audit report
Chacha Food Company Limited(002557)
Rong Cheng Shen Zi [2022] No. 230z1897
Rongcheng Certified Public Accountants (special general partnership)
Beijing, China
catalogue
Serial number content page number
1 audit report 1-6
2 consolidated balance sheet 7
3 consolidated income statement 8
4 consolidated cash flow statement 9
5 consolidated statement of changes in owner’s equity 10 – 11
6 balance sheet of parent company12
7. Income statement of the parent company 13
8 cash flow statement of parent company 14
9 statement of changes in owner’s equity of the parent company 15 – 16
10 notes to the financial statements 17 – 126
Audit report
Rong Cheng Shen Zi [2022] No. 230z1897 Chacha Food Company Limited(002557) all shareholders:
1、 Audit opinion
We have audited the financial statements of Chacha Food Company Limited(002557) (hereinafter referred to as Chacha Food Company Limited(002557) ), 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 owner’s 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 financial position of Chacha Food Company Limited(002557) the consolidated and parent 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 Chacha Food Company Limited(002557) , 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.
（1） Revenue recognition
1. Event description
Chacha Food Company Limited(002557) see note iii.26 to the financial statements for the disclosure of accounting policies for income and note v.36 to the financial statements for the disclosure of income amount Chacha Food Company Limited(002557) main products are sunflower seeds and nuts. In 2021, Chacha Food Company Limited(002557) operating income was 598502603216 yuan; Operating revenue is the key performance indicator of Chacha Food Company Limited(002557) and there may be inherent risk that Chacha Food Company Limited(002557) Management (hereinafter referred to as management) manipulates revenue recognition in order to achieve specific business objectives. Therefore, we determine revenue recognition as a key audit matter.
2. Audit response
The relevant procedures we implement for revenue recognition include:
(1) Understand and evaluate the effectiveness of the management’s key internal control design and operation related to revenue recognition, and perform control tests on important control points.
(2) Select samples to check contracts or orders, identify contract terms and conditions related to the transfer of risks and rewards on commodity ownership, evaluate whether the revenue recognition time point of Chacha Food Company Limited(002557) is in line with the provisions of accounting standards, and review whether relevant accounting policies have been consistently implemented.
(3) Implement analytical review procedures, including: analysis of the fluctuation of income, cost and gross profit margin of each month in the current period, and comparative analysis of income, cost and gross profit margin of main products in the current period with that in the previous period.
(4) Implement the revenue detail test, select samples from the sales revenue list, and check the sales contract or order, sales delivery order, logistics document, customer signing record, etc.
(5) Select samples from major customers and execute the confirmation procedure to confirm the sales amount of the current period and the balance of accounts receivable at the end of the period.
(6) For the revenue transactions recorded before and after the balance sheet date, select samples to check the relevant supporting vouchers, and evaluate whether the revenue recognition is recorded in the appropriate accounting period.
Through the implementation of the above procedures, we found no abnormality in revenue recognition.
（2） Recognition and measurement of inventories
1. Event description
Chacha Food Company Limited(002557) see notes iii.12 and v.6 to the financial statements for the disclosure of accounting policies and estimates for the recognition of inventories Chacha Food Company Limited(002557) the amount of inventory at the end of each reporting period is large. The book value of inventory on December 31, 2021 is 146224909722 yuan, accounting for 18.11% of assets. Inventory may have an important impact on financial statements. Therefore, we recognize the recognition and measurement of inventories as key audit matters.
2. Audit response
Our relevant procedures for the recognition and measurement of inventories include:
(1) Understand and evaluate the rationality and effectiveness of the design of key internal control related to inventory confirmation, and test the operation effectiveness of key control procedures;
(2) Check that the recognition and measurement of inventory comply with the accounting standards for business enterprises and the consistency between the previous and subsequent periods in combination with the information obtained from understanding Chacha Food Company Limited(002557) and its environment;
(3) Execute analysis procedure: compare the current period’s inventory book amount with the previous period’s inventory book amount to analyze whether the change of inventory amount is abnormal; Select the main inventory products, compare the fluctuation of purchase prices in each month of the current period, analyze whether the change trend is in line with the sales market trend, and confirm the rationality of inventory cost carry forward;
(4) Select important suppliers and implement letter of confirmation in combination with accounts payable and prepayments;
(5) Perform the cut-off test on the purchase receipt and inventory issue, and check whether the purchase receipt and issue are intertemporal by checking the receipt documents, issue documents, transportation information, sign in records, etc. before and after the balance sheet date; (6) Test the pricing of inventory goods: check whether the pricing method of inventory goods is consistent between the previous and later periods; Check whether the entry method and inventory valuation method of goods are correct; Check whether the issued pricing of inventory goods is correct; Pay attention to the fairness of commodity prices in related party transactions;
(7) Conduct on-site inventory supervision before and after the balance sheet date, and roll back to the quantity and amount on the balance sheet date to confirm whether the quantity is true;
(8) In view of the accuracy of the provision for inventory falling price, we evaluated the design and implementation of internal control related to Chacha Food Company Limited(002557) inventory falling price provision; Obtained and evaluated the management’s provision method and relevant assumptions for inventory falling price reserves, and considered the possible impact of Chacha Food Company Limited(002557) ‘s expected sales plan and other factors on inventory falling price reserves; Check the quantity of inventory and product status in combination with inventory counting and supervision; The inventory turnover days and inventory age are reviewed and analytical procedures are implemented to judge whether there is an inventory with a long stock age, resulting in the risk of inventory impairment.
Obtain the inventory age list of the ending inventory, and conduct analytical review on the inventory with long inventory age in combination with the validity period of the product to analyze whether the inventory falling price reserve is reasonable.
Through the implementation of the above procedures, we found no abnormality in the measurement and confirmation of inventory.
4、 Other information
Chacha Food Company Limited(002557) Management (hereinafter referred to as management) is responsible for other information. Other information includes the information covered in the annual report of Chacha Food Company Limited(002557) 2021, 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 going concern ability of Chacha Food Company Limited(002557) and disclosing matters related to going concern and applying the going concern assumption, unless the management plans to liquidate Chacha Food Company Limited(002557) , terminate the operation or has no other realistic choice.
Chacha Food Company Limited(002557) governance layer (hereinafter referred to as governance layer) is responsible for supervising the financial reporting process of Chacha Food Company Limited(002557) .
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 the audit in order to design appropriate audit procedures, but the purpose is not to express an opinion 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 conclusions on the appropriateness of management’s use of going concern assumptions. 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 Chacha Food Company Limited(002557) going concern ability. If we conclude that there is significant uncertainty, the auditing standards require us to draw the attention of statement 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 result in Chacha Food Company Limited(002557) inability to continue as a going concern.
(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 the entity or business activities in Chacha Food Company Limited(002557) to express an audit opinion on the financial statements. We are responsible for guiding, supervising and implementing the group audit, and take full responsibility for the audit opinions.
Identify and communicate with our internal management on the audit plan and the matters worthy of our attention.
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. 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.
(there is no text on this page, which is the signature and seal page of Chacha Food Company Limited(002557) Rong Cheng Shen Zi [2022] No. 230z1897 report)
Rongcheng certified public accountants China Certified Public Accountant: Ning Yun
(special partnership)
Chinese certified public accountant: Ma Jing
Beijing, China Certified Public Accountant: Chen Kaifeng
Chen Kaifeng
April 11, 2022
1. Consolidated balance sheet prepared by: Chacha Food Company Limited(002557)
Unit: yuan currency: RMB
Project notes December 3, 2021
