Shenzhen Kingkey Smart Agriculture Times Co.Ltd(000048)
audit report
Dahuashen Zi [2022] No. Jiangsu Dagang Co.Ltd(002077)
Dahua Certified Public Accountants (special general partnership)
Da Hua Certified Public Accountants（Special General Partnership）
Shenzhen Kingkey Smart Agriculture Times Co.Ltd(000048)
Audit report and financial statements
(from January 1, 2021 to December 31, 2021)
Contents page I. audit report 1-7 II. Audited financial statements
Consolidated balance sheet 8-9 consolidated income statement 10 consolidated cash flow statement 11 consolidated statement of changes in shareholders’ equity 12-13 parent company balance sheet 14-15 parent company income statement 16 cash flow statement of parent company 17 statement of changes in shareholders’ equity of parent company 18-19 notes to financial statements 20-122
Dahua Certified Public Accountants (special general partnership) 12 / F, building 7, yard 16, Middle West Fourth Ring Road, Haidian District, Beijing [100039] Tel: 86 (10) 58350011 Fax: 86 (10) 58350006 www.dahua-cpa. com. Audit report
Dahuashen Zi [2022] No. Jiangsu Dagang Co.Ltd(002077) Shenzhen Kingkey Smart Agriculture Times Co.Ltd(000048) all shareholders:
1、 Audit opinion
We have audited the financial statements of Shenzhen Kingkey Smart Agriculture Times Co.Ltd(000048) (hereinafter referred to as Shenzhen Kingkey Smart Agriculture Times Co.Ltd(000048) 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 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 of Shenzhen Kingkey Smart Agriculture Times Co.Ltd(000048) company as of December 31, 2021 and the consolidated and parent company’s operating results and 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 Shenzhen Kingkey Smart Agriculture Times Co.Ltd(000048) 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
Key audit matters are the most important matters that we consider to be the audit of 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. 1. Recognition of real estate income
2. Provision for impairment of biological assets
（1） Recognition of real estate income
1. Event description
Shenzhen Kingkey Smart Agriculture Times Co.Ltd(000048) company is mainly engaged in real estate development, feed production, production and sales of aquaculture.
For example, note IV (33), note VI and note 40 Operating income: in 2021, the real estate operating income of Shenzhen Kingkey Smart Agriculture Times Co.Ltd(000048) company was 2216362000 yuan, accounting for 68.80% of the consolidated operating income.
The recognition of real estate income of Shenzhen Kingkey Smart Agriculture Times Co.Ltd(000048) company involves a series of contracts of real estate projects and the judgment conditions for the time point of risk return transfer of selling commercial houses, and the importance of real estate operating income to Shenzhen Kingkey Smart Agriculture Times Co.Ltd(000048) company and the small errors in the recognition of operating income of single real estate development project may have a significant impact on the profits of Shenzhen Kingkey Smart Agriculture Times Co.Ltd(000048) company, Therefore, we recognize the recognition of real estate operating income as a key audit matter.
2. Audit response
For the recognition of real estate income, our main audit procedures are as follows:
(1) Evaluate the design and operation effectiveness of Shenzhen Kingkey Smart Agriculture Times Co.Ltd(000048) company’s main internal control related to the revenue recognition of real estate development projects;
(2) Check the sales contract of Shenzhen Kingkey Smart Agriculture Times Co.Ltd(000048) company to evaluate whether the revenue recognition policies of Shenzhen Kingkey Smart Agriculture Times Co.Ltd(000048) company related to real estate development projects meet the requirements of relevant accounting standards;
(3) Check the completion record form (receipt) for the projects whose real estate business income is confirmed in the current period; Select samples and check the sales contract, supplementary agreement and supporting documents that can prove that the real estate has been delivered, so as to evaluate whether the operating income of relevant real estate complies with the revenue recognition policy of Shenzhen Kingkey Smart Agriculture Times Co.Ltd(000048) company;
(4) Shenzhen Kingkey Smart Agriculture Times Co.Ltd(000048) company issued (hardbound) occupancy notice to the owner and (hardbound) repossession opinion confirmed by the owner to evaluate whether Shenzhen Kingkey Smart Agriculture Times Co.Ltd(000048) company’s business income recognition policy on real estate development projects meets the requirements of relevant accounting standards.
Based on the audit work performed, we believe that the recognition of real estate operating income is in line with the accounting policy of income, and the real estate operating income is true and complete and recorded in the appropriate accounting period.
（2） Provision for impairment of biological assets
1. Event description
The biological assets of Shenzhen Kingkey Smart Agriculture Times Co.Ltd(000048) company include consumptive biological assets and productive biological assets.
For example, note IV (XV), note VI and note 8 Inventories – consumptive biological assets and notes IV (XXIII), VI and 15 Productive biological assets: as of December 31, 2021, Shenzhen Kingkey Smart Agriculture Times Co.Ltd(000048) company’s total balance of consumptive biological assets and productive biological assets was 990899300 yuan, the total provision for impairment was 49793200 yuan, and the total book value was 941106100 yuan, accounting for 6.34% of the total consolidated assets.
The determination of the book value of biological assets requires the management to identify the items and objective evidence that have been impaired, evaluate the expected future available cash flow and determine its present value, which involves the management to use major estimates and judgments, and the provision for impairment of biological assets is important to the financial statements. Therefore, we determine the provision for impairment of biological assets as a key audit event.
2. Audit response
For the provision for impairment of biological assets, our main audit procedures are as follows:
(1) Evaluate the design and operation effectiveness of main internal controls related to biological asset management of Shenzhen Kingkey Smart Agriculture Times Co.Ltd(000048) company;
(2) Obtain the inventory plan of Shenzhen Kingkey Smart Agriculture Times Co.Ltd(000048) company and formulate the inventory supervision plan, and conduct on-site inventory supervision of biological assets on the basis of sampling;
(3) Analyze the change trend of unit cost of consumable biological assets in each month according to the type of pigs, compare the standard cost with the actual cost, and analyze and review the accuracy of cost accounting of consumable biological assets;
(4) Review the depreciation calculation table of productive biological assets and evaluate the accuracy of the accounting of productive biological assets;
(5) Obtain the impairment model of biological assets and evaluate the rationality of relevant assumptions and parameter settings to confirm the rationality of impairment of biological assets.
Based on the audit work performed, we believe that the recognition of the provision for impairment of biological assets meets the requirements of accounting standards, and the provision for impairment of biological assets is true and complete and recorded in the appropriate accounting period.
4、 Other information
Shenzhen Kingkey Smart Agriculture Times Co.Ltd(000048) the management of the 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 understand 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
Shenzhen Kingkey Smart Agriculture Times Co.Ltd(000048) 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 due to fraud or error.
When preparing the financial statements, the management of Shenzhen Kingkey Smart Agriculture Times Co.Ltd(000048) company is responsible for evaluating the continuous operation ability of Shenzhen Kingkey Smart Agriculture Times Co.Ltd(000048) company, disclosing matters related to continuous operation (if applicable), and applying the assumption of continuous operation, unless the management plans to liquidate Shenzhen Kingkey Smart Agriculture Times Co.Ltd(000048) company, terminate operation or has no other realistic choice.
The management is responsible for supervising the financial reporting process of Shenzhen Kingkey Smart Agriculture Times Co.Ltd(000048) 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 a conclusion on the appropriateness of the going concern assumption used by the management. 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 Shenzhen Kingkey Smart Agriculture Times Co.Ltd(000048) company. If we conclude that there are significant uncertainties, the auditing standards require us to draw the attention of report 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 Shenzhen Kingkey Smart Agriculture Times Co.Ltd(000048) company to be unable to continue its business.
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 Shenzhen Kingkey Smart Agriculture Times Co.Ltd(000048) 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 Shenzhen Kingkey Smart Agriculture Times Co.Ltd(000048) corporate governance, we determine which matters are most important to 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 the public disclosure of these matters, or in rare cases, if it is reasonably expected to be disclosed in the audit report
