Modern Avenue Group Co.Ltd(002656) : Announcement on offsetting estimated liabilities involved in some major lawsuits

Announcement on the reversal of estimated liabilities involved in some major lawsuits

Securities code: Modern Avenue Group Co.Ltd(002656) securities abbreviation: Modern Avenue Group Co.Ltd(002656) Announcement No.: 2022032

Modern Avenue Group Co.Ltd(002656)

Announcement on the reversal of estimated liabilities involved in some major lawsuits

The company and all members of the board of directors guarantee that the contents of the announcement are true, accurate and complete, and there are no false records, misleading statements or major omissions in the announcement.

Modern Avenue Group Co.Ltd(002656) (hereinafter referred to as "the company") in order to truly, accurately, objectively and fairly reflect the financial status and operating results of the company, in accordance with the self regulatory guidelines of Shenzhen Stock Exchange No. 1 - standardized operation of companies listed on the main board (hereinafter referred to as "standardized operation guidelines") and the accounting standards for business enterprises, in order to truly reflect the financial status and operating results of the company in 2021, Based on the principle of prudence, the company conducted self-examination and evaluation on relevant litigation cases within the scope of the consolidated financial statements, and partially reversed the estimated liabilities according to the judgment results related to litigation matters. The specific conditions are announced as follows:

1、 Overview of expected liabilities reversed this time

Due to the difference between the judgment and ruling results of relevant cases in the reporting period and the previous prediction, the company appropriately adjusted the proportion of accrued estimated liabilities for some pending litigation. The amount of estimated liabilities reversed in the current period is 638945 million yuan. Due to overdue interest and expenses arising from some litigation matters, the accrued amount of new estimated liabilities is 9.281 million yuan. Details are as follows:

20202021

Item name withdrawn amount (ten thousand withdrawn amount compared with new withdrawn amount in December 2021 yuan) case amount (ten thousand yuan) offset amount (ten thousand yuan) balance on 31st day (ten thousand yuan)

Ligen small loan disputes 557077 50.00%

Zhou Zhicong loan dispute 917122 50.00% 926.691009791

Disputes over equity transfer of Lin Fengguo 818.68 50.00%

Loan of Li Zhong 123.79 100.00% 1.41 125.20

Total 1568446 928.106389451022311

Remarks: 1. The loan dispute of Macao International Bank has been recognized as non operating during the 2019 report period because the early payment has been deducted

Expenditure, the amount that may be recovered is included in non operating income according to the judgment results in the current period.

2. The above balance is the loss amount expected to be borne by the company.

Announcement on the reversal of estimated liabilities involved in some major lawsuits

2、 Specific description of this reversal of estimated liabilities

1. Legen small loan litigation

On April 10, 2018, Guangzhou Ligen microfinance Co., Ltd. (hereinafter referred to as "Ligen small loan") signed a maximum loan credit contract with Lijia small loan. Ligen small loan agreed to provide a maximum loan credit of RMB 100 million for Lijia small loan, and the actual loan amount was RMB 80 million, with a term from April 10, 2018 to June 10, 2019. On the same day, the controlling shareholder signed a maximum guarantee contract with Ligen small loan in the name of the company, which agreed that the company would provide joint and several liability guarantee for the relevant debts under the above maximum loan credit contract.

The people's Court of Yuexiu District, Guangzhou City, Guangdong Province issued the civil judgment numbered "(2019) Yue 0104 min Chu No. 34730" in December 2020, made a first instance judgment on the above case, and ordered the company to bear compensation liability for half of the debts that jiaxiaodai could not pay off. The company refuses to accept the above judgment and appeals according to law.

During the reporting period, the company received the civil judgment numbered "(2021) Yue 01 min Zhong No. 7597" issued by Guangzhou intermediate people's Court of Guangdong Province, which ruled that the company would not be liable for compensation. However, Ligen xiaodai applied for retrial to the higher people's Court of Guangdong Province, which issued a notice of response to Modern Avenue Group Co.Ltd(002656) on November 4, 2021. On January 10, 2022, the higher people's Court of Guangdong Province issued a civil ruling (2021) Yue min Shen No. 13424, which ruled to reject the retrial request of Guangzhou Ligen microfinance Co., Ltd. and Guangzhou Xingsheng Group Co., Ltd.

According to the accounting standards for Business Enterprises No. 13 - contingencies, the estimated liabilities shall be initially measured according to the best estimate of the expenditure required to perform the relevant realistic obligations. The enterprise shall review the book value of estimated liabilities on the balance sheet date and adjust the book value according to the current best estimate. Accordingly, the company will write back the book value of relevant estimated liabilities.

