Yunnan Copper Co.Ltd(000878) : audit report of Yunnan Diqing Nonferrous Metals Co., Ltd. – Tian Ye Ye Zi [2022] No. 10182 audit report of Yunnan Diqing Nonferrous Metals Co., Ltd. Tian Ye Zi [2022] No. 10182
catalogue
Audit report 1 financial statements from January 1, 19 to September 30, 2021620 note 13 to financial statements from January 1, 19 to September 30, 2021 audit report
Tian Zhi Ye Zi [2022] No. 10182 Yunnan Diqing Nonferrous Metals Co., Ltd.:
1、 Audit opinion
We have audited the financial statements of Yunnan Diqing Nonferrous Metals Co., Ltd. (hereinafter referred to as “Diqing nonferrous metals company”), including the balance sheets as of December 31, 2019, December 31, 2020 and September 30, 2021, and the income statements, cash flow statements, statements of changes in owner’s equity and notes to relevant financial statements for 2019, 2020 and January September 2021.
In our opinion, the attached financial statements are prepared in accordance with the accounting standards for business enterprises in all major aspects, and fairly reflect the financial position of Diqing nonferrous metals company on December 31, 2019, December 31, 2020 and September 30, 2021, as well as the business results and cash flows of 2019, 2020 and January September 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. According to the code of professional ethics for Chinese certified public accountants, we are independent of Diqing nonferrous metals 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.
Audit report (Continued)
Tian Zhi Ye Zi [2022] No. 10182
Key audit matters how to deal with them in the audit
(I) refer to note III (XI) and note VI (V) of the financial statements for inventory impairment. The main audit procedures for the key audit matters of inventory impairment include but are not limited to:
As of September 30, 2021, the book value of inventory of Diqing Nonferrous Metals Co., Ltd
The balance is 853412 million yuan. On September 30, 2021, (1) evaluate and test the inventory falling price reserves and determine the inventory price reserves at the end of the year as 10000 yuan; Internal control related to the estimated selling price of inventory account on December 31, 2020;
The face balance is 1019222 million yuan, and the inventory (2) on December 31, 2020 has a falling price reserve of 113052 million yuan for major products that can obtain the sales price in the open market; On December 31, 2019, the inventory price was queried and compared with the estimated selling price. The book balance of inventory was 1107196 million yuan, which was analyzed on December 31, 2019;
The daily inventory falling price reserve is 7.5932 million yuan. The management of Diqing Nonferrous Metals Company (3) compares the estimated selling price of the product with the actual selling price of the latest or future period to the estimated cost and estimated sales fee at the time of completion when the main production management layer is unable to obtain the sales price in the open market determines the net realizable value of the inventory and reduces the product by the estimated selling price of the inventory; And the amount after relevant taxes. As Diqing Nonferrous Metals Company (4) estimated that the completion of Diqing nonferrous metals company still needs to incur costs, the company needs to use significant judgment to evaluate the rationality of inventory when determining the net realizable value of inventory. And the amount of impact is significant. Therefore, we regard inventory impairment as a key audit matter.
Audit report (Continued)
Responsibilities of the financial statements and management [No. 10182]
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 evaluating the continuous operation ability of Diqing nonferrous metals company, disclosing matters related to continuous operation (if applicable), and applying the assumption of continuous operation, unless the management plans to liquidate Diqing nonferrous metals company, terminate operation or has no other realistic choice.
The management is responsible for supervising the financial reporting process of Diqing nonferrous metals company.
5、 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 sustainable operation ability of Diqing nonferrous metals 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 Diqing nonferrous metals company to be unable to continue its business.
Audit report (Continued)
Tian Ye Zi [2022] No. 10182 (5) evaluates the overall presentation, structure and content of the financial statements, and evaluates whether the financial statements fairly reflect relevant transactions and events.
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.
