Report
REPORT Shandong Denghai Seeds Co.Ltd(002041)
Audit report
ZTY [2022] SZ No. 90180
April 17, 2002
Zhongtianyun Certified Public Accountants (special general partnership)
JONTEN CERTIFIED PUBLIC ACCOUNTANTS LLP
Zhongtianyun Certified Public Accountants (special general partnership) jonten CPAs LLP
Report
R E P O R T
catalogue
1、 Audit report
2、 Annex to the report
1. Balance sheet
2. Income statement
3. Cash flow statement
4. Statement of changes in shareholders’ equity
5. Notes to financial statements
6. Copy of business license of the firm
7. Copy of practice certificate of the firm
8. Copy of signed CPA certificate
Auditor: zhongtianyun Certified Public Accountants (special general partnership)
Address: No. 9, Chegongzhuang street, Xicheng District, Beijing
Tel: 01088395676
Fax: 01088395200
Zhongtianyun Certified Public Accountants (special general partnership) jonten CPAs LLP
audit report
ZTY [2022] SZ No. 90180 Shandong Denghai Seeds Co.Ltd(002041) all shareholders:
1、 Audit opinion
We have audited the financial statements of Shandong Denghai Seeds Co.Ltd(002041) (hereinafter referred to as Shandong Denghai Seeds Co.Ltd(002041) 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 financial statements in 2021.
In our opinion, the attached financial statements are prepared in accordance with the accounting standards for business enterprises in all material aspects, and fairly reflect the consolidated and parent company’s financial position of Shandong Denghai Seeds Co.Ltd(002041) company as of December 31, 2021, as well as the consolidated and parent company’s 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 Shandong Denghai Seeds Co.Ltd(002041) 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) revenue recognition
1. Item description
As stated in note III (28) and note V (30) of the financial statements, Shandong Denghai Seeds Co.Ltd(002041) company’s sales revenue mainly comes from corn seeds, wheat seeds and vegetable seeds. The operating income in the consolidated financial statements of the current period was 110727 million yuan, an increase of 22.20% over the same period of the previous year. Since operating revenue is one of the key performance indicators of Shandong Denghai Seeds Co.Ltd(002041) company, revenue recognition has a significant impact on the financial statements, so we determine revenue recognition as a key audit event.
2. Audit response
Our main audit procedures for revenue recognition are as follows:
(1) Understand and test the rationality of the design and effectiveness of the operation of key internal controls related to revenue recognition;
Zhongtianyun Certified Public Accountants (special general partnership) jonten CPAs LLP
(2) Understand the company’s revenue recognition policies, and evaluate whether the company’s revenue recognition policies comply with the relevant provisions of the accounting standards for business enterprises in combination with the sales policies, sales contracts, revenue recognition supporting documents, etc;
(3) Take the sampling method to check the sales contract or order, delivery order and bank flow for the sales revenue recorded this year, and verify the authenticity of revenue recognition;
(4) Combined with accounts receivable and contract liability letters, the current sales volume of main customers is confirmed by letter in the form of sampling;
(5) According to the company’s sales policy, the actual return proportion of the latest sales quarter and the market situation of the current year, evaluate the rationality of the company’s sales rebate and the expected return proportion, and test the accuracy of the withdrawal;
(6) Conduct a cut-off test on the income, pay attention to whether there is a significant cross period, and check the post period sales to evaluate whether the income is recorded in the appropriate accounting period;
(7) Implement analytical procedures for revenue and cost, and judge the rationality of changes in sales revenue and gross profit margin.
(II) inventory falling price reserves
1. Item description
As stated in note III (XI) and note V (VI) of the financial statements, as of December 31, 2021, Shandong Denghai Seeds Co.Ltd(002041) company’s inventory book balance was 569071800 yuan, inventory falling price reserve balance was 70707300 yuan, book value was 498364500 yuan, and the book value of ending inventory accounted for 11.84% of total assets. Except for a small amount of seed coating agent and packaging materials, the rest of the ending inventory are crop seeds. Due to the large amount of inventory, the inventory impairment test requires the management to make significant estimates and judgments on future industry changes, market demand and market price. The provision for inventory falling price reserves is important to the financial statements. We determine the inventory falling price reserves as key audit matters.
