Suzhou Chunxing Precision Mechanical Co.Ltd(002547) : special explanation of the board of directors on the matters involved in the audit report with unqualified opinions in the highlighted matters section in 2021

Suzhou Chunxing Precision Mechanical Co.Ltd(002547)

Special explanation of the board of directors on the matters involved in the audit report with unqualified opinions in the highlighted matters section of 2021

Suzhou Chunxing Precision Mechanical Co.Ltd(002547) (hereinafter referred to as "the company") hired Su yajincheng Certified Public Accountants (special general partnership) (hereinafter referred to as "Su yajincheng") as the audit institution of the company in 2021. Su yajincheng issued an unqualified audit report with emphasis on the financial statements of the company in 2021 [Su yashen (2022) No. 724]. In accordance with the relevant provisions of the rules for the preparation of information disclosure of companies offering securities to the public No. 14 - handling of non-standard audit opinions and matters involved, and the standards for the content and format of information disclosure of companies offering securities to the public No. 2 - content and format of annual report (revised in 2021), the board of directors of the company explains the matters involved in the unqualified audit report with emphasis as follows:

1、 The main contents of the highlighted items in the audit report

"We remind users of the financial statements that, as stated in note 13 (1) of the financial statements, the company indirectly sold 25.5% equity of calient technologies, Inc. (hereinafter referred to as calient) to Suzhou Industrial Park kahnliant Technology Co., Ltd. in 2018 by transferring 100% equity of Huizhou Zehong Technology Co., Ltd. (hereinafter referred to as Huizhou Zehong) and 100% equity of its wholly-owned subsidiary Chunxing Holdings (USA) Ltd (hereinafter referred to as Kahn link), the equity transfer price is 120 million yuan and 329.65 million yuan respectively. Mr. Sun Jiexiao, the controlling shareholder and actual controller of the listed company, is the actual controller of the transferee Kahn Liante and provides joint and several guarantee liabilities for the above transactions.

After deliberation at the sixth extraordinary meeting of the Fifth Board of directors and the fifth extraordinary general meeting of shareholders in 2021, the payment period of the above equity transfer fee and interest is extended to one year after the expiration of the original payment period. Mr. Sun Jiexiao plans to use his disposable assets to offset the principal of the remaining unpaid equity transfer and the corresponding interest continuously generated up to the date of principal repayment. As of the issuance date of this report, the specific debt settlement plan is still in progress.

As of December 31, 2021, the company has received the equity transfer payment of 55 million yuan from Kahn Liante, the remaining 394.65 million yuan of equity transfer principal and corresponding interest have not been paid, and the company has accrued the bad debt provision of 197325 million yuan.

The contents of this paragraph shall not affect the issued audit opinion. "

2、 Relevant explanations of the board of directors on matters involved in the audit report

The board of Directors believes that the matters that Suya Jincheng Certified Public Accountants (special general partnership) reminds users of the financial statements to pay attention to are objective, and the company understands and recognizes the audit report. The board of directors and management of the company have formulated practical measures to eliminate the impact of the matter on the company and effectively safeguard the interests of the company and all shareholders.

In order to eliminate the impact caused by the above matters, the company has carried out or plans to carry out the following work:

For the equity transfer fee and interest payment of Kahn Liante and the guarantor Mr. Sun Jiexiao, the company has hired an appraisal institution in line with the provisions of the securities law to carry out due diligence on the assets to be offset. At present, the relevant appraisal work is being actively promoted. After the specific due diligence plan of the company is completed and approved by the intermediary, it can take effect. As of December 31, 2021, the company has accrued bad debt reserves for equity transfer of RMB 197325 million.

The board of directors will continue to pay attention to the progress of the above events, actively cooperate with relevant work, and safeguard the legitimate rights and interests of the company and all shareholders. The board of directors will perform the obligation of information disclosure in a timely manner in strict accordance with the relevant information disclosure standards, and remind investors to invest carefully and pay attention to investment risks.

3、 Opinions of independent directors

The board of directors of the company made a special explanation on the matters involved in the unqualified audit report with emphasized matters issued by the accounting firm for the financial statements of 2021. We agree with the opinions of the board of directors. We require the board of directors and management of the company to actively promote relevant work and strive to eliminate the emphasized matters and their impact as soon as possible.

4、 Opinions of the board of supervisors

The board of directors of the company made a special explanation on the matters involved in the audit report with unqualified opinions on the highlighted items issued by the accounting firm in 2021, and the board of supervisors agreed with the opinions of the board of directors. The board of supervisors requires the board of directors and management of the company to actively promote relevant work and strive to eliminate the emphasized matters and their impact as soon as possible.

5、 Special instructions issued by accountants

Suya Jincheng Certified Public Accountants (special general partnership) issued special instructions on Issuing unqualified audit report with emphasis on the financial statements of Suzhou Chunxing Precision Mechanical Co.Ltd(002547) 2021 for the non-standard audit opinions of the company's financial statements of 2021.

Suzhou Chunxing Precision Mechanical Co.Ltd(002547) board of directors

April 26, 2002

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