audit report
Anhui Xinbo Aluminum Co.Ltd(003038)
Rong Cheng Shen Zi [2022] No. 230z0275
Rongcheng Certified Public Accountants (special general partnership)
Beijing, China
catalogue
Serial number content page number
1 audit report 1-6
2. Consolidated balance sheet 1
3 consolidated income statement 2
4 consolidated cash flow statement 3
5 consolidated statement of changes in owner’s equity 4
6 balance sheet of parent company 5
7 income statement of parent company 6
8 cash flow statement of parent company 7
9 statement of changes in owner’s equity of the parent company 8
10 notes to financial statements 9-114
Audit report
Rong Cheng Shen Zi [2022] No. 230z0275 Anhui Xinbo Aluminum Co.Ltd(003038) all shareholders:
1、 Audit opinion
We have audited the financial statements of Anhui Xinbo Aluminum Co.Ltd(003038) (hereinafter referred to as Anhui Xinbo Aluminum Co.Ltd(003038) ), including the consolidated and parent company’s balance sheet as of December 31, 2021, the consolidated and parent company’s income statement, consolidated and parent company’s cash flow statement, consolidated and parent company’s statement of changes in owner’s equity and notes to relevant financial statements in 2021.
In our opinion, the attached financial statements are prepared in accordance with the accounting standards for business enterprises in all material aspects, and fairly reflect the financial position of the consolidated and parent company as of December 31, 2021 and the operating results and cash flows of the consolidated and parent company in 2021.
2、 Basis for forming audit opinions
We conducted our audit in accordance with the auditing standards for Chinese certified public accountants. The “responsibilities of certified public accountants for the audit of financial statements” in the audit report further expounds our responsibilities under these standards. In accordance with the code of professional ethics for Chinese certified public accountants, we are independent of Anhui Xinbo Aluminum Co.Ltd(003038) company and have fulfilled other responsibilities in terms of professional ethics. We believe that the audit evidence we have obtained is sufficient and appropriate, which provides a basis for our audit opinion.
3、 Key audit matters
The key audit matters are the most important matters that we consider to audit the current financial statements according to our professional judgment. The response to these matters is based on the overall audit of the financial statements and the formation of audit opinions. We will not express separate opinions on these matters.
(I) recognition of operating income
1. Event description
Anhui Xinbo Aluminum Co.Ltd(003038) mainly engaged in the R & D, production and sales of aluminum alloy profiles. In 2021, Anhui Xinbo Aluminum Co.Ltd(003038) the amount of operating income in the consolidated financial statements was 2596.5491 million yuan. For the accounting policies for revenue recognition, see “III. important accounting policies and accounting estimates 25. Revenue recognition principles and measurement methods” in the notes to the financial statements. For the information of the book amount of operating revenue, see “v. notes to consolidated financial statements 35. Operating revenue and operating cost” in the notes to the financial statements.
As revenue is one of the company’s key performance indicators, there is an inherent risk that Anhui Xinbo Aluminum Co.Ltd(003038) Management (hereinafter referred to as management) manipulates revenue recognition in order to achieve specific goals or expectations. Therefore, we recognize revenue recognition as a key audit matter.
2. Audit response
Our audit procedures for the recognition of operating revenue mainly include:
(1) Obtain the internal control system related to Anhui Xinbo Aluminum Co.Ltd(003038) sales and collection, understand and evaluate the rationality of internal control design, and test the effectiveness of key control implementation;
(2) Select samples to check sales contracts and orders, identify contract terms related to the transfer of control over commodity ownership, and evaluate whether the revenue recognition policies comply with the provisions of the accounting standards for business enterprises;
(3) Select the samples related to revenue transactions, check the supporting documents related to revenue recognition, including sales contracts, orders, sales product delivery orders, signing orders, export customs declarations and bills of lading, invoices, bank collection receipts or collection vouchers, and evaluate whether the relevant revenue recognition complies with the accounting policies of the company for revenue recognition; (4) Implement analysis procedures, mainly including analysis of changes in operating income and analysis of fluctuations in gross profit margin, and analyze whether there are abnormalities in operating income in combination with the audit of accounts receivable and other statement items;
(5) For the sales revenue of important customers, the letter confirmation procedure is implemented, and the amount of revenue recognized in the current period is confirmed to confirm the authenticity and integrity of revenue transactions;
(6) For the revenue recognized before and after the balance sheet date, select samples and check them to the supporting documents such as customer receipt, export declaration and bill of lading, so as to evaluate whether the revenue is recorded in the appropriate accounting period.
(II) recoverability of accounts receivable
1. Event description
Anhui Xinbo Aluminum Co.Ltd(003038) the book balance of accounts receivable at the end of the period was 749.0735 million yuan, and the balance of bad debt provision was 44.0219 million yuan. For the book amount information of accounts receivable and bad debt reserves, see “v. notes to consolidated financial statements 3. Accounts receivable” in the notes to the financial statements.
The amount of the company’s accounts receivable is significant. When evaluating the recoverability of accounts receivable, the management needs to comprehensively consider the aging of accounts receivable, the debtor’s repayment records, the debtor’s financial status and the debtor’s industry status, etc. As the balance of accounts receivable is significant and the assessment of recoverability involves significant judgment and estimation of the management, we regard the recoverability of accounts receivable as a key audit matter.
