Special note on non-standard audit opinion of Xiongan Kerong Environment Technology Co.Ltd(300152) 2021 annual financial report Zhongzheng Tiantong Certified Public Accountants (special general partnership)
Beijing, China
About Xiongan Kerong Environment Technology Co.Ltd(300152)
Special notes on non-standard audit opinions of 2021 financial report
Zhong Zheng Tian Tong (2022) Zheng Shen Zi No. 0102 Shenzhen Huaqiang Industry Co.Ltd(000062) Xiongan Kerong Environment Technology Co.Ltd(300152) all shareholders:
We have been entrusted to audit the financial statements of Xiongan Kerong Environment Technology Co.Ltd(300152) (hereinafter referred to as " Xiongan Kerong Environment Technology Co.Ltd(300152) ") in 2021, including the consolidated and parent company's balance sheet as of December 31, 2021, the consolidated and parent company's income statement, consolidated and parent company's cash flow statement, consolidated and parent company's statement of changes in shareholders' equity and notes to financial statements in 2021, And issued a qualified audit report on April 19, 2022 (Report No.: Zhong Zheng Tian Tong (2022) Zheng Shen Zi No. 010200006).
According to the relevant requirements of the China Securities Regulatory Commission, 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 and the stock listing rules of Shenzhen Stock Exchange (revised in 2022), the relevant matters are explained as follows:
1、 Contents of "qualified opinions" in the audit report
As stated in "XIV. Other significant events (III)" in the notes to the consolidated financial statements:
In June 2021, Puyi Shijiazhuang equity investment fund management center (limited partnership) (hereinafter referred to as "Puyi fund") affiliated to Xiongan Kerong Environment Technology Co.Ltd(300152) signed the equity transfer agreement with Xinjiang limacheng Energy Equipment Co., Ltd. (hereinafter referred to as "Xinjiang limacheng"), It is agreed that Puyi fund will acquire 29.50% equity of Bazhou junchuang Energy Co., Ltd. (hereinafter referred to as "Bazhou junchuang") held by Xinjiang Lima Cheng in cash. In July 2021, Puyi fund paid 58 million yuan for equity transfer. In January 2022, both parties signed the termination of equity transfer agreement. From January to March 2022, Xinjiang Lima component returned 58 million yuan of equity transfer funds to Puyi fund four times.
We note that in March 2021, Xinjiang junchuang Energy Equipment Co., Ltd. (hereinafter referred to as "Xinjiang junchuang") under the same control as Xiongan Kerong Environment Technology Co.Ltd(300152) transferred its 100% equity of Bazhou junchuang to Xinjiang Lima Cheng, and its 100% equity transfer price was 40 million yuan. As of December 31, 2021, Xinjiang limacheng has not paid the equity transfer price. We are unable to obtain sufficient and appropriate audit evidence on the commercial rationality and pricing fairness of Puyi fund's acquisition of 29.50% equity of Bazhou junchuang. Accordingly, we are unable to judge whether the treatment of Bazhou junchuang's 58 million yuan investment reported under long-term equity investment on Xiongan Kerong Environment Technology Co.Ltd(300152) balance sheet date is appropriate.
2、 Reasons and basis for issuing "qualified opinion"
(I) overall importance level of consolidated financial statements
When we performed the audit of Xiongan Kerong Environment Technology Co.Ltd(300152) financial statements, according to the auditing standards for Chinese certified public accountants No. 1221 - importance of planning and performing audit work, Xiongan Kerong Environment Technology Co.Ltd(300152) is a profit-making entity. Due to the large fluctuation of the total profit in this period compared with the previous period, we adopted its total profit (in absolute value) of 616477 million yuan after deducting non recurring profits and losses in recent three years as the benchmark, Multiplying the benchmark by 5%, the overall importance level of the consolidated financial statements is 3082000 yuan.
(II) reasons and basis for issuing "qualified opinion" audit report
According to Article 8 of the auditing standards for Chinese certified public accountants No. 1502 - issuing unqualified opinions in audit reports "When one of the following circumstances exists, the certified public accountant shall express a qualified opinion: 1. After obtaining sufficient and appropriate audit evidence, the certified public accountant believes that the misstatement alone or combined has a significant impact on the financial statements, but it is not extensive; 2. The certified public accountant cannot obtain sufficient and appropriate audit evidence as the basis for forming the audit opinion, but believes that there are undiscovered misstatements (if any) It may have a significant impact on the financial statements, but it is not extensive. " As stated in the qualified opinion in the above audit report, these matters may have a significant impact on Xiongan Kerong Environment Technology Co.Ltd(300152) financial statements, but they are not extensive. According to the guidelines for the application of regulatory rules - Audit No. 1: Certified Public Accountants shall carefully evaluate whether the impact of relevant matters on the financial statements is extensive. If there is no obvious evidence to the contrary, the following circumstances show that the impact of relevant matters on the financial statements is extensive: including multiple major events that cannot obtain sufficient and appropriate audit evidence; A single event has a great impact on the main components of the financial statements; It may affect delisting indicators, risk warning indicators, changes in profit and loss nature, going concern, etc.
