Bright Oceans Inter-Telecom Corporation(600289) board of directors
With regard to the special statement on the matters involved in the qualified opinion audit report issued in 2021 with emphasis and major uncertainties related to continuous operation Bright Oceans Inter-Telecom Corporation(600289) (hereinafter referred to as "Yiyang Xintong" or "the company") hired Dahua Certified Public Accountants (special general partnership) (hereinafter referred to as "Dahua Certified Public Accountants") as the audit institution of the company's 2021 financial report, Dahua Certified Public Accountants issued a qualified opinion audit report with emphasis on events and major uncertainties related to going concern for the company's 2021 financial report. In accordance with the relevant requirements of the Listing Rules of Shanghai Stock Exchange and the rules for the preparation and reporting of information disclosure of companies offering securities to the public No. 14 - handling of matters involved in non-standard audit opinions, the board of directors of the company explains the matters involved in the above non-standard audit opinions as follows:
1、 Contents of non-standard audit opinions
(I) reservations
As stated in Note 6 and note 9 of the financial statements, other equity instruments held by Yiyang Xintong invested in 1.6836% equity of Yiyang Group Co., Ltd. (hereinafter referred to as "Yiyang group"), the book value at the beginning of the year was 1333055 million yuan, the fair value of other equity instrument investment reassessed at the end of the year was 1297891 million yuan, the disposal expense was 4.1898 million yuan, the recoverable amount was 1255993 million yuan, and the impairment was 7.7057 million yuan, The impairment rate is 5.78%. According to the requirements of auditing standards for Chinese certified public accountants No. 1421 - using the work of experts, we reviewed the evaluation report (Beifang Yashi pingbao Zi [2022] No. 01-281). We note that the eleventh item of the appraisal report and the "statement of special matters" mention that the users of the appraisal report should pay attention to the impact of special matters on the appraisal conclusion. Due to the limitation of audit scope, we are unable to obtain sufficient and appropriate audit evidence for the special matters existing in Yiyang group and the impact on the evaluation conclusion. (II) highlights
1. Pending litigation for breach of warranty
We remind the users of the financial statements to pay attention to the fact that, as stated in note 12, commitments and contingencies and note 13, events after the balance sheet date, as of the date of issuance of the audit report, the company still has the dispute over the guarantee contract between huiqiantu (Xiamen) asset management Co., Ltd. and Deng Wei, the dispute over the loan contract between Huarong International Trust Co., Ltd. and Yiyang group, Deng Wei and the company, China Huarong Asset Management Co., Ltd. Heilongjiang Branch v. Yiyang group, Deng Wei and company loan contract dispute, Bank of Communications International Trust Co., Ltd. v. Yiyang group, company and Deng Wei financial loan contract dispute, Lecheng enterprise management consulting (Shanghai) Co., Ltd. v. Shanghai Shenheng Trading Co., Ltd. Bright Oceans Inter-Telecom Corporation(600289) private loan dispute has not been settled, and the total principal involved is 145545455159 yuan.
2. Investor litigation
On December 28, 2021, Yiyang Xintong and relevant parties received the decision on administrative punishment ([2021] No. 1) and the decision on market entry Prohibition ([2021] No. 1) issued by Heilongjiang securities regulatory bureau. Several investors filed a civil lawsuit against Yiyang Xintong on the grounds of Securities Misrepresentation liability dispute, and there is great uncertainty in the amount of compensation.
3. Validity of guarantee
We remind users of the financial statements to pay attention. As stated in note 15 and other important matters, on April 28, 2021, Yiyang group entrusted Dalian Wanyi to apply for a letter of guarantee of RMB 556 million from Fuxin bank. Fuxin bank promised to deduct the amount of Yiyang Telecom from the third party who paid the agreed matters to Yiyang Telecom within the amount of the letter of guarantee. As of the date of issuance of the audit report, the total amount of the performance guarantee was 15480600 yuan. Yiyang Xintong still has outstanding illegal guaranteed debts, which may trigger the performance guarantee.
The above contents shall not affect the issued audit opinion.
(III) major uncertainties related to going concern
We remind users of financial statements to pay attention, such as notes III and II to financial statements
As mentioned above, the net profit of Yiyang Xintong in 2021 was a loss of 2010644 million yuan and the net cash flow from operating activities was -1213874 million yuan. As a result of the litigation, several bank accounts of Yiyang Xintong, including the basic account, were frozen (the frozen amount was 890881200 yuan as of December 31, 2021), and the equity of its subsidiaries and several real estate were frozen.
The above matters indicate that there are major uncertainties that may lead to major doubts about the sustainable operation ability of Yiyang Telecom. This matter does not affect the audit opinion issued.
2、 Relevant explanations of the board of directors on the matters involved in the above non-standard audit opinions
Dahua Certified Public Accountants issued a qualified opinion audit report on the 2021 annual financial statements of the company with emphasis on the matters and significant uncertainties related to sustainable operation. The opinion was issued out of professional judgment in accordance with the requirements of the auditing standards for Chinese certified public accountants. The basis and reasons met the relevant provisions. The board of directors of the company had no objection to the audit opinion. The board of directors will urge the management of the company to make every effort to eliminate the above matters and their adverse effects in 2022.
