Jiangsu Transimage Technology Co.Ltd(002866)
Annual financial report for 2021
March 2022
financial reports
1、 Audit report
Unqualified opinion of audit opinion type standard
Signing date of audit report: March 17, 2022
Name of audit institution: Rongcheng Certified Public Accountants (special general partnership)
Audit Report No. [2022] 215z0031
Name of certified public accountant: Zhi Caiqin, Guo Jingjing, Gu Dan
Body of audit report
Audit report
Rong Cheng Shen Zi [2022] No. 215z0031 Jiangsu Transimage Technology Co.Ltd(002866) all shareholders:
1、 Audit opinion
We have audited the financial statements of Jiangsu Transimage Technology Co.Ltd(002866) (hereinafter referred to as Jiangsu Transimage Technology Co.Ltd(002866) 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 owner’s 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 Jiangsu Transimage Technology Co.Ltd(002866) 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 Jiangsu Transimage Technology Co.Ltd(002866) 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 operating income
1. Item description
See notes III, 24, V, 34 and XV and 4 of the financial statements Jiangsu Transimage Technology Co.Ltd(002866) company is mainly engaged in the R & D, production and sales of electronic information components. The operating revenue in 2021 was 192046219448 yuan, an increase of 8.51% over the previous year. As operating income is the main source of income of the company, there is an inherent risk that the amount recognized may be inaccurate or included in the incorrect accounting period. We recognize the operating income of Jiangsu Transimage Technology Co.Ltd(002866) company as a key audit event.
2. Audit response
For the key audit matter of operating revenue recognition, our audit procedures mainly include:
(1) Understand the internal control related to the recognition of operating revenue and evaluate the effectiveness of the design;
(2) Select a sample to check the sales contract and identify the performance obligations in the contract, that is, the revenue is recognized when the customer obtains the control right of relevant goods. Obtain control over relevant commodities and evaluate whether the recognition time point of operating revenue meets the requirements of accounting standards for business enterprises;
(3) Check the supporting documents related to revenue confirmation, including sales order, sales invoice, delivery order, export declaration form, customer reconciliation confirmation data, etc; (4) Perform a cut-off test on the operating revenue and check whether the revenue recognition is recorded in the correct accounting period;
(5) Implement analysis procedures for operating revenue and analyze the fluctuation of gross profit margin from the dimensions of region, product and customer;
(6) Confirm the balance of accounts receivable and transaction volume of major customers, and check the authenticity of the recognized income.
(II) provision for inventory impairment
1. Item description
See notes III, 11 and V, 7 to the financial statements.
As of December 31, 2021, the inventory balance in the consolidated financial statements of Jiangsu Transimage Technology Co.Ltd(002866) company was 41096231207 yuan, and the inventory falling price reserve was 3166594245 yuan. Inventories are measured at the lower of cost and net realizable value.
Net realizable value refers to the amount after the estimated selling price of inventory minus the estimated cost to be incurred at the time of completion, estimated selling expenses and relevant taxes.
In view of the significant amount of inventory and the complex calculation of inventory falling price reserves, we determine the impairment of inventory as a key audit event.
2. Audit response
For the key audit item of inventory impairment, the audit procedures we implemented mainly include:
(1) Understand and evaluate the effectiveness of internal control design related to inventory impairment assessment;
(2) Implement inventory supervision procedures and check the status of ending inventory;
(3) Obtain the year-end stock age list of Jiangsu Transimage Technology Co.Ltd(002866) inventory, analyze and review the inventory with long stock age in combination with the product status, and analyze whether the inventory falling price reserve is reasonable;
(4) Obtain Jiangsu Transimage Technology Co.Ltd(002866) inventory depreciation provision calculation table, perform inventory impairment test, check whether it is implemented in accordance with Jiangsu Transimage Technology Co.Ltd(002866) relevant accounting policies, check the changes of inventory depreciation accrued in previous years in the current period, and analyze whether the inventory depreciation provision is sufficient.
(III) impairment of goodwill
1. Item description
See notes III, 19 and V, 13 to the financial statements.
As of December 31, 2021, the book balance of goodwill in the consolidated financial statements is RMB 9965470302, and the provision for impairment of goodwill has been withdrawn is RMB 43901411269.
The management shall conduct impairment test on goodwill at the end of each year and adjust the book value of goodwill according to the results of impairment test.
The results of goodwill impairment test largely depend on the estimates made and assumptions adopted by the management, such as the estimation of the expected future cash flow and discount rate of the asset group. These estimates are affected by the management’s judgment on the future market and the economic environment.
In view of the significant amount of goodwill, the complex process of goodwill impairment test and the need for significant judgment by the management, we identified the impairment of goodwill as a key audit event.
2. Audit response
For the key audit matter of the provision for goodwill impairment, the audit procedures we implemented mainly include:
(1) Understand and evaluate the effectiveness of internal control design related to goodwill impairment assessment;
(2) Review the management’s judgment and Analysis on the signs of goodwill impairment;
(3) Evaluate the competence, professional quality and objectivity of external valuation experts appointed by the management; (4) Obtain the goodwill impairment test valuation report prepared by external valuation experts, evaluate the appropriateness of the goodwill impairment test method, test the basic data on which the goodwill impairment test is based, and evaluate the rationality of the key assumptions and judgments adopted in the goodwill impairment test;
(5) Review whether the disclosure related to goodwill impairment assessment in the financial statements is sufficient.
4、 Other information
Jiangsu Transimage Technology Co.Ltd(002866) company management (hereinafter referred to as management) is responsible for other information. Other information includes the information covered in the 2021 annual report of Jiangsu Transimage Technology Co.Ltd(002866) company, 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.
When preparing the financial statements, the management is responsible for evaluating the going concern ability of Jiangsu Transimage Technology Co.Ltd(002866) company, disclosing matters related to going concern (if applicable), and applying the going concern assumption, unless the management plans to liquidate Jiangsu Transimage Technology Co.Ltd(002866) company, terminate operation or have no other realistic choice.
The management is responsible for supervising the financial reporting process of Jiangsu Transimage Technology Co.Ltd(002866) 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 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 lead to major doubts about the sustainable operation ability of Jiangsu Transimage Technology Co.Ltd(002866) 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 lead to the inability of Jiangsu Transimage Technology Co.Ltd(002866) company 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 Jiangsu Transimage Technology Co.Ltd(002866) company to express audit opinion on the financial statements. We are responsible for guiding, supervising and implementing the group audit, and take full responsibility for the audit opinions.
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 the public disclosure of these matters, or in rare cases, if the negative consequences of communicating a matter in the audit report are reasonably expected to exceed the benefits in the public interest, we determine that we should not communicate the matter in the audit report.
There is no text on this page, which is the signature and seal page of Jiangsu Transimage Technology Co.Ltd(002866) Rong Cheng Shen Zi [2022] No. 215z0031 report.
Rongcheng certified public accountants China Certified Public Accountants:
(special general partnership) Zhi Caiqin (project partner)
Chinese certified public accountant:
Guo Jingjing
Beijing, China Certified Public Accountant:
Gu Dan
March 17, 2022
2、 The unit of the statement in the notes to the financial statements is: yuan 1. Preparation unit of the consolidated balance sheet: Jiangsu Transimage Technology Co.Ltd(002866)
Unit: Yuan
Project December 31, 2021
