Hunan Xiangjia Animal Husbandry Company Limited(002982) 2021 annual financial report
1、 Audit report
Unqualified opinion of audit opinion type standard
Signing date of audit report: March 22, 2022
Name of audit institution: Tianjian Certified Public Accountants (special general partnership)
Audit Report No.: tjss [2022] No. 2-50
Name of certified public accountant: Liu Liya, Liu Lingshan
Body of audit report
Hunan Xiangjia Animal Husbandry Company Limited(002982) all shareholders:
1、 Audit opinion
We have audited the financial statements of Hunan Xiangjia Animal Husbandry Company Limited(002982) (hereinafter referred to as Hunan Xiangjia Animal Husbandry Company Limited(002982) 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 Hunan Xiangjia Animal Husbandry Company Limited(002982) 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. According to the code of professional ethics for Chinese certified public accountants, we are independent of Hunan Xiangjia Animal Husbandry Company Limited(002982) 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 v.39 and vii.61 of this section for relevant information disclosure.
Hunan Xiangjia Animal Husbandry Company Limited(002982) company mainly sells chicken, duck and other poultry, feed and chilled poultry meat products, which belong to the performance obligation to be performed at a certain point in time. Revenue is recognized when the company has delivered the products to customers, received the price or obtained the right to receive payment according to the contract, and the relevant economic benefits are likely to flow in. In 2021, Hunan Xiangjia Animal Husbandry Company Limited(002982) company's operating revenue amounted to Wuhan Ligong Guangke Co.Ltd(300557) 3 million yuan.
Since operating revenue is one of the key performance indicators of Hunan Xiangjia Animal Husbandry Company Limited(002982) company, there may be inherent risks that the management of Hunan Xiangjia Animal Husbandry Company Limited(002982) company (hereinafter referred to as the management) may achieve specific goals or expectations through inappropriate revenue recognition. Therefore, we identified revenue recognition 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 effectiveness of the operation of relevant internal controls;
(2) Compare and analyze the monthly sales prices of different varieties of Hunan Xiangjia Animal Husbandry Company Limited(002982) company, and analyze whether the price fluctuation trend is abnormal in combination with the actual operation of the enterprise, industry characteristics, relevant statistical data in the industry and the situation of comparable listed companies in the industry;
(3) Select a sample of revenue transactions recorded in the current period, check the information of invoices, sales contracts, delivery orders, customer receipts, statements, shipping bills, etc., and evaluate whether the relevant revenue recognition complies with the accounting policies of Hunan Xiangjia Animal Husbandry Company Limited(002982) company for revenue recognition;
(4) Confirm the amount of customers' accounts receivable and ending balance by letter and implement alternative test procedures, and visit and confirm major customers on sales and other related matters;
(5) 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;
(6) Check whether the information related to operating income has been properly presented in the financial statements.
（2） Measurement of long-term assets
See v.24.25 and vii.22 of this section for relevant information disclosure.
Hunan Xiangjia Animal Husbandry Company Limited(002982) company's construction in progress and fixed assets mainly include breeding barns, feed production plants and equipment, slaughtering plants and equipment, etc.
With the increasing expansion of fresh sales of Hunan Xiangjia Animal Husbandry Company Limited(002982) company, the scale of self raised live poultry has gradually expanded. In recent years, new farms have been invested successively. Most of the new farms have been delivered for use in recent two years. The slaughtering and processing cold chain logistics distribution project was also completed at the end of this year, and the book value of fixed assets at the end of this year was 1.151 billion yuan. Due to the expansion of breeding scale, the demand for feed has further increased. At the same time, Hunan Xiangjia Animal Husbandry Company Limited(002982) company plans to continue to expand pig breeding and slaughtering and other sections. 1 million tons of feed intelligent processing project and 1 million pigs slaughtered annually have been put into operation successively. The book value of projects under construction at the end of this year is 385 million yuan.
The management's judgment on whether the project expenditure meets the capitalization conditions and the time point of fixed assets conversion will have an impact on the book value of fixed assets and construction in progress. Since the evaluation of the book value of fixed assets and construction in progress involves significant management judgment and is important to the consolidated financial statements, we identify the measurement of long-term assets of Hunan Xiangjia Animal Husbandry Company Limited(002982) company as a key audit event.
2. Audit response
For the measurement of long-term assets, our audit procedures mainly include:
(1) Obtain the engineering project management system and fixed assets management system of Hunan Xiangjia Animal Husbandry Company Limited(002982) company, understand the design of key internal controls related to the integrity, existence, accuracy, pricing and allocation of fixed assets and projects under construction, evaluate the design of these controls, determine whether they have been implemented, and test the operation effectiveness of relevant internal controls;
(2) Analyze the scale and distribution of fixed assets in combination with industry characteristics and the production and operation of Hunan Xiangjia Animal Husbandry Company Limited(002982) company; Confirm whether the fixed assets match the production capacity and output of Hunan Xiangjia Animal Husbandry Company Limited(002982) company;
(3) Spot check the newly added construction and installation costs with significant amount in 2021, check the relevant engineering contracts, and check the actual payment amount to the contract, invoice and payment voucher;
(4) Spot check the newly added main equipment in 2021, check the relevant purchase contract and shipping acceptance certificate, and check the actual payment amount to the contract, invoice and payment voucher;
(5) Implement letter confirmation procedures for major engineering contractors and equipment suppliers to confirm the main contract terms, project implementation or equipment delivery, payment, etc; (6) Check the capitalized expenses incurred in 2021 and evaluate whether the capitalized expenses meet the relevant conditions of capitalization;
(7) Check the acceptance report, conduct field investigation, observe the project progress, and confirm the accuracy of the time point when the project under construction is transferred to fixed assets; At the end of the period, the physical supervision of important fixed assets is carried out to confirm the existence of fixed assets, and pay attention to whether there are fixed assets that have been scrapped but have not been written off.
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 Hunan Xiangjia Animal Husbandry Company Limited(002982) 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.
Hunan Xiangjia Animal Husbandry Company Limited(002982) corporate governance (hereinafter referred to as governance) is responsible for supervising the financial reporting process of Hunan Xiangjia Animal Husbandry Company Limited(002982) 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） The purpose of expressing audit opinions is not to understand the effectiveness of internal control 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 Hunan Xiangjia Animal Husbandry Company Limited(002982) 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 Hunan Xiangjia Animal Husbandry Company Limited(002982) 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 Hunan Xiangjia Animal Husbandry Company Limited(002982) company to express an 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.
Tianjian Certified Public Accountants (special general partnership) Chinese certified public accountant:
(project partner)
Hangzhou, China Certified Public Accountant:
March 22, 2002 2. The unit of the statement in the notes to the financial statements is: yuan
1. Consolidated balance sheet prepared by: Hunan Xiangjia Animal Husbandry Company Limited(002982)
Unit: Yuan
December 31, 2021 December 31, 2020
Current assets:
Monetary capital 2984779280066245760535
Provision for settlement
Lending funds
Trading financial assets
Derivative financial assets
Notes receivable
Accounts receivable 2058193164018529924657
Receivables financing
Prepayment 2421263081404978033
receivable premium
