Board of directors of Mengshi new energy technology (Henan) Co., Ltd
Explanation on the settlement of matters involved in the early non-standard opinion audit report
The 2020 financial statements of Mengshi new energy technology (Henan) Co., Ltd. (hereinafter referred to as "the company" or "Mengshi technology") have been audited by China Audit Asia Pacific Certified Public Accountants (special general partnership), and an audit report with a qualified opinion of China Audit Asia Pacific audit Zi [2021] 020310 was issued on April 28, 2021.
1、 Main contents of matters involved in the reservation
1. Going concern ability
As stated in note 2.2 of the financial statements, as of December 31, 2020, the net assets of lion technology to the shareholders of the listed company were -1720382900 yuan, and the net profit to the shareholders of the listed company in 2020 was -1813521900 yuan. These events or circumstances indicate that there are major uncertainties that may lead to major doubts about the sustainable operation ability of lion technology. As stated in note 2.2 to the financial statements on going concern, lion technology disclosed the improvement measures taken by the management for the above matters, but we still have doubts about the uncertainty of its ability to continue as a going concern.
2. The financial information of durion energyag, an overseas subsidiary, is incomplete
As of December 31, 2020, the holding subsidiary durion energy Ag (registered address of the company is diddingen, Switzerland) with a shareholding ratio of 55% of lion technology had total assets and net profit of RMB 406087 million and RMB -141077 million respectively. Due to the management's failure to provide complete financial information for 2020, we are unable to obtain sufficient and appropriate audit evidence to judge durion energy AG Whether the presentation of the financial statements is correct, so it is impossible to judge the impact of the event on the financial statements.
2、 Settlement of matters involved in the reservation
(I) explanation on the solution of going concern ability
Although the owner's equity attributable to the shareholders of the listed company in the company's financial statements is relatively low and the overdue debt still exists, the company's main business is stable and still maintains a certain scale and competitive advantage.
1. The company's industry has entered an explosive period and has great market potential
The company's development strategy focuses on the energy storage business. Its main businesses include new energy power engineering and battery manufacturing, new energy vehicle leasing and operation, etc. the lithium battery and energy storage industries engaged in meet the requirements of the national new energy policy and have huge market prospects. With the progress of technology and the improvement of environmental protection awareness, the industry has fully entered the business cycle and has great commercial value.
2. The company's existing business layout is reasonable and has market competitiveness
After focusing on the company's development strategy, the limited resources are concentrated in the core subsidiaries that meet the company's strategic development plan and have strong market competitiveness, and strive to ensure the development of core business. At this stage, the company's main operating revenue mainly comes from its core subsidiaries Fujian power treasure, Fujian lion new energy, Zhengzhou Dakar, Shenzhen clean power, etc. Apart from the above-mentioned unique market position, the company does not have certain operational risks.
3. Gradually dispose of non core assets, strengthen the recovery of accounts receivable and improve the company's cash flow
In 2021, the company sold the equity of Yicheng Mengshi Clean Energy Technology Co., Ltd., Jingmen Mengshi clean energy Co., Ltd., jimusar Mengshi photoelectric new energy Co., Ltd. and other project companies and their power stations, and sold the equity participation of Xiamen Gaorong nano New Material Technology Co., Ltd., which effectively realized the return of funds and reduced the company's liabilities.
The company strengthened the collection of accounts receivable through various ways, and the balance of accounts receivable at the end of 2021 decreased by more than a quarter compared with the beginning of the period. The company has accelerated the cash inflow of the company through the above means to ensure the development of business.
4. The core management team is stable, and the main creditors are optimistic about the company's industry
Facing the difficult situation, the actual controller and core management team of the company actively responded. Through strategic cooperation with central enterprises, the introduction of local government support, the implementation of debt restructuring, the termination of non core business and the streamlining of governance structure, we have maintained a relatively stable revenue scale and positive operating cash flow under extremely difficult circumstances, and gradually reserved a large amount of scenery storage projects.
In 2021, the production and operation team of the company and its subsidiaries remained stable, there was no resignation of core personnel, and the salary arrears of the company improved significantly. The company and most subsidiaries did not have salary arrears in the current period in 2021. To sum up, the company's cash flow is relatively stable in the past four years, and the company's main business is to maintain a positive focus on cash flow. The company's main business operation is relatively stable, the industry development continues to improve, and has entered a comprehensive business cycle. The company has strong technology and competitiveness in energy storage, lithium battery and other fields, has a large number of project reserves in new energy project development and engineering construction, and has good business expectations in the future. The company's strategic cooperation with central enterprises has ensured the normal development of the company's basic business. The company still has the ability of sustainable operation.
(II) settlement of incomplete financial data of durion energy AG, an overseas subsidiary
Since 2018, due to the tight liquidity of the company, various businesses under durion energy Ag have been suspended and personnel have left one after another. Now the company has no full-time employees. Affected by the epidemic prevention and control policy, the company was also unable to send personnel to Europe to handle the follow-up affairs of durion energy AG.
Therefore, the company hired SCHWEIZERISCHE Treuhandgesellschaft (Bern) AG, a Swiss intermediary, to sort out and audit the accounts of durion energy Ag in 2020 and 2021. As of the date of issuance of the company's audit report, the company and the annual audit accountant have not received the complete financial data and audit report of durion energy Ag for 2020 and 2021. The company will continue to urge Swiss intermediaries to sort out and audit the accounts of durion energy AG, coordinate the annual audit accounting firm to audit after obtaining complete financial data and audit report, and supplement and announce the annual report in time.
The board of directors of the company respectfully invites investors to pay attention to investment risks.
It is hereby explained.
Board of directors of Mengshi new energy technology (Henan) Co., Ltd
April 29, 2002
