Guangdong High Dream Intellectualized Machinery Co.Ltd(300720) : audit report of Chengdu Xintong Software Co., Ltd. Chengdu Xintong Software Co., Ltd
2019, 2020, January August 2021
audit report
catalogue
1、 Audit report Page 1-3 II. Financial statements Page 4-8
(i) Balance sheet Page 4
（2） Income statement… Page 5
（3） Cash flow statement… Page 6
（4） Statement of changes in owner’s equity… Page 7-8 III. notes to financial statements… Page 9-55
audit report
Tian Jian Yue Shen [2021] No. 1629
All shareholders of Chengdu Xintong Software Co., Ltd.:
1、 Audit opinion
We have audited the financial statements of Chengdu Xintong Software Co., Ltd. (hereinafter referred to as “Xintong software”), including the balance sheets as of August 31, 2021, December 31, 2020 and December 31, 2019, the income statement, cash flow statement, statement of changes in owner’s equity and notes to relevant financial statements from January to August 2021, 2020 and 2019.
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 Xintong software company as of August 31, 2021, December 31, 2020 and December 31, 2019, as well as the operating results and cash flows from January to August, 2021, 2020 and 2019.
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 Xintong software 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、 Responsibilities of management and governance for financial statements
The management of Xintong software company (hereinafter referred to as the management) is responsible for preparing the financial statements in accordance with 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 evaluating the sustainable operation ability of Xintong software company, disclosing matters related to sustainable operation (if applicable), and applying the assumption of sustainable operation, unless it plans to liquidate, terminate operation or has no other realistic choice.
The governance layer of Xintong software company (hereinafter referred to as the governance layer) is responsible for supervising the financial reporting process of Xintong software company.
4、 Responsibilities of certified public accountants for the audit of financial statements
Our objective is to obtain reasonable assurance as to whether the financial statements as a whole are free from material misstatement due to fraud or error, and to issue an audit report containing audit opinions. Reasonable assurance is a high-level assurance, but it does not guarantee that an audit performed in accordance with audit standards can 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 performing audit work in accordance with 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. As fraud may involve collusion, forgery, intentional omission, misrepresentation or override of internal control, the risk of failure to find material 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 cause major doubts about the sustainable operation ability of Xintong software 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 Xintong software company to be unable to continue its business.
（5） Evaluate the overall presentation, structure and content of the financial statements, and evaluate whether the financial statements fairly reflect relevant transactions and events.
We communicate with the management on the planned audit scope, schedule and major audit findings, including the noteworthy internal control defects identified in the audit.
4、 Restrictions on distribution and use
Xintong software company prepares the financial statements to meet the purpose of Guangdong High Dream Intellectualized Machinery Co.Ltd(300720) acquiring the equity of Xintong software. Therefore, the financial statements may not be suitable for other purposes. This report is only provided by Xintong software company to the parties concerned for the above purposes, and shall not be used for any other purpose. The contents of this paragraph shall not affect the issued audit opinion. Tianjian Certified Public Accountants (special general partnership) Guangdong Branch Chinese certified public accountant: Li Wenyu
China · Guangzhou Chinese certified public accountant: Wang Zhen
October 20, 2001
Chengdu Xintong Software Co., Ltd
Notes to financial statements
January 1, 2019 to August 31, 2021
Monetary unit: RMB I. Basic information of the company
Chengdu Xintong Software Co., Ltd. (hereinafter referred to as the company or the company) is invested and established by Chengdu Xintong Technology Co., Ltd. and registered with Chengdu Administration for Industry and Commerce on June 9, 2009. Now it holds a business license with a unified social credit code of 91510100689039211j and a registered capital of 30 million yuan.
Business scope of the company: R & D Production (only branches can operate in the Industrial Park), sales of computer software, hardware and auxiliary equipment; system integration; data processing services and provision of technical consulting, technology transfer and technical services; enterprise management consulting; computer information technology consulting; R & D and sales of communication equipment (excluding wireless radio and television transmitting equipment and satellite ground receiving equipment), instruments, electronic components and provide technical consultation; integrated circuit design and sales; software development; import and export of goods and technology.
2、 Preparation basis of financial statements
（1） Preparation basis
The financial statements of the company are prepared on the basis of going concern.
（2） Evaluation of going concern ability
The company has no events or circumstances that cause major doubts about its ability to continue as a going concern within 12 months from the end of the reporting period. 3、 Important accounting policies, accounting estimates and prior period errors
（1） Statement of compliance with accounting standards for business enterprises
The financial statements comply with the requirements of the accounting standards for business enterprises and truly and completely reflect the financial status, operating results, cash flow and other relevant information of the enterprise.
（2） Accounting period
The fiscal year starts on January 1 and ends on December 31 of the Gregorian calendar. The accounting period of the financial information contained in the financial statements is from January 1, 2019 to August 31, 2021.
（3） Business cycle
The business cycle of the company’s business is relatively short, and 12 months is taken as the liquidity classification standard of assets and liabilities.
