Xinjiang Tianshan Cement Co.Ltd(000877)
Financial report for 2021
February 20203
financial reports
1、 Audit report
Unqualified opinion of audit opinion type standard
Signing date of audit report: March 21, 2022
Name of audit institution: Tianzhi International Certified Public Accountants (special general partnership)
Audit Report No. [2022] 5776
Name of certified public accountant: Tan Xue, Cheng Kai
Body of audit report
audit report
Tian Zhi Ye Zi [2022] No. 5776 Xinjiang Tianshan Cement Co.Ltd(000877) all shareholders:
1、 Audit opinion
We have audited the attached financial statements of Xinjiang Tianshan Cement Co.Ltd(000877) (hereinafter referred to as " Xinjiang Tianshan Cement Co.Ltd(000877) "), 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 accounting standards for business enterprises in all material aspects, and fairly reflect the financial position of Xinjiang Tianshan Cement Co.Ltd(000877) the consolidated and parent 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 Xinjiang Tianshan Cement Co.Ltd(000877) , 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.
Key audit matters how to deal with them in the audit
Key audit matters how to deal with them in the audit
[recognition of sales revenue of cement and commercial concrete]
Please refer to "v. audit procedures related to important accounting policies and accounting estimates" in the notes to the financial statements, including but not limited to:
（31） VII. Notes to main items of consolidated financial statements (IV) 1. Interview with the management and discuss Xinjiang Tianshan Cement Co.Ltd(000877) cement, clinker and commodities
17） Operating income and operating cost ". Understand and analyze the internal control related to the recognition of sales revenue of concrete and aggregate
Xinjiang Tianshan Cement Co.Ltd(000877) mainly engaged in the production and sales of cement and commercial concrete. Testing;
Xinjiang Tianshan Cement Co.Ltd(000877) according to the sales contract, the control of the goods has been transferred 2 Interview with the management, check the sales contracts of main business categories, and
The revenue is recognized when it arrives at the customer. For cement products, the contract terms have been checked and the appropriateness of the revenue recognition policy has been evaluated;
Is the time point of revenue recognition; Commercial concrete products are delivered to customers and confirmed by customers Conduct annual, monthly and simultaneous analysis on the sales revenue and gross profit margin of various commodities
Recognized as the time point of revenue recognition. Industry comparative analysis;
4. By sampling, the related to revenue recognition are examined
Key audit matters how to deal with them in the audit
[recognition of sales revenue of cement and commercial concrete]
In 2021, Xinjiang Tianshan Cement Co.Ltd(000877) operating revenue was 169979 billion yuan, including supporting data, mainly including sales contract, sales system, price adjustment sheet
The sales revenue of cement and commercial concrete is 162422 billion yuan, accounting for 100% of the operating revenue, such as delivery list, customer confirmation list, etc.
95.55% of the total. 5. Confirm the sales revenue of major customers by letter;
Whether the transaction of confirming the sales revenue of cement and commercial concrete is true or not 6 Check whether there is compliance by changing sales strategy and routine in 2021
Production has a significant impact on Xinjiang Tianshan Cement Co.Ltd(000877) operating results. Therefore, we will realize surprise sales of Xinjiang Tianshan Cement Co.Ltd(000877) same terms, early delivery, etc; The recognition of sales revenue of cement and commercial concrete is regarded as a key audit matter.
7. Increase the sales price of major customers and new important customers in 2021
Conduct analysis, check the industrial and commercial registration data of new important customers, and evaluate whether they exist
Non related transactions;
8. Take samples of sales revenue recognized before and after the balance sheet date
Check the supporting documents and select samples for the income after the balance sheet date
Check sales returns, etc. to assess whether the sales revenue is confirmed in the appropriate period
Yes.
[goodwill impairment]
Please refer to "v. audit procedures related to important accounting policies and accounting estimates" in the notes to the financial statements, including but not limited to:
（25） Impairment of long-term assets "," VII. Main items of consolidated financial statements 1. Understand and test the internal control of goodwill impairment and evaluate the impairment of goodwill
Item note (XX). Goodwill. "
Key audit matters how to deal with them in the audit
As of December 31, 2021, the original value of Xinjiang Tianshan Cement Co.Ltd(000877) goodwill is 374.73, and whether the key internal control related to the test is effective;
Billion yuan, 10.988 billion yuan of impairment has been accrued, and the book value is 26.485 billion yuan. 2. Evaluate the rationality of the management's division of asset groups and asset group combinations;
The management calculates the expected future cash flow of the asset group and the asset group portfolio
To assess whether there is impairment of goodwill. Estimated present value of future cash flow 3 Discuss with management the parties used in the goodwill impairment test
The calculation of requires the management to make major judgments, especially the rationality of the selection of future operating results method, key assumptions and parameters;
And the applicable discount rate, so we will Xinjiang Tianshan Cement Co.Ltd(000877) 4 By comparing the expected future cash flow of the previous year with that of the current year
Goodwill impairment is identified as a key audit event. Evaluate the rationality of the prediction made by the management and consider the actual performance of the business
The judgment made by the management when selecting data is whether there will be management bias
To;
5. Evaluate the competence and professional quality of the appraisers hired by the management
And objectivity; Review the evaluation methods, evaluation parameters and key assumptions.
6. Obtain the special impairment test report issued by the independent appraiser and check the company
Verify the arithmetical accuracy of the calculation process of reputation impairment test, and recheck the book provision of goodwill minus
Accuracy of value and amount.
4、 Other information
Xinjiang Tianshan Cement Co.Ltd(000877) Management (hereinafter referred to as "management") is responsible for other information. Other information includes the information covered in Xinjiang Tianshan Cement Co.Ltd(000877) 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.
When preparing the financial statements, the management is responsible for assessing Xinjiang Tianshan Cement Co.Ltd(000877) 's ability to continue as a going concern, disclosing matters related to going concern (if applicable), and applying the assumption of going concern, unless liquidation is planned, operation is terminated or there is no other realistic choice.
The management is responsible for supervising the financial reporting process of Xinjiang Tianshan Cement Co.Ltd(000877) .
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 Xinjiang Tianshan Cement Co.Ltd(000877) 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 cause Xinjiang Tianshan Cement Co.Ltd(000877) unable to continue operation.
(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 Xinjiang Tianshan Cement Co.Ltd(000877) to express an audit opinion on the financial statements. We are responsible for guiding, supervising and implementing the group audit and taking full responsibility for the audit opinions
