Shandong Humon Smelting Co.Ltd(002237)
audit report
Hxsz (2022) No. 000269
Table of contents page number
1、 Audit report 1-5
2、 Audited financial statements and notes
1. Consolidated and company balance sheet 6-9
2. Consolidated and company income statement 10-11
3. Consolidated and company cash flow statement 12-13
4. Consolidated and statement of changes in shareholders’ equity 14-17
5. Notes to financial statements 18-126
Hexin Certified Public Accountants (special general partnership)
March 21, 2002
Shandong Humon Smelting Co.Ltd(002237) report body
Audit report
Hxsz (2022) No. 000269 Shandong Humon Smelting Co.Ltd(002237) all shareholders:
1、 Audit opinion
We have audited the financial statements of Shandong Humon Smelting Co.Ltd(002237) (hereinafter referred to as humon company), including the consolidated and company’s balance sheet as of December 31, 2021, the consolidated and company’s income statement, consolidated and company’s cash flow statement, consolidated and 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 accounting standards for business enterprises in all material aspects, and fairly reflect the consolidated and company’s financial position as of December 31, 2021 and the consolidated and company’s operating results and consolidated and company’s 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 humon 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. We confirm that the following matters are the key audit matters that need to be communicated in the audit report:
Hexin Certified Public Accountants (special general partnership) 1
Shandong Humon Smelting Co.Ltd(002237) report body
(I) inventory falling price reserves
1. Event description
As of December 31, 2021, as disclosed in notes V and 7 to the consolidated financial statements of humon company, the original value balance of inventory is 88709458 million yuan, the amount of inventory falling price reserves is 916669 million yuan, the book value is high, and the provision of inventory falling price reserves has a significant impact on the financial statements. The raw materials, goods in stock and products in process of humon company are affected by the price fluctuations of gold, silver and electrolytic lead, which have a great impact on the financial statements. Therefore, we identify the confirmation of inventory falling price reserves as key audit matters.
2. Audit response
(1) Understand and test the design and implementation of internal control related to inventory falling price reserves of humon company;
(2) Supervise the inventory at the end of the period, and check the storage location, quantity and status of the inventory;
(3) Query the unit price changes of main products in this year, understand the price trend of gold, silver and other products in 2021, and judge the risk of inventory falling price;
(4) Obtain the calculation table of inventory falling price reserves of humon company, perform inventory impairment test, check whether it is implemented in accordance with relevant accounting policies, and analyze whether the provision for inventory falling price reserves is sufficient.
(II) revenue recognition
1. Event description
In 2021, as disclosed in notes V and 44 of the consolidated financial statements of humon company, the total operating revenue is 41382878500 yuan. Since the recognition of operating revenue directly affects the authenticity, integrity and accuracy of the financial statements in 2021, and revenue is a key indicator of the company’s profits, the management may have a major risk of misstatement in revenue recognition, so we recognize revenue recognition as a key audit matter.
2. Audit response
(1) Understand and evaluate the design and operation effectiveness of key internal controls related to revenue recognition;
(2) Select samples to check sales contracts, identify contract terms and conditions related to the transfer of risks and rewards on commodity ownership, and evaluate whether the company’s revenue recognition time point meets the requirements of accounting standards for business enterprises;
(3) Implement analysis procedures for operating income, analyze abnormal changes in gross profit, review the rationality of income, and
Hexin Certified Public Accountants (special general partnership) 2
Shandong Humon Smelting Co.Ltd(002237) report body
Compare the gross profit margin of the same industry;
(4) Perform a cut-off test on the operating revenue to confirm whether the revenue is recorded in the correct accounting period;
(5) Obtain the price information of gold, silver, cathode copper and other products in the open market, analyze and compare with the book sales price of the company, and analyze the rationality of the company’s sales price;
(6) Check the monthly statement of Shanghai Gold Exchange and the calculation table of the company’s confirmed income to confirm the authenticity and accuracy of gold income;
(7) Implement the confirmation procedure for major customers, take sufficient samples to confirm the amount and balance of accounts receivable and advances, and conduct post period collection test for major customers.
4、 Other information
The management of humon company (hereinafter referred to as “the management”) is responsible for other information. Other information includes the information covered in the 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 evaluating the sustainable operation ability of humon company, disclosing matters related to sustainable operation and applying the assumption of sustainable operation, unless the management plans to liquidate humon company, terminate operation or has no other realistic choice.
The management of humon company (hereinafter referred to as “the management”) is responsible for supervising the financial reporting process of humon company. 6、 Responsibilities of certified public accountants for the audit of financial statements
Hexin Certified Public Accountants (special general partnership) 3
Shandong Humon Smelting Co.Ltd(002237) report body
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 humon 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 humon to continue its business.
(V) evaluate the overall presentation, structure and content of the financial statements, and evaluate whether the financial statements fairly reflect relevant transactions and events.
(VI) obtain sufficient and appropriate audit evidence on the financial information of entities or business activities in humon company to express audit opinions on the financial statements. We are fully responsible for the audit, guidance and implementation of the audit opinions of the group.
We communicated with the management on the planned audit scope, schedule and major audit findings,
Hexin Certified Public Accountants (special general partnership) 4
Shandong Humon Smelting Co.Ltd(002237) report body
Including communicating 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.
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.
Hexin Certified Public Accountants (special general partnership) Chinese certified public accountant: Chi Wei
(project partner)
Jinan, China
Chinese certified public accountant: Liu abin
March 21, 2002
Hexin Certified Public Accountants (special general partnership) 5
Shandong Humon Smelting Co.Ltd(002237) notes to financial statements
Shandong Humon Smelting Co.Ltd(002237)
Notes to financial statements for the year 2 Yunnan Yuntou Ecology And Environment Technology Co.Ltd(002200) 1
1、 Basic information of the company
(I) Company Profile
Shandong Humon Smelting Co.Ltd(002237) (hereinafter referred to as “the company” or “the company”) is a joint stock limited company established by directional offering initiated by Muping gold smelter in February 1994 with the approval of Mujing Gai [1994] No. 4 document of Muping County Economic Reform Commission. The company’s unified social credit code is 9137 Konka Group Co.Ltd(000016) 53412924.
In May 2008, with the approval of the China Securities Regulatory Commission, the
