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PVR: Explanation for the qualified opinion of the auditor in the financial statement before and after audit On 31/03/2016,
PetroVietnam Premier Recreation Joint Stock Company explained the qualified
opinion of the auditor in the financial statement before and after audit as
follows:
1. The qualified
opinion of the auditor
- Other
short-term payables: on 31/12/2015, the Company signed capital contribution
contract and received deposits from customer for Van Phu project and Viet Hung
project. Total deposits from customers in Van Phu project and Viet Hung project
was VND 266,275,933,721 and VND 496,520,000 respectively. However, the Company
had not issued VAT invoice to record and declare output VAT and declare the
advance payment of corporate income tax according to current regulations of tax
law.
- Inventory: In
the financial statement dated 31/12/2015, the Company could not accurately
assess the investment effectiveness of Van Phu project because there were not
enough parameters for calculation. Accordingly, the Company could not extract
any provision for the diminution in inventory into the unfinished cost of this
project.
- The value of
investments in Binh An Development and Investment Joint Stock Company and
PetroVietnam Construction and Investment Joint Stock Company was VND
205,082,444,751 and VND 21,350,000,000 respectively. As of 31/12/2015, the
Company had not considered extracting provision for the impairment of these
investments.
- Other
receivables were from the person who was related to the transfer of 825,000
shares of PetroVietnam Construction and Investment Joint Stock Company from
2011. As of the date of making this financial statement, after signing written
agreement, this person agreed to transfer 825,000 shares to the Company.
Concurrently, the Company also sent all related documents to PetroVietnam
Construction and Investment Joint Stock Company and this company approved. As
of 31/12/2015, the Company had not considered extracting provision for these
receivables.
- Additionally,
the auditor emphasized that the projects of the Company were in the
implementation process and did not create revenue in 2015. On 31/12/2015,
short-term liabilities were bigger than short-term asset, the Company had the
2015 loss and the accumulated loss and net cash flow from operating activities
was negative. This was signs showing that the ability of the Company to repay
short-term liabilities could find it difficult.
2. Explanation
- On 31/12/2015,
the Company signed 124 sales contracts with buyers of the project CT10-11 in
Van Phu Ward, Ha Dong District, Hanoi City. According to the guidance of Decree
71/2010/ND-CP dated 23/06/2010 and Circular 06/2012/TT-BTC dated 11/01/2012,
the Company declared VAT and paid 1% of corporate income tax in advance. The
remaining customers had not signed sales contract so the Company had no basis
for invoice issuance and tax declaration according to current tax law.
- Inventory: In
the financial statement dated 31/12/2015, the Company could not accurately
assess the investment effectiveness of the project CT10-11 Van Phu because
there were not enough parameters for calculating and extracting the provision
for the diminution of inventory.
- As of
31/12/2015, the Company had not received the financial statement of
PetroVietnam Construction and Investment Joint Stock Company and Binh An
Development and Investment Joint Stock Company. Therefore, the Company had no
basis to extract provisions for these investments.
- Regarding the
receivable from the person who was related to the transfer of 825,000 shares of
PetroVietnam Construction and Investment Joint Stock Company, as of 31/12/2015,
this person completed documents to transfer 825,000 shares of PetroVietnam
Construction and Investment Joint Stock Company to the Company. Concurrently,
the Company also sent all related documents to PetroVietnam Construction and
Investment Joint Stock Company and this company approved the transfer. So, in
fact, the Company owned 825,000 shares of PetroVietnam Construction and
Investment Joint Stock Company and need not extract provision for this
receivable.
- The Company
mainly operated in the real estate field and was the developer of the project
CT10-11 in Van Phu Ward, Ha Dong District, Hanoi. Currently, the project was in
the investment process, the real estate was still in the difficult period so
the Company could not mobilize more capital from customers. The leader team of
the Company built detailed plans to resolve matters related to cash flow. For
example, the Company signed the contract with MHD Houses Construction and
Trading Joint Stock Company to ensure capital source for constructing the
remaining items of the project. The Company also approved transferring the Viet
Hung project to withdraw investment capital for other investment activities of
the Company. Concurrently, the Company also searched for partners to transfer
the less-effective projects.
According to the
financial statement of quarter 4.2015, the 2015 loss was VND 12,333,460,484.
However, in the independent audit report 735/VN1A-HN-BC dated 30/03/2016 of
Deloitte Vietnam Company Limited, the 2015 loss was VND 27,447,972,143.
Therefore, after audit, the increase of VND 15,114,511,659 in the loss of
Company was because of extracting the additional provisions for capital
investments.
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