Jiangsu Huasheng Tianlong Photoeletric Co.Ltd(300029) board of directors
For the special explanation on the matters involved in the unqualified audit report with explanatory paragraph Jiangsu Huasheng Tianlong Photoeletric Co.Ltd(300029) (hereinafter referred to as "the company" or "Tianlong optoelectronics"), Beijing Xinghua Certified Public Accountants (special general partnership) is employed as the auditor of the company's 2021 annual financial report. Beijing Xinghua Certified Public Accountants (special general partnership) has submitted the 2021 annual audit report to the company. Beijing Xinghua Certified Public Accountants (special general partnership) issued an unqualified audit report with explanatory paragraphs for the company's 2021 financial report. The relevant matters involved in the audit opinion are explained as follows:
1、 Details of matters covered in the explanatory paragraph
The certified public accountant added the paragraph "significant uncertainty related to going concern" in the audit report as follows:
(I) as of December 31, 2021, the net assets in the consolidated financial statements of Tianlong optoelectronics company were 1410976564 yuan, the undistributed profit was -104696373039 yuan, the net profit attributable to the shareholders of the parent company in the consolidated financial statements in 2021 was -459048197 yuan, and the consolidated operating cash flow in 2021 was -1520721923 yuan. The accumulated losses of the company are huge, and the net cash flow from operating activities is negative;
(II) as stated in note 12 to the financial statements, the company has contingent liabilities arising from external guarantees and pending litigation in the current period.
Tianlong optoelectronics company has disclosed the improvement measures to be taken in note II (II), but there are still major uncertainties in the matters or circumstances that may cause major doubts about the ability of sustainable operation. This matter does not affect the audit opinion issued. 2、 Reasons and basis for issuing the audit report with explanatory notes
The reasons and basis for the CPA to add the paragraph "significant uncertainty related to going concern" in the audit report are as follows:
Article 21 of the auditing standards for Chinese certified public accountants No. 1324 - going concern stipulates that if the assumption of going concern is appropriate, but there are significant uncertainties, and the financial statements have fully disclosed the significant uncertainties, the certified public accountant shall express an unqualified opinion and add a separate part titled "significant uncertainties related to going concern" to the audit report, To remind the users of the financial statements to pay attention to the disclosure of matters or situations related to the significant uncertainty of going concern in the notes to the financial statements; Explain that these matters or circumstances indicate that there are major uncertainties that may lead to major doubts about the going concern ability of the auditee, and that the matter does not affect the audit opinion issued. The matters involved in the section of major uncertainty related to going concern indicate that there are major uncertainties that may lead to major doubts about the going concern ability of Tianlong photoelectric company. It is appropriate for the management of Tianlong optoelectronics company to use the assumption of continuous operation to prepare the financial statements of 2021. Based on the provisions of auditing standards for Chinese certified public accountants No. 1501 - forming audit opinions on financial statements and issuing audit reports, it is appropriate to express an unqualified opinion and add significant uncertainties related to going concern in the audit report. 3、 Opinions of the board of directors, independent directors and board of supervisors on this matter 1. Opinions of the board of directors
The board of directors of the company respects the unqualified audit report with explanatory paragraphs issued by Beijing Xinghua Certified Public Accountants (special general partnership). The explanation of the matters involved in the explanatory paragraph of the audit report objectively reflects the actual situation of the company, and we agree. We will try our best to take corresponding and effective measures to eliminate the impact of the matters involved in the explanatory paragraph as soon as possible, improve the company's sustainable operation ability, and actively safeguard the interests of the company and the majority of investors. 2. Independent opinions of independent directors
Beijing Xinghua Certified Public Accountants (special general partnership) issued an unqualified audit report with explanatory paragraphs for the company's 2021 financial statements. The contents of the audit report objectively and truly reflect the actual financial situation of the company and reveal the risks faced by the company. We agree with the audit report issued by Beijing Xinghua certified public Accountants (special general partnership) for the company's 2021 financial statements.
In addition, we will continue to pay attention to and supervise the corresponding measures taken by the board of directors and management of the company, and hope that the company can properly handle relevant matters, so as to improve the company's sustainable operation ability and safeguard the interests of all investors of the company. 3. Opinions of the board of supervisors
Based on professional judgment, Beijing Xinghua Certified Public Accountants (special general partnership) issued an unqualified audit report with explanatory paragraph on the company's 2021 financial report. We respect the professional opinion of the accountant and agree with the special explanation of the matters involved in the explanatory paragraph by the board of directors of the company. The board of supervisors of the company will actively cooperate with the work of the board of directors of the company, continue to pay attention to the development of relevant work of the board of directors and management, and earnestly safeguard the legitimate rights and interests of the company and all shareholders.
4、 Specific measures to eliminate relevant matters and their impact, the possibility and time of expected elimination of the impact, the company has made good progress in new energy EPC project and new energy accessories sales business in 2021. After nearly two years of efforts, the development and operation and maintenance business of new energy power station has also laid the foundation for subsequent business, so as to eliminate the impact of the above related matters and enhance the company's sustainable operation ability, To improve the company's sustainable profitability, the company will take the following measures:
After changing the controlling shareholder in April 2020, the company began to promote business transformation. On the premise of adhering to the new energy industry, the company proposed the business development direction for new energy power station development and investment, EPC engineering, equipment sales, power station operation and maintenance and other businesses. Compared with other upstream businesses in the new energy industry chain, this kind of business starts quickly and has low requirements for the company's own resources. After nearly half a year's efforts, it will achieve an operating revenue of 116 million yuan and a net profit of - 32.177 million yuan in 2020; 2021 is the year when the company enters the substantive stage of business transformation. After building and completing the business team, the business scale of the company gradually increases, and the operating revenue in 2021 is 309 million yuan. With the fulfillment of orders in hand, the development and contracting of new projects, and the process from the operation input period to the stable operation period, the management of the company strives to improve the operating revenue and net profit in 2022, and realize the full normalization of net profit and operating cash flow.
Jiangsu Huasheng Tianlong Photoeletric Co.Ltd(300029) board of directors
April 28, 2022
