Explanation from the Board of Directors on the Resolution of Matters Related to the Previous Non-standard Opinion Audit Report
Manshi New Energy Technology (Henan) Co., Ltd. (hereinafter referred to as "the Company" or "Manshi Technology") has had its 2020 financial statements audited by Zhongshen Asia Pacific Accounting Firm (Special General Partnership), which issued an audit report with a qualified opinion on April 28, 2021, under document number Zhongshen Yaping Audit [2021] No. 020310.
1. Main Contents of the Qualified Opinion
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Going Concern Ability
As stated in Note 2.2 of the financial statements regarding going concern, as of December 31, 2020, the net assets attributable to shareholders of the listed company were -172,038.29 ten thousand yuan, and the net profit attributable to shareholders of the listed company for 2020 was -181,352.19 ten thousand yuan. These matters indicate significant uncertainties that may raise substantial doubts about the Company's ability to continue as a going concern. Although the Company disclosed management's improvement measures regarding these matters, uncertainties about its going concern ability remain. -
Incomplete Financial Data of Overseas Subsidiary Durion Energy AG
The Company holds a 55% stake in its subsidiary Durion Energy AG (registered in Düdingen, Switzerland), which had total assets and net profit of 40,608.7 ten thousand yuan and -14,107.7 ten thousand yuan, respectively, as of December 31, 2020. Due to management's failure to provide complete financial data for 2020, we could not obtain sufficient and appropriate audit evidence to determine whether the financial statements of Durion Energy AG were presented correctly, and thus could not assess the impact of this matter on the financial statements.