Guanghui Logistics Co.Ltd(600603)
Audit report
Dxsz [2022] No. 1200005
Daxin certified public accountants LLP
Wuyige certified public accountants LLP telephone: + 86 (10) 82330558 Xueyuan International Tower, 15 / F, No. 1 Zhichun Road, Haidian District, Beijing Fax: + 86 (10) 82327668 no.1zhichun Road, Haidian dist, 15th floor, College International Building. Website: Internet: www.daxincpa com. cn. Postal Code: Beijing, China 100083
audit report
Dxsz [2022] No. 1200005 Guanghui Logistics Co.Ltd(600603) all shareholders:
1、 Audit opinion
We have audited the financial statements of Guanghui Logistics Co.Ltd(600603) (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 shareholders' equity and notes to 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 your company as of December 31, 2021 and the operating results and cash flows of your company and the parent 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 your 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. We shall not express an opinion on these matters based on the overall audit of the financial statements.
(I) accounting treatment of other non current assets
1. Event description
Wuyige certified public accountants LLP telephone: + 86 (10) 82330558
Xueyuan International Tower, 15 / F, No. 1 Zhichun Road, Haidian District, Beijing Fax: + 86 (10) 82327668 no.1zhichun Road, Haidian dist, 15th floor, College International Building com. cn. Postal Code: Beijing, China 100083
As of December 31, 2021, the book value of other non current assets in the consolidated financial statements of your company was 4.302 billion yuan, accounting for 28.84% of the total assets in the consolidated financial statements. Since this part of assets is included in the government's demolition and reform plan and transferred from investment real estate, the book value of other non current assets accounts for a large proportion of your company's total assets, and the judgment results of accounting treatment have a great impact on the company, so we regard the accounting treatment of other non current assets as a key audit matter.
Part of the company's original investment real estate in this phase is included in the government's 2021 old urban upgrading and reconstruction project. The government collects some buildings in Guanghui Meiju logistics park in the way of property right replacement in accordance with the principle of "demolition, compensation and local resettlement". Compensation involves physical asset compensation and monetary compensation for shutdown and business suspension. How and when to recognize the income will have a great impact on the company.
For the disclosure of this matter in the financial report, please refer to "v. notes to important items in the consolidated financial statements (XVIII)" in the notes to the financial statements.
2. Audit response
For the accounting treatment of other non current assets, our audit procedures mainly include the following aspects:
Check the decision-making procedures for this matter;
Check the demolition agreement with the government;
Check the company's announcement information and other documents on this matter;
Recheck the initial measurement of other non current assets, and recheck whether the separation of accounting units in the demolition and modification items complies with the relevant provisions of the accounting standards for business enterprises;
Review whether the monetary compensation for suspension of work meets the agreement of both parties;
Recalculate the monetary compensation for suspension of business, check whether the money is recovered, and send a letter to the compensation department;
Review the presentation and disclosure related to other non current assets in the financial report.
(II) income recognition of real estate development projects
1. Event description
The income from real estate development projects accounts for 95.01% of your company's total income in 2021. Your company recognizes the income of real estate development projects when the following conditions are met: the contract has been signed; The house has been completed and accepted, and the delivery conditions agreed in the sales contract have been met; Collect the down payment and go through the bank mortgage procedures or obtain the right to collect the house payment.
Wuyige certified public accountants LLP telephone: + 86 (10) 82330558 Xueyuan International Tower, 15 / F, No. 1 Zhichun Road, Haidian District, Beijing Fax: + 86 (10) 82327668 no.1zhichun Road, Haidian dist, 15th floor, College International Building. Website: Internet: www.daxincpa com. cn. Postal Code: Beijing, China 100083
Due to the importance of the income from real estate development projects to your company, we regard the income recognition of real estate development projects as a key audit matter.
For the disclosure of this event in the financial report, please refer to the notes to the financial statements "III. important accounting policies and accounting estimates (XXIII)" and "v. notes to important items in the consolidated financial statements (XXXVIII)".
2. Audit response
For the problem of income recognition of real estate development projects, our audit procedures mainly include the following aspects:
Evaluate the effectiveness of the design and operation of key internal controls related to the revenue recognition of real estate development projects;
Check the terms of your company's standard real estate sales contract to evaluate whether your company's revenue recognition policies related to real estate development projects meet the requirements of relevant accounting standards;
For the items that confirm the real estate sales revenue this year, select samples, check the sales contract and supporting documents that can prove that the real estate has met the delivery conditions, so as to evaluate whether the relevant real estate sales revenue has been recognized in accordance with the company's revenue recognition policy;
For the items that confirm the real estate sales revenue before and after the balance sheet date, select samples and check the supporting documents that can prove that the real estate has met the delivery conditions, so as to evaluate whether the relevant real estate sales revenue is recognized in an appropriate period;
For items that meet other income recognition conditions, select samples to check the proportion of payment collection and loan processing.
4、 Other information
The management of your company is responsible for other information. Other information includes the information covered in your 2021 annual report (excluding the financial statements and our audit report). We have obtained some information in the annual report before the audit report date, and the annual report is expected to be provided to us after the audit report date.
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 on other information obtained before the date of the audit report, if we determine that there is material misstatement in other information, we shall report the fact. In this regard, we have nothing to report.
Wuyige certified public accountants LLP telephone: + 86 (10) 82330558
Xueyuan International Tower, 15 / F, No. 1 Zhichun Road, Haidian District, Beijing Fax: + 86 (10) 82327668 no.1zhichun Road, Haidian dist, 15th floor, College International Building com. cn. Postal Code: Beijing, China 100083
After reading the annual report, if we determine that there is a material misstatement, the audit standards require us to communicate the matter with the management and take appropriate measures.
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.
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 going concern assumption, unless the management plans to liquidate the company, terminate the operation or has no other realistic choice.
The management is responsible for supervising the financial reporting process of your 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:
(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. The risk of fraud, collusion or failure to control may be higher than that caused by the discovery of material misstatement or fraud.
(II) understand the internal control related to audit to design appropriate audit procedures.
(III) evaluate the appropriateness of accounting policies selected by the management and the rationality of accounting estimates and related disclosures.
Wuyige certified public accountants LLP telephone: + 86 (10) 82330558
Xueyuan International Tower, 15 / F, No. 1, Zhichun Road, Haidian District, Beijing Fax: + 86 (10) 8232766
