Wuxi Dk Electronic Materials Co.Ltd(300842)
audit report
ZTY [2022] SZ No. 90044
Zhongtianyun certified public accountants LLP (special general partnership)
catalogue
1. Audit report one
2. Consolidated balance sheet five
3. Parent company balance sheet seven
4. Consolidated income statement nine
5. Parent company income statement ten
6. Consolidated cash flow statement eleven
7. Cash flow statement of parent company twelve
8. Consolidated statement of changes in owner’s equity thirteen
9. Statement of changes in owner’s equity of the parent company fifteen
10. Notes to the financial statements seventeen
11. Copy of the business license of the firm ninety-seven
12. Copy of practice certificate of the firm ninety-eight
13. Copy of certified public accountant qualification certificate signed ninety-nine
audit report
ZTY [2022] SZ No. 90044 Wuxi Dk Electronic Materials Co.Ltd(300842) all shareholders:
1、 Audit opinion
We have audited the financial statements of Wuxi Dk Electronic Materials Co.Ltd(300842) (hereinafter referred to as “the company”), 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 consolidated and parent company’s financial position as of December 31, 2021, as well as the consolidated and parent company’s operating results and consolidated and parent company’s cash flow 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 the 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. The key audit matters identified in our audit are as follows:
Revenue recognition
(1) Item description
The company is mainly engaged in the R & D, production and sales of new electronic paste. At present, the company’s main product is crystal silicon Cecep Solar Energy Co.Ltd(000591) battery front silver paste. Since operating revenue is one of the key performance indicators of the company and the scale of revenue increases rapidly, we determine revenue recognition as a key audit event.
According to notes III and 32 to the financial statements, the company’s revenue recognition accounting policy is to recognize revenue when the customer obtains the control over relevant commodities. Obtaining control of relevant commodities means being able to dominate the use of the commodities and obtain almost all economic benefits from them. For sales in China, under the general mode, the company will deliver the goods to the delivery place designated by the customer according to the contract or the customer’s requirements, and the sales revenue will be recognized after the customer signs; Under the consignment warehouse mode, the company recognizes the sales revenue according to the actual collection of customers; For foreign sales, the company will ship the goods to the customer according to the contract or the customer’s requirements, so as to confirm the sales revenue when the export customs declaration formalities are completed and the customs declaration form is obtained.
(2) Audit response
The audit procedures related to the evaluation of revenue recognition include the following procedures:
Understand the internal control cycle of sales and collection, carry out walkthrough test, and carry out control test on important control points;
Implement analysis procedures for income and cost, including: analysis of monthly income, cost and gross profit fluctuation in the reporting period, and comparative analysis of income, cost and gross profit margin of main products in the reporting period with the previous period;
Select samples to check sales contracts, identify contract terms and conditions related to the transfer of risks and rewards on commodity ownership, and evaluate whether the time point of revenue recognition meets the requirements of accounting standards for business enterprises;
Perform a cut-off test on the operating revenue to confirm whether the revenue recognition is recorded in the correct accounting period;
Combined with the procedures of accounts receivable correspondence, and spot check the relevant documents of income recognition to check the authenticity of the recognized income.
4、 Other information
The management of the company (hereinafter referred to as the management) is responsible for other information. Other information includes the information covered in the 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. We do not need to report on any matter in this regard.
5、 Responsibilities of management and governance for financial statements
The management of the company is responsible for preparing the consolidated 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.
In preparing the financial statements, the management is responsible for assessing the company’s ability to continue as a going concern, disclosing matters related to going concern (if applicable), and applying the assumption of going concern, unless the management plans to liquidate the company, terminate operation or has no other realistic choice.
The management is responsible for supervising the company’s financial reporting process.
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, draw a conclusion on whether there are major uncertainties in matters or circumstances that may lead to major doubts about the company’s ability to continue as a going concern. 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 result in the company’s inability to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, and evaluate whether the financial statements fairly reflect relevant transactions and events.
(6) Obtain sufficient and appropriate audit evidence on the financial information of entities or business activities in the company to express an audit opinion on the 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 most important to the audit of the 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.
Zhongtianyun Certified Public Accountants (special general partnership) Chinese certified public accountant: (project partner) Chinese certified public accountant:
Beijing, China March 8, 2002
Consolidated balance sheet
Prepared by: Wuxi Dk Electronic Materials Co.Ltd(300842) December 31, 2021 unit: RMB
Project notes v. closing balance and opening balance
Current assets:
Monetary capital 12363191638114238030294
Settlement provision —
Lending funds —
Trading financial assets 21167587900019223931220
Derivative financial assets —
Notes receivable 36118959012444970874212
Accounts receivable 46513579504951023624063
Receivables financing —
Advance payment 55037365019842898444
Premium receivable —
accounts receivable reinsurance
