Netac Technology Co.Ltd(300042)
audit report
Dhsz [2022] No. 005068
Dahua Certified Public Accountants (special general partnership)
Da Hua Certified Public Accountants（Special General Partnership）
Netac Technology Co.Ltd(300042)
Audit report and financial statements
(from January 1, 2021 to December 31, 2021)
Contents page I. audit report 1-9 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 statement 10. Statement of changes in shareholders' equity of the parent company 11-12 notes to financial statements 1-97
Dahua Certified Public Accountants (special general partnership)
12 / F, building 7, yard 16, Middle West Fourth Ring Road, Haidian District, Beijing [100039]
Tel: 86 (10) 58350011 Fax: 86 (10) 58350006
www.dahua-cpa. com.
Audit report
Dhsz [2022] No. 005068
Netac Technology Co.Ltd(300042) all shareholders:
1、 Audit opinion
We have audited the financial statements of Netac Technology Co.Ltd(300042) (hereinafter referred to as Netac Technology Co.Ltd(300042) 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 Netac Technology Co.Ltd(300042) 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 Netac Technology Co.Ltd(300042) 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 audit of the current financial statements according to our professional judgment
The most important thing. 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. 1. Impairment of accounts receivable
2. Inventories and their impairment
3. Revenue recognition
（1） Impairment of accounts receivable
1. Event description
Please refer to notes IV (XII) and VI to the financial statements Note 4. As of December 31, 2021, the book balance of accounts receivable of Netac Technology Co.Ltd(300042) company was 12744580372 yuan, and the bad debt provision of accounts receivable was 1727515997 yuan.
The expected credit loss of accounts receivable is evaluated based on single and combination, taking into account reasonable and reliable information about past events, current situation and future economic situation prediction. Except for accounts receivable for which bad debt reserves have been withdrawn individually, the management evaluates the expected credit loss of accounts receivable based on the expected loss rate of accounts receivable portfolio with similar or similar credit risk characteristics in previous years.
Since the determination of the recoverability of accounts receivable requires the management to identify the items and objective evidence that have been impaired, evaluate the expected future available cash flow and determine its present value, which involves the management's use of significant accounting estimates and judgments, and the recoverability of accounts receivable is important to the financial statements, we determine the impairment of accounts receivable as a key audit event.
2. Audit response
Our important audit procedures for the impairment of accounts receivable include:
(1) Understand and evaluate the key controls related to the division of accounts receivable portfolio and the calculation of expected credit loss;
(2) Evaluate whether the calculation method of expected credit loss used by the management meets the requirements of accounting standards, and review the accuracy of the calculation process of expected credit loss of accounts receivable by the management; (3) Assess the reasonableness of the major assumptions and parameters used by the management in the forward-looking information forecast;
(4) For the accounts receivable assessed individually, the basis for the management's assessment of credit risk and the amount of expected credit loss is reviewed, including the management's assessment of credit risk in combination with the customer's business situation, market environment, historical and future repayment ability and willingness;
(5) For the accounts receivable evaluated according to the portfolio, sample and recheck the accuracy of aging portfolio, credit record and other key information.
Review the division of portfolios by the management and the rationality of the expected credit loss rate used for different portfolios based on historical credit loss experience and in combination with the current situation and the prediction of future economy;
(6) We sampled and checked the collection after the period to verify the rationality of the estimated credit loss assessment of accounts receivable;
(7) We evaluated the accounting treatment and disclosure of bad debt provision for accounts receivable by the management on December 31, 2021.
Based on the audit work performed, we believe that the presentation and disclosure of the impairment of accounts receivable by the management of Netac Technology Co.Ltd(300042) company is appropriate.
（2） Inventories and their impairment
1. Event description
Please refer to notes IV (XV) and VI to the financial statements Note 7. As of December 31, 2005, the book value of the company's inventory was RMB 0 Bybon Group Company Limited(300736) 1, and the balance was 0300431 RMB 020261 1 as of December 31, 2005.
The management shall conduct inventory counting and impairment test on inventories on a quarterly basis. If the cost is higher than the net realizable value, the inventory falling price reserves shall be accrued. The net realizable value is determined according to the estimated selling price of the inventory minus the estimated cost to be incurred at the time of completion, the estimated selling expenses and relevant taxes. The management needs to make significant judgments and assumptions in the forecast, especially for the future sales price, production cost, operating expenses and relevant taxes.
Due to the significant amount of inventory and the complex impairment test process, the management's implementation of inventory impairment test involves key judgments and estimates. Therefore, we identified the existence of inventories and the provision for inventory falling price reserves as key audit matters.
