Sinomach Precision Industry Co.Ltd(002046) audit report and financial statements (xksbz [2022] No. zg10836)
Sinomach Precision Industry Co.Ltd(002046)
Audit report and financial statements
(from January 1, 2021 to December 31, 2021)
Table of contents page
1、 Audit report 1-5 II. Financial statements
Consolidated balance sheet and parent company balance sheet 1-4 consolidated income statement and parent company income statement 5-6 consolidated cash flow statement and parent company cash flow statement 7-8 consolidated statement of changes in owner’s equity and parent company statement of changes in owner’s equity 9-12 notes to financial statements 1-143
audit report
Xin Hui Shi Bao Zi [2022] No. 10836 Sinomach Precision Industry Co.Ltd(002046) all shareholders:
1、 Audit opinion
We have audited the financial statements of Sinomach Precision Industry Co.Ltd(002046) (hereinafter referred to as Sinomach Precision Industry Co.Ltd(002046) ), 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 Sinomach Precision Industry Co.Ltd(002046) the consolidated and parent company as of December 31, 2021 and the operating results and cash flow of the consolidated and parent company 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 Sinomach Precision Industry Co.Ltd(002046) , 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.
The key audit matters identified in our audit are summarized as follows:
Key audit matters how to deal with them in the audit
(I) for inventory falling price reserves, please refer to the notes to the financial statements “III. important meetings (1) evaluation of management and preparation and supervision of accounting policies and accounting estimates” (XI) accounting policies related to inventory management and inventory falling price reserves and “v. consolidated internal control”;
Item notes to financial statements “(VIII) inventory. (2) Implement the inventory supervision procedures, check the quantity and status of the inventory on December 31, 2021, and review the stock age and turnover of the inventory balance in the consolidated financial statements of Seiko; 6568849 million yuan, and the inventory falling price reserve is (3) evaluate and review whether the management has withdrawn 1268484 million yuan, and whether the method with the book value of goods falling price reserve is in line with the accounting standards for the industry of consolidated financial statements, accounting for 530365 million yuan; 10.76% of total assets. Inventory falling price standard (4) compare the withdrawal of the sales price deducted from the completion provision, which depends on the estimation of the estimated cost and estimated net value when the inventory is realizable. Due to the significant amount of inventory, the variable cash after sales expenses and taxes, and the determination of the net realizable value of inventory, the higher of the net value and book cost; Ask the management to estimate the selling price of the inventory until completion. (5) for the inventory with sales contract or the cost and sales expenses to be incurred during sales, estimate the amount of sales contract or sales and related taxes, review the price of the order, and make no judgment and assumption. Therefore, we identify the inventory price reserve of the inventory falling in the sales contract or sales order as a key audit event. Recheck the recent transaction price, and recheck the market price if there is no recent transaction;
(6) Check the management’s calculation of inventory falling price reserves.
(II) for operating income, please refer to the notes of “III. important meetings” (1) understanding and evaluation of management’s revenue accounting policies and accounting estimates “(XX) recognition of key internal controls related to the fifth) accounting policies and” v. effectiveness of accounting and operation; notes to consolidated financial statements “(40) (2) selecting samples to check sales contracts, and IV) operating income and operating costs. Identify the contract terms and conditions related to the transfer of control right in the contract, and evaluate whether the recognition time point of operating income in the company’s Seiko consolidated financial statements is in line with the enterprise’s total amount of 33278896 million yuan on December 31, 2021. Due to the requirements of income accounting standards; It is one of the key performance indicators of Sinomach Precision Industry Co.Ltd(002046) (3) revenue and I are analyzed in combination with product types, so there is an inherent risk that the company’s management will manipulate whether there is abnormal fluctuation in the confirmed amount of revenue in order to achieve gross profit and judge whether there is abnormal fluctuation in the received specific goals or expectations in the current period. We will review the situation in China;
The audit record of Seiko is the recognition of key revenue in the current year (option 4). Take samples, check invoices, sales contracts and customer confirmation documents, and check the accuracy of relevant revenue recognition;
(5) For the transactions related to the sale of products, select samples and execute letters of confirmation for the balance of accounts receivable and the amount of major sales transactions at the end of the year
Procedures;
(6) For the sales transactions recorded before and after the balance sheet date, select samples and check the delivery note, sales invoice and other supporting documents to evaluate whether the income is recorded in the appropriate accounting period.
4、 Other information
Sinomach Precision Industry Co.Ltd(002046) Management (hereinafter referred to as management) is responsible for other information. Other information includes the information covered in the annual report of Sinomach Precision Industry Co.Ltd(002046) 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.
Unless the management chooses to make a going concern assessment (such as the assumption of going concern or liquidation, which is not applicable), and is responsible for the preparation of the financial statements and the termination of the financial statements.
The management is responsible for supervising the financial reporting process of Sinomach Precision Industry Co.Ltd(002046) .
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:
(I) 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.
(II) 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.
(III) evaluate the appropriateness of accounting policies selected by the management and the rationality of accounting estimates and related disclosures.
(IV) draw a conclusion on the appropriateness of the management’s use of the going concern assumption. 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 Sinomach Precision Industry Co.Ltd(002046) 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 Sinomach Precision Industry Co.Ltd(002046) inability to continue as a going concern.
(V) evaluate the overall presentation (including disclosure), structure and content of the financial statements, and evaluate whether the financial statements fairly reflect relevant transactions and events.
(VI) obtain sufficient and appropriate audit evidence on the financial information of the entity or business activities in Sinomach Precision Industry Co.Ltd(002046) to express an audit opinion on the consolidated financial statements. We are responsible for guiding, supervising and implementing the group audit, and take full responsibility for the audit opinions.
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. China Certified Public Accountants of Lixin Certified Public Accountants (special general partnership):
(project partner)
Chinese certified public accountant in Shanghai, China:
April 11, 2022
Sinomach Precision Industry Co.Ltd(002046)
Consolidated balance sheet
December 31, 2021
(unless otherwise specified, the monetary unit is RMB)
Note V closing balance of assets closing balance of last year
Current assets:
Monetary capital (I) 6072377489672645948835
Provision for settlement
