Special Explanation on Non-standard Audit Opinion of 2023 Financial Report
Special Explanation Report
Asia Pacific (Group) CPA Firm (Special General Partnership)
April 29, 2024
Regarding the Special Explanation on the Non-standard Audit Opinion of the 2023 Financial Report of Beijing Zuojing Technology Co., Ltd.
Audit Report No.: YaHuiZhuanShenZi (2024) No. 01110010
Contents
- Special Explanation on Non-standard Audit Opinion of Beijing Zuojing Technology Co., Ltd.'s 2023 Financial Report
Audit Report No.: YaHuiShenZi (2024) No. 01110118
Shenzhen Stock Exchange: We have been entrusted to audit the financial statements of Beijing Zuojing Technology Co., Ltd. (hereinafter referred to as "Zuojing Technology") for the year 2023, and issued an audit report with a paragraph on significant uncertainties related to going concern, expressing an inability to issue an opinion on April 29, 2024. According to the relevant requirements of the China Securities Regulatory Commission's "Rules for the Disclosure of Information by Companies Issuing Securities No. 14 - Handling of Non-standard Audit Opinions and Related Matters" and the "Shenzhen Stock Exchange GEM Stock Listing Rules," we provide the following explanations regarding the relevant matters:
1. Main Contents of the Non-standard Audit Opinion
(1) Basis for Inability to Express an Opinion
As stated in the audit report's "Basis for Inability to Express an Opinion": As of December 31, 2023, Zuojing Technology had accounts receivable with a book balance of 301.5661 million yuan, a bad debt provision of 93.3955 million yuan, and a book value of 208.1706 million yuan. For part of the accounts receivable, we were unable to conduct on-site interviews or obtain confirmation replies, involving a book balance of 201.2475 million yuan, accounting for 66.73% of the total accounts receivable at the end of the period. Due to limitations in executing important audit procedures, we were unable to obtain sufficient and appropriate audit evidence to assess the recoverability of the aforementioned accounts receivable.
On December 1, 2023, the company received a "Notice of Case Filing" (No. ZhenJianLiAnZi 0142023018) from the China Securities Regulatory Commission for suspected violations of information disclosure laws and regulations. On January 30, 2024, the CSRC released a report on the progress of the investigation into financial fraud at *ST Zuojing. We are unable to confirm the impact of these matters on the company's financial statements.
(2) Significant Uncertainties Related to Going Concern
As stated in the audit report's "Significant Uncertainties Related to Going Concern":
We remind users of the financial statements to pay attention to Note 2, 2, Going Concern, which states that Zuojing Technology's consolidated operating revenue for 2023 was 53.2516 million yuan; the consolidated net loss for 2023 was 245.3355 million yuan, with net losses in the past two years; and the net cash outflow from operating activities was -24.384 million yuan. These matters or situations, along with the matters shown in Note 16 regarding the unresolved investigation by the CSRC, led to the issuance of an audit report expressing an inability to issue an opinion for Zuojing Technology for 2023. The company's stock may be delisted from the Shenzhen Stock Exchange, indicating significant uncertainties that may raise doubts about Zuojing Technology's ability to continue as a going concern. This matter does not affect the previously issued audit opinion.