Henan Qingshuiyuan Technology Co.Ltd(300437)
Year of 2021
audit report
Zhitong Certified Public Accountants (special general partnership)
catalogue
Audit report 1-6
Consolidated and company balance sheet 1-2
Consolidated and corporate income statement 3
Consolidated and company cash flow statement 4
Consolidated and statement of changes in shareholders' equity 5-8
Notes to financial statements 9-112
Zhitong Certified Public Accountants (special general partnership) 22 Jianguomenwai street, Chaoyang District, Beijing, China
5th floor, set square, 100004
Tel. + 86 1085665588
Fax + 86 1085665120
www.grantthornton. cn.
audit report
Zhi Tong Shen Zi (2022) No. 410a001176 Henan Qingshuiyuan Technology Co.Ltd(300437) all shareholders:
1、 Audit opinion
We have audited the financial statements of Henan Qingshuiyuan Technology Co.Ltd(300437) (hereinafter referred to as Henan Qingshuiyuan Technology Co.Ltd(300437) company), 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 consolidated and financial position of Henan Qingshuiyuan Technology Co.Ltd(300437) company as of December 31, 2021 and the consolidated and operating results and cash flow of 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 Henan Qingshuiyuan Technology Co.Ltd(300437) 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) recognition of revenue from water treatment agents and derivatives business
See notes III, 24 and V, 41 of the financial statements for relevant information disclosure.
1. Item description
In 2021, Henan Qingshuiyuan Technology Co.Ltd(300437) company recognized the operating income of water treatment agents and derivatives of RMB 120122573434, accounting for 73.34% of the operating income in 2021, an increase of 87.74% compared with that in 2020. As the income from the water treatment agent and derivatives business of Henan Qingshuiyuan Technology Co.Ltd(300437) company is important to the overall financial statements and is one of the key performance indicators of Henan Qingshuiyuan Technology Co.Ltd(300437) company, there is an inherent risk that the management of Henan Qingshuiyuan Technology Co.Ltd(300437) company (hereinafter referred to as the management) manipulates the time point of revenue recognition in order to achieve specific goals or expectations, We recognize the revenue recognition of water treatment agents and derivatives as key audit matters.
2. Audit response
For the recognition of revenue from water treatment agents and derivatives business, we mainly implemented the following audit procedures:
(1) Understand and evaluate the management's key internal controls related to the revenue recognition of water treatment agents and derivatives, evaluate whether their design and implementation are effective, and test the operation effectiveness of relevant internal controls;
(2) Select samples to check the sales contracts, identify the contract terms and conditions related to the transfer of commodity control, and evaluate whether the revenue recognition time point of the company meets the requirements of the accounting standards for business enterprises;
(3) Obtain the sales list of this year, select samples of the revenue transactions recorded in this year, check the sales contract or order, invoice, delivery order, receipt or bill of lading, customs declaration and other supporting documents, and evaluate whether the relevant revenue recognition complies with the accounting policies and industry practices of Henan Qingshuiyuan Technology Co.Ltd(300437) company for revenue recognition;
(4) Obtain customs export data and check the accuracy of the company's export revenue;
(5) Take samples and send letters to Chinese foreign customers to confirm accounts receivable, balance of contract liabilities and amount of sales revenue;
(6) Implement remote video interview procedures for foreign customers with major abnormalities;
(7) The cut-off test is conducted for income transactions recorded before and after the balance sheet date.
(II) provision for bad debts of accounts receivable and provision for impairment of contract assets
See notes III, 9 and 25 to the financial statements and notes V, 3 and 8 for relevant information disclosure.
1. Item description
On December 31, 2021, the book balance of accounts receivable of Henan Qingshuiyuan Technology Co.Ltd(300437) company was 41181161415 yuan and the balance of bad debt provision was 7353847393 yuan. The book balance of contract assets is 28646904607 yuan, and the provision for impairment of contract assets is 1704490825 yuan. When determining the provision for bad debts of accounts receivable and the provision for impairment of contract assets, the management needs to use significant accounting estimates and judgments, including assessing the current credit rating of the counterparty and its historical repayment records, as well as the current operating conditions and market conditions, and the amount of impact is significant. Therefore, we determine the provision for bad debts of accounts receivable The provision for impairment of contract assets is a key audit event.
