Zhejiang Founder Motor Co.Ltd(002196)
Year of 2021
audit report
Zhitong Certified Public Accountants (special general partnership)
Beijing Institute of Certified Public Accountants
Business report unified coding reporting system
Unified code of business reporting: 110101562022487008040
Zhejiang Founder Motor Co.Ltd(002196) name of annual report of 2021:
audit report
Report No.: ztsz (2022) No. 332a010073
Name of audited (inspected) unit: Zhejiang Founder Motor Co.Ltd(002196)
Name of accounting firm: Zhitong accounting firm (special general partnership)
Business type: financial statement audit
Report opinion type: unqualified opinion
Report date: April 14, 2022
Filing date: April 14, 2022
Goofy (110101560249),
Signed by:
Dai Simin (110101561049)
(information can be queried by scanning QR code or logging into the official website of Beijing injection Association)
Note: this filing information only proves that the report has been filed with the Beijing Institute of certified public accountants, and does not mean that the Beijing Institute of Certified Public Accountants makes any form of guarantee for the content of the report in any sense.
catalogue
Audit report 1-6
Consolidated and company balance sheet 1-2
Consolidated and corporate income statement 3
Consolidated and company cash flow statement 4
Consolidated and statement of changes in shareholders’ equity 5-6
Notes to financial statements 7-110
Zhitong Certified Public Accountants (special general partnership) 22 Jianguomenwai street, Chaoyang District, Beijing, China
5th floor, set square, 100004
Tel. + 86 1085665588
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audit report
Zhi Tong Shen Zi (2022) No. 332a010073 Zhejiang Founder Motor Co.Ltd(002196) all shareholders:
1、 Audit opinion
We have audited the financial statements of Zhejiang Founder Motor Co.Ltd(002196) (hereinafter referred to as Zhejiang Founder Motor Co.Ltd(002196) company), including the consolidated and company’s balance sheet as of December 31, 2021, the consolidated and company’s income statement, consolidated and company’s cash flow statement, consolidated and 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 financial position of Zhejiang Founder Motor Co.Ltd(002196) company as of December 31, 2021 and the consolidated and operating results and cash flow of the 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 Zhejiang Founder Motor Co.Ltd(002196) 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.
(I) provision for bad debts of accounts receivable
For details of relevant information disclosure, see notes III, 10, financial instruments, notes V, 4, notes III, 33, major accounting judgments and estimates and notes V, 50, credit impairment losses of the financial statements.
1. Item description
As of December 31, 2021, the balance of accounts receivable of Zhejiang Founder Motor Co.Ltd(002196) company was 593723600 yuan, the balance of bad debt provision was 43152700 yuan, and the book value was 550570900 yuan.
Zhejiang Founder Motor Co.Ltd(002196) the management of the company (hereinafter referred to as the management) measures its loss reserves according to the expected credit loss amount equivalent to the whole duration based on the credit risk characteristics of various accounts receivable and the combination of individual accounts receivable or accounts receivable. For accounts receivable whose expected credit loss is measured on a single basis, the management comprehensively considers the reasonable and reliable information about past events, current situation and future economic situation forecast, estimates the expected cash flow received, and determines the bad debt provision to be withdrawn accordingly; For the accounts receivable whose expected credit loss is measured on the basis of combination, the management divides the combination based on the product customer group, and prepares the comparison table of accounts receivable aging and default loss rate with reference to the historical credit loss data, so as to determine the bad debt reserves to be withdrawn.
As the amount of accounts receivable is significant and the determination of expected credit loss involves the judgment and estimation of the management, we determine the provision for bad debts of accounts receivable as a key audit event.
2. Audit response
Our main audit procedures for the provision of bad debt reserves for accounts receivable include:
(1) Understand and evaluate the rationality of the design of internal control related to the expected credit loss of accounts receivable. (2) Combined with the industry characteristics and credit risk characteristics, evaluate whether the expected credit loss model determined by the management conforms to the provisions of the accounting standards for business enterprises and industry practices.
(3) For accounts receivable with single provision for bad debts, review the basis for the management to evaluate the credit risk and the amount of expected credit loss, including customer operation, market environment, historical repayment and other credit risk related factors.
(4) For accounts receivable for which bad debt reserves are withdrawn according to the combination of credit risk characteristics, check the key information such as aging range, credit record and historical loss, and evaluate whether the combination division and the determination of expected credit loss rate are within the acceptable range.
(5) Discuss the recoverability of important accounts receivable with the management, implement the letter confirmation procedure and check the collection after the period, and evaluate the rationality of the management’s provision for bad debts of accounts receivable.
(II) goodwill impairment test
For details of relevant information disclosure, please refer to notes III and 20, asset impairment, notes III and 33, significant accounting judgment and estimation, notes V and 18, goodwill and notes V and 51, asset impairment loss.
1. Item description
As of December 31, 2021, the original book value of the goodwill of Zhejiang Founder Motor Co.Ltd(002196) company was 1112124300 yuan, the provision for impairment was 8648025 million yuan, and the book value was 2473218 million yuan.
Zhejiang Founder Motor Co.Ltd(002196) the management of the company compares the relevant asset group containing goodwill with its recoverable amount to determine whether impairment is required. The recoverable amount is calculated and determined according to the present value of estimated future cash flow. The key assumptions used in the impairment test include: revenue growth rate in the forecast period, revenue growth rate in the sustainable forecast period, gross profit margin, expense rate and discount rate.
As the amount of goodwill is significant, the goodwill impairment test process is complex and involves significant management judgment, we determine the goodwill impairment test as a key audit event.
2. Audit response
Our main audit procedures for goodwill impairment test include:
(1) Understand and evaluate the design effectiveness of Zhejiang Founder Motor Co.Ltd(002196) company’s internal control over goodwill impairment assessment. (2) Discuss with the management, understand and analyze the most sensitive assumptions of the impairment test results, analyze and check the appropriateness of the assumptions adopted by the management and whether the relevant disclosures are appropriate.
(3) Understand the work of external experts, evaluate the competence, professional quality and objectivity of external valuation experts appointed by Zhejiang Founder Motor Co.Ltd(002196) company, and whether the valuation results are sufficient and appropriate as audit evidence.
(4) Using the work of Certified Public Accountants’ valuation experts and referring to the historical financial data and market trends of relevant asset groups or asset group combinations, reviewed the basic data on which the management impairment test is based, and evaluated the rationality of the calculation methods, key assumptions and parameters (such as discount rate) used in the management impairment test; It also evaluates the competence, professional quality and independence of Certified Public Accountants’ valuation experts.
(5) Check whether the disclosure related to goodwill impairment in the financial statements is sufficient and appropriate.
4、 Other information
Zhejiang Founder Motor Co.Ltd(002196) the management of the company is responsible for other information. Other information includes the information covered in the 2021 annual report of Zhejiang Founder Motor Co.Ltd(002196) company, 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
Zhejiang Founder Motor Co.Ltd(002196) 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 is responsible for evaluating the going concern ability of Zhejiang Founder Motor Co.Ltd(002196) company, disclosing matters related to going concern (if applicable), and applying the going concern assumption, unless the management plans to liquidate Zhejiang Founder Motor Co.Ltd(002196) company, terminate operation or have no other realistic choice.
The management is responsible for supervising the financial reporting process of Zhejiang Founder Motor Co.Ltd(002196) 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 to design appropriate audit procedures.
(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 the going concern ability of Zhejiang Founder Motor Co.Ltd(002196) company. If we conclude that there is significant uncertainty, the audit standards require us to include in the audit report
