Asia-Pacific Strategic Investments Limited - Annual Report 2021

Independent Auditor’s Report To the Members of Asia-Pacific Strategic Investments Limited

Key Audit Matters (continued)

2.

Going concern assumption (continued)

Area of focus (continued)

(iv) The Group is exploring various fund-raising options to fund the working capital and growth of the Group going forward including the construction of development properties; and

(v) The Group’s term loan from a licensed bank in Singapore is secured against a deed of undertaking from Dato’ Dr Choo Yeow Ming (“Dato’ Choo”), the Chairman and Chief Executive Officer of the Group (Note 18(a)(ii)) and the term loan from a licensed bank in the PRC is secured against a personal guarantee by Dato’ Choo of up to RMB55.0 million (equivalent to S$11.45 million) (Note 18(a)(iii)). As described in the preceding paragraphs, the Board of Directors is confident that the Group has adequate resources to continue in operational existence, and the use of the going concern assumption in the preparation of the financial statements is appropriate. The assessment of the Group’s ability to generate sufficient operating cash flows on a timely basis and availability of sufficient funds for its operations are important considerations for the going concern assumption. As such, these are significant aspects of our audit and we determined this is a key audit matter.

How our audit addressed the area of focus

In obtaining sufficient audit evidence, we:

• Evaluated management’s assessment of the Group’s ability to continue as a going concern, relying on the sources of liquidity and funding available to the Group;

• Discussed with management to obtain an understanding on the Group's business plans and financing requirements and obtained written representations from management and the Board of Directors, regarding their plans for future actions and the feasibility of these plans; • Obtained and evaluated the cash flows forecasts prepared by management as approved by the Board of Directors, for the next 12 months from the date of the financial statements and assessed the reasonableness of the key assumptions used by checking against the Group's business plans and historical performance; • Challenged the appropriateness of the key assumptions used by management in the cash flow projection, including timing of cash required for operations, the Group’s forecasts of revenue, gross margin and operating expenses; and

• Reviewed the adequacy and appropriateness of the disclosures made in Note 2.1 to the financial statements.

ASIA-PACIFIC STRATEGIC INVESTMENTS LIMITED

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