Bank Of Qingdao Co.Ltd(002948)
From January 1, 2021
Financial statements for the year ended December 31, 2021
audit report
KPMG huazhenshen Zi No. 2203088 Bank Of Qingdao Co.Ltd(002948) all shareholders:
1、 Audit opinion
We have audited the attached financial statements of Bank Of Qingdao Co.Ltd(002948) (hereinafter referred to as " Bank Of Qingdao Co.Ltd(002948) "), 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 relevant financial statements in 2021.
In our opinion, the attached financial statements are prepared in accordance with the accounting standards for business enterprises (hereinafter referred to as the "accounting standards for business enterprises") issued by the Ministry of finance of the people's Republic of China in all material aspects, and fairly reflect the consolidated and parent company's financial status as of December 31, 20282021, 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 (hereinafter referred to as the "auditing standards"). 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 Bank Of Qingdao Co.Ltd(002948) , 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. Page 1 of 12
Audit report (Continued)
KPMG huazhenshen Zi No. 2203088 III. key audit matters (Continued) 1. For the determination of the provision for impairment of loans and financial investments measured at amortized cost, please refer to the accounting policies described in notes III and 7 to the financial statements and notes V and 6 to the financial statements and notes V and 9 to the financial statements.
Key audit matters how to deal with them in the audit
Bank Of Qingdao Co.Ltd(002948) in accordance with the revised accounting standards for Business Enterprises No. 22 and evaluation of loans and advances and measurement at amortized cost No. - recognition and measurement of financial instruments, the audit procedures related to the determination of financial investment impairment reserves of financial assets are measured by the expected credit loss model. It includes the following procedures: use the expected credit loss model to determine the issuance of loans and advances \uf0b7 understand and evaluate the impairment provisions of loans, funds measured at amortized cost and financial investment measured at amortized cost. Financial investment involves several key parameters and assumptions in the process of approval, recording, monitoring and classification, and the internal use of key financial reports related to the accrual of impairment provisions, Including the stage division of credit impairment, the design and operation effectiveness of default probability control. Rate, default loss rate, default risk exposure, discount rate, etc. \uf0b7 make use of the work of our financial risk management experts to evaluate the parameter estimation, taking into account the forward-looking adjustment and the expected credit epidemic used by covid-19 when the management evaluates the impairment provision, and the reliability of the loss model and parameters of relevant parameters as of December 31, 2021, including the impact of evaluation and other adjustment factors. In the selection of these parameters, the stage division of credit impairment, default probability, default loss and the application of assumptions involve more management failure rate, default risk exposure, discount rate and forward-looking adjustment. Adjust and adjust the management, and evaluate the external macro environment involved and the rationality of the judgment of key management of Bank Of Qingdao Co.Ltd(002948) internal credit risk management, including the management's decision on the strategy and the expected credit loss model, which has a great impact on the covid-19 pneumonia epidemic as of December 31, 2021. When evaluating key parameters and assumptions, Bank Of Qingdao Co.Ltd(002948) the judgment of the impact on relevant parameters of the day. The factors considered in corporate loans and financial investments measured at amortized cost include historical loss rate, internal credit rating, external credit rating and other adjustment factors; For individual human loans, the factors considered include historical overdue data of personal loans, historical loss experience and other adjustment factors.
Audit report (Continued)
KPMG huazhenshen Zi No. 2203088 III. key audit matters (Continued) 1. For the determination of the provision for impairment of loans and financial investments measured at amortized cost, please refer to the accounting policies described in notes III and 7 to the financial statements and notes V and 6 to the financial statements and notes V and 9 to the financial statements.
Key audit matters how to deal with them in the audit
When using judgment to determine the default loss rate, the management will consider a variety of key factors to evaluate the use of parameters of the expected credit loss model. These factors include the recoverable amount, the completeness and accuracy of the borrower's data. For the key internal data related to the financial status of the original file, the recoverable amount of the collateral and the order of claim repayment, we will use the management to determine whether there are other creditors and their degree of cooperation. When evaluating the value of the mortgaged property, the management and evaluation of the loan with impairment provision and the layer measured at amortized cost will refer to the total amount of the qualified financial investment list and compare it with the general ledger respectively, the collateral evaluation report issued by the third-party evaluation institution, and select samples to compare the information of a single loan or investment with the market price, geographical location and purpose of the collateral.
Compare relevant agreements and other relevant documents to evaluate the enforceability, time and method of collateral realization, as well as the accuracy of the price list; For key external data, I will affect the recoverable amount of collateral. We reconcile them with public sources to check their accuracy due to the impairment of loans and financial investments measured at amortized cost. The determination of preparation has inherent uncertainty and involves management \uf0b7 for the input parameters involving subjective judgment, we make layer judgment, and at the same time, it makes a prudent evaluation of Bank Of Qingdao Co.Ltd(002948) 's operating status and capital, including seeking supporting evidence from the outside, which will have an important impact, We recognize the determination of impairment reserves of loans and financial investments measured by internal bookkeeping, such as historical loss experience and guarantee methods based on amortized ratio, as closed records. As part of the above procedures, we also asked about key audit matters. The reasons for the adjustment of key assumptions and input parameters made by the management relative to the previous period are given, and whether the judgment used by the management is consistent is considered. We compare the economic factors and market information used in the model to evaluate whether they are consistent with the market and economic development.
Audit report (Continued)
KPMG huazhenshen Zi No. 2203088 III. key audit matters (Continued) 1. For the determination of the provision for impairment of loans and financial investments measured at amortized cost, please refer to the accounting policies described in notes III and 7 to the financial statements and notes V and 6 to the financial statements and notes V and 9 to the financial statements.
Key audit matters how to deal with them in the audit
\uf0b7 for the key internal data to be generated by the system operation, we select samples to check the system input data to the original file to evaluate the accuracy of the system input data. In addition, using the work of our information technology experts, On the basis of selecting samples, this paper tests the compilation logic of overdue information of loans and financial investment measured by amortized cost and the systematic operation of internal credit rating of corporate customers. \uf0b7 evaluate the rationality of the judgment made by the management on whether the credit risk of such loans or financial investments measured at amortized cost has increased significantly since initial recognition and whether credit impairment has occurred. Based on the risk oriented method, select samples to check the rationality of the stage division results of credit impairment of the management. We analyze loans according to industry classification, and select samples from industries affected by the current economic environment or covid-19 pneumonia epidemic and other borrowers with potential credit risks. On the basis of selecting samples, we check the overdue information of relevant assets, understand the borrower's credit risk status, ask the credit manager about the borrower's business status Check the borrower's financial information and search for market information about the borrower's business, and consider the impact of covid-19 pneumonia on the credit risk of relevant borrowers as of December 31, 2021.
Audit report (Continued)
KPMG huazhenshen Zi No. 2203088 III. key audit matters (Continued) 1. For the determination of the provision for impairment of loans and financial investments measured at amortized cost, please refer to the accounting policies described in notes III and 7 to the financial statements and notes V and 6 to the financial statements and notes V and 9 to the financial statements.
Key audit matters how to deal with them in the audit