3、 Specific measures to eliminate the matter and its impact
(I) the 1.6836% equity of Yiyang Group invested in other equity instruments held by Yiyang Xintong is obtained from the declaration of creditor's rights and conversion of shares in the process of bankruptcy and reorganization of Yiyang group, with a number of 66025200 shares. The recoverable amount of the asset on December 31, 2020 is 133 million yuan. With the change of the share value of Yiyang group, the recoverable amount needs to be re measured on each balance sheet date. According to the appraisal report (Bei Ya Shi Ping Bao Zi [2022] No. 01-281) issued by Bei Northking Information Technology Co.Ltd(002987) Yashi Assets Appraisal Office (special general partnership), the recoverable amount of the asset on December 31, 2021 was 126 million yuan.
At the extraordinary general meeting of shareholders held on April 14, 2021, Yiyang group approved the agreement to repurchase the assets with cash equivalent to RMB 682 million or assets conducive to the operation and development of the company within 36 months (from the date of completion of the self-improvement plan). The company attaches great importance to the relevant contents mentioned in item 11 of the evaluation report and the "description of special matters", and actively communicates with Yiyang group to urge it to sign a repurchase agreement as soon as possible to eliminate the impact of the matter on the company.
(II) among the pending lawsuits of the company, huiqiantu (Xiamen) Asset Management Co., Ltd. v. the company and Deng Wei guarantee contract dispute, Huarong International Trust Co., Ltd. v. Yiyang group, Deng Wei and company loan contract dispute, China Huarong Asset Management Co., Ltd. Heilongjiang Branch v. Yiyang group, Deng Wei and company loan contract dispute, and Bank of Communications International Trust Co., Ltd. v. Yiyang group The creditor's rights related to the dispute over the company and Deng Wei's financial loan contract have been paid off in the form of cash + debt to equity swap during the bankruptcy and reorganization of Yiyang group.
The company is actively responding to the lawsuit and striving to close the case as soon as possible.
The details of the dispute case of Lecheng enterprise management consulting (Shanghai) Co., Ltd. v. Shanghai Shenheng Trading Co., Ltd. and private lending of the company are as follows: the reorganization plan of Yiyang group has been ruled and implemented by Harbin intermediate people's court, in which Yiyang Group retains the rights and interests of the declared unconfirmed creditor's rights (creditor: Lecheng company) in the deposit and reservation part, involving a total principal of 100 million yuan, Yiyang Group paid off according to law. The company is actively responding to the lawsuit and striving to close the case as soon as possible.
(III) as of March 31, 2022, a total of 131 natural persons have filed civil lawsuits against the company on the grounds of Securities Misrepresentation liability disputes, with a total amount of 1184226 million yuan. The company attaches great importance to relevant litigation matters, and has hired a professional legal team to actively respond to the lawsuit, making every effort to safeguard the legitimate rights and interests of the company and all shareholders. As of the disclosure date of the announcement, the above cases have not been heard in court. The company will continue to pay attention to the progress of the above litigation matters and fulfill the obligation of information disclosure in a timely manner.
(IV) on April 28, 2021, Yiyang group applied to Fuxin bank for issuing a performance guarantee to the company to provide guarantee for the shares held by Yiyang group repurchase company, perform all obligations and responsibilities for the shares held by Yiyang group repurchase company, and assume an irrevocable and unconditional guarantee to the company with a maximum amount of RMB 556 million. According to Article 5 of the letter of guarantee, if Yiyang group fails to buy back the shares corresponding to Yiyang group held by the company with the same amount of the deducted amount within 10 working days after the deduction of the amount, and pay the repurchase amount of this part of the shares to the company, the company will submit a written notice to Fuxin bank requiring payment, and Fuxin bank will pay the repurchase amount of the notified claim amount to the company within 15 working days, No proof or justification from the company is required. As of the date of this announcement, the performance conditions of the letter of guarantee have been triggered for 4 times, and the repayment has been completed under the letter of guarantee, with a total repayment amount of 15480600 yuan. The company will continue to pay close attention to the performance of the letter of guarantee, actively communicate with Fuxin bank and timely fulfill the obligation of information disclosure.
(V) the company communicates closely with Yiyang group and strives to solve the problems of fund occupation and illegal guarantee as soon as possible. At the same time, the business risks are resolved through multiple measures. In 2022, the company will consolidate and expand the development of traditional business based on the field of traditional telecom operators. In terms of communication business, make use of the long-established brand advantages, management advantages and technical advantages to face the fierce market competition, survive by management, effectively reduce the production and operation cost by means of linking budget cost control and performance appraisal, actively adjust the organizational structure according to the market situation, try our best to reduce the impact of external environment and ensure the realization of production and operation objectives. At the same time, based on the existing technical advantages and the lightweight transformation of core products, a series of digital intelligence solutions will be formed, the business chain will be extended, and the rapid expansion in non telecommunications fields such as energy grid, government education, rail transit and industrial Internet will be realized.
Bright Oceans Inter-Telecom Corporation(600289) board of directors April 27, 2022