2. Macao International Litigation

On December 20, 2018, Guangzhou huayuanli Development Co., Ltd. (hereinafter referred to as "huayuanli company"), a related party of Ruifeng group, the controlling shareholder of the company, signed a comprehensive credit contract with Guangzhou Branch of Macao International Bank Co., Ltd. (hereinafter referred to as "Macao International Bank"), and Macao International bank granted a credit line of RMB 100 million to huayuanli company, The term is from December 20, 2018 to December 20, 2019. On the same day, Ruifeng group took Guangzhou liancafu famous products Management Co., Ltd. (hereinafter referred to as "Guangzhou liancafu")

Announcement on reversal of estimated liabilities involved in some major lawsuits

Signed a certificate of deposit pledge contract with the Bank of Macau International in the name of, and agreed to guarantee the relevant debts under the above comprehensive credit contract with the time deposit of 103.1 million yuan (the deposit term is from December 20, 2018 to March 20, 2019) deposited by Guangzhou liancafu in Foshan branch of the Bank of Macau.

On August 20, 2019, during the business process of the company, it was found that the certificate of deposit held by Guangzhou liancafu had been deducted by Foshan branch of Macao International Bank, and the deducted amount was 10386393317 yuan. On the next day, Guangzhou liancafu returned 322226650 yuan, that is, the actual deducted amount was 10064166667 yuan. In view of the fact that the deduction of funds by Macao International Bank without authorization, notice or consent of Guangzhou liancafu has seriously infringed upon the interests of the company, the company filed a lawsuit in this case.

In 2020, the company received the civil judgment numbered "(2019) Yue 01 min Chu No. 1246" issued by Guangzhou intermediate people's court for the above case, and the first instance ruled that the Bank of Macau International returned 5032083333 yuan and the corresponding interest.

On April 11, 2022, the company received the civil judgment numbered "(2021) yueminzhong No. 498" issued by the higher people's Court of Guangdong Province (hereinafter referred to as "Guangzhou high court") on the above case. The final judgment was that Guangzhou liancafu was liable for 30% of the debts of huayuanli company under the loan contract involved, and Macao International Bank was liable for 70% of the amount not recovered.

In 2021, the company adjusted the impact on the balance sheet date according to the best estimate according to the judgment result of (2021) yueminzhong No. 498 issued by Guangzhou high court. The amount included in non operating income in 2021 is 23.99 million yuan.

3. Li Zhong matters

The case of contract dispute between Li Zhong and the defendants modern group and Lin Fengguo was heard in public on October 23, 2020. The company received the civil judgment (2020) Yue 0112 min Chu No. 2017) issued by the Huangpu District People's Court of Guangzhou City, Guangdong Province (hereinafter referred to as "Guangzhou Huangpu court") on December 21, 2020, A first instance judgment was made on the above case: the defendant modern group was ordered to return the equity subscription amount of 1016670 yuan and interest to the plaintiff Li Zhong within 10 days from the effective date of this judgment, and pay the case acceptance fee of 7772 yuan and preservation fee of 5000 yuan.

The company refused to accept the above judgment and appealed according to law. At present, the second instance of the case ruled that the facts were wrong and rejected the retrial of the court of first instance.

On April 25, 2022, the company received the "(2021) Yue 0112 early Republic of China 17498 issued by Guangzhou Huangpu court

Announcement on the reversal of estimated liabilities involved in some major lawsuits

"Civil judgment", ruling on the above case: ordered Lin Fengguo and the company to jointly pay 1016670 yuan and interest to Li Zhong within 10 days from the date of entry into force of this judgment.

In 2021, the company adjusted the estimated liabilities on the balance sheet date according to the best estimate according to the judgment results of the civil judgment "(2021) Yue 0112 min Chu No. 17498" issued by Guangzhou Huangpu court. As of December 31, 2021, a total of 1252000 yuan of relevant estimated liabilities have been accrued in the balance sheet.

3、 Impact of this reversal of estimated liabilities on the company

The amount of estimated liabilities written back this time is 638945 million yuan, and the newly accrued amount due to overdue interest and expenses is 9.281 million yuan. Related matters will affect the company's total consolidated profit of 546135 million yuan in 2021, accounting for 7.28% of the audited net assets on December 31, 2021.

It is hereby announced.

Modern Avenue Group Co.Ltd(002656) board of directors April 27, 2022

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