2. Audit response
Our main audit procedures for inventory falling price reserves are as follows:
(1) Understand, evaluate and test the rationality of internal control design and effectiveness of operation related to inventory falling price reserves; (2) Implement the supervision and audit procedures for the inventory, and check the quantity and status of the company’s inventory at the end of the year, so as to evaluate the adequacy of the provision for inventory falling price;
(3) Obtain and evaluate the management’s provision method and relevant assumptions for inventory falling price reserves, and consider the possible impact of expected sales plan and other factors on inventory falling price reserves;
(4) Obtain the year-end inventory age list of the company’s inventory, and carry out analytical review on the inventory with long inventory age in combination with the sales status of products in recent years to analyze whether the inventory falling price reserve is reasonable;
(5) Obtain the calculation table of inventory falling price reserves, and recheck the net realizable value of inventory and the amount of inventory impairment provision determined by the company’s management;
(6) Check the changes of inventory falling price reserves accrued in previous years in this year, analyze and evaluate the rationality of the changes of jonten CPAs LLP of Tianyun Certified Public Accountants (special general partnership) in inventory falling price reserves.
4、 Other information
Shandong Denghai Seeds Co.Ltd(002041) the management of the company (hereinafter referred to as the management) is responsible for other information. Other information includes the information covered in the 2021 annual report of Shandong Denghai Seeds Co.Ltd(002041) 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 Shandong Denghai Seeds Co.Ltd(002041) company, disclosing matters related to going concern (if applicable), and applying the going concern assumption, unless the management plans to liquidate Shandong Denghai Seeds Co.Ltd(002041) company, terminate operation or have no other realistic choice.
The management is responsible for supervising the financial reporting process of Shandong Denghai Seeds Co.Ltd(002041) 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. The risk of fraud, collusion or failure to control may be higher than that caused by the discovery of material misstatement or fraud.
(2) Understand the internal control related to audit to design appropriate audit procedures.
Zhongtianyun Certified Public Accountants (special general partnership) jonten CPAs LLP
(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 Shandong Denghai Seeds Co.Ltd(002041) 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 lead to the inability of Shandong Denghai Seeds Co.Ltd(002041) 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 Shandong Denghai Seeds Co.Ltd(002041) company to express audit opinion on the financial statements. We are responsible for guiding, supervising and executing the group audit, and assume 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.
Zhongtianyun Certified Public Accountants (special general partnership) Chinese certified public accountant:
(project partner)
Chinese certified public accountant:
Beijing, China April 17, 2002
Shandong Denghai Seeds Co.Ltd(002041)
Notes to financial statements of 2021
(unless otherwise specified, the amount in this note is in RMB)
1、 Basic information of the company
(I) Company Profile
Shandong Denghai Seeds Co.Ltd(002041) (hereinafter referred to as the company or the company) was wholly changed and established by Laizhou Shandong Denghai Seeds Co.Ltd(002041) (Group) Co., Ltd. Laizhou Shandong Denghai Seeds Co.Ltd(002041) (Group) Co., Ltd. was formerly Laizhou Shandong Denghai Seeds Co.Ltd(002041) Co., Ltd.
Laizhou Shandong Denghai Seeds Co.Ltd(002041) Co., Ltd. was established on July 15, 1998 with the approval of Laizhou Structural Reform Commission “laiti gaicai Zi (1998) No. 55”. Laizhou Administration for Industry and Commerce issued the business license of enterprise legal person on July 16, 1998, with a registered capital of 10.277 million yuan.
On March 19, 1999, Laizhou Shandong Denghai Seeds Co.Ltd(002041) Co., Ltd. was restructured into Laizhou Shandong Denghai Seeds Co.Ltd(002041) (Group) Co., Ltd. with the approval of Laizhou Structural Reform Commission’s “Lai Ti Gai Cai Zi (1999) No. 5” document. After the change, the registered capital was 30 million yuan, and the registration was changed at Laizhou Administration for Industry and Commerce on March 20, 1999.
The establishment of Shandong Denghai Seeds Co.Ltd(002041) , approved by the Shandong provincial economic system reform office in the “ltgh Zi [2000] No. 34” document on November 27, 2000, was approved and registered by the Shandong Provincial Administration for Industry and commerce according to law on December 8, 2000, and the registration number of the business license of the enterprise legal person is 3700001
