Jiangsu Kanion Pharmaceutical Co.Ltd(600557)
Audit report and financial statements
(from January 1, 2021 to December 31, 2021)
Table of contents page I. audit report 1-4
2、 Financial statements
Consolidated balance sheet and parent company balance sheet 1-4
Consolidated income statement and parent company income statement 5-6
Consolidated cash flow statement and cash flow statement of parent company 7-8
Consolidated statement of changes in owner’s equity and statement 9-12 of changes in owner’s equity of the parent company
Notes to financial statements 1-88
audit report
Xin Hui Shi Bao Zi [2022] No. zh10007 Jiangsu Kanion Pharmaceutical Co.Ltd(600557) all shareholders:
1、 Audit opinion
We have audited the financial statements of Jiangsu Kanion Pharmaceutical Co.Ltd(600557) (hereinafter referred to as Jiangsu Kanion Pharmaceutical Co.Ltd(600557) ), 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 provisions of 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, Jiangsu Kanion Pharmaceutical Co.Ltd(600557) 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 Jiangsu Kanion Pharmaceutical Co.Ltd(600557) , 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.
Key audit matters how to deal with them in the audit
(I) revenue recognition in 2021, Jiangsu Kanion Pharmaceutical Co.Ltd(600557) selling drugs. Our main audit procedures for the recognition of main business revenue include:
36136219 million yuan, accounting for 99.04% of the operating revenue. (1) understand and evaluate the management and revenue, all of which are the revenue of design students of key internal control related to sales confirmation in China, which is higher and more effective than that of the previous year;
21.08%。 (2) Implement the analytical review procedure to evaluate one of the performance indicators of the company’s income change in the current period from multiple dimensions because income is the key industry of Jiangsu Kanion Pharmaceutical Co.Ltd(600557) and the rationality of the management’s intention; Manipulation of revenue to achieve specific goals or expectations (3) the inherent risk of selecting the recognition time point for the revenue transactions recorded this year, so take samples and check invoices, sales contracts, and we identify the company’s revenue recognition as supporting documents such as customs delivery orders and transportation documents
Key audit matters. Evaluate whether the relevant revenue recognition complies with the accounting policies of the company for revenue recognition;
(4) Combined with the audit of accounts receivable, select samples to confirm the sales revenue of customers;
(5) Select a sample of revenue transactions recorded before and after the balance sheet date and check the delivery note and other supporting documents to evaluate whether the revenue is recorded in the appropriate accounting period.
4、 Other information
Jiangsu Kanion Pharmaceutical Co.Ltd(600557) Management (hereinafter referred to as management) is responsible for other information. Other information includes the information covered in Jiangsu Kanion Pharmaceutical Co.Ltd(600557) 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 Jiangsu Kanion Pharmaceutical Co.Ltd(600557) ‘s ability to continue as a going concern, disclosing matters related to going concern (if applicable), and applying the assumption of going concern, unless liquidation is planned, operation is terminated or there is no other realistic choice.
The management is responsible for supervising the financial reporting process of Jiangsu Kanion Pharmaceutical Co.Ltd(600557) .
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 to design appropriate audit procedures.
(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 Jiangsu Kanion Pharmaceutical Co.Ltd(600557) 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 cause Jiangsu Kanion Pharmaceutical Co.Ltd(600557) unable to continue to operate.
(V) evaluate the overall presentation (including disclosure), structure and content of the financial statements, and evaluate whether the financial statements fairly reflect relevant transactions and events.
(VI) obtain sufficient and appropriate audit evidence on the financial information of the entity or business activities in Jiangsu Kanion Pharmaceutical Co.Ltd(600557) to express an audit opinion on the consolidated 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.
China certified public accountant of Lixin certified public accountants: Zhang Aiguo
(special general partnership) (project partner)
Chinese certified public accountant: Liu Jun
Shanghai, China March 2, 2022
December 31, 2021
(unless otherwise specified, the monetary unit is RMB)
Notes to assets closing balance closing balance of last year
Current assets:
Monetary capital v. (I) 937438231857 Western Superconducting Technologies Co.Ltd(688122) 1418
Provision for settlement
Lending funds
Trading financial assets v. (II) 176000 Shenzhen Guohua Network Security Technology Co.Ltd(000004) 50000000
Derivative financial assets
Notes receivable
Accounts receivable v. (III) 7320610536695529624427
Receivables financing v. (IV) 6179809194666043493826
Prepayment v. (V) 32448094805235475698
receivable premium
accounts receivable reinsurance
Reinsurance contract reserve receivable
Other receivables v. (VI) 1174901471982166633
Purchase of resale financial assets
Inventory v. (VII) 3380771950637652927562
Contract assets
Assets held for sale
Non current assets due within one year
Other current assets v. (VIII) 28464272775794156330
Total current assets 287421878231288569065894
Non current assets:
Loans and advances
Debt investment
Other debt investment
long-term receivables
Long term equity investment v. (IX) 404685285402716356
Investment in other equity instruments
Other non current financial assets v. (x) 56594403826959860200
Investment real estate
Fixed assets v. (XI) 244991301618254241441587
Construction in progress
