Beijing Honggao Creative Architectural Design Co., Ltd. (hereinafter referred to as "the Company") and all members of the Board of Directors guarantee that the content of the information disclosure is true, accurate, and complete, without false records, misleading statements, or major omissions.
Recently, the Company received the "Inquiry Letter Regarding the 2022 Annual Report of Beijing Honggao Creative Architectural Design Co., Ltd." (Company Department Annual Report Inquiry Letter [2023] No. 65) issued by the Listing Company Management Department of the Shenzhen Stock Exchange. The Company now responds to the issues mentioned in the 2022 annual report inquiry letter one by one, as follows:
During the review of your company's 2022 annual report (hereinafter referred to as "the Annual Report"), the following matters were noted:
- Zhongxing Caiguanghua Certified Public Accountants (hereinafter referred to as "Zhongxing Caiguanghua") issued a qualified audit opinion on your company's 2022 financial report. The main reason for the qualified opinion was the failure to obtain sufficient appropriate audit evidence for certain accounts receivable and contract assets, as well as an investigation initiated by the China Securities Regulatory Commission (CSRC). Specifically, the reason for the qualified opinion on accounts receivable and contract assets was that some of your projects had not completed final settlement on time, and Zhongxing Caiguanghua was unable to obtain customer credit assessments and payment plans, nor could they obtain sufficient appropriate audit evidence through alternative procedures. The total book value of these accounts receivable and contract assets amounted to 141 million yuan.
Please provide the following: (1) Details regarding the specific circumstances of the accounts receivable and contract assets for which Zhongxing Caiguanghua failed to obtain sufficient appropriate audit evidence, including but not limited to customer names, project implementation status (project names, implementation progress), receivable amounts, aging, impairment provisions, revenue recognition, cost transfer status, and whether the debtor has any related party relationship with your company. Additionally, explain the reasons and rationale for the prolonged unresolved status of these projects and the lack of specific payment plans from the relevant customers.
Company Response: The following are the specific circumstances of the accounts receivable and contract assets for which Zhongxing Caiguanghua failed to obtain sufficient appropriate audit evidence: