Shenzhen Institute Of Building Research Co.Ltd(300675)
From January 1, 2021
Financial statements for the year ended December 31, 2021
audit report
KPMG huazhenshen Zi No. 2202439 Shenzhen Institute Of Building Research Co.Ltd(300675) all shareholders:
1、 Audit opinion
We have audited the attached financial statements of Shenzhen Institute Of Building Research Co.Ltd(300675) (hereinafter referred to as " Shenzhen Institute Of Building Research Co.Ltd(300675) group"), 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, and fairly reflect the financial status of Shenzhen Institute Of Building Research Co.Ltd(300675) group and its parent 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 (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 Shenzhen Institute Of Building Research Co.Ltd(300675) group 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.
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Audit report (Continued)
KPMG hzsz No. 2202439 III. 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. For revenue recognition, please refer to the accounting policies described in "v. important accounting policies and accounting estimates of the company" 25 in the notes to the financial statements, "VII. Item notes to the consolidated financial statements" 34 and "XVII. Main item notes to the financial statements of the parent company" 6.
Key audit matters how to deal with them in the audit
Shenzhen Institute Of Building Research Co.Ltd(300675) group's main businesses include architectural design business, green building consulting business related to revenue recognition in the audit of current financial statements, eco city planning business and accounting procedures, including the following procedures:
EPC and project whole process management business and public credit business. \uf0b7 understand the key financial reports related to revenue recognition. In 2021, the operating revenue recognized by Shenzhen Institute Of Building Research Co.Ltd(300675) group is controlled by people, and evaluate its design and operation effectiveness;
RMB 503 million. \uf0b7 select the service contracts signed between Shenzhen Institute Of Building Research Co.Ltd(300675) group and customers, comprehensively evaluate relevant contracts and business arrangements of Shenzhen Institute Of Building Research Co.Ltd(300675) group, check their main terms, evaluate the income of Shenzhen Institute Of Building Research Co.Ltd(300675) group, identify various performance obligations in the contract, and judge whether the relevant performance recognition accounting policies comply with the requirements of accounting standards for business enterprises. Whether the obligations are performed within a certain period of time or at a certain time;
\uf0b7 the revenue recognized according to the performance progress shall be performed at the sampling basis point. On this basis, the revenue recognized in this year shall be checked to the confirmation certificates of customers for architectural design business, green building consulting business, production confirmed deliverables, government approved urban planning business, EPC and project whole process management documents, third-party verification certificates or other supporting documents that can prove that the service section provided by Shenzhen Institute Of Building Research Co.Ltd(300675) group in the process of performance has been completed, To evaluate whether the revenue has irreplaceable uses and whether the Shenzhen Institute Of Building Research Co.Ltd(300675) Group recognizes it in accordance with the accounting policies of Shenzhen Institute Of Building Research Co.Ltd(300675) group;
During the contract period, Shenzhen Institute Of Building Research Co.Ltd(300675) group has the right to collect payment for the performance part that has been completed so far. Therefore, Shenzhen Institute Of Building Research Co.Ltd(300675) group regards it as the performance obligation to be performed within a certain period of time and recognizes the income according to the performance progress.
Audit report (Continued)
KPMG hzsz No. 2202439 III. for revenue recognition of key audit matters (Continued), please refer to the accounting policies described in "v. important accounting policies and accounting estimates of the company" 25 in the notes to the financial statements, "VII. Item notes to the consolidated financial statements" 34 and "XVII. Main item notes to the financial statements of the parent company" 6.
Key audit matters how to deal with them in the audit
For the public trust business, Shenzhen Institute Of Building Research Co.Ltd(300675) group will recognize the revenue when submitting relevant test reports to customers. On the basis of sampling, check the revenue recognized in the current year to the achievement deliverables confirmed by the customer and other relevant certificates. Since the revenue is the supporting document submitted in the report to measure the key performance indicators of Shenzhen Institute Of Building Research Co.Ltd(300675) group, so as to evaluate whether the revenue is one of them, and whether it is recognized in accordance with the accounting policies of Shenzhen Institute Of Building Research Co.Ltd(300675) group according to the contract terms and business arrangements; Performance obligations and determining whether to select the revenue items of the current year within a certain period of time or a certain period of time. The completion of performance obligations on the time point when the project has been completed involves the judgment of the management, and there is a management implementation letter procedure; In order to achieve specific goals or expectations, the management will advance or postpone \uf0b7 select the income recognition close to the balance sheet date to record the risk of income recognition. We will recognize the income recognition as a close entry and check it to the supporting documents of relevant income recognition to evaluate whether the income is recorded in the appropriate accounting period; Key audit matters.
