Qingdao Tgood Electric Co.Ltd(300001)
audit report
Hxsz (2022) No. 000306
Table of contents page number
1、 Audit report 1-7
2、 Audited financial statements and notes
1. Consolidated and company balance sheet 8-11
2. Consolidated and company income statement 12-13
3. Consolidated and company cash flow statement 14-15
4. Consolidated and statement of changes in shareholders’ equity 16-19
5. Notes to financial statements 20-164
Hexin Certified Public Accountants (special general partnership)
March 7, 2002
Hexin Certified Public Accountants (special general partnership)
Audit report
Hxsz (2022) No. 000306 Qingdao Tgood Electric Co.Ltd(300001) all shareholders:
1、 Audit opinion
We have audited the financial statements of Qingdao Tgood Electric Co.Ltd(300001) (hereinafter referred to as ” Qingdao Tgood Electric Co.Ltd(300001) “), 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 provisions of the accounting standards for business enterprises in all material aspects and fairly reflect the financial position of Qingdao Tgood Electric Co.Ltd(300001) consolidated and the company as of December 31, 2021, as well as the operating results and cash flows of the consolidated and the 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 Qingdao Tgood Electric Co.Ltd(300001) , 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. We confirm that the following matters are the key audit matters that need to be communicated in the audit report:
(I) provision for bad debts of accounts receivable
1. Item description
As stated in “note v.4” of Qingdao Tgood Electric Co.Ltd(300001) consolidated financial statements, as of December 31, 2021, the original value of Qingdao Tgood Electric Co.Ltd(300001) accounts receivable was 603764342480 yuan and the amount of bad debt provision was 70423122508 yuan. management layer
Hexin Certified Public Accountants (special general partnership) page 1 of 164
According to the credit risk characteristics of accounts receivable, based on single accounts receivable or a combination of accounts receivable, the loss reserves are withdrawn according to the expected credit loss in the whole duration. For accounts receivable whose expected credit loss is measured on a single basis, the management comprehensively considers the reasonable and reliable information about past events, current situation and future economic situation forecast, estimates the expected cash flow received, and determines the bad debt provision to be withdrawn accordingly; For the accounts receivable whose expected credit loss is measured on the basis of portfolio, the management divides the portfolio based on the aging, refers to the experience of historical credit loss, adjusts it in combination with the current situation and forward-looking estimation, and prepares the comparison table between the aging and default loss rate of accounts receivable, so as to confirm the expected credit loss of accounts receivable. As the amount of accounts receivable is significant and the impairment of accounts receivable involves significant management judgment, we determine the provision for bad debts 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 include:
(1) We evaluated and tested Qingdao Tgood Electric Co.Ltd(300001) credit policy and internal control related to accounts receivable management;
(2) Analyze the rationality of accounting estimation of bad debt provision for accounts receivable, including the basis for determining the combination of accounts receivable, judgment of significant amount, judgment of separate provision for bad debt provision, etc;
(3) Evaluate the rationality of the provision for bad debts of accounts receivable by analyzing the aging of Qingdao Tgood Electric Co.Ltd(300001) accounts receivable and the reputation of customers, and implementing the procedures of accounts receivable confirmation and the collection after the inspection period;
(4) Analyze and calculate the ratio between the amount of bad debt provision and the balance of accounts receivable on Qingdao Tgood Electric Co.Ltd(300001) balance sheet date, compare the amount of bad debt provision in the previous period with the actual amount in combination with the credit period agreed in the contract, and analyze whether the provision for bad debt provision of accounts receivable is sufficient.
(5) Obtain the Qingdao Tgood Electric Co.Ltd(300001) bad debt provision accrual table and check whether the accrual method is implemented in accordance with the bad debt policy; Recalculate whether the amount of bad debt provision is accurate.
(6) Pay attention to check the real financial situation of customers with large amount of accounts receivable with long aging. For accounts receivable that have been overdue and in breach of contract, whether the relevant assumptions and parameters used in the prediction of recoverable amount are reasonable.
Based on the audit procedures implemented, we believe that the relevant professional judgment used by the management in the calculation of bad debt provision for accounts receivable can be supported by the evidence we have obtained.
(II) recognition of deferred income tax assets related to deductible losses
Hexin Certified Public Accountants (special general partnership) page 2 of 164
1. Item description
As stated in “note V.21” of Qingdao Tgood Electric Co.Ltd(300001) consolidated financial statements, as of December 31, 2021, the deferred income tax assets in Qingdao Tgood Electric Co.Ltd(300001) consolidated balance sheet are 53905239625 yuan, of which 21636511509 yuan is related to deductible losses.
