Asia-Pacific Strategic Investments Limited - Annual Report 2021

Notes to the Financial Statements For the financial year ended 30 June 2021

2

Summary of significant accounting policies (continued)

2.1 Basis of preparation (continued)

Going concern assumption (continued)

Notwithstanding the above mentioned, the Board of Directors has assessed that the going concern basis of preparation for this set of financial statements remains appropriate after considering the following: (i) As at 30 June 2021, the Group is in net current assets position of $2,103,000 with cash and cash equivalents of S$1,537,000 and financial assets, at fair value through profit or loss (“FVPL”) of S$2,824,000 which are readily available for use and can be realised immediately as and when required; (ii) The Group is still negotiating with the contractors to finalise the final contract sums and it is expected that the payment of accrued construction cost (included in current trade and other payables) amounting to S$3,087,000 as at 30 June 2021 will be delayed beyond 12 months from the end of the financial year;

(iii) Based on a 12–month cash flow projection, the Group will have sufficient cash flow to meet the operating requirements;

(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 (approximate to S$11.45 million) (Note 18(a)(iii)).

Coronavirus (“COVID-19”) impact

The COVID-19 pandemic has affected almost all countries of the world, and resulted in border closures, workplace closures, movement controls and other measures imposed by the various governments. The Group’s significant operations are in Singapore and PRC, both of which have been affected by the spread of COVID-19 during the financial year.

Set out below is the impact of COVID-19 on the Group’s financial performance reflected in this set of financial statements for the financial year ended 30 June 2021:

(i) The Company has assessed that the going concern basis of preparation for this set of financial statements, as set out above, remains appropriate;

(ii) During the financial year, workplace closures have resulted in periods where the Group’s operations were temporarily suspended to adhere to the respective governments’ movement control measures. These have negatively impacted the hotel’s occupancy rate in both 2020 and 2021, resulting in a negative impact on the Group’s financial performance for the financial year ended 30 June 2021;

ANNUAL REPORT 2021

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