote.

It concluded that these conditions, among others, pointed to a material uncertainty “that may cast significant doubt on the group’s ability to continue as a going concern”.

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But the IEV board cited a recent share-subscription exercise that raised gross proceeds of S$3.8 million, a cash flow forecast that suggested that the group will have enough cash to meet its working-capital requirements and obligations, and more potential corporate fund-raising.

The 15-month cash flow forecast takes into account the possible impact from the coronavirus pandemic, as well as planned private share placements of S$8.5 million that will raise capital from July, the board added.

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