Jiangxi Sanxin Medtec Co.Ltd(300453)
Audit report
Dxsz [2022] No. Inner Mongolia Baotou Steel Union Co.Ltd(600010)
Daxin Certified Public Accountants (special general partnership)
WUYIGE 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. Inner Mongolia Baotou Steel Union Co.Ltd(600010) Jiangxi Sanxin Medtec Co.Ltd(300453) all shareholders:
1、 Audit opinion
We have audited the financial statements of Jiangxi Sanxin Medtec Co.Ltd(300453) (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. 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.
(I) recognition of income
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
1. Item description
The main business income of your company in 2021 was 1159934600 yuan, accounting for 99.63% of the operating income, an increase of 23.63% over 938214800 yuan in 2020. See notes III (XXIII) and V (XXXVII) for the accounting policies and disclosure of revenue recognition. As operating revenue is one of the key performance indicators of your company, there may be misstatement risk or expected inherent risk in revenue recognition. Therefore, we regard the recognition of income as a key audit matter.
2. Audit response
Our main audit procedures for your company's revenue recognition include:
(1) Understand and evaluate the design of your company's internal control related to sales and collection, and test the effectiveness of operation;
(2) Implement analytical review procedures, compare and analyze the changes of product sales structure, selling price, cost and gross profit margin of main products, and compare and analyze with the gross profit margin of the same industry;
(3) Carry out detail test, check the supporting documents related to revenue recognition by sampling, including sales contract and order, sales invoice, delivery list, delivery order, receipt, customs declaration and freight bill of lading, and verify the authenticity of revenue recognition;
(4) Combined with the audit of accounts receivable, select major customers, confirm their transaction amount and current accounts by letter, and conduct substitution test on customers who have not replied to the letter to evaluate the accuracy of revenue recognition;
(5) In combination with the inventory supervision, a cut-off test is conducted to confirm whether the income is recorded in the appropriate accounting period. (II) share based payment
1. Item description
As stated in note 3 (22) and note 9 to the financial statements, your company implemented the second type of restricted stock incentive plan in 2021. Due to the implementation of the above equity incentive plan, the share based payment fee of 7.4824 million yuan was recognized in the reporting period. Since the determination of the fair value of equity instruments on the grant date by share based payment involves the estimation and judgment of the management, and the number of equity instruments exercisable and the share based payment expenses to be recognized need to be continuously estimated by the management on each balance sheet date during the lock up period, we identify share based payment as a key audit event.
2. Audit response
For share based payment, our main audit procedures include:
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
(1) Understand and evaluate the rationality of internal control design related to share based payment confirmation and measurement, and test the effectiveness of operation;
(2) Checked the approved equity incentive plan and relevant resolutions of the board of directors and the general meeting of shareholders, and checked the relevant evidence of the implementation of the equity incentive plan;
(3) Checked the basis for the management to estimate the fair value on the grant date of the equity incentive plan, and evaluated the appropriateness of the valuation model selected by the management; Evaluate the rationality of key parameters (such as risk-free interest rate, historical fluctuation interest rate and dividend yield) and assumptions with reference to open market data; Check the basis of the management's estimation of the number of exercisable rights of the equity incentive plan on December 31, 2021, and evaluate the rationality of the management's estimation in combination with the performance appraisal requirements at the company level and individual level;
(4) Obtain the list of employees granted equity incentive, recalculate the expenses recognized by the equity incentive plan in 2021 according to the provisions of the equity incentive agreement, and check whether the relevant accounting treatment is correct;
(5) Checked whether the presentation and disclosure of the equity incentive plan and relevant accounting estimates by the management are sufficient and appropriate.
4、 Other information
The management of your company (hereinafter referred to as the management) is responsible for other information. Other information includes the information covered in your 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
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.
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: www.daxincpa com. cn.
Postal Code: Beijing, China 100083
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. 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 your 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 your company to be unable to continue its business.
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
(V) evaluate the overall presentation, structure and content of the financial statements, and evaluate whether the financial statements fairly reflect relevant transactions and events
