Changzhou Galaxy Century Microelectronics Co.Ltd(688689)
Audit report and financial statements
From January 1, 2017 to December 31, 2019
Changzhou Galaxy Century Microelectronics Co.Ltd(688689)
Audit report and financial statements
(from January 1, 2017 to December 31, 2019)
Table of contents page
1、 Audit report 1-4 II. Financial statements
Consolidated balance sheet and parent company balance sheet 1-4 consolidated income statement and parent company income statement 5-6 consolidated cash flow statement and parent company cash flow statement 7-8 consolidated statement of changes in owner's equity and parent company statement of changes in owner's equity 9-14 notes to financial statements 1-117
Audit report
Xksbz [2020] No. zf10452 Changzhou Galaxy Century Microelectronics Co.Ltd(688689) all shareholders:
1、 Audit opinion
We have audited the financial statements of Changzhou Galaxy Century Microelectronics Co.Ltd(688689) (hereinafter referred to as Changzhou Galaxy Century Microelectronics Co.Ltd(688689) ), including the consolidated and parent company's balance sheets as of December 31, 2017, December 31, 2018 and December 31, 2019, the consolidated and parent company's income statements, consolidated and parent company's cash flow statements for 2017, 2018 and 2019 Consolidated and parent company's statement of changes in owner's equity and notes to relevant financial statements.
In our opinion, the attached financial statements are prepared in accordance with the accounting standards for business enterprises in all material aspects, and fairly reflect Changzhou Galaxy Century Microelectronics Co.Ltd(688689) the consolidated and parent company's financial position as of December 31, 2017, December 31, 2018 and December 31, 2019, as well as the consolidated and parent company's operating results and cash flows in 2017, 2018 and 2019.
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 Changzhou Galaxy Century Microelectronics Co.Ltd(688689) 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 financial statements of 2017, 2018 and 2019 respectively 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 do not express separate opinions on these matters.
The key audit matters identified in our audit are summarized as follows:
Key audit matters how to deal with them in the audit
(i) Ending value of inventory
Changzhou Galaxy Century Microelectronics Co.Ltd(688689) inventory balance as of December 31, 2017 1. Understand and test the design and implementation of internal control related to Changzhou Galaxy Century Microelectronics Co.Ltd(688689) inventory; 81959464.06 yuan, and the amount of inventory falling price reserves is 4778583.92 yuan. Understand and evaluate the accounting estimation of inventory falling price reserves;
Yuan; As of December 31, 2018, the inventory balance was 77383771.612, the inventory in the factory and some issued commodities stored in end customers at the end of the period were supervised, and the amount of inventory falling price reserves was 4601600.53 yuan; Check the quantity and condition of inventory by 2019;
On December 31, 2003, the inventory balance was 83905146.58 yuan, and the inventory price fell. 3. Interviewed the financial personnel, asked about the inventory accounting method, and obtained the main production reserve amount of 4373430.92 yuan. Due to the large inventory balance and the production process of inventory, the production cost shall be analyzed and reviewed; Spot check the cost calculation sheet. The calculation of goods falling price reserves involves major judgments and estimates of the management, and check whether the calculation and distribution of material and labor costs are correct;
Therefore, we regard the ending value of inventories as a key audit matter. 4. For the analysis of inventory turnover rate, inventory balance and composition of previous and subsequent periods and months, see "III. (x) inventory" and "v. (VII) review" in the notes to the financial statements, and compare with comparable companies in the same industry to see whether there are abnormal changes;
Inventory ". 5. Trace the purchase of large materials to the relevant purchase contracts and invoices, review the correctness of the purchase cost, and sample and test the relevant purchase application form, warehousing form and other data; Send letters to major suppliers and major outsourced processors to verify the accuracy of transaction volume;
6. Check and visit the main suppliers and new large value suppliers during the reporting period, obtain the industrial and commercial data and background data of suppliers, and check the authenticity of suppliers and purchase amount;
7. Test the inventory pricing method to check whether the inventory pricing is correct and whether the previous and later periods are consistent;
8. Check the correspondence between the products in progress, goods in stock and goods issued at the end of the period and the order, as well as the completion and delivery after the period;
9. Check whether the basis and method for withdrawing inventory falling price reserves are appropriate; Obtain the calculation table of inventory falling price reserves, review the inventory impairment test, and analyze whether the provision of inventory falling price reserves is sufficient; 10. Obtain the company's output, capacity and other data, interview the workshop leader, investigate the production scale, check the information about the production capacity of existing equipment, and review whether the output matches the existing production capacity.
