Audit report
Zhong Huan Shen Zi (2022) 0110523 Hvsen Biotechnology Co.Ltd(300871) all shareholders:
1、 Audit opinion
We have audited the financial statements of Hvsen Biotechnology Co.Ltd(300871) (hereinafter referred to as ” Hvsen Biotechnology Co.Ltd(300871) 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 Hvsen Biotechnology Co.Ltd(300871) 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 Hvsen Biotechnology Co.Ltd(300871) 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. We confirm that the following matters are the key audit matters that need to be communicated in the audit report.
(I) revenue recognition
Key audit matters how to deal with them in the audit
Year: 2021 1 1. To understand and evaluate the management’s key internal control related to revenue recognition, please refer to notes IV and 29 to the financial statements and the effectiveness of design and operation. Note 6: 37operating income in 2021 2. Select samples to check the sales contract and identify that the amount related to the transfer of commodity control is 99621681761 yuan. According to the contract terms and conditions, evaluate whether the revenue recognition time point meets the requirements of the accounting standards because revenue is one of the key performance indicators. Therefore, we identify revenue recognition as the key. 3. Select samples to confirm the amount and balance of operating revenue, accounts receivable and contract liabilities, and conduct alternative tests on customers who do not reply; check
Key audit matters how to deal with them in the audit
Audit matters. Check the relevant contract, order, delivery order, customer receipt, logistics order, invoice, collection record and other supporting evidence of revenue confirmation.
4. Select samples and calculate the sales discount according to the sales discount policy. 5. Conduct income cut-off test and pay attention to whether there is cross period recognition of income. 6. Check the payment collection and return after the period.
7. Implement analysis procedures for accounts receivable and operating income, analyze whether there are abnormal fluctuations in the turnover rate and gross profit margin of accounts receivable, and compare them with the indicators of the same industry.
4、 Other information
The management of Hvsen Biotechnology Co.Ltd(300871) company 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. In this regard, we have nothing to report.
5、 Responsibilities of management and governance for financial statements
Hvsen Biotechnology Co.Ltd(300871) the management of the company (hereinafter referred to as “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 major misstatement caused by fraud or error.
When preparing the financial statements, the management is responsible for evaluating the sustainable operation ability of Hvsen Biotechnology Co.Ltd(300871) company, disclosing matters related to sustainable operation (if applicable), and applying the assumption of sustainable operation, unless the management plans to liquidate Hvsen Biotechnology Co.Ltd(300871) company, terminate operation or have no other realistic choice.
The management is responsible for supervising the financial reporting process of Hvsen Biotechnology Co.Ltd(300871) company.
6、 Responsibilities of certified public accountants for the audit of financial statements
Our goal is to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement due to fraud or error. Page 2 of 4
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 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 Hvsen Biotechnology Co.Ltd(300871) 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 Hvsen Biotechnology Co.Ltd(300871) company to be unable to continue its business.
(V) evaluate the overall presentation, structure and content of the financial statements, and evaluate whether the financial statements fairly reflect relevant transactions and events.
(VI) obtain sufficient and appropriate audit evidence on the financial information of entities or business activities in Hvsen Biotechnology Co.Ltd(300871) company to express an opinion on the financial statements. We are responsible for guiding, supervising and executing the group audit. We are fully responsible for the audit opinion. 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 public disclosure of these matters, or in rare cases, if we reasonably expect to communicate a matter in the audit report, the negative consequences will exceed that on page 3 of 4 of the audit report in the public interest
We determined that the matter should not be communicated in the audit report.
Zhongshen Zhonghuan Certified Public Accountants (special general partnership) Chinese certified public accountant:
(project partner):
Luo Mingguo, Chinese certified public accountant:
Liu Xiaoying, Wuhan, China March 10, 2022
Audit report page 4 of 4
Audit report page 2 of 4
Hvsen Biotechnology Co.Ltd(300871) notes to financial statements of 2021
Hvsen Biotechnology Co.Ltd(300871)
Notes to financial statements of 2021
(unless otherwise specified, the monetary unit is RMB)
1、 Basic information of the company
Hvsen Biotechnology Co.Ltd(300871) (formerly known as “Wuhan Hvsen Biotechnology Co.Ltd(300871) Technology Co., Ltd”, hereinafter referred to as “the company”, “the company” or ” Hvsen Biotechnology Co.Ltd(300871) “) was jointly invested and established by Taiwan Huisheng Chemical Pharmaceutical Co., Ltd. (hereinafter referred to as “Taiwan Huisheng”) and Wuhan KangSi Feed Co., Ltd. (hereinafter referred to as “Wuhan KangSi”) in January 2002.
In May 2005, Wuhan KangSi changed its contribution mode to 980000 yuan in cash, accounting for 49% of the registered capital; The contribution method of Huisheng in Taiwan was changed to foreign currency equivalent to RMB 1020000, accounting for 51% of the registered capital. This change has been verified by the capital verification report of Wuhan Dacheng Yan Zi [2005] No. 013 issued by Wuhan Dacheng certified public accountants Co., Ltd.
In July 2005, the registered capital of the company increased from RMB 2000000 to RMB 4000000, and the newly increased capital contribution of RMB 2000000 was subscribed by Wuhan KangSi. Taiwan Huisheng transferred the original price of the equity corresponding to the original holding of RMB 20000 to Wuhan KangSi. The capital increase was verified by the capital verification report issued by Wuhan Dacheng Yan Zi [2005] No. 023 issued by Wuhan Dacheng certified public accountants Co., Ltd. After this change, Wuhan KangSi has invested 300000 yuan in total, accounting for 75% of the registered capital; Taiwan Huisheng has invested 1000000 yuan in total, accounting for 25% of the registered capital.
In March 2008, the company increased its registered capital by Shanghai Pudong Development Bank Co.Ltd(600000) 0 yuan and changed its registered capital to 10000000 yuan. Among them, Wuhan KangSi increased its capital by RMB 4500000 and Taiwan Huisheng increased its capital by foreign exchange equivalent to RMB 1500000. This change has been verified by the capital verification report eyhkz [2008] No. 031 issued by Hubei Yongxin certified public accountants Co., Ltd. After this change, Wuhan KangSi has invested 7500000 yuan, accounting for 75% of the registered capital, and Taiwan Huisheng has invested 2500000 yuan, accounting for 25% of the registered capital.
In September 2009, Wuhan KangSi transferred its 75% equity of the company to Wuhan Tongsheng Investment Co., Ltd. (hereinafter referred to as “Wuhan Tongsheng”). After the equity transfer, Wuhan Tongsheng invested 7500000 yuan, accounting for 75% of the registered capital; Taiwan Huisheng invested 2500000 yuan, accounting for 25% of the registered capital.
In May 2011, Taiwan Huisheng transferred its 25% equity of the company to Liang Dongguo. After the equity transfer, Wuhan Tongsheng invested 7500000 yuan, accounting for 75% of the registered capital; Liang Dongguo contributed 2500000 yuan, accounting for 25% of the registered capital.
In January 2012, Wuhan Tongsheng increased the capital of the company by 14000000 yuan in RMB, of which 4666000 yuan was included in the registered capital. After the change, the registered capital of the company is 14666000 yuan. This change has been issued by Zhonghuan Haihua certified public accountants Co., Ltd. (now renamed “Zhongshen Zhonghuan Certified Public Accountants (special general partnership)”) Zhonghuan Yanzi (2011)
