Special notes on matters involved in non-standard audit opinions of 2021 financial report
Zhongxinghua Certified Public Accountants (special general partnership) (hereinafter referred to as "the accounting firm") audited the 2021 financial statements of Whole Easy Internet Technology Co.Ltd(002464) (hereinafter referred to as "the company") and issued an audit report on the company that could not express an opinion. In accordance with the requirements of the Listing Rules of Shenzhen Stock Exchange, the rules for the preparation of information disclosure of companies offering securities to the public No. 14 - handling of non-standard audit opinions and matters involved, and the standards for the contents and forms of information disclosure of companies offering securities to the public No. 2 - Contents and forms of annual report, the board of directors of the company made a special explanation on the matters involved in the above opinions as follows:
1、 Main contents involved in non-standard audit opinions
(I) there are significant uncertainties in the ability to continue as a going concern
As of December 31, 2021, the current liabilities of Zhongying Internet company were higher than the current assets by 1.022 billion yuan, and the overdue debts were 1.229 billion yuan, all of which had been involved in litigation and could not be repaid. The accumulated undistributed profit was - 717 million yuan. The net assets attributable to the parent company in 2021 were 28 million yuan, which had great operational and financial risks. As stated in "II. Preparation basis of financial statements 2. Going concern" in the notes to the financial statements, the company's management plans to take measures to improve the company's operating and financial conditions, but we fail to obtain sufficient and appropriate audit evidence related to the evaluation of the ability of going concern. Therefore, we cannot determine whether the financial statements prepared by Zhongying Internet based on the assumption of going concern are appropriate.
(II) impact on the recoverability of agency procurement funds
As stated in "IV. 10 impairment of financial assets and VI. 4 other receivables" in the notes to the financial statements, Zhongying Internet company accrues the expected credit loss according to the aging combination for other receivables related to overseas agency procurement funds. The closing balance of the account is 1707845 million yuan, the accrued expected credit loss is 1084524 million yuan, and the book value is 623321 million yuan. We are unable to obtain sufficient and appropriate audit evidence to judge the recoverability of the above agency purchase receivables.
(III) investigation items
As stated in "XV. 2 other important matters" in the notes to the financial statements, Zhongying Internet company received the notice of filing (No.: Zhengjian Lijian Lijian Zi 0112020112020112, 2012, 1012, 1012) from the China Securities Regulatory Commission (hereinafter referred to as the "CSRC") on December 3, 2021. The CSRC decided to file a case for investigation against Zhongying Internet company and its chairman, Mr. Li Hualiang. As of the date of this audit report, the investigation has not reached a final conclusion. We cannot judge the possible impact of the investigation results on the financial statements of Zhongying Internet.
2、 Reasons and basis for expressing unable opinions
(I) overall importance level of consolidated financial statements
During the audit of the financial statements of Zhongying Internet company in 2021, we determined the overall importance level of the consolidated financial statements of RMB 18.5 million. Zhongying Internet company is a profit-making entity. Because the total profit of this period fluctuates greatly compared with that of the previous period, we use its average total pre tax profit (taking the absolute value) of 370 million yuan in the last three years as the benchmark, multiply the benchmark by 5%, and the overall importance level of the consolidated financial statements is 18.5 million yuan.
(II) reasons and basis for expressing opinions that cannot be expressed
According to Article 7 of the auditing standards for Chinese certified public accountants No. 1502 - issuing unqualified opinions in audit reports, "certified public accountants shall issue unqualified opinions in the audit report in case of any of the following circumstances: (I) draw a conclusion that there are significant misstatements in the financial statements as a whole based on the audit evidence obtained; (II) Unable to obtain sufficient and appropriate audit evidence and conclude that there is no material misstatement in the financial statements as a whole. " And Article 10 "if we cannot obtain sufficient and appropriate audit evidence as the basis for forming audit opinions, but believe that the undetected misstatement (if any) may have a significant and extensive impact on the financial statements, the certified public accountant shall express an opinion."
As stated in the audit report "forming the basis of unable to express opinions", the above matters affect the presentation of credit impairment losses, other receivables, estimated liabilities and the disclosure of going concern ability. The relevant matters are extensive for the users of financial statements to understand the financial statements. Therefore, we issued an audit report with unable to express opinions on the 2021 financial statements of Zhongying Internet company.