and
\uf0b7 select the accounting entries of operating income that meet the specific risk standards, ask the management about the reasons for making the above accounting entries, and check the relevant supporting documents.
Audit report (Continued)
KPMG hzsz No. 2202439 III. for key audit matters (Continued) provision for impairment of accounts receivable and contract assets, please refer to the accounting policies described in 9 (6) of "v. important accounting policies and accounting estimates of the company", 3 and 8 of "VII. Notes to items of consolidated financial statements" and 1 and 4 of "XVII. Notes to main items of financial statements of the parent company".
Key audit matters how to deal with them in the audit
On December 31, 2021, in the audit of the current financial statements of accounts receivable of Shenzhen Institute Of Building Research Co.Ltd(300675) group, the original value of accounts receivable and contract assets was RMB 406 million, and the audit procedures related to the accrued provision for impairment of accounts receivable included the following: the amount of impairment provision was RMB 77.75 million; Contract sequence:
The original value of the property is RMB 113 million, and the accrued contract capital \uf0b7 understanding and credit risk control and expected credit loss. The estimated amount of property impairment provision is RMB 5.65 million. Relevant key financial reporting internal control, and evaluate its design and operation effectiveness;
The management shall evaluate the expected credit loss rate of accounting accounts receivable and contract assets estimated by Shenzhen Institute Of Building Research Co.Ltd(300675) group based on each category of accounts receivable classified according to the characteristics of credit risk, and whether it meets the requirements of relevant accounting standards in accordance with the policy; The amount equivalent to the expected credit loss in the whole duration \uf0b7 select the test amount loss provision from the aging table of accounts receivable and contract assets. The expected credit loss rate considers the accounts receivable items, checks them to the relevant supporting documents, and evaluates the quasi current market situation and forward-looking information divided by the overdue aging range in combination with the overdue aging of customers and contract assets, the recovery history of customers and credit period policies. The assessment involves re accuracy;
Large management judgment and estimation. \uf0b7 understand the key parameters and assumptions used in the management's expected credit loss model, including the management's determination of the classification of accounts receivable and contract assets based on the customer's credit due to the risk characteristics of the provision for the impairment of accounts receivable and contract assets, which involves significant management judgment and has a solid foundation As well as the uncertainty in the expected credit loss rate of the management, we will make provision for impairment of accounts receivable, historical loss data included in the contract, etc;
The same as the recognition of asset impairment reserves as key audit matters. \uf0b7 information used by management to check the accuracy of historical data, Evaluate whether the management has considered and adjusted the historical loss rate according to the current market conditions and forward-looking information when determining the expected credit loss rate, and evaluate the appropriateness of the management's estimation of the expected credit loss; and
\uf0b7 recalculate the provision for impairment of accounts receivable and contract assets on December 31, 2021 based on the expected credit loss model of Shenzhen Institute Of Building Research Co.Ltd(300675) group.
Audit report (Continued)
KPMG huazhenshen Zi No. 2202439 IV. other information
Shenzhen Institute Of Building Research Co.Ltd(300675) group management is responsible for other information. Other information includes the information covered in the 2021 annual report of Shenzhen Institute Of Building Research Co.Ltd(300675) group, 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 Shenzhen Institute Of Building Research Co.Ltd(300675) group, disclosing matters related to sustainable operation (if applicable), and applying the assumption of sustainable operation, unless Shenzhen Institute Of Building Research Co.Ltd(300675) group plans to liquidate, terminate operation or has no other realistic choice.
The management is responsible for supervising the financial reporting process of Shenzhen Institute Of Building Research Co.Ltd(300675) group.