（4） Recording currency
RMB is adopted as the bookkeeping base currency.
（5） Criteria for determining cash and cash equivalents
Cash listed in the cash flow statement refers to cash on hand and deposits that can be used for payment at any time. Cash equivalents refer to investments held by enterprises with short term, strong liquidity, easy to be converted into known amount of cash and low risk of value change.
（6） Translation of foreign currency business
When foreign currency transactions are initially recognized, they are translated into RMB at the spot exchange rate on the transaction date. On the balance sheet date, foreign currency monetary items are translated at the spot exchange rate on the balance sheet date. The exchange difference arising from different exchange rates, in addition to the exchange difference between the principal and interest of foreign currency special borrowings related to the acquisition and construction of assets eligible for capitalization, is included in the current profit and loss; Foreign currency non monetary items measured at historical cost shall still be translated at the spot exchange rate on the transaction date without changing their RMB amount; Foreign currency non monetary items measured at fair value are translated at the spot exchange rate on the date when the fair value is determined, and the difference is included in the current profit and loss or other comprehensive income.
（7） Financial instruments
1. Classification of financial assets and financial liabilities
Financial assets are divided into the following three categories at initial recognition: (1) financial assets measured at amortized cost; (2) Financial assets measured at fair value and whose changes are included in other comprehensive income; (3) Financial assets measured at fair value through profit or loss.
Financial liabilities are divided into the following four categories at initial recognition: (1) financial liabilities measured at fair value and whose changes are included in current profits and losses; (2) The transfer of financial assets does not meet the conditions for derecognition or continues to be involved in the financial liabilities formed by the transferred financial assets; (3) Financial guarantee contracts that do not belong to (1) or (2) above, and loan commitments that do not belong to (1) above and lend at a lower market interest rate; (4) Financial liabilities measured at amortized cost.
2. Recognition basis, measurement method and derecognition conditions of financial assets and financial liabilities
(1) Recognition basis and initial measurement method of financial assets and financial liabilities
A financial asset or financial liability is recognized when the company becomes a party to the financial instrument contract. When financial assets or financial liabilities are initially recognized, they are measured at fair value; For financial assets and financial liabilities measured at fair value and whose changes are included in current profits and losses, relevant transaction costs are directly included in current profits and losses; For other types of financial assets or financial liabilities, relevant transaction costs are included in the initially recognized amount. However, if the accounts receivable initially recognized by the company does not contain significant financing components or the company does not consider the financing components in the contract less than one year, the initial measurement shall be carried out according to the transaction price defined in the accounting standards for Business Enterprises No. 14 – revenue.
(2) Subsequent measurement methods of financial assets
1) Financial assets measured at amortized cost
The effective interest rate method is adopted for subsequent measurement according to the amortized cost. The gains or losses arising from financial assets measured at amortized cost and not part of any hedging relationship shall be included in the current profits and losses when they are derecognized, reclassified, amortized according to the effective interest rate method or recognized as impairment.
2) Debt instrument investment measured at fair value with changes included in other comprehensive income
The fair value is adopted for subsequent measurement. The interest, impairment loss or gain and exchange gain and loss calculated by the effective interest rate method are included in the current profit and loss, and other gains or losses are included in other comprehensive income. Upon derecognition, the accumulated gains or losses previously included in other comprehensive income shall be transferred out of other comprehensive income and included in the current profit and loss.
3) Equity instrument investment measured at fair value with changes included in other comprehensive income
The fair value is adopted for subsequent measurement. Dividends obtained (except those belonging to the recovery part of investment costs) shall be included in the current profits and losses, and other gains or losses shall be included in other comprehensive income. At the time of derecognition, the accumulated gains or losses previously included in other comprehensive income shall be transferred out of other comprehensive income and included in retained earnings.
4) Financial assets measured at fair value through profit or loss
The subsequent measurement is carried out at fair value, and the resulting gains or losses (including interest and dividend income) are included in the current profit and loss, unless the financial asset is part of the hedging relationship.
(3) Subsequent measurement method of financial liabilities
1) Financial liabilities measured at fair value through profit or loss
Such financial liabilities include trading financial liabilities (including derivative instruments belonging to financial liabilities) and financial liabilities designated to be measured at fair value with changes included in current profits and losses. Such financial liabilities are subsequently measured at fair value. The amount of changes in fair value of financial liabilities designated to be measured at fair value with changes included in current profits and losses caused by changes in the company’s own credit risk is included in other comprehensive income Profit or loss, unless the treatment will cause or expand the accounting mismatch in profit or loss. Other gains or losses arising from such financial liabilities (including interest expenses, except for changes in fair value caused by changes in the company’s own credit risk) are included in the current profits and losses, unless the financial liabilities are part of the hedging relationship. At the time of derecognition, the accumulated gains or losses previously included in other comprehensive income are transferred out of other comprehensive income and included in retained earnings.
2) Financial liabilities arising from the transfer of financial assets that do not meet the conditions for derecognition or continue to be involved in the transferred financial assets
