AUDITORS for investment-holding firm 3Cnergy, formerly known as HSR Global, have highlighted a material uncertainty related to the company' s ability to continue as a going concern, according to an exchange filing on Tuesday.

 

Mazars LLP, the company' s independent auditors, noted that 3Cnergy' s current liabilities exceeded its current assets by nearly S$18.9 million as at Dec 31, 2020.

 

In addition, the group incurred a net loss of S$7.04 million and net operating cash outflows of almost S$3.17 million for financial year 2020.

 

" These conditions indicate that a material uncertainty exists that may cast significant doubt on the group' s ability to continue as a going concern," said the auditors.

 

" The ability of the group to continue as a going concern is dependent on its ability to continue to obtain support from (the) bank and to receive continued financial support from its substantial shareholders to pay their debts as and when they fall due," they said, adding that their opinion is not modified.

 

Another key audit matter relates to the recoverable amount of land held for property development.

 

As at Dec 31, 2020, the carrying amount of the group' s land held for property development amounted to S$86.3 million, net of impairment loss of S$71.1 million. This valuation was performed by an independent external valuer to estimate the recoverable amount of the land held for property development, according to the filing.

 

The auditors said they determined this to be a key audit matter due to the high level of judgment involved in estimating the value and the significance of the carrying amount of the land held for property development.

 

3Cnergy is controlled by Tong Kooi Ong, owner of news publication The Edge.