catalogue
1、 Audit report Page 1-5 II. Financial statements Page 6-13
(I) consolidated balance sheet Page 6
(II) balance sheet of parent company Page 7
(III) consolidated income statement Page 8
(IV) profit statement of the parent company Page 9
(V) consolidated cash flow statement Page 10
(VI) cash flow statement of the parent company Page 11
(VII) consolidated statement of changes in owner's equity Page 12
(VIII) statement of changes in owner's equity of the parent company Page 13
3、 Notes to the financial statements Page 14-77
Audit report
TJS [2022] No. 7-64
Shandong Dongyue Organosilicon Materials Co.Ltd(300821) all shareholders:
1、 Audit opinion
We have audited the financial statements of Shandong Dongyue Organosilicon Materials Co.Ltd(300821) (hereinafter referred to as Shandong Dongyue Organosilicon Materials Co.Ltd(300821) 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 accounting standards for business enterprises in all material aspects, and fairly reflect the consolidated and parent company's financial position of Shandong Dongyue Organosilicon Materials Co.Ltd(300821) company as of December 31, 2021, as well as 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 Shandong Dongyue Organosilicon Materials Co.Ltd(300821) 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.
（1） Revenue recognition
1. Event description
See note III (XVIII), note V (Ⅱ) 1 and note XII to the financial statements for relevant information disclosure Shandong Dongyue Organosilicon Materials Co.Ltd(300821) company is mainly engaged in the R & D, production and sales of silicone materials. In 2021, Shandong Dongyue Organosilicon Materials Co.Ltd(300821) company's operating income was 433321912091 yuan, of which the main business income was 426813325606 yuan, accounting for 98.50% of the operating income Shandong Dongyue Organosilicon Materials Co.Ltd(300821) company's sales revenue is divided into domestic sales and export sales. The sales revenue is recognized after the domestic goods are delivered to the customer and signed for receipt. The offshore time or receipt of export goods is regarded as the revenue recognition time, and the revenue is recognized according to the contract, customs declaration, bill of lading or receipt records.
Since operating revenue is one of the key performance indicators of Shandong Dongyue Organosilicon Materials Co.Ltd(300821) company, there may be inherent risks that the management of Shandong Dongyue Organosilicon Materials Co.Ltd(300821) company (hereinafter referred to as the management) may achieve specific goals or expectations through inappropriate revenue recognition. Therefore, we recognize the main business income as a key audit matter.
2. Audit response
For revenue recognition, our audit procedures mainly include:
(1) Understand the key internal controls related to revenue recognition, evaluate the design of these controls, determine whether they are implemented, and test the operation effectiveness of relevant internal controls;
(2) Check the sales contract, understand the main contract terms or conditions, and evaluate whether the revenue recognition method is appropriate; (3) Implement analysis procedures for operating revenue and gross profit margin on a monthly basis, products, customers, etc., identify whether there are significant or abnormal fluctuations, and find out the causes of fluctuations;
(4) For domestic sales revenue, check the supporting documents related to revenue recognition by sampling, including sales contracts, sales invoices, delivery orders signed by customers, etc; For export income, the sales contract, export declaration form, freight bill of lading or receiving record, sales invoice and other supporting documents shall be inspected by sampling;
(5) Combined with the letter of accounts receivable, the current sales volume is confirmed to the main customers by sampling;
(6) Conduct a cut-off test on the operating income recognized before and after the balance sheet date to evaluate whether the operating income is recognized in an appropriate period;
(7) Check whether the information related to operating income has been properly presented in the financial statements.
（2） Book value of fixed assets and construction in progress
1. Event description
See notes III (XII) (XIII) and V (Ⅰ) 12 and 13 to the financial statements for relevant information disclosure.
As of December 31, 2021, the book value of fixed assets of Shandong Dongyue Organosilicon Materials Co.Ltd(300821) company is RMB 70169561215 and the book value of construction in progress is RMB 190011713504. As the amount of long-term assets is significant, and the time point of conversion of construction in progress to fixed assets and the depreciation policy of fixed assets involve significant management judgment, we determine the book value of fixed assets and construction in progress as key audit matters.
2. Audit response
(1) Understand the key internal controls related to the book value of fixed assets and construction in progress, evaluate the design of these controls, determine whether they are implemented, and test the operation effectiveness of relevant internal controls;
(2) Evaluate the appropriateness of the time point when the construction in progress is transferred to fixed assets through inspection and acceptance report or project progress report;
(3) Check the purchase application form, purchase contract, purchase invoice, acceptance form or acceptance report, bank receipt and fund application form by sampling, and check whether the recorded value of fixed assets and projects under construction is accurate;
(4) Through the implementation of supervision procedures and on-site observation of relevant assets, understand the use status of fixed assets and the construction progress of projects under construction, and confirm the existence of fixed assets and projects under construction;
(5) Check whether the information related to fixed assets and construction in progress has been properly reflected in the financial statements
Presentation.
4、 Other information
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 Shandong Dongyue Organosilicon Materials Co.Ltd(300821) company, disclosing matters related to sustainable operation (if applicable), and applying the assumption of sustainable operation, unless liquidation is planned, operation is terminated or there is no other realistic choice.
Shandong Dongyue Organosilicon Materials Co.Ltd(300821) corporate governance (hereinafter referred to as governance) is responsible for supervising the financial reporting process of Shandong Dongyue Organosilicon Materials Co.Ltd(300821) 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 in order to design appropriate audit procedures, but the purpose is not to express an opinion on the effectiveness of internal control.
（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 Shandong Dongyue Organosilicon Materials Co.Ltd(300821) 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 Shandong Dongyue Organosilicon Materials Co.Ltd(300821) 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 Shandong Dongyue Organosilicon Materials Co.Ltd(300821) 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, 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. Tianjian Certified Public Accountants (special general partnership) Chinese certified public accountant:
(project partner)
Hangzhou, China Certified Public Accountant:
March 21, 2002
Consolidated balance sheet
December 31, 2021
Prepared by: Shandong Dongyue Organosilicon Materials Co.Ltd(300821) unit: RMB
End of year amount of assets and end of year amount of liabilities and owner's equity
No. (or shareholders' equity)
Current assets: current liabilities:
Monetary fund 1196064652551200415066368 short term loan
Provision for settlement
