ENN (Zhoushan) LNG Co., Ltd
audit report
Zxcs No. 2022s00261
Zhongxi Certified Public Accountants (special general partnership)
Address: 11th floor, block a, Xincheng culture building, No. 11, Chongwenmenwai Street, Dongcheng District, Beijing zip code: 100062
Tel: 01067085873
Fax: 01067084147
Email: [email protected].
Beijing Institute of Certified Public Accountants
Business report unified coding reporting system
Unified business reporting code: 11000168202294 Zte Corporation(000063) 8
Audit report of ENN (Zhoushan) LNG Co., Ltd
Report name:
Sue
Report No.: zxcs 2022s00261
Name of auditee: ENN (Zhoushan) LNG Co., Ltd
Name of accounting firm: Zhongxi accounting firm (special general partnership)
Business type: financial statement audit
Report opinion type: unqualified opinion
Report date: March 28, 2022
Filing date: March 25, 2022
Zhang Zenggang (13 Shenzhen Cereals Holdings Co.Ltd(000019) 0355),
Signed by:
Deng Haifu (110001680160)
(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.
Audit report
Zxcs No. 2022s00261 all shareholders of ENN (Zhoushan) LNG Co., Ltd.:
1、 Audit opinion
We have audited the financial statements of ENN (Zhoushan) LNG Co., Ltd. (hereinafter referred to as "ENN Zhoushan"), including the consolidated and parent company's balance sheets as of December 31, 2021 and 2020, 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 for 2021 and 2020.
In our opinion, the attached financial statements are prepared in accordance with the accounting standards for business enterprises in all major aspects, and fairly reflect the consolidated and parent company's financial position as of December 31, 2021 and December 31, 2020, as well as the consolidated and parent company's operating results and cash flow in 2021 and 2020.
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 ENN Zhoushan 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
Key audit matters are the most important matters in the audit of 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
Address: floor 11, block a, Xincheng culture building, No. 11, Chongwenmenwai Street, Beijing
Tel: 01067085873 Fax: 01067084147 postal code: 100062
The operating income of new Austrian Zhoushan in 2021 and 2020 was 1377371600 yuan and 918878400 yuan. See note V and 31 to the financial statements for details. The revenue of ENN Zhoushan mainly includes LNG liquid storage service fee, LNG gas export service fee, natural gas pipeline transportation service fee and other charges. As the operating revenue is one of the key performance indicators of ENN Zhoushan, there is an inherent risk that the management operates the revenue recognition time point in order to achieve specific objectives, so we identify the revenue recognition of ENN Zhoushan as a key audit matter.
2. Audit response
For this key audit matter, our audit procedures mainly include:
(1) We understand and evaluate the design of internal control in the sales process by the management of ENN Zhoushan, and test the effectiveness of the implementation of key controls.
(2) Through sampling inspection of sales contracts and interviews with management, we identify key contract terms and performance obligations related to revenue recognition and verify them, so as to judge whether the company's revenue recognition policies meet the requirements of accounting standards for business enterprises and have been consistently implemented;
(3) We compared the gross profit margin of the sales of ENN Zhoushan with the gross profit margin of the same period of last year and the gross profit margin of the same industry, and analyzed whether the change trend of gross profit margin is normal; Compare the fluctuations of various main business income in each month of the current period, analyze whether the change trend is normal, whether it is in line with the seasonal and periodic business law of the auditee, and find out the causes of abnormal phenomena and major fluctuations;
(4) Select samples according to the income statement and check the supporting documents related to the recognition of operating income, including contracts, orders, sales invoices, statements, annual planned natural gas receiving volume of customers (users), actual natural gas receiving vouchers, etc;
(5) Select some customers in the revenue of the reporting period for correspondence or customer visit to check the authenticity of the revenue; (6) Check the timeliness and completeness of cost carry forward related to revenue recognition;
(7) For the sales revenue recognized before and after the balance sheet date, check the supporting documents such as the customer's receipt, and perform the cut-off test to evaluate whether the sales revenue is recognized in an appropriate period.
