Guangdong No.2 Hydropower Engineering Company Ltd(002060)
audit report
Dhsz [2022] 005930
Dahua Certified Public Accountants (special general partnership)
DaHuaCertifiedPublicAccountants（SpecialGeneralPartnership）
Guangdong No.2 Hydropower Engineering Company Ltd(002060)
Audit report and financial statements
(from January 1, 2021 to December 31, 2021)
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
Dahua Certified Public Accountants (special general partnership) 12th floor, building 7, No. 16 courtyard, Middle West Fourth Ring Road, Haidian District, Beijing [100039] Tel: 86 (10) 58350011 Fax: 86 (10) 58350006 www.dahua-cpa com. Audit report
Dahuashen Zi [2022] 005930 Guangdong No.2 Hydropower Engineering Company Ltd(002060) all shareholders:
1、 Audit opinion
We have audited the financial statements of Guangdong No.2 Hydropower Engineering Company Ltd(002060) (hereinafter referred to as Guangdong No.2 Hydropower Engineering Company Ltd(002060) 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 shareholders’ equity and notes to relevant financial statements in 2021.
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 of Guangdong No.2 Hydropower Engineering Company Ltd(002060) company as of December 31, 2021 and 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 Guangdong No.2 Hydropower Engineering Company Ltd(002060) 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.
We confirm that the following matters are the key audit matters that need to be communicated in the audit report. Revenue recognition of engineering construction contract
1. Item description
For specific disclosure information, please refer to note IV (34) and note VI and note 41 of the financial statements Guangdong No.2 Hydropower Engineering Company Ltd(002060) company recognizes the revenue of the construction business provided by it according to the time period when the result of the construction contract can be reliably estimated. The management needs to make a reasonable estimate of the estimated total revenue and estimated total cost of the construction contract to determine the completion progress, and should continuously evaluate and revise it during the execution of the contract, which involves significant accounting estimates and judgments of the management. Therefore, we recognize it as a key audit matter.
2. Audit response
Our audit procedures for the recognition of construction contract revenue mainly include:
(1) Understand and evaluate the effectiveness of the design and implementation of the company’s internal control related to the recognition of construction contract revenue, and test the effectiveness of the implementation of key controls;
(2) Understand the confirmation process of performance progress and construction contract revenue;
(3) Check the accounting policies for revenue recognition of construction contracts, and review major construction contracts and key contract terms;
(4) Review the preparation, review and change process of the total budget cost of the construction contract and relevant control procedures, and evaluate the rationality of its major judgments and estimates;
(5) Obtain the construction contract account and recalculate the accuracy of the construction contract performance progress; (6) Select the sample of construction contract, check the construction contract and cost budget data based on the estimated total revenue and estimated total cost, and evaluate whether the management’s estimation of the estimated total revenue and estimated total cost is sufficient;
(7) Review the actual cost and total budget cost of major construction contracts, review the change data of construction contracts, and evaluate the rationality of the amount adjustment;
(8) Select samples to test the project construction costs incurred in this year.
Check the supporting documents such as the contract, invoice, material receipt and distribution sheet and settlement sheet of the actual project cost, so as to evaluate the rationality of the identification of the actual cost. Implement cut-off test procedures to check whether the relevant contract costs are recorded in the appropriate accounting period;
(9) Select the sample of construction contract, check the project progress on site, discuss with the project management department to confirm the completion degree of the project, compare it with the book records, and carry out further inspection procedures for abnormal deviations.
Based on the audit work performed, we believe that the management’s recognition of construction contract revenue is in line with the company’s accounting policies.
4、 Other information
Guangdong No.2 Hydropower Engineering Company Ltd(002060) the management of the company is responsible for other information. Other information includes the information covered in the 2021 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 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
Guangdong No.2 Hydropower Engineering Company Ltd(002060) the management of the company 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 of Guangdong No.2 Hydropower Engineering Company Ltd(002060) company is responsible for evaluating the continuous operation ability of Guangdong No.2 Hydropower Engineering Company Ltd(002060) company, disclosing matters related to continuous operation (if applicable), and applying the assumption of continuous operation, unless the management plans to liquidate Guangdong No.2 Hydropower Engineering Company Ltd(002060) company, terminate operation or has no other realistic choice.
The management is responsible for supervising the financial reporting process of Guangdong No.2 Hydropower Engineering Company Ltd(002060) 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 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 the sustainable operation ability of Guangdong No.2 Hydropower Engineering Company Ltd(002060) company. 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 Guangdong No.2 Hydropower Engineering Company Ltd(002060) 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 Guangdong No.2 Hydropower Engineering Company Ltd(002060) company to express an opinion on the financial statements. We are responsible for directing, supervising and performing group audits. 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.
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(there is no text on this page, which is the signature and seal page of dahuashen Zi [2022] 005930 audit report). Dahua Certified Public Accountants (special general partnership) Chinese certified public accountant:
Wang Jianhua, Beijing, China Certified Public Accountant:
Rongfan
March 29, 2002
Consolidated balance sheet
December 31, 2021
Prepared by: Guangdong No.2 Hydropower Engineering Company Ltd(002060) (unless otherwise specified, the amount unit is RMB) asset note VI closing balance opening balance closing balance of last period current assets:
Notes to monetary funds 12855117992622876660
