Hubei Shuanghuan Science And Technology Stock Co.Ltd(000707)
Preliminary audit opinions and non-standard matters
Special instructions for elimination in the current period
Dxbz [2022] No. 200013
Daxin certified public accountants LLP
Wuyige certified public accountants LLP telephone: + 86 (10) 82330558 Xueyuan interna l tower, 15 / F, No. 1 Zhichun Road, Haidian District, Beijing Fax: + 86 (10) 82327668 No. 1 Zhichun Road, Haidian dist, 15 / F, College International Building com. cn. Postal Code: Beijing, Ch ina, 100083
About Hubei Shuanghuan Science And Technology Stock Co.Ltd(000707)
Special instructions on elimination of non-standard items in the previous period in the current period
Dxbz [2022] No. 200013 Hubei Shuanghuan Science And Technology Stock Co.Ltd(000707) all shareholders:
We have been entrusted to audit the consolidated and parent company's balance sheet of Hubei Shuanghuan Science And Technology Stock Co.Ltd(000707) (hereinafter referred to as "your company" and "the company") as of December 31, 2021 and the consolidated and parent company's income statement, statement of changes in shareholders' equity, cash flow statement and notes to financial statements in 2021, On March 8, 2022, the company issued the standard unqualified audit report dxsz [2022] No. 200272.
In accordance with the rules for the preparation and reporting of information disclosure of companies offering securities to the public No. 14 - handling of non-standard audit opinions and matters involved (revised in 2020), the guidelines for the application of regulatory rules - Audit No. 1, the stock listing rules of Shenzhen Stock Exchange and other provisions of the China Securities Regulatory Commission, the specific contents of non-standard matters in the previous period The specific measures to eliminate the non-standard matters in the previous period are described as follows:
1、 Specific contents of non-standard items in the previous audit opinion
We have issued an unqualified audit report on your company's 2020 financial statements with significant uncertainties related to going concern. The specific contents of non-standard matters are as follows:
We remind the users of the financial statements to pay attention. As mentioned in note II (II) of the financial statements, the net profit attributable to the shareholders of the parent company in the consolidated statements of your company in 2020 is -480371200 yuan, the undistributed profit as of December 31, 2020 is -1695111200 yuan, the equity attributable to the shareholders of the parent company is -290233800 yuan, and the current liabilities are higher than the total current assets by 1243303800 yuan. These events or circumstances indicate that there are major uncertainties that may lead to major doubts about your company's ability to continue as a going concern. This matter does not affect the audit opinion issued.
Wuyige certified public accountants LLP telephone: + 86 (10) 82330558
Xueyuan interna l tower, 15 / F, No. 1, Zhichun Road, Haidian District, Beijing Fax: + 86 (10) 82327668
No. 1 Zhichun Road, Haidian dist, 15th floor, College International Building. Website: www.daxincpa com. cn.
Postal Code: Beijing, Ch ina, 100083
2、 Specific measures to eliminate non-standard matters in the previous period
In order to solve the problem of continuous operation in 2021, your company mainly takes the following two measures: on the one hand, implement and complete major asset restructuring, strip assets and financial liabilities, thicken net assets, improve profitability and reduce asset liability ratio. On the other hand, seize the opportunity of economic recovery, industrial recovery and rising product prices, adhere to safety investment, continue to pay close attention to safety standardization, and achieve safe, stable and efficient production.
1. In 2021, the net assets will become regular
In 2021, the company sold the equity, fixed assets and creditor's rights of its subsidiaries and associated companies to Yihua group and its subsidiaries, with a book value of 1153513400 yuan and an estimated price of 1600574400 yuan. The consideration was paid by the company's financial liabilities, which reduced the financial liabilities by 1598511800 yuan, received a cash supplement of 2062600 yuan, and the difference of 447061000 yuan was included in the capital reserve, The company realized a net profit of 42.262 million yuan attributable to the shareholders of the parent company in the current period. As of December 31, 2021, the total shareholders' equity attributable to the parent company was 5892746 million yuan, and the net assets turned positive.
2. The current liabilities decreased and the asset liability ratio decreased
In 2021, the company stripped off financial liabilities due to the implementation and completion of major asset restructuring. As of December 31, 2021, the company's current liabilities were higher than current assets by 3843576 million yuan, a decrease of 69.09% compared with the previous period, and the asset liability ratio decreased from 109.74% in the previous period to 73.06% in the current period.
3. Profitability improved in 2021
In 2021, the soda ash industry recovered and the price of products rose. The operating revenue of the company's joint soda and chemical products in this period was 27992713 million yuan, an increase of 60.51% over the previous period, and the gross profit margin increased from - 0.89% to 23.61%, a significant increase over the previous period. The company's net profit attributable to shareholders of the parent company in this period was 422.62 million yuan, a decrease of 9029912 million yuan compared with - 4803712 million yuan in the previous period, and the net profit attributable to shareholders of the parent company in this period increased significantly.
4. Improvement of operating cash flow
The net operating cash flow of the company in the current period was 583163400 yuan, an increase of 496970700 yuan or 576.58% over the previous period, and the operating cash flow was greatly improved.
Wuyige certified public accountants LLP telephone: + 86 (10) 82330558
Xueyuan interna l tower, 15 / F, No. 1, Zhichun Road, Haidian District, Beijing Fax: + 86 (10) 82327668
No. 1 Zhichun Road, Haidian dist, 15th floor, College International Building. Website: www.daxincpa com. cn.
Postal Code: Beijing, Ch ina, 100083
3、 Explanation on whether the matters involved in the previous period obviously violate the accounting standards for business enterprises and relevant normative provisions on Information Disclosure
The significant uncertainties related to going concern in the previous period mainly draw the attention of users of financial statements to this important event, which does not obviously violate the accounting standards for business enterprises and relevant normative provisions on information disclosure.
4、 Impact of relevant matters on opening balance and current audit opinion
The non-standard events of the previous period do not affect the opening amount.
The specific measures taken by your company to eliminate non-standard matters are consistent with the information we learned in the audit process. We believe that the impact of the matters described in the unqualified opinion of the major uncertainties related to going concern in your 2020 audit report has been eliminated and will no longer have an impact on the current audit opinion.
5、 Other explanatory matters
This special instruction is issued in accordance with the requirements of the securities regulatory authority and shall not be used for other purposes. The consequences caused by improper use have nothing to do with the certified public accountants performing the business and their accounting firms.
Daxin Certified Public Accountants (special general partnership) Chinese certified public accountant:
Beijing, China Certified Public Accountant:
March 8, 2002