3、 Unable to express opinions on the impact of the matters involved on the financial situation and operating results in the reporting period
As stated in the audit report "II. Forming the basis for unable to express opinions", we are unable to express an opinion on the financial statements of Zhongying Internet because we are unable to obtain sufficient and appropriate audit evidence as the basis for forming audit opinions. Therefore, we are unable to determine the specific impact of these matters on the financial position of Zhongying Internet as of December 31, 2021 and the operating results of 2021.
4、 Opinions of the board of directors
The board of Directors believes that the audit report issued by zhongxinghua Certified Public Accountants (special general partnership) has reflected the actual situation of the company. The board of directors of the company respects the audit opinions issued by zhongxinghua Certified Public Accountants (special general partnership). The board of directors will urge the management to actively take measures to eliminate the matters involved in the inability to express opinions as soon as possible and safeguard the legitimate rights and interests of the company and all shareholders.
The above matters that cannot express opinions do not belong to the obvious violation of the accounting standards, systems and relevant information disclosure norms stipulated in the rules for the preparation and reporting of information disclosure of companies offering securities to the public No. 14 - non-standard audit opinions and the handling of matters involved (revised in 2018) of the China Securities Regulatory Commission. Opinions and suggestions of director Zheng Yuzhi: I respect the audit opinions issued by zhongxinghua Certified Public Accountants (special general partnership), but I have two different views on the matters involved in which the certified public accountants cannot express their opinions. 1、 The impact on the ability to continue as a going concern comes from the company's related debt problems. The company has signed a debt exemption agreement with relevant important creditors on December 21, 2021. According to the interest penalty interest exemption agreement and mediation agreement signed by creditors, the exemption amount of debt interest and penalty interest is 854 million. In April 2022, the listed company reached a consensus with relevant important creditors to continue to exempt the debt interest and penalty interest in 2022 (among which, important creditors Beijing Yidi Fund Management Co., Ltd. China Zheshang Bank Co.Ltd(601916) , Xiaochang Mingya Investment Center (limited partnership) have signed an agreement). After the exemption, the company expects the net profit attributable to the parent company to be positive in 2022 and the operating cash flow can cover the relevant operating costs of the company. In addition, the company is actively promoting the start of formal bankruptcy reorganization procedures, so as to solve the company's debt and operation problems in a package in 2022. At the same time, the company's main operating asset mmoga is in stable operation.
In conclusion, I think the financial statements prepared by the listed company on the basis of sustainable operation are reasonable. 2、 It is learned from the listed company that the reason for the investigation of the company is that the company reported the illegal guarantee matters not disclosed by Mr. Li Hualiang, chairman of Zhongying Internet company. The listed company has confirmed that the official seal used for the guarantee matters is false, and the company's illegal guarantee should not be established; In addition, Tumushuke Guangneng enterprise management consulting partnership (limited partnership) (hereinafter referred to as "new investor"), Zhongying Internet and the reporting creditors have signed a resolution agreement. Even if the listed company should bear the guarantee responsibility, the guarantee responsibility of the listed company has been transferred, the creditors have agreed not to investigate the listed company, and the listed company does not have to bear the guarantee responsibility. In addition, in the opinion of the board of directors in proposal 9: the audit report cannot express an opinion, and the description of the matters involved objectively reflects the actual situation of the company (I suggest removing this sentence).
Zhu Enle's personal opinions on the annual report are as follows:
According to the provisions of "II. 5. (1)" in the application guide of "auditing standards for Chinese certified public accountants No. 1503 - adding emphasized items and other items in audit reports", certified public accountants may consider it necessary. At the same time, through the inquiry of cases in the market, most of the listed companies involved in the filing and investigation matters have been given opinions with emphasis by accountants. I have reservations about Zhongying Internet's inability to express opinions due to the filing and investigation matters. At the same time, it is believed that with regard to the recovery management of other receivables of mmoga, under the strict control requirements of the company on the subsidiary mmoga, the company has formulated the recovery control system of other receivables and effectively supervised the implementation. However, due to the regulatory restrictions of foreign banks and financial institutions on large amounts of funds and other factors, the progress of collection has objectively lagged behind, and the cash collection is mainly recovered from the first quarter to April of 2022, And the proportion of cash collection shall not be lower than that of previous years. In my opinion, there are no major defects in the company's internal control over the management of other receivables. There are systems, measures and actions to ensure from beginning to end, and the company has achieved payment collection results. However, the lag of recovery progress caused by the limited factors of overseas banks and financial institutions is defined as the major defect or ineffective implementation of the company's internal control.
5、 Opinions of the board of supervisors
The board of supervisors believes that the 2021 audit report issued by zhongxinghua Certified Public Accountants (special general partnership) truly and objectively reflects the company's financial situation and operation in 2021.