When recognizing deferred income tax assets related to deductible losses, Qingdao Tgood Electric Co.Ltd(300001) management recognizes deferred income tax assets for all unused tax losses to the extent that it is likely to have sufficient taxable profits to offset losses. This requires Qingdao Tgood Electric Co.Ltd(300001) management to use a lot of judgment to estimate the time and amount of future taxable profits, and determine the amount of deferred income tax assets to be recognized in combination with tax planning strategy. Assessing whether the deferred income tax assets can be realized in the future requires the management to make significant judgments, and the management’s estimates and assumptions are uncertain. Therefore, we identified Qingdao Tgood Electric Co.Ltd(300001) the deferred income tax assets related to deductible losses as key audit matters.
2. Audit response
Our main audit procedures for the recognition of deferred income tax assets related to deductible losses include:
(1) We evaluated the design and implementation of Qingdao Tgood Electric Co.Ltd(300001) and tax related internal control; (2) Obtained the final payment data of income tax related to deductible losses and reviewed the amount of deductible losses;
(3) Obtain the financial forecast of the company in the future approved by the management, evaluate whether its preparation is in line with the overall trend of the industry and the company’s own situation, consider the impact of special circumstances, and evaluate its realizability;
(4) Reviewed whether the recognition of deferred income tax assets is limited to the taxable income that is likely to be obtained in the future to offset deductible losses.
Based on the audit work performed, we believe that the relevant professional judgment used by the management in the recognition of deferred income tax assets can be supported by the evidence we have obtained.
(III) impairment of goodwill
1. Item description
As stated in Qingdao Tgood Electric Co.Ltd(300001) “note iii.33” and “note v.19”, the management shall conduct annual impairment test on the goodwill formed by business combination, whether there are signs of impairment or not Qingdao Tgood Electric Co.Ltd(300001) management conducts impairment test on goodwill by comparing the recoverable amount of relevant asset groups with the book value of asset groups and goodwill. In the process of determining the present value of the future cash flow of the asset group, the management of Qingdao Tgood Electric Co.Ltd(300001) adopts the cash flow method including discount
Hexin Certified Public Accountants (special general partnership) page 3 of 164
And the adopted discount rate and other key parameters. As of December 31, 2021, the goodwill formed by business combination was 22041361705 yuan and the provision for goodwill impairment was 3112808058 yuan. In view of the importance of goodwill to the financial statements as a whole, and the goodwill impairment test involves the significant judgment and estimation of the management, we determine the goodwill impairment as a key audit event.
2. Audit response
Our main audit procedures for the impairment test and measurement of goodwill include:
(1) Understanding of the division of assets and the determination of the impairment group of assets;
(2) Understand the macro economy and the development trend, historical performance and development plan of each asset group or asset group portfolio industry;
(3) Evaluate Qingdao Tgood Electric Co.Ltd(300001) the recognition of the asset group or combination of asset groups to which the goodwill belongs;
(4) Evaluate the appropriateness of the valuation method, model and key assumptions of goodwill impairment test;
(5) Evaluate the rationality of the parameters quoted in the goodwill impairment test, including the prediction period, stable period, growth rate in the prediction period, growth rate in the stable period, profit rate, discount rate, etc. when predicting the present value of future cash flow and their determination basis;
(6) Review the calculation process of goodwill impairment test;
(7) Evaluate whether the process and method of goodwill impairment test and relevant disclosure are sufficient.
Based on the audit work performed, we believe that the relevant professional judgment used by the management in the recognition of goodwill impairment can be supported by the evidence we have obtained.
4、 Other information
Qingdao Tgood Electric Co.Ltd(300001) Management (hereinafter referred to as management) is responsible for other information. Other information includes the information covered in the 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 the going concern ability of Qingdao Tgood Electric Co.Ltd(300001) the company, disclosing matters related to going concern (if applicable), and applying the going concern assumption, unless the management plans to liquidate, terminate the operation or has no other realistic choice.
The management is responsible for supervising the financial reporting process of Qingdao Tgood Electric Co.Ltd(300001) .
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 information obtained
Hexin Certified Public Accountants (special general partnership), page 5 of 164, shows whether there is significant uncertainty about the matters or circumstances that may cause major doubts about Qingdao Tgood Electric Co.Ltd(300001) going concern ability