2. Audit response
(1) Understand the key internal control related to the recoverability of accounts receivable, evaluate the rationality of internal control design, and test the effectiveness of key control implementation;
(2) Review the relevant considerations and objective evidence of the management’s evaluation of the recoverability of accounts receivable, and pay attention to whether the management has fully identified the items that have been impaired;
(3) For accounts receivable that measure the expected credit loss on a single basis, obtain and check the management’s prediction of the expected cash flow received, evaluate the rationality of the key assumptions used in the prediction and the accuracy of the data, and check with the obtained external evidence; For the accounts receivable whose expected credit loss is measured on the basis of portfolio, check the aging migration, customer reputation and historical bad debt of the company’s accounts receivable, evaluate the rationality of the expected credit loss rate of accounts receivable, and test the adequacy of the provision for the loss of accounts receivable;
(4) Implement the confirmation procedures, check the confirmation results with the book records, and confirm the authenticity and integrity of the balance of accounts receivable;
(5) Check the post period collection of accounts receivable and evaluate the rationality of the provision for bad debts of the management.
4、 Other information
The management is responsible for other information. Other information includes the information covered in the Anhui Xinbo Aluminum Co.Ltd(003038) 2021 annual report, but does not include the financial statements and our audit report.
Our audit opinion on the financial statements does not cover other information, and we will not issue any form of assurance conclusion on other information.
In combination with our audit of the financial statements, our responsibility is to read other information and consider whether other information is materially inconsistent with the financial statements or the information we have learned in the audit process, or there seems to be material misstatement.
Based on the work we have performed, if we determine that there is a material misstatement in other information, we should report that fact. In this regard, we have nothing to report.
5、 Responsibilities of management and governance for financial statements
The management is responsible for preparing the financial statements in accordance with the provisions of the accounting standards for business enterprises to achieve a fair reflection, and designing, implementing and maintaining necessary internal control so that the financial statements are free from material misstatement caused by fraud or error.
When preparing the financial statements, the management is responsible for assessing the going concern ability of Anhui Xinbo Aluminum Co.Ltd(003038) , disclosing matters related to going concern and applying the going concern assumption, unless the management plans to liquidate Anhui Xinbo Aluminum Co.Ltd(003038) , terminate the operation or has no other realistic choice.
The Anhui Xinbo Aluminum Co.Ltd(003038) governance layer (hereinafter referred to as the governance layer) is responsible for supervising the financial reporting process of Anhui Xinbo Aluminum Co.Ltd(003038) . 6、 Responsibilities of certified public accountants for the audit of financial statements
Our goal is to obtain reasonable assurance on whether the financial statements as a whole are free from material misstatement due to fraud or error, and issue an audit report containing audit opinions. Reasonable assurance is a high-level assurance, but it does not guarantee that the audit performed in accordance with the audit standards will always be found when a major misstatement exists. Misstatement may be caused by fraud or error. If it is reasonably expected that the misstatement alone or in summary may affect the economic decisions made by the users of the financial statements based on the financial statements, the misstatement is generally considered to be significant.
In the process of carrying out the audit work in accordance with the audit standards, we use professional judgment and maintain professional doubt. At the same time, we also carry out the following work:
(1) Identify and assess the risks of material misstatement of financial statements due to fraud or error, design and implement audit procedures to deal with these risks, and obtain sufficient and appropriate audit evidence as the basis for issuing audit opinions. Since fraud may involve collusion, forgery, intentional omission, misrepresentation or override of internal control, the risk of failing to find major misstatement caused by fraud is higher than that caused by error.
(2) Understand the internal control related to audit to design appropriate audit procedures.
(3) Evaluate the appropriateness of accounting policies selected by the management and the rationality of accounting estimates and related disclosures.
(4) Draw conclusions on the appropriateness of management’s use of going concern assumptions. At the same time, according to the audit evidence obtained, draw a conclusion on whether there are major uncertainties in the matters or circumstances that may lead to major doubts about Anhui Xinbo Aluminum Co.Ltd(003038) going concern ability. If we conclude that there is significant uncertainty, the auditing standards require us to draw the attention of statement users to the relevant disclosures in the financial statements in the audit report; If the disclosure is insufficient, we should express a non unqualified opinion. Our conclusions are based on the information available as of the date of the audit report. However, future events or circumstances may result in Anhui Xinbo Aluminum Co.Ltd(003038) being unable to continue as a going concern.
(5) Whether the financial statements reflect the overall evaluation and transaction structure of the financial statements.
(6) Obtain sufficient and appropriate audit evidence on the financial information of the entity or business activities in Anhui Xinbo Aluminum Co.Ltd(003038) to express an audit opinion on the financial statements. We are responsible for guiding, supervising and implementing the group audit, and take full responsibility for the audit opinions.
We communicated with the management on the planned audit scope, schedule and major audit findings, including the internal control defects that we identified in the audit.
We also provide a statement to the management that we have complied with the professional ethics requirements related to independence, and communicate with the management all relationships and other matters that may reasonably be considered to affect our independence, as well as relevant preventive measures.
From the matters communicated with the management, we determine which matters are the most important for the audit of the current financial statements, thus constituting key audit matters. We describe these matters in the audit report, unless laws and regulations prohibit the public disclosure of these matters, or in rare cases, if the negative consequences of communicating a matter in the audit report are reasonably expected to exceed the benefits in the public interest, we determine that we should not communicate the matter in the audit report.
(there is no text on this page, which is the signature and seal page of Anhui Xinbo Aluminum Co.Ltd(003038) Rongcheng Shenzi [2022] No. 230z0275 audit report.)
Rongcheng certified public accountants China Certified Public Accountants:
(special general partnership) Shi Qizhang (project partner)
Chinese certified public accountant:
Sun Qing
Beijing, China Certified Public Accountant:
Fang Qinhan
February 24, 2022
Consolidated balance sheet:
Project notes December 31, 2021 December 31, 2020 project notes December 31, 2021 December 31, 2020
