Auditor flag going concern for Singapore Institute of Advanced Medicine

The company reported a loss after tax of $37.4m for the year.

The Singapore Institute of Advanced Medicine Holdings Ltd. (SIAMH) announced that its external auditors, PricewaterhouseCoopers LLP (PwC), issued a disclaimer of opinion on its financial statements for the fiscal year ending June 30, 2024.

PwC highlighted significant uncertainties that cast doubt on SIAMH’s ability to continue as a going concern. The company reported a loss after tax of $37.4m for the year, with net cash used in operations amounting to $12.9m. As of June 30, 2024, current liabilities exceeded current assets by S$7.9m.

The auditors expressed concern over SIAMH’s dependence on a subsidiary, which accounts for approximately 87% of the group’s total assets. The subsidiary incurred a loss after tax of S$21.1m and had current liabilities exceeding current assets by $146.6m. PwC noted uncertainties surrounding the subsidiary’s ability to generate sufficient cash flow.

PwC cited three primary issues: the appropriateness of the going concern assumption, the impairment of property, plant and equipment, and the recoverability of receivables from the subsidiary. The auditors were unable to verify management’s assumptions about financial support and future revenue growth from the group’s radiation therapy business.

The board of directors stated that the use of the going concern assumption is appropriate, pointing to post-year-end financial support of $6m in loans drawn from a subsidiary of a controlling shareholder and an expected additional S$16 million from internal and third-party sources. Management expressed confidence that these measures, along with forecasted cash flows, would enable the group to meet its obligations.

PwC warned that if the going concern assumption is determined to be inappropriate, significant adjustments to asset valuations and liability classifications would be required. The financial statements do not currently reflect these potential changes.

SIAMH assured shareholders that impairment concerns would not affect cash flow and said it will provide updates as necessary. The company advised investors to exercise caution when dealing with its shares and consult professional advisers.

The annual report for FY2024, including the auditors’ report, will be published on SGXNet.

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