2. Audit response
Our main audit procedures for inventories and their impairment include:
(1) We understand, evaluate and test the design and operation effectiveness of internal control related to inventory management;
(2) We supervised the inventory count, checked the quantity and status of the inventory, paid attention to whether the relevant defective and sluggish materials were identified, and implemented the letter of confirmation procedure for the main issued goods;
(3) In the process of physical counting, we observe the stock age of inventory, review the accuracy of inventory age division by the management, and consider the impact of stock age on inventory impairment;
(4) Take samples to carry out purchase test and pricing test on the inventory, and check the contract, delivery order, logistics information and post period carry forward of the issued goods;
(5) Pay attention to the capacity utilization of the company and conduct input-output analysis of main raw materials; (6) We evaluated the relevant parameters used by the management in the inventory impairment test, especially the future selling price, production cost, operating expenses and relevant taxes;
(7) We evaluated the management's accounting treatment and disclosure of inventory existence and inventory falling price reserves on December 31, 2021.
Based on the audit work performed, we believe that the presentation and disclosure of inventories and their impairment by the management of Netac Technology Co.Ltd(300042) company is appropriate.
（3） Revenue recognition
1. Event description
Please refer to notes IV (35) and VI to the financial statements Note 28.
Netac Technology Co.Ltd(300042) company is mainly engaged in the R & D, production and sales of flash disk and mobile hard disk. The company's operating income in 2021 was 191286172766 yuan, of which the proportion of trade income in the amount of operating income in the current period was 28.97%. As revenue is one of the key performance indicators of Netac Technology Co.Ltd(300042) company, there is an inherent risk that the management manipulates the time point of revenue recognition in order to achieve specific goals or expectations. Therefore, we determine revenue recognition as a key audit matter.
At the same time, since the trade income of Netac Technology Co.Ltd(300042) company is recognized according to the total amount method, and the trade income accounts for a large proportion of the income, the inherent risk of misstatement is high, which has a great impact on the operating results of Netac Technology Co.Ltd(300042) company, so we take the recognition of trade income as the key audit item.
2. Audit response
Our main audit procedures for revenue recognition include:
(1) Understand and evaluate the management's design of internal control related to operating revenue recognition, and test the effectiveness of the implementation of key controls;
(2) Select samples to check sales contracts, identify contract terms and conditions related to the transfer of commodity control, and evaluate whether the revenue recognition time point of Netac Technology Co.Ltd(300042) company meets the requirements of accounting standards for business enterprises;
(3) Analyze and verify major customers, and implement analysis procedures for income and cost, including: current income, cost and gross profit margin fluctuation analysis, annual and monthly gross profit margin change analysis of major products, etc;
(4) Select a sample of revenue transactions recorded in this year for confirmation; Select samples from trade customers and implement the procedures of interview and letter confirmation from end customers to understand the authenticity of business;
(5) Select a sample of revenue transactions recorded in this year and check the contract, sales order, delivery document, export declaration record, freight bill of lading, sales invoice, transportation document, bookkeeping voucher, payment collection document and other data between Netac Technology Co.Ltd(300042) company and customers;
(6) Test the delivery documents before the balance sheet date by sampling samples, and check the accounts receivable and income Sub Ledger; If there is a phenomenon of cross period return of accounts receivable, check whether there is a phenomenon of cross period return of income from the balance sheet in combination with the sales documents of the other party, and check whether there is a phenomenon of cross period return of all accounts receivable before and after the balance sheet is obtained;
(7) For the total amount method of trade business accounting, we have additionally implemented the following audit procedures: ① understand the business background and reasons of Netac Technology Co.Ltd(300042) company's trade business, evaluate the design of internal control related to the recognition of trade business income, and test the effectiveness of the implementation of key controls;
② Interview suppliers and customers to understand whether the actual implementation of trade business is consistent with the contract terms;
③ Obtain the purchase and sales contracts related to the trade business, analyze the contract terms, combine the actual implementation of the business, and consult the experts of the internal technology department to evaluate the rationality of the total amount method adopted by the management of Netac Technology Co.Ltd(300042) company to judge its identity as the main responsible person when engaging in the trade business;
(8) Assess whether the management's presentation and disclosure of income in the financial statements are appropriate.
Based on the audit work performed, we believe that the accounting treatment adopted by the management in the operating income is acceptable.
4、 Other information
Netac Technology Co.Ltd(300042) company management is responsible for other information. Other information includes the information covered in the 2021 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 relevant to the financial statements