（2） Revenue recognition
The consolidated operating revenue of Changzhou Galaxy Century Microelectronics Co.Ltd(688689) from 2017 to 2019 are respectively 1. The design and implementation of key internal control related to revenue recognition by Changzhou Galaxy Century Microelectronics Co.Ltd(688689) management are 611704600 yuan, 585382700 yuan and 527893800 yuan, which are understood and tested to evaluate whether they are reasonable and effective;
It mainly comes from semiconductor separators such as small signal devices and power devices. 2. Understand the revenue recognition policies of the company under different sales modes, check the appropriateness of components at the time of revenue recognition, LED light beads, optocouplers and a small number of three components, and confirm whether there is any situation of early or delayed revenue recognition; Terminal voltage stabilizing circuit, Linear IC and other integrated circuits. Since revenue is one of the key performance indicators of the company 3. Implementing analytical procedures for revenue and cost, including the fluctuation of revenue and gross profit margin in each period, in order to achieve special analysis, the management evaluates the rationality of changes in revenue related indicators and compares them with comparable companies in the same industry; The inherent risk of manipulating the time point of revenue recognition by setting goals or expectations. 4. Check and visit the main customers and new large customers in the reporting period to obtain customers, which identifies revenue recognition as a key audit matter. Industrial and commercial materials, background materials, etc., and check the authenticity of customers and transactions;
See "III. (XXI) revenue" and "v. 5. Select samples from the accounting records and delivery records of sales revenue to check the (XXIX) operating revenue and operating cost related to sales" in the notes to the financial statements. Contract order, delivery order, sales invoice, export declaration form, freight bill of lading, reconciliation record, collection voucher and other information, select samples according to the customer's transaction amount, implement the letter of confirmation procedure, and verify the authenticity of sales revenue;
6. Select the sales records with large amount in the month before and after the balance sheet date, check the information recorded in orders, delivery orders, customs declarations, bills of lading, statements and invoices, and evaluate whether the sales revenue is recorded in the appropriate accounting period.
4、 Responsibilities of management and governance for financial statements
Changzhou Galaxy Century Microelectronics Co.Ltd(688689) the management (hereinafter referred to as the management) is responsible for preparing the 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.
When preparing the financial statements, the management is responsible for assessing Changzhou Galaxy Century Microelectronics Co.Ltd(688689) 's ability to continue as a going concern, disclosing matters related to going concern (if applicable), and applying the going concern assumption, unless it plans to liquidate, terminate operations or has no other realistic choice.
The management is responsible for overseeing Changzhou Galaxy Century Microelectronics Co.Ltd(688689) 's financial reporting process.
5、 Responsibilities of certified public accountants for the audit of financial statements
Our objective is to obtain reasonable assurance as to whether the financial statements as a whole are free from material misstatement due to fraud or error, and to issue an audit report containing audit opinions. Reasonable assurance is a high-level assurance, but it does not guarantee that an audit performed in accordance with audit standards can 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 performing audit work in accordance with 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. As fraud may involve collusion, forgery, intentional omission, misrepresentation or override of internal control, the risk of failure to find material misstatement caused by fraud is higher than that caused by error.
(2) Understand the internal control related to audit in order to design appropriate audit procedures, but the purpose is not to express an opinion on the effectiveness of internal control.
(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 the matters or circumstances that may cause major doubts about Changzhou Galaxy Century Microelectronics Co.Ltd(688689) going concern ability. 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 Changzhou Galaxy Century Microelectronics Co.Ltd(688689) 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 the entity or business activities in Changzhou Galaxy Century Microelectronics Co.Ltd(688689) to express an audit opinion on the financial statements. We are responsible for guiding, supervising and implementing the group audit, and assume full responsibility for the audit opinion.
We discussed with the management on the planned audit scope, timing and re audit
