Dong A Hotel (DAH) explains the auditor's exception opinion

On the 2023 Semi-Annual Financial Statements, TTP Auditing Company Limited issued an exception opinion on the independent Semi-Annual Financial Statements of Dong A Hotel Group due to a lot of information about debts that could not be verified.

The auditing company has sent a letter to compare receivables and payables to the partners of Dong A Hotel. However, by the time the report was prepared, only nearly 6% of the units confirmed receivables and no units confirmed payables. Thus, there are more than 90% of the partners' debts that the auditors have not been able to confirm. Therefore, the auditors cannot verify the balance of receivables and payables.

Auditors could not verify more than 90 debts of Dong A Hotel, Figure 1 — Dong A Hotel was audited excepted because it could not determine more than 90% of its debt (Photo TL)

In addition, in recording customer receivables, Dong A Hotel also did not analyze debt aging or set up provisions for receivables from Quang Ngan Vietnam Company Limited. This receivable was recorded at VND 87.4 billion on the self-prepared financial statements.

Explaining the above issues, Dong A Hotel has explained as follows: Regarding the debt issue, Dong A Hotel Group has sent letters to partners, customers and suppliers to confirm the debt. However, currently some partners have not finalized the figures. Some partners lost their mail so they had to resend the confirmation letter.

Some other partners have not yet made payments to Dong A Hotel and have not yet agreed on a payment time, so the company has not been able to complete the paperwork as required by the auditor.

Regarding Quang Ngan Vietnam Company, although this partner is still operating normally, Dong A Hotel has repeatedly urged payment of outstanding debts, but Quang Ngan Company has not yet paid this debt and requested an extension in 2023.

Regarding the business results for the first 6 months of 2023, Dong A Hotel recorded net revenue of VND 18.8 billion, an increase of 190.8% over the same period. However, profit after tax in the period only reached VND 1.4 billion, a decrease of 96.2% over the same period. The reason is that the company is operating below cost price, causing gross profit to record a negative VND 2.4 billion.

The company has just escaped losses thanks to financial revenue of 17.1 billion VND. A large part of which is recorded from interest on shares transfer as well as interest on deposits.

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