Elite Color Environmental Resources Science&Technology Co.Ltd(002998)
audit report
Dhsz [2022] 006867
Dahua Certified Public Accountants (special general partnership)
DaHuaCertifiedPublicAccountants（SpecialGeneralPartnership）
Elite Color Environmental Resources Science&Technology Co.Ltd(002998)
Audit report and financial statements
(from January 1, 2021 to December 31, 2021)
Contents page I. audit report 1-7 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 1-79
Dahua Certified Public Accountants (special general partnership) 12 / F, 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] 006867 Elite Color Environmental Resources Science&Technology Co.Ltd(002998) all shareholders:
1、 Audit opinion
We have audited the financial statements of Elite Color Environmental Resources Science&Technology Co.Ltd(002998) (hereinafter referred to as Elite Color Environmental Resources Science&Technology Co.Ltd(002998) 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 Elite Color Environmental Resources Science&Technology Co.Ltd(002998) 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 Elite Color Environmental Resources Science&Technology Co.Ltd(002998) 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. 1. Recognition of income
2. Determination of ending value of inventory
（1） Recognition of income
1. Event description
Elite Color Environmental Resources Science&Technology Co.Ltd(002998) please refer to note IV, (XXIX) and VI, note 32 of the attached financial statements for the accounting policies and book amount information related to the recognition of revenue.
Elite Color Environmental Resources Science&Technology Co.Ltd(002998) the company's operating revenue in 2021 was 1620373300 yuan Elite Color Environmental Resources Science&Technology Co.Ltd(002998) company's revenue mainly comes from the sales revenue of products in China. The revenue is recognized when the product control right is transferred, that is, the customer signs for the product. As revenue is one of the key performance indicators of Elite Color Environmental Resources Science&Technology Co.Ltd(002998) company, there is an inherent risk that the management of Elite Color Environmental Resources Science&Technology Co.Ltd(002998) company (hereinafter referred to as the management) manipulates the time point of revenue recognition in order to achieve specific goals or expectations. Therefore, we recognize the revenue of Elite Color Environmental Resources Science&Technology Co.Ltd(002998) company as a key audit matter.
2. Audit response
Our important audit procedures for the recognition of operating income in the current period include:
(1) Through consulting the sales contract of Elite Color Environmental Resources Science&Technology Co.Ltd(002998) company and interviewing with the management, we learned about the revenue recognition policy of Elite Color Environmental Resources Science&Technology Co.Ltd(002998) company.
(2) Ask the management and management to evaluate the integrity and fraud risk of the management. (3) Understand and test the internal control related to income, and evaluate whether the internal control design is reasonable and effectively implemented.
(4) Analyze the income and gross profit in combination with the product type to judge whether there is abnormal fluctuation in the amount of income in the current period.
(5) Implement the letter confirmation procedure of operating revenue, spot check the relevant documents of revenue recognition, and check the authenticity of the recognized revenue.
(6) For the possible integrity risk, on the basis of increasing the sample of income integrity test, the cut-off test is carried out for the sales revenue recognized before and after the balance sheet date to determine whether the sales revenue is recognized in an accurate period.
According to the audit work performed, we believe that the recognition of income is in line with the accounting policies of Elite Color Environmental Resources Science&Technology Co.Ltd(002998) company.
（2） Determination of ending value of inventory
1. Event description
Elite Color Environmental Resources Science&Technology Co.Ltd(002998) please refer to notes IV, (XIV) and VI and note 9 of the attached financial statements for the accounting policies and book amount information related to the determination of the ending value of inventories.
Elite Color Environmental Resources Science&Technology Co.Ltd(002998) the book balance of inventory at the end of 2021 was RMB 265012900, and the provision for inventory falling price was RMB 1834000. The book value of the inventory at the end of the period is relatively large, and the book value of the inventory accounts for 14.23% of the total assets, which accounts for a high proportion. Therefore, we recognize the ending value of the inventory as a key audit event.
2. Audit response
Our important audit procedures for the determination of the ending value of inventories include:
(1) Understand and evaluate the design and operation effectiveness of management's internal control related to inventory.
(2) Supervise the inventory of Elite Color Environmental Resources Science&Technology Co.Ltd(002998) company at the end of the current period, and check the quantity and condition of inventory.
(3) For the purchase of large amount materials, trace to the relevant purchase contract and purchase invoice, review the correctness of the purchase cost, and spot check the relevant purchase application form, warehousing form and other data.
(4) Check the correspondence between the products in process at the end of the period, the goods in stock and the order and the delivery after the period.
(5) Analyze the rationality of inventory increase and decrease in combination with accounts payable, operating cost and other subjects.
(6) Obtain the calculation table of inventory falling price reserves of Elite Color Environmental Resources Science&Technology Co.Ltd(002998) company, perform inventory impairment test, check whether it is implemented in accordance with relevant accounting policies of Elite Color Environmental Resources Science&Technology Co.Ltd(002998) company, check the changes of the accrued inventory falling price reserves in the current period, and analyze whether the inventory falling price reserves are sufficient. According to the audit work performed, we believe that the determination of the ending value of inventories is in line with the accounting policies of Elite Color Environmental Resources Science&Technology Co.Ltd(002998) company.
4、 Other information
Elite Color Environmental Resources Science&Technology Co.Ltd(002998) 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
Elite Color Environmental Resources Science&Technology Co.Ltd(002998) 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 Elite Color Environmental Resources Science&Technology Co.Ltd(002998) company is responsible for evaluating the continuous operation ability of Elite Color Environmental Resources Science&Technology Co.Ltd(002998) company, disclosing matters related to continuous operation (if applicable), and applying the assumption of continuous operation, unless the management plans to liquidate Elite Color Environmental Resources Science&Technology Co.Ltd(002998) company, terminate operation or has no other realistic choice.
The management is responsible for supervising the financial reporting process of Elite Color Environmental Resources Science&Technology Co.Ltd(002998) 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 Elite Color Environmental Resources Science&Technology Co.Ltd(002998) 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 lead to the inability of Elite Color Environmental Resources Science&Technology Co.Ltd(002998) company 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 Elite Color Environmental Resources Science&Technology Co.Ltd(002998) company 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) Wang Xiang, Beijing, China Certified Public Accountant:
Song bin April 13, 2002 Elite Color Environmental Resources Science&Technology Co.Ltd(002998) 2021
