audit report
Huangshan Novel Co.Ltd(002014)
Rong Cheng Shen Zi [2022] No. 230z0321
Rongcheng Certified Public Accountants (special general partnership)
Beijing, China
Audit report
Rong Cheng Shen Zi [2022] No. 230z0321 Huangshan Novel Co.Ltd(002014) all shareholders:
1、 Audit opinion
We have audited the financial statements of Huangshan Novel Co.Ltd(002014) (hereinafter referred to as Huangshan Novel Co.Ltd(002014) ), 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 flow 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 Huangshan Novel Co.Ltd(002014) 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) revenue recognition
1. Event description
Huangshan Novel Co.Ltd(002014) it mainly produces and operates vacuum coating, plastic color printing composite flexible packaging materials, and produces and sells self-produced new drug packaging materials, fine chemical products and other high-tech products. In 2021, the operating revenue of Huangshan Novel Co.Ltd(002014) was 3023694600 yuan. Since the operating revenue is one of the key performance indicators of the company, the appropriateness of the recognition of operating revenue has a significant impact on the operating results of Huangshan Novel Co.Ltd(002014) , so we identified the recognition of Huangshan Novel Co.Ltd(002014) operating revenue as a key audit matter.
2. Audit response
The relevant procedures we implement for revenue recognition include:
(1) Understand the key internal control related to revenue recognition, evaluate whether the internal control design is reasonable, and test the effectiveness of relevant internal control operation.
(2) Check the commodity sales contracts of major customers, identify the contract terms and conditions related to the transfer of commodity control, and evaluate whether the accounting policies for revenue recognition meet the requirements of the accounting standards for business enterprises.
(3) Implement analytical procedures for operating income and gross profit margin, identify whether there are significant or abnormal changes, and find out the rationality of the reasons for the changes.
(4) Take the sampling method to check the supporting documents such as sales contracts or orders, shipping bills, sales invoices, collection documents and export declaration materials related to commodity sales revenue, so as to evaluate the occurrence of commodity sales revenue. (5) According to the characteristics and nature of customer transactions, select samples to implement the letter confirmation procedure to confirm the authenticity and accuracy of the amount of commodity sales revenue.
(6) Perform a cut-off test on the sales revenue of goods recognized before and after the balance sheet date, and check the product delivery note, shipping note, customs declaration, etc., so as to evaluate whether the sales revenue of goods is recognized in the appropriate accounting period.
Through the implementation of the above procedures, we found no abnormality in revenue recognition.
(II) impairment of accounts receivable
1. Event description
As of December 31, 2021, Huangshan Novel Co.Ltd(002014) the balance of accounts receivable was 576663200 yuan, and the balance of bad debt provision of accounts receivable was 33.75 million yuan, accounting for 5.85% of the balance of accounts receivable. As the balance of accounts receivable is significant and the evaluation of bad debt reserves largely involves the judgment of Huangshan Novel Co.Ltd(002014) Management (hereinafter referred to as "management"), if the accounts receivable cannot be recovered, it will have a great impact on the financial statements. Therefore, we regard the impairment of accounts receivable as a key audit matter.
2. Audit response
(1) Understand the management's key internal control over financial reporting related to credit approval, account recovery and provision for impairment of accounts receivable, and evaluate the effectiveness of the design and operation of relevant internal control.
(2) Analyze the rationality of the management's accounting estimation of bad debt provision for accounts receivable, including the basis for determining the combination of accounts receivable, the withdrawal proportion of bad debt provision, the judgment of single withdrawal of bad debt provision, etc.
(3) Obtain the calculation table of bad debt provision of accounts receivable, check whether the accrual method is implemented in accordance with the accounting policy of bad debt provision, and recalculate whether the accrual amount of bad debt provision of accounts receivable is accurate.
① According to the sampling principle, check the sales invoices and shipping documents related to the balance of accounts receivable, and evaluate whether the aging interval division of accounts receivable is appropriate.
② According to the principle of full inspection, comprehensively evaluate the accounts receivable for which the bad debt provision is withdrawn individually, and review the appropriateness of the withdrawal proportion of the bad debt provision of individual recognized accounts receivable by the management.
③ Select customers with large amount and long aging, and evaluate whether their bad debt provision is sufficient according to the reasons for arrears.
(4) Analyze the aging of accounts receivable and customer reputation, implement the procedures of accounts receivable correspondence and spot check the collection after the period, and evaluate the rationality of the provision for bad debts of accounts receivable.
We found that there was no abnormal impairment of accounts receivable through the above procedures.
4、 Other information
The management is responsible for other information. Other information includes the information covered in the Huangshan Novel Co.Ltd(002014) 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.
In preparing the financial statements, the management is responsible for assessing the going concern ability of Huangshan Novel Co.Ltd(002014) , disclosing matters related to going concern (if applicable), and applying the going concern assumption, unless the management plans to liquidate Huangshan Novel Co.Ltd(002014) , terminate the operation or has no other realistic choice.
The management is responsible for supervising the financial reporting process of Huangshan Novel Co.Ltd(002014) .
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 is significant uncertainty in the matters or circumstances that may lead to major doubts about Huangshan Novel Co.Ltd(002014) 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 Huangshan Novel Co.Ltd(002014) being unable to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, and evaluate whether the financial statements fairly reflect relevant transactions and events.
(6) Obtain sufficient and appropriate audit evidence on the financial information of the entity or business activities in Huangshan Novel Co.Ltd(002014) 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 (if applicable).
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.
Rongcheng certified public accountants China Certified Public Accountants:
(special general partnership) Gao Ping (project partner) Chinese certified public accountant:
Xu Lin
Beijing, China Certified Public Accountant:
Tang Baofeng
February 24, 2022
1. Consolidated balance sheet prepared by: Huangshan Novel Co.Ltd(002014)
December 31, 2021
Unit: Yuan
Current assets of the project from December 31, 2021 to December 31, 2020:
Monetary capital 787007930.96 785147881.29 settlement reserve
Lending funds
Trading financial assets 30881900.00 301334794.51 derivative financial assets
Notes receivable 285000.00
Accounts receivable 542913249.99 492640371.95 accounts receivable financing 123753055.50 57400947.48 prepayments 11366892.33 9501069.10 premiums receivable
accounts receivable reinsurance
Reinsurance contract reserve receivable
Other receivables 5349580.39 7710495.01, including: interest receivable
Dividends receivable
Purchase of resale financial assets
Inventory 332657868.16 243067118.51 contract assets
Assets held for sale
Non current assets due within one year
Other current assets 9136567.27 6651998.26 total current assets 1843352044.60 1903454676.11 non current assets:
Loans and advances
Debt investment
Other debt investment
long-term receivables
Long term equity investment
