Welle Environmental Group Co.Ltd(300190) : 2021 annual audit report ShineWing certified public accountants North Office, Chaoyang Gate North, Dongcheng District, Beijing Tel: + 86 (010) 65542288 Street telephone: + 86 (010) 65542288 9 / F, building a, Fuhua building
ShineWing 9/F, Block A, Fu Hua Mansion,
certified public No.8, Chaoyangmen Beidajie,
Dongcheng District, Beijing, fax:
+86(01065547190 accountants 100027, P.R.China facsimile: +86(01065547190
Welle Environmental Group Co.Ltd(300190)
Year 2021
audit report
Index page number
Audit report 1-4
Company financial report
– consolidated balance sheet 5-6
– balance sheet of parent company 7-8
– consolidated income statement 9
– income statement of the parent company 10
– consolidated cash flow statement 11
– cash flow statement of the parent company 12
– Consolidated Statement of changes in shareholders’ equity 13-14
– statement of changes in shareholders’ equity of the parent company 15-16
– Notes to financial statements 17-136
audit report
Xyzh / 2022shaa10105 Welle Environmental Group Co.Ltd(300190) all shareholders:
1、 Audit opinion
We have audited the financial statements of Welle Environmental Group Co.Ltd(300190) (hereinafter referred to as Welle Environmental Group Co.Ltd(300190) 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 Welle Environmental Group Co.Ltd(300190) 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 Welle Environmental Group Co.Ltd(300190) 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.
Countermeasures in key audit matters
1. Recognition of project income
Welle Environmental Group Co.Ltd(300190) company’s environmental protection project in 2021, the main audit procedures we implemented are as follows:
The revenue is 1771296700 yuan, which is one of the important performance indicators — testing the design and implementation of key internal controls related to the revenue cycle and evaluating internal standards. The effectiveness of environmental protection project income to be controlled according to the income standard; It is required to confirm according to the progress of contract performance within a certain period – consult important contracts, understand important agreements on the transfer of control right of contract performance obligations, and recognize the realization of revenue. Identify contract performance obligations and determine the rationality of revenue recognition methods; Determining and apportioning the transaction price and determining the progress of contract performance — analyzing the total cost of completed projects and the total cost of estimated projects, and analyzing the complexity, all involve the judgment and estimation of the management. Therefore, the gross profit rate of each phase of the nuclear environmental protection project contract is listed, and the evaluation of the management on the project is a key audit matter. Experience and ability of accounting estimation of performance progress, and sample to review the accuracy of calculation;
–Spot check the construction site by sampling, discuss the cost input of the project with the project management department, and compare it with the book records;
2. Provision for bad debts of accounts receivable
As of December 31, 2021, Welle Environmental Group Co.Ltd(300190) our main audit procedures are as follows:
The book balance of accounts receivable of the company is – understand the internal control process related to accounts receivable of Welle Environmental Group Co.Ltd(300190) company, test the key control of 20658377 million yuan, and the implementation effectiveness of the book balance of bad debt reserves; It is 297485400 yuan, with a high book value.
If — evaluate the rationality of accounting policy for bad debt provision adopted by Welle Environmental Group Co.Ltd(300190) company, and review the process of bad debt provision of accounts receivable if accounts receivable cannot be recovered on schedule or cannot be recovered; Bad debt has a great impact on the financial statements and is bad — analyze and compare the provision for bad debt loss of accounts receivable of Welle Environmental Group Co.Ltd(300190) company in this year and in the past, involving the judgment and estimation of the management, and judge the rationality of the provision policy for bad debt;
Therefore, it is listed as a key audit event– Discuss the possible recovery risks of accounts receivable with the management in combination with the reply of accounts receivable and the collection after the period.
3. Impairment of goodwill
As of December 31, 2021, Welle Environmental Group Co.Ltd(300190) our main audit procedures are as follows:
Total goodwill formed during previous mergers and acquisitions of the company — understand the processes and controls related to goodwill impairment assessment;
10513967 million yuan, book value of goodwill impairment provision – evaluate the accuracy and relevance of the data provided by the management to external experts; The balance is 781817 million yuan. The amount of goodwill is significant, — evaluate the rationality of the valuation method of goodwill impairment test and the division of asset groups; Moreover, the impairment of goodwill involves the judgment of the management, so it is listed – to evaluate the appropriateness of the key assumptions in the valuation model adopted by the management and the key audit matters cited. Rationality of number;
–Check the basic data of the estimated recoverable amount of the asset group (the present value of the estimated future cash flow) with the historical data and other supporting evidence, and consider the rationality– Based on our understanding of the facts and circumstances, evaluate the rationality of the significant estimates and judgments used by the management in estimating the recoverable amount (estimated present value of future cash flow) in the impairment test.
–With the help of experts, review the rationality of the value evaluation method of the asset group related to goodwill and the rationality of the value results of the external experts employed by the management.
4、 Other information
The management of Welle Environmental Group Co.Ltd(300190) company (hereinafter referred to as the management) is responsible for other information. Other information includes the information covered in the 2021 annual report of Welle Environmental Group Co.Ltd(300190) 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
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 Welle Environmental Group Co.Ltd(300190) company, disclosing matters related to going concern (if applicable), and applying the going concern assumption, unless the management plans to liquidate Welle Environmental Group Co.Ltd(300190) company, terminate operation or have no other realistic choice.
The management is responsible for supervising the financial reporting process of Welle Environmental Group Co.Ltd(300190) 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 sustainable operation ability of Welle Environmental Group Co.Ltd(300190) company. 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 cause Welle Environmental Group Co.Ltd(300190) company to be unable 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) For entities in Welle Environmental Group Co.Ltd(300190) company
