Jinlei Technology Co.Ltd(300443)
Year of 2021
audit report
Zhitong Certified Public Accountants (special general partnership)
catalogue
Audit report 1-5
Consolidated and company balance sheet 1-2
Consolidated and corporate income statement 3
Consolidated and company cash flow statement 4
Consolidated and statement of changes in shareholders’ equity 5-8
Notes to financial statements 9-89
Zhitong Certified Public Accountants (special general partnership), 5th floor, set square, No. 22, Jianguomenwai street, Chaoyang District, Beijing, China, 100004
Tel. + 86 108566 5588
Fax + 86 108566 5120
www.grantthornton. cn.
audit report
Zhi Tong Shen Zi (2022) No. 371a000609 Jinlei Technology Co.Ltd(300443) all shareholders:
1、 Audit opinion
We have audited the financial statements of Jinlei Technology Co.Ltd(300443) (hereinafter referred to as ” Jinlei Technology Co.Ltd(300443) “), including the consolidated and company’s balance sheet as of December 31, 2021, the consolidated and company’s income statement, consolidated and company’s cash flow statement, consolidated and company’s statement of changes in shareholders’ 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 consolidated and company’s financial position as of December 31, 2021 and the consolidated and company’s operating results and cash flows 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 Jinlei Technology Co.Ltd(300443) and have fulfilled other responsibilities in terms of professional ethics. It is the basis for us to obtain and express audit opinions.
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
See note III, 25 “revenue” and note V, 34 “operating revenue and operating cost” of the financial statements for relevant information disclosure.
1. Item description
Jinlei Technology Co.Ltd(300443) mainly engaged in the research and development and forging of wind turbine spindles, and the processing and sales of metal forgings and mechanical parts. The main business income in 2021 was 1640827161.29 yuan. As revenue is one of the key performance indicators of Jinlei Technology Co.Ltd(300443) , there is an inherent risk that Jinlei Technology Co.Ltd(300443) management manipulates revenue recognition in order to achieve specific goals or expectations. We identify revenue recognition as a key audit matter.
2. Audit response
Our main audit procedures for revenue recognition are as follows:
(1) Understand the effectiveness of internal collection process design and operation;
(2) Select samples to check the sales contracts, identify and analyze the contract terms and conditions related to the transfer of commodity control, and evaluate whether the revenue recognition policies comply with the provisions of the accounting standards for business enterprises;
(3) Select samples of revenue transactions recorded in 2021, check sales invoices, sales contracts, delivery notices, arrival confirmations, customs declarations and other supporting documents, check the capital flow records of collection, take samples to confirm accounts receivable and income, and implement alternative procedures for samples that have not replied, especially for export business, Log in to the website of China E-port and check the information of customs declaration form by sampling to evaluate the authenticity of income; (4) Compare the data of the same industry, implement analytical review procedures, and judge the rationality of changes in income and gross profit margin;
(5) For the revenue transactions recorded before and after the balance sheet date, select samples and check the delivery notice, arrival confirmation, customs declaration and other supporting documents to evaluate whether the revenue is recorded in the appropriate accounting period.
(II) provision for bad debts of accounts receivable
See note III, 10 (6) “impairment of financial assets”, note III, 32 (2) “measurement of expected credit loss of accounts receivable” and note V and 4 “accounts receivable” for relevant information disclosure.
1. Item description
As of December 31, 2021, Jinlei Technology Co.Ltd(300443) the balance of accounts receivable in the consolidated financial statements was RMB 531434957.37, and the balance of bad debt provision for accounts receivable was RMB 13350735.40. For accounts receivable, whether there is a significant financing component or not, Jinlei Technology Co.Ltd(300443) always measures its loss reserves according to the amount equivalent to the expected credit loss during the whole duration. Since Jinlei Technology Co.Ltd(300443) is determining the estimated recoverable amount of accounts receivable
Significant accounting estimates and judgments need to be used when the amount is significant, and the amount affected is significant. We recognize the provision for bad debt reserves of accounts receivable as a key audit event.
2. Audit response
Our main audit procedures for the provision of bad debt reserves for accounts receivable are as follows:
(1) Understand, evaluate and test the effectiveness of the design and operation of internal control related to the daily management of accounts receivable and the final recoverability evaluation;
(2) Review the relevant considerations and objective evidence of the impairment test of accounts receivable, and evaluate whether the impairment items have been fully identified;
(3) For the accounts receivable for which the bad debt provision is made according to the combination of credit risk characteristics, review the rationality of the combination division, review whether the historical loss rate and forward-looking adjustment calculated based on the migration rate model are reasonable, and check the accuracy of the bad debt provision;
(4) Evaluate the rationality of the provision for bad debts in combination with the inspection of the collection after the period.
4、 Other information
Jinlei Technology Co.Ltd(300443) the management is responsible for other information. Other information includes the information covered in the annual report of Jinlei Technology Co.Ltd(300443) 2021, 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
Jinlei Technology Co.Ltd(300443) 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 Jinlei Technology Co.Ltd(300443) , disclosing matters related to going concern (if applicable), and applying the going concern assumption, unless the management plans to liquidate Jinlei Technology Co.Ltd(300443) , terminate the operation or has no other realistic choice.
The management is responsible for supervising the financial reporting process of Jinlei Technology Co.Ltd(300443) .
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 in order to design appropriate audit procedures, but the purpose is not to express an opinion on the effectiveness of internal control.
(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 the going concern ability of Jinlei Technology Co.Ltd(300443) . 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 Jinlei Technology Co.Ltd(300443) 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 Jinlei Technology Co.Ltd(300443) to express an 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.
Zhitong certified public accountants China Certified Public Accountants
(special general partnership) (project partner)
Chinese certified public accountant
Beijing, China February 25, 2002
Consolidated and company balance sheet
December 31, 2021
Prepared by: Jinlei Technology Co.Ltd(300443) unit: RMB
Project notes December 31, 2021 December 31, 2020