2. Audit response
For the provision for bad debts of accounts receivable and impairment of contract assets, we mainly implemented the following audit procedures:
(1) Understand, evaluate and test the internal control related to the daily management and recoverability evaluation of accounts receivable and contract assets. These internal controls include customer credit risk assessment, accounts receivable recovery process, contract asset settlement process, identification of accounts receivable with credit impairment and its objective evidence, as well as estimation of recoverable amount;
(2) Select the accounts receivable, contract assets and long-term accounts receivable for which the management has individually accrued the expected credit loss, and obtain the supporting documents for the management to judge the customer's payment ability and the historical settlement of contract assets, as well as the management's prediction of the customer's credit status, project progress, historical payment and future economic situation, Assess the adequacy of the management's provision for expected credit losses;
(3) For the accounts receivable and contract assets for which the management calculates and withdraws the expected credit loss according to the combination of credit risk characteristics, with reference to historical experience and forward-looking information, evaluate the rationality of the expected credit loss rate estimated by the management for different combinations, and recalculate the accuracy of the expected credit loss;
(4) Select samples to check the settlement of contract assets and the collection of accounts receivable after the period.
(III) goodwill impairment test
See notes III, 19 and 33 and notes V and 16 of the financial statements for relevant information disclosure.
1. Item description
As of December 31, 2021, the book balance of goodwill of Henan Qingshuiyuan Technology Co.Ltd(300437) company was 45141155424 yuan, and the provision for impairment of goodwill was 39023998848 yuan.
The management shall conduct impairment test on goodwill at the end of each year and conduct impairment test when impairment signs are identified. The management conducts impairment test on the goodwill by comparing the recoverable amount of the relevant asset group of the goodwill with the book value of the asset group and the goodwill. The prediction of recoverable amount involves the prediction of the present value of future cash flow of the asset group. The management needs to make major judgments and assumptions in the prediction, especially for future income, cost, operating expenses, discount rate and growth rate. As the impairment test process is complex and involves significant judgment, we determine the goodwill impairment test as a key audit matter.
2. Audit response
For the goodwill impairment test, we mainly implemented the following audit procedures:
(1) Understand the key internal control related to goodwill impairment test, evaluate whether its design and implementation are effective, and test the operation effectiveness of relevant internal control;
(2) Analyze the key assumptions and methods adopted by the management in the identification of the asset group to which the goodwill belongs and the goodwill impairment test, and check the rationality of relevant assumptions and methods;
(3) Evaluate the competence, professional quality and objectivity of the external valuation experts appointed by the management, and review the valuation methods of the asset group and the evaluation report issued by the external valuation experts;
(4) Reviewed the calculation table of the recoverable amount of the asset group to which the goodwill belongs prepared by the management and the sensitivity analysis of the management on the key assumptions used in the discounted cash flow forecast;
(5) The data used in cash flow forecast are compared with historical data, actual operation and budget;
(6) Select the items with large book value of goodwill, use the work of the evaluation experts of certified public accountants, review the process of goodwill impairment test of the management and the accuracy of the amount of impairment withdrawn, and evaluate the competence, professional quality and independence of the evaluation experts of Certified Public Accountants;
(7) It evaluates whether the disclosure of goodwill impairment and key assumptions in the financial statements meet the requirements of accounting standards for business enterprises.
4、 Other information
The management of Henan Qingshuiyuan Technology Co.Ltd(300437) company is responsible for other information. Other information includes the information covered in the 2021 annual report of Henan Qingshuiyuan Technology Co.Ltd(300437) company, 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
Henan Qingshuiyuan Technology Co.Ltd(300437) the management of the company 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 sustainable operation ability of Henan Qingshuiyuan Technology Co.Ltd(300437) company, disclosing matters related to sustainable operation (if applicable), and applying the assumption of sustainable operation, unless the management plans to liquidate Henan Qingshuiyuan Technology Co.Ltd(300437) company, terminate operation or have no other realistic choice.
The management is responsible for supervising the financial reporting process of Henan Qingshuiyuan Technology Co.Ltd(300437) 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:
(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 to design appropriate audit procedures.
(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, it may lead to the loss of the sustainable operation ability of Henan Qingshuiyuan Technology Co.Ltd(300437) company