As for the equity transfer mentioned in note 1, it may have a significant impact on the presentation of financial statements, but it is only limited to the impact between different statement items of the balance sheet. The equity transfer funds involved have been recovered on the reporting date and are not a major part of the financial statements. Moreover, the event does not affect delisting indicators, risk warning indicators, changes in the nature of profits and losses, going concern, etc., so it is not extensive. Due to the possible impact of this matter on the financial statements, we have expressed a qualified opinion on the 2021 financial statements of Xiongan Kerong Environment Technology Co.Ltd(300152) in accordance with the relevant provisions of the auditing standards.
3、 Possible impact of "qualified opinions" on financial position, operating results and cash flow during the reporting period
As mentioned in note II, the above matters that lead to the issuance of qualified opinions may have a significant impact on the financial statements of Xiongan Kerong Environment Technology Co.Ltd(300152) 2021, but they are not extensive Xiongan Kerong Environment Technology Co.Ltd(300152) on the balance sheet date, the investment amount of Bazhou junchuang of 58 million yuan reported under the long-term equity investment item will not affect the total assets of the enterprise at the end of 2021, the profit statement of 2021, and only the specific accounts of the balance sheet. Therefore, we judge that its impact on Xiongan Kerong Environment Technology Co.Ltd(300152) financial statements is not extensive. Therefore, reservations were expressed.
4、 Elimination or change of matters involved in non-standard audit opinions in the previous audit report in the current period
Xiongan Kerong Environment Technology Co.Ltd(300152) 2020 financial statements have been audited by the exchange and the exchange has issued an audit report with qualified opinions (Zhong Zheng Tian Tong (2021) Zheng Shen Zi No. 0100015) (hereinafter referred to as the previous audit report)
(I) matters involved in non-standard audit opinions in the previous audit report
As described in note V (III) to the consolidated financial statements and note VI to the consolidated financial statements, Lantian Environmental Protection Equipment Engineering Co., Ltd. (hereinafter referred to as "Lantian Environmental Protection") is a holding subsidiary of Xiongan Kerong Environment Technology Co.Ltd(300152) former subsidiary. In April 2019, Xiongan Kerong Environment Technology Co.Ltd(300152) disposed of all the equity of Lantian Environmental Protection held by it.
As of December 31, 2020, the principal, interest and loan balance of Xiongan Kerong Environment Technology Co.Ltd(300152) business loans receivable from Lantian Environmental protection was 781703 million yuan, and Xiongan Kerong Environment Technology Co.Ltd(300152) accrued the expected credit loss of 370928 million yuan according to the aging analysis method. For the above receivables, we have implemented audit procedures such as checking repayment commitment data, checking recent repayment records, bookkeeping vouchers and bank documents, sending confirmation letters, on-site interviews with auditors and so on. However, as there are still a large number of sales contract disputes and other litigation matters affecting the company's operation as of the date of this report, and there is significant uncertainty about whether the current accounts can be repaid on time according to the plan agreed by both parties, we are unable to obtain the supporting materials for Xiongan Kerong Environment Technology Co.Ltd(300152) determining the rationality of the expected credit loss of the accounts receivable, and we are unable to determine the adjustment amount of the above expected credit loss and its impact on relevant disclosure. (II) elimination or change of matters involved in non-standard audit opinions in the previous audit report in the current period
In 2021, the company learned that the operation of Lantian Environmental Protection Equipment Engineering Co., Ltd. (hereinafter referred to as "Lantian Environmental Protection") failed to improve significantly as expected, and was unable to repay the arrears as agreed in the repayment plan. After communication, Lantian Environmental protection could not guarantee to repay the arrears as agreed in the future. Based on the principle of prudence, the expected credit loss was fully accrued in the current period for the part of Lantian Environmental Protection receivables that had not yet accrued the expected credit loss, In 2021, the provision for expected credit loss was 37.98 million yuan. We have checked the recent repayment records, bookkeeping vouchers and bank documents, sent confirmation letters and interviewed auditors. We believe that Xiongan Kerong Environment Technology Co.Ltd(300152) the accounting treatment of withdrawing bad debt reserves in full for accounts receivable from Lantian Environmental protection is appropriate. The reserved items of the previous period have been eliminated in the current period.
This special instruction is issued by the exchange in accordance with the relevant provisions of the CSRC and shall not be used for other purposes. The consequences caused by improper use have nothing to do with the accounting firm and certified public accountant performing the business.
(there is no text on this page, which is the signature and seal page of Xiongan Kerong Environment Technology Co.Ltd(300152) zzttz [2022] zsz No. 010200006 attached report No. 2)
Certified Public Accountants of China Securities Tiantong certified public accountants Co., Ltd.:
(special general partnership) (project partner)
Chinese certified public accountant:
Beijing, China
April 19, 2021