Yunnan Diqing Nonferrous Metals Co., Ltd
January 1, 2019 to September 30, 2021
Notes to financial statements
(unless otherwise noted, all amounts are in RMB)
1、 Basic information of the company
1. Place of registration, organizational form and headquarters address of the company.
The company was established in 2004 as “Yunnan Diqing Metal Co., Ltd.”, hereinafter referred to as “Diqing” Co., Ltd. The company obtained the business license for enterprise legal person No. 5334 Tcl Technology Group Corporation(000100) 0608, organization code certificate No. 760445109 and tax registration certificate No. 533421760445109 issued by the Administration for Industry and Commerce of Diqing Tibetan Autonomous Prefecture on June 8, 2004, On December 25, 2018, it obtained the business license with unified social credit code No. 915334007604451096 issued by the Administration for Industry and Commerce of Diqing Tibetan Autonomous Prefecture, Yunnan Province. After several equity changes and capital increases, the registered capital of the company is 194821 million yuan and the paid in capital is 194821 million yuan, respectively Yunnan Copper Co.Ltd(000878) 974299800 yuan, accounting for 50.01% of the total capital Yunnan Copper Co.Ltd(000878) (Group) Co., Ltd. is 7448007 million yuan, accounting for 38.23% of the total capital; Yunnan Gold Mining Group Co., Ltd. was 2291095 million yuan, accounting for 11.76% of the total capital.
Registered address: Pulang copper mine, GEZAN village, GEZAN Township, Shangri La City, Diqing Tibetan Autonomous Prefecture, Yunnan Province.
Legal representative: Li shanbing.
Registered capital of the company: RMB 194821 million.
2. Business nature and main business activities of the company.
Mining and beneficiation of mineral resources and product sales of Pulang copper mine, management of mining development projects, construction of mining projects, comprehensive management of mine production and operation, scientific and technological research and development and technical consultation; Geological exploration, mineral resources exploration and purchase and sale of mineral products of Pulang copper mine; Purchase and sale of raw materials, lease of land and houses, and lease of mechanical equipment.
3. The name of the parent company and the ultimate parent company of the group.
The parent company of the company is Yunnan Copper Co.Ltd(000878) , and the final controller is the state owned assets supervision and Administration Commission of the State Council. 2、 Preparation basis of financial statements
(I) preparation basis
The financial statements are based on the assumption of continuous operation of the company, according to the actual transactions and in accordance with the accounting standards for business enterprises
(II) going concern
The company confirmed that the company has the ability of sustainable operation after the evaluation of the ability of sustainable operation for 12 months from the end of the reporting period, and no major adverse factors affecting the ability of sustainable operation were found. The company prepares financial statements on the basis of going concern assumption.
3、 Important accounting policies and accounting estimates
(I) statement of compliance with accounting standards for business enterprises
The financial statements prepared by the company based on the above preparation basis comply with the requirements of the latest accounting standards for business enterprises and Its Application guide, interpretation and other relevant regulations issued by the Ministry of Finance (collectively referred to as “accounting standards for business enterprises”), and truly and completely reflect the company’s financial position, operating results, cash flow and other relevant information.
In addition, the preparation of this financial report refers to the presentation and disclosure requirements of the rules for the preparation of information disclosure of companies offering securities to the public No. 15 – General Provisions on financial reports (revised in 2014) and the notice on matters related to the implementation of the new accounting standards for business enterprises by listed companies (Accounting Department letter [2018] No. 453) issued by the CSRC.
(II) accounting period and business cycle
The accounting year of the company is from January 1 to December 31 of the Gregorian calendar.
(III) recording currency
The company adopts RMB as the bookkeeping base currency.
(IV) statement items whose measurement attributes have changed in the current period and the measurement attributes adopted in the current period
The measurement attributes adopted by the company include historical cost, replacement cost, net realizable value, present value and fair value.
(V) determination criteria of cash and cash equivalents
Cash in the cash flow statement refers to the cash on hand and deposits that can be used for payment at any time. Cash equivalents refer to short-term (generally due within three months from the date of purchase), highly liquid, easy to convert into known amount of cash and low risk of value change.
(VI) financial instruments
1. Recognition and derecognition of financial instruments
The company recognizes a financial asset or financial liability when it becomes a party to the financial instrument contract.
The trading of financial assets in the conventional way is based on the trading day