The board of supervisors agrees with the special explanation made by the board of directors on the matters involved in the audit report of the above non-standard audit opinions, and will continue to urge the board of directors and management to take effective measures to reduce and eliminate the adverse impact of matters that cannot express opinions on the company, and effectively safeguard the legitimate rights and interests of the company and all shareholders.
6、 Opinions of independent directors
We have no objection to the 2021 annual audit report issued by zhongxinghua Certified Public Accountants (special general partnership); We agree with the special statement of the board of directors on the matters involved in the non-standard audit opinion of the company's 2021 financial report, and will continue to pay attention to and supervise the relevant work of the board of directors and the management of the company, eliminate the matters involved in the opinions as soon as possible, and effectively safeguard the legitimate rights and interests of the company and all shareholders.
7、 Specific measures to eliminate relevant matters and their impact
In the face of the above situation, the company will try its best to take measures in all aspects to eliminate the relevant matters that lead to the inability to express opinions and their impact, so as to safeguard the legitimate rights and interests of the company and shareholders. Specific measures are as follows:
(I) measures against major uncertainties in the company's ability to continue as a going concern
1. On the premise of maintaining the advantages of genuine authorization / registration code (card) products, focus on the development of game virtual goods (non card) business and increase the trading volume of the platform. Continue to cultivate the German speaking market, expand its market share in the UK, France, Spain and Italy, and further implement the market development strategy around northern Europe, North America and the Middle East. Through regional market expansion, mmoga's business scale, market share and platform users are bound to be significantly improved;
2. Adjust the original strategic direction to optimize the existing business product lines and services, continue to promote the all-round development of platform business, and create three-dimensional marketing channels and technical barriers. Establish an efficient partner management system, optimize existing partners and introduce more and better partners;
3. Continue to deepen the application for European payment license in Lithuania, carry out professional payment business, effectively reduce the existing payment cost of mmoga platform, and provide cross-border payment solutions for many international e-commerce platforms and e-commerce distribution entities outside mmoga platform;
4. Take the physical e-commerce platform mmoga power as the key business development direction of the next year to build a new e-commerce platform. In the early stage, it will focus on the drainage of users of mmoga platform, introduce a series of professional dealers and hot-selling products, so as to revitalize tens of millions of users of mmoga platform and realize the effective realization of existing user traffic of mmoga in the field of physical e-commerce.
In 2022, mmoga will continue to guard the stock business, deeply cultivate the traditional advantageous market and expand the increment. According to its massive loyal customer base and combined with the leading advantages of overseas markets, in 2022, mmoga will position its strategic direction to optimize the existing business product lines and services, strengthen brand construction and market promotion, and expand other markets outside the German speaking area of Europe, so as to expand the global target market share. And integrate the existing platform resources, strive to increase the number of platform users, and deepen and strengthen the internal advantages of mmoga's platform channels.
(II) measures for the recovery of agency purchase funds of the company
1. Actively communicate with relevant personnel of the subsidiary mmoga, including the general manager and the chief financial officer, to understand the reasons for the formation of its agency procurement funds, the time of confirmation, the compliance of accounting treatment, the relevant situation of suppliers, the commercial essence of procurement, the reasons for the overdue payment and the risk of recovering the payment. Check the fund management system, fund payment process and other fund related internal controls of the subsidiary mmoga. 2. The company strengthened the internal control system of its subsidiary mmoga. In order to control the risk of agency procurement funds, combined with the actual situation of the company, the company reviewed and approved the payment management system for agency procurement business, and the subsequent company will implement control in strict accordance with the system. The company will continue to improve various internal control processes and further improve the internal control system according to the relevant requirements of the basic norms of enterprise internal control and supporting guidelines.
3. The company and mmoga continue to pay close attention to the progress and results of monthly recovery and reduction work, maintain close supervision over platform sellers, and ensure effective supervision and control over recovery and reduction work during the period.
(III) measures for company investigation
1. Actively communicate with the CSRC, cooperate with the inspection work of the CSRC, provide relevant company information required for the inspection, and all relevant personnel of the company cooperate with the inspection, inquiry, conversation and other work of the CSRC.
2. The company's internal control personnel are required to implement the internal control system and the effectiveness of the external control system in a timely manner after the company's internal control personnel find the loopholes, and the company's internal control personnel are required to report the effectiveness of the external control system. In accordance with relevant laws and regulations, regulatory requirements and《
