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TMC auditor flags 'significant doubt' on group continuing as going concern
TMC Education Corporation on Thursday said its auditor has flagged the "significant doubt" on the group's ability to continue as a going concern. Companies operating as a going concern are expected to remain in business.
The auditor of the private education company noted that as at June 30, 2015, the group's current liabilities exceeded current assets by S$8.85 million. For the fiscal year ended June 30, 2015, the group incurred a loss of S$5.35 million, and reported a negative operating cashflow.
"At the reporting date, the group did not have any unutilised bank credit facilities," the auditor's report said. "These factors indicate the existence of a material uncertainty which may cast significant doubt on the group's and the company's ability to continue as a going concern."
Responding to the auditor's report, TMC said that the group has obtained funding, and plans to obtain more to improve its cashflow. It has also undertaken cost reduction exercises, and has been strategically disposing of non-core investment properties.
In September, TMC failed to receive bids high enough to match its reserve price in its Sept 22 auction of two strata-titled lots in Peninsula Plaza. The lots were valued at S$5.62 million as at June 30, 2015, by a valuer.
TMC did not disclose its reserve price, but said that it will carry out another auction on Oct 22.