(II) fixed assets and construction in progress
Address: floor 11, block a, Xincheng culture building, No. 11, Chongwenmenwai Street, Beijing
Tel: 01067085873 Fax: 01067084147 postal code: 100062
1. Item description
The net value of fixed assets of Xinao Zhoushan on December 31, 2021 and December 31, 2020 were 6561128500 yuan and 5660205600 yuan respectively, and the projects under construction were 17078000 yuan and 9017805 yuan respectively. See note V, 9-10 to the financial statements for details.
During the reporting period, the completion of Zhoushan liquefied natural gas (LNG) receiving and filling station phase II project and connecting pipeline project was converted into fixed assets, with a huge amount and the risk of inaccurate entry value and time point of conversion. Therefore, we identified the fixed assets and construction in progress of ENN Zhoushan as key audit matters.
2. Audit response
For this key audit matter, our audit procedures mainly include:
(1) We understand and evaluate the internal control design of fixed assets and engineering project management by the management of new Austrian Zhoushan, and test the effectiveness of the implementation of key controls;
(2) Check the project initiation, bidding, construction plan, supervision data, agreement and other documents, analyze the coverage of the paid project funds, pay attention to the project materials or project construction corresponding to the corresponding funds in combination with the on-site supervision and survey procedures, and verify the authenticity and accuracy of the project;
(3) Analyze the unit project cost, pay attention to whether it is reasonable, whether there are significant differences with peer companies, and investigate the reasons; If there is a related party transaction, check whether it is properly authorized and whether the price is fair;
(4) Check the construction progress balance and project details of each project according to the project settlement sheet; For major projects, conduct on-site visits to their constructors or equipment suppliers;
(5) For the construction in progress contracted by the auditee, check whether the construction in progress is increased according to the reasonably estimated progress of the contracted project and the progress payment settled in the contract, or when the equipment is delivered to the construction contractor for construction and installation;
(6) For the capitalization of borrowing costs, combined with the audit of long-term and short-term loans, check whether the conditions for capitalization of borrowing costs are met, whether the capitalization calculation method is correct, whether the capitalization period is correct, whether the amount is accurate and whether the accounting treatment is correct;
(7) For the capitalization of project management fee, combined with the audit of management fee and other subjects, check whether the capitalization amount of project management fee is reasonable and whether the accounting treatment is correct;
Address: floor 11, block a, Xincheng culture building, No. 11, Chongwenmenwai Street, Beijing
Tel: 01067085873 Fax: 01067084147 postal code: 100062
(8) For the fixed assets transferred in from the construction in progress, combined with the inventory procedures of fixed assets, check whether the completion final accounts, acceptance and handover reports are correct and whether they are consistent with the records related to the construction in progress; For the fixed assets that are already in use or have reached the expected serviceable state but have not yet handled the completion settlement, check whether they have been temporarily estimated and recorded in the account, and calculate and withdraw depreciation / depletion according to the regulations; Check whether the division of capital expenditure and income expenditure is appropriate; Whether the final settlement of completion is adjusted in time.
4、 Other information
The management of ENN Zhoushan company is responsible for other information. Other information includes the information covered in the 2021 and 2020 annual reports, 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 of ENN Zhoushan 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 sustainable operation ability of ENN Zhoushan, disclosing matters related to sustainable operation (if applicable), and applying the assumption of sustainable operation, unless the management plans to liquidate ENN Zhoushan, terminate operation or has no other realistic choice.
The governance layer is responsible for supervising the financial reporting process of ENN Zhoushan.
6、 Responsibilities of certified public accountants for the audit of financial statements
Address: floor 11, block a, Xincheng culture building, No. 11, Chongwenmenwai Street, Beijing
Tel: 01067085873 Fax: 01067084147 postal code: 100062
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 consolidated 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 perform the following work: (1) identify and evaluate the risk 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 an opinion 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 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 ENN Zhoushan. 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 consolidated 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 non sustainable operation of ENN Zhoushan. (5) Evaluate the overall presentation of the financial statements
