Special Explanation from the Board of Directors of Tengxin Regarding the Matters Involved in the 2022 Audit Report with No Opinion Expressed
Zhongxinghua Certified Public Accountants (Special General Partnership) issued the audit report with no opinion (Report No. 010806) on April 25, 2023. The board of directors understands the report's findings and will take effective measures to address the issues raised, aiming to protect the interests of investors.
Due to the 2021 audit report being issued with no opinion, there is a risk of delisting warning as per Article 10.3.1 of the Stock Listing Rules. The company's stock was flagged for delisting risk on May 5, 2022. The 2022 audit report also expressed no opinion, triggering conditions for potential delisting under Article 10.3.10 of the Stock Listing Rules.
Main Contents of the Non-standard Audit Opinion
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Authenticity and Accuracy of Main Business
The company and all members of the board guarantee that the information disclosed is true, accurate, and complete, with no false records, misleading statements, or significant omissions. The company confirmed revenue of 253 million yuan from its largest customer in 2021, accounting for 79.31% of total revenue, with accounts receivable of 55.6426 million yuan as of December 31, 2021. No confirmation letters were received from this customer. Revenue from new customers in 2021 was 53.2041 million yuan, accounting for 16.67% of total revenue, with no supporting materials provided. In 2022, the company confirmed revenue of 160.2738 million yuan, but no confirmation letters were received from major customers, nor were customer visits conducted. Sufficient and appropriate audit evidence could not be obtained to assess the authenticity and accuracy of the reported revenue and corresponding costs. -
Commercial Reasonableness and Recoverability of Prepayments and Other Receivables
From 2019 to 2021, the company had significant transactions with 12 entities, including Dalian Caitong Wanlu Trading Co., Ltd. and Tianjin Haizun Trading Co., Ltd., involving prepayments totaling 1.26947 billion yuan, with 455.4389 million yuan returned. As of December 31, 2021, the unrecovered amount was 814.0311 million yuan, including 129.3 million yuan in prepayments and 684.7311 million yuan in other receivables. In 2022, the company reclassified these prepayments as other receivables, with payments of 5 million yuan and returns of 3.9 million yuan. As of December 31, 2022, the unrecovered amount was 815.1311 million yuan, with an impairment provision of the same amount. Sufficient and appropriate audit evidence could not be obtained to assess the commercial reasonableness and recoverability of these receivables. -
Recoverability of Deferred Tax Assets from Losses
As noted in Note 6, deferred tax assets of 125.1264 million yuan were recognized for deductible losses at year-end, and 99.9651 million yuan at the beginning of the year. Due to significant uncertainty regarding the company's ability to continue as a going concern, the recoverability of these deferred tax assets could not be confirmed.