You are here

340m yuan difference in China Environment's audited FY2015 loss due to 'non-existent trade receivables'

INDEPENDENT auditors of China Environment have found that a 339.9 million yuan (S$68.03 million) discrepancy in the company's audited full-year net loss for fiscal 2015 against its announced results, was mainly due to "non-existent trade receivables" from 2013 through 2015.

For the 12 months ended Dec 31, 2015, independent auditors, RT LLP, noted that net loss for the industrial waste gas treatment company should have been 450.8 million yuan, instead of the 110.9 million yuan announced previously.

According to the auditors, revenue for the year should also have been only 36.7 million yuan, instead of the 316.7 million yuan formerly reported.

Following two site visits, the auditors found that there were five major trade receivables that were non-existent, as at end December 2015, 2014 and 2013. The company's new board also noted that there were "instances of severe non-compliance".

sentifi.com

Market voices on:

Meanwhile, audited other expenses came in at 408.6 million yuan, versus an unaudited 145.9 million yuan. This mainly comprises impairment allowance of 155 million yuan on trade receivables, 157.7 million yuan on property, plant and equipment, as well as a 47 million yuan loss derived from the non-existent trade receivables, the company said.

China Environment had in its Q4 2015 and FY2015 results made a total impairment allowance of 145.9 million yuan, including 135.2 million yuan for trade receivables, and 10.7 million yuan for property, plant and equipment.

"For the audited financials, the company has taken a prudent approach, and further provided an additional impairment allowance of 19.8 million yuan for trade receivables, and 147 million yuan for property, plant and equipment," China Environment said.

In view of the advisory letter received from the Accounting And Corporate Regulatory Authority, the company has performed a restatement of the company's financial statements, it added.

Trading in China Environment's stock remains suspended.