audit report
Dhsz [2021] 008297
Dahua Certified Public Accountants (special general partnership)
DaHuaCertifiedPublicAccountants（SpecialGeneralPartnership）
Audit report and financial statements
(from January 1, 2020 to December 31, 2020)
Contents page 1. Audit report 1-6 II. Audited financial statements
Consolidated balance sheet 1-2 consolidated income statement 3 consolidated cash flow statement 4 consolidated statement of changes in shareholders' equity 5-6 parent company balance sheet 7-8 parent company income statement 9 parent company cash flow Table 10 changes in shareholders' equity of parent company 11-12 notes to financial statements 1-132
Audit report
Dahuashen Zi [2021] 008297 Risen Energy Co.Ltd(300118) all shareholders:
1、 Audit opinion
We have audited the financial statements of Risen Energy Co.Ltd(300118) (hereinafter referred to as " Risen Energy Co.Ltd(300118) " or "the company"), including the consolidated and parent company's balance sheet as of December 31, 2020, 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 2020.
In our opinion, the attached financial statements are prepared in accordance with the provisions of the accounting standards for business enterprises in all material aspects, and fairly reflect the consolidated and parent company's financial position as of December 31, 2020 and the consolidated and parent company's operating results and cash flow in 2020.
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 Risen Energy Co.Ltd(300118) , 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.
Dhsz [2021] 008297 audit report
1. Provision for bad debts of accounts receivable
2. Impairment of fixed assets
(I) provision for bad debts of accounts receivable
1. Event description
As stated in note 4 of note VI to the financial statements, on December 31, 2020, the book balance of accounts receivable in the company's consolidated financial statements was 440534329740 yuan, the balance of bad debt provision was 67851485923 yuan, and the net book value of accounts receivable was 372682843817 yuan, accounting for 12.89% of the total assets.
The company implements the new financial instrument standards and determines the expected loss of receivables based on the expected value of losses caused by possible future events of default under the expected credit loss method. The estimation of impairment of accounts receivable involves the use of significant accounting estimates and judgments by the management, and the credit loss of accounts receivable is important to the financial statements. Therefore, we recognize the provision for bad debt reserves of accounts receivable as a key audit event.
2. Audit response
Our important audit procedures for the impairment of accounts receivable include:
(1) Understand, evaluate and test the design and operation effectiveness of the company's credit policy and internal control related to accounts receivable management, so as to judge whether its internal control is effective;
(2) Analyze the rationality of the company's accounting policies and accounting estimates for bad debt reserves of accounts receivable, including the basis for determining the combination of accounts receivable, the judgment of significant amount, the judgment of separate provision for bad debt reserves, etc;
(3) Analyze and calculate the ratio between the amount of bad debt provision and the balance of accounts receivable on the balance sheet date of the company, compare the amount of bad debt provision in the previous period with the actual amount, and check whether the provision for bad debt of accounts receivable is sufficient;
(4) Obtain the company's bad debt provision accrual table and check whether the accrual method is based on bad debt provision
Dhsz [2021] 008297 audit report
Implement the policy and recalculate whether the bad debt provision amount is accurate;
(5) We sampled and checked the payment collection after the period;
(6) Implement independent confirmation procedures for important accounts receivable;
(7) For accounts receivable involving litigation matters, we evaluate the recoverability of accounts receivable by consulting relevant documents, and communicate with the management and lawyers hired by the management about the estimation of the recoverable amount of accounts receivable for litigation matters.
Based on the audit work performed, we believe that the management's judgment and estimation on the recoverability of accounts receivable are reasonable.
(II) impairment of fixed assets
1. Event description
As stated in note 15 of note VI to the consolidated financial statements, as of December 31, 2020, the net book value of the company's fixed assets was 1071244569666 yuan, accounting for 37.04% of the company's total assets. At the end of the period, the net asset value of Cecep Solar Energy Co.Ltd(000591) power station was 639919340716 yuan. The asset value of Cecep Solar Energy Co.Ltd(000591) power station may be affected by the overall economic environment and relevant local photovoltaic policies. Once there is impairment, it will have a significant impact on the financial statements.
Therefore, we recognize the impairment of fixed assets as a key audit event.
2. Audit response
Our important audit procedures for the impairment of fixed assets include:
(1) Evaluate and test the design and implementation of the company's key internal controls related to the cycle of fixed assets;
(2) Analyze the impairment of relevant production equipment and intangible assets in combination with the company's production of battery chips and components;
(3) Check whether there are idle fixed assets and judge whether there are signs of impairment in combination with the inventory;
Dhsz [2021] 008297 audit report
(4) Select large and variable power station assets for field investigation to understand the use of relevant assets.
(5) Select overseas power station projects and obtain the audit report of local accounting firm.
Based on the audit work performed, we believe that the judgment made by the management on the impairment of fixed assets is acceptable.
4、 Other information
Risen Energy Co.Ltd(300118) management is responsible for other information. Other information includes the information covered in the 2020 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 understand 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
Risen Energy Co.Ltd(300118) the management is responsible for preparing the financial statements in accordance with 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 due to fraud or error.
When preparing the financial statements, Risen Energy Co.Ltd(300118) the management is responsible for evaluating Risen Energy Co.Ltd(300118) 's ability of going concern, disclosing matters related to going concern (if applicable), and applying the assumption of going concern, unless the management plans to liquidate Risen Energy Co.Ltd(300118) , terminate operation or has no other realistic choice. The management is responsible for supervising the financial reporting process of Risen Energy Co.Ltd(300118) .
6、 Responsibilities of certified public accountants for the audit of financial statements
Our goal is to determine whether the financial statements as a whole are free from fraud or error
Dhsz [2021] 008297 audit report
Obtain reasonable assurance for material misstatement 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 opinions 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 a conclusion on the appropriateness of the going concern assumption used by the management. 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 Risen Energy Co.Ltd(300118) going concern ability. If we conclude that there are significant uncertainties, the auditing standards require us to draw the attention of report 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 Risen Energy Co.Ltd(300118) unable to continue to operate.
5. Evaluate the overall presentation, structure and content of the financial statements, and evaluate whether the financial statements fairly reflect relevant transactions and events.
Dhsz [2021] 008297 audit report
6. Obtain sufficient and appropriate audit evidence on the financial information of entities or business activities in Risen Energy Co.Ltd(300118) to express an opinion on the financial statements. We are responsible for guiding, supervising and executing the group audit. We are fully responsible for the audit opinion.
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.
Dahua Certified Public Accountants (special general partnership) Chinese certified public accountant:
(project partner)
