Shandong Hongchuang Aluminum Industry Holding Company Limited(002379)
Audit report
Dxsz [2022] No. Bestway Marine & Energy Technology Co.Ltd(300008)
Daxin certified public accountants LLP
Wuyige certified public accountants LLP telephone: + 86 (10) 82330558 Xueyuan International Tower, 15 / F, No. 1 Zhichun Road, Haidian District, Beijing Fax: + 86 (10) 82327668 no.1zhichun Road, Haidian dist, 15th floor, College International Building. Website: Internet: www.daxincpa com. cn. Postal Code: Beijing, China 100083
Audit report
Dxsz [2022] No. Bestway Marine & Energy Technology Co.Ltd(300008) Shandong Hongchuang Aluminum Industry Holding Company Limited(002379) all shareholders:
1、 Audit opinion
We have audited the financial statements of Shandong Hongchuang Aluminum Industry Holding Company Limited(002379) (hereinafter referred to as "your company"), 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 shareholders' equity and notes to financial statements in 2021.
In our opinion, the attached financial statements are prepared in accordance with the provisions of the accounting standards for business enterprises in all material aspects, and fairly reflect the financial position of your company as of December 31, 2021 and the operating results and cash flows of your company and the 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 your 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) related purchase
1. Item description
Wuyige certified public accountants LLP telephone: + 86 (10) 82330558
Xueyuan International Tower, 15 / F, No. 1 Zhichun Road, Haidian District, Beijing Fax: + 86 (10) 82327668 no.1zhichun Road, Haidian dist, 15th floor, College International Building com. cn. Postal Code: Beijing, China 100083
Please refer to "X. related party relations and transactions (IV)" in the notes to the financial statements. In this period, your company purchased 211450328451 yuan of aluminum ingots, liquid aluminum, hot rolled coils, accessories, auxiliary materials, waste aluminum, aluminum bus and other raw materials and power from related parties. The purchase amount is significant, which has a significant impact on the company's operating results; Due to the particularity of related party transactions, there may be risks of incomplete transaction records and unfair transaction prices. Therefore, we identify related party procurement as a key audit matter.
2. Audit response
For the related procurement matters in this period, we mainly implemented the following audit procedures:
(1) Obtain the statements of the management on the integrity of related party relationships and related procurement, evaluate and test the internal control of your company to identify and disclose related party relationships and related transactions. Obtain the list of related parties provided by the management, check it with the information obtained from other public channels and query platforms, and review major procurement, sales and other contracts to identify whether there are undisclosed related parties; Obtain the resolutions of the board of directors and the shareholders' meeting related to related party transactions, check the decision-making authority and procedures of related party transactions, judge the legality and compliance of related party transactions, and whether they have been properly authorized and approved;
(2) Implement audit procedures such as inspection agreement, warehousing order, purchase invoice, freight, purchase payment voucher, on-site visit to related suppliers and interview with relevant personnel, and verify the authenticity of related procurement in combination with other audit procedures such as letter of confirmation and supervision; (3) Compare and analyze the purchase price between the company and related party units, the purchase price with non related party units and the market price in the same period, and analyze whether the pricing of related party transactions is fair;
(4) Check the related party relationship, amount and balance of related procurement provided by the management with the relevant information concerned in the audit, and check whether it is completely disclosed.
(II) recoverability of accounts receivable
1. Item description
Please refer to the accounting policies described in "III. important accounting policies and accounting estimates (XI)" and "v. notes to important items of consolidated financial statements (IV)" in the notes to the financial statements.
As of December 31, 2021, the book value of your company's accounts receivable is 11752953319 yuan. Due to the high proportion of accounts receivable in total assets, and the management needs to use significant accounting estimates and judgments when determining the expected recoverable amount of accounts receivable, we identify the recoverability of accounts receivable as a key audit event.
2. Audit response
Wuyige certified public accountants LLP telephone: + 86 (10) 82330558 Xueyuan International Tower, 15 / F, No. 1 Zhichun Road, Haidian District, Beijing Fax: + 86 (10) 82327668 no.1zhichun Road, Haidian dist, 15th floor, College International Building. Website: Internet: www.daxincpa com. cn. Postal Code: Beijing, China 100083
We have mainly implemented the following audit procedures for the recoverability of accounts receivable:
(1) Understand, evaluate and verify the key control of your company's management in the evaluation of the recoverability of accounts receivable, including the overdue analysis of accounts receivable and the regular evaluation of the recoverability of the balance of accounts receivable;
(2) Select a sample of accounts receivable for which loss reserves are individually assessed, and review the basis and rationality of the management's estimation of the expected future cash flow;
(3) For accounts receivable for which loss reserves are accrued by portfolio, evaluate whether the proportion of loss reserves determined by the management is reasonable;
(4) Implement the correspondence procedure and check the correspondence results with the amount recorded by the management;
(5) Evaluate the rationality of the management's assessment of the recoverability of the balance of accounts receivable in combination with the inspection of the collection after the period.
4、 Other information
The management of your company (hereinafter referred to as the management) is responsible for other information. Other information includes the information covered in your 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 company's ability to continue as a going concern, disclosing matters related to going concern (if applicable), and applying the assumption of going concern, unless the management plans to liquidate the company, terminate operation or have no other cash flow
Wuyige certified public accountants LLP telephone: + 86 (10) 82330558
Xueyuan International Tower, 15 / F, No. 1, Zhichun Road, Haidian District, Beijing Fax: + 86 (10) 82327668
No.1zhichun Road, Haidian dist, 15th floor, College International Building. Website: www.daxincpa com. cn.
Postal Code: Beijing, China 100083
Real choice.
The management is responsible for supervising the financial reporting process of your company.
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:
(I) 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.
(II) understand the internal control related to audit in order to design appropriate audit procedures, but the purpose is not to express opinions on the effectiveness of internal control.
(III) evaluate the appropriateness of accounting policies selected by the management and the rationality of accounting estimates and related disclosures.
(IV) draw a conclusion on the appropriateness of the management's use of the going concern assumption. 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 sustainable operation ability of your company. 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 cause your company to be unable to continue its business. (V) evaluate the overall presentation, structure and content of the financial statements, and evaluate whether the financial statements fairly reflect relevant transactions and events.
Wuyige certified public accountants LLP telephone: + 86 (10) 82330558 Xueyuan International Tower, 15 / F, No. 1 Zhichun Road, Haidian District, Beijing Fax: + 86 (10) 82327668 no.1zhichun Road, Haidian dist, 15th floor, College International Building. Website: Internet: www.daxincpa com. cn. Postal Code: Beijing, China 100083
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