3 Guangdong Xianglu Tungsten Co.Ltd(002842) 021 annual financial statement audit report
Tian Heng Shen Zi (2022) 00815
Audit report
Tianhengshen Zi (2022) No. 00815 Jsti Group(300284) all shareholders:
1、 Audit opinion
We have audited the attached financial statements of Jsti Group(300284) (hereinafter referred to as " Jsti Group(300284) "), 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 owner's equity and notes to 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 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 Jsti Group(300284) , 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) measurement of expected credit loss of accounts receivable and contract assets
See note III, 11 receivables, note III, 14 contract assets, note V, 4 receivables and note V and 9 contract assets of the financial statements for relevant information disclosure.
1. Item description
As of December 31, 2021, the original value of accounts receivable and contract assets in Jsti Group(300284) consolidated balance sheet was 99580159 million yuan, and bad debt provision was 22385774 million yuan. The management divides the receivables and contract assets into different combinations according to the credit risk characteristics, and calculates the expected credit loss through the actual risk exposure and the expected credit loss rate throughout the duration on the basis of the combination, referring to the historical credit loss experience, combined with the current situation and the prediction of the future economic situation; As stated in financial statements III and 36, the management changed the proportion of bad debt provision in each aging range of bad debt provision in the accounts receivable arising from project contracting business according to the combination of credit risk characteristics - aging combination. As the above matters involve the management's use of significant accounting estimates and management's judgment, we determine the provision of expected credit loss of accounts receivable as a key audit matter. 2. Audit response
For the recognition of the recoverability of accounts receivable and contract assets, our audit procedures mainly include:
(1) Test the key internal controls related to the daily management and evaluation of recoverability of management's accounts receivable and contract assets. (2) For the impairment provision withdrawn in combination, we analyzed the key assumptions used in combination with the historical data of Jsti Group(300284) and the current and future economic conditions, so as to evaluate the rationality of the expected credit loss.
(3) We selected accounts receivable and contract assets with significant amounts to test their recoverability. Including inspection of relevant supporting evidence, such as the owner's reply, subsequent collection, etc.
(4) Check the accuracy of the aging analysis table of accounts receivable and contract assets prepared by the management.
(II) confirmation of survey and design and other technical consultation
See note III, 31 revenue and note V, 45 operating revenue of the financial statements for relevant information disclosure.
1. Item description
Jsti Group(300284) in the consolidated statement of 2021, the operating income is 5119426500 yuan, of which the income from survey and design and other technical consulting business accounts for about 69.94% of the consolidated operating income. For such businesses, the company determines the performance progress of providing services according to the proportion of the actual effective working hours completed by the members of the project team in the total working hours of the project budget according to the input method. Since the total working hours of the project budget depend on the judgment of the management and are directly related to the recognition of operating income, we regard the recognition of performance progress income of survey and design and other technical consulting business as a key audit matter.
For the recognition of performance progress income of survey and design and other technical consulting services, our audit procedures mainly include:
(1) Understand, evaluate and test the internal control related to revenue recognition, including the application of performance progress and revenue recognition process.
(2) Select important contracts, analyze key contract terms and contract amount, and review the accuracy of total labor revenue; At the same time, check the project working hours and the total budgeted working hours, and recalculate the completion percentage to verify the accuracy of income calculation.
(3) Select samples to review the internal and external evidence for the progress confirmation of important projects, including the owner's confirmation form, review and approval documents of relevant units, stage business results, etc., and review whether the project completion percentage matches the actual completion progress.
(4) Send a letter to the owner for confirmation on the project name, contract amount, project implementation progress and project settlement.
(III) impairment of goodwill
See note III, 24 impairment of long-term assets and note V, 21 goodwill of the financial statements for relevant information disclosure.
1. Item description
As of December 31, 2021, the balance of goodwill in Jsti Group(300284) consolidated balance sheet was 6329386 million yuan, and the provision for impairment was 1088407 million yuan. The management shall conduct impairment test on goodwill at least annually. The goodwill is tested for impairment by comparing the recoverable amount of the relevant asset group to which the goodwill is allocated with the book value of the asset group and the goodwill. The predicted recoverable amount involves the prediction of the present value of the future cash flow of the asset group, and major judgments and assumptions need to be made in the prediction. Therefore, we determine the impairment of goodwill as a key audit event.
For goodwill impairment, our audit procedures mainly include:
(1) Test the design, implementation and effectiveness of key internal controls related to evaluation.
(2) Analyze and review the rationality of major estimates and judgments used by the management in predicting the present value of future cash flows in the impairment test, including the management's analysis of impairment signs, the division of asset groups, key indicators such as the growth rate of operating revenue and the rationality of using discount rate; Evaluate management's use of the work of its valuation experts.
(3) Review the disclosure related to goodwill impairment assessment in the financial statements.
4、 Other information
The management is responsible for other information. Other information includes the information covered in 3 Guangdong Xianglu Tungsten Co.Ltd(002842) 021 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 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 Jsti Group(300284) and disclosing the matters related to going concern (if applicable), and applying the going concern assumption, unless the management plans to liquidate Jsti Group(300284) , terminate the operation or has no other realistic choice.
The management is responsible for supervising the financial reporting process of Jsti Group(300284) .
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:
(I) 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.
(II) 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.
(III) evaluate the appropriateness of accounting policies selected by the management and the rationality of accounting estimates and related disclosures.
(IV) draw a conclusion on the appropriateness of the management's use of the going concern assumption. 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 Jsti Group(300284) going concern ability. 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 Jsti Group(300284) unable to continue its business.
(V) evaluate the overall presentation (including disclosure), structure and content of the financial statements, and evaluate whether the financial statements fairly reflect relevant transactions and events.
(VI) obtain sufficient and appropriate audit evidence on the financial information of entities or business activities in Jsti Group(300284) to express audit opinions on the consolidated financial statements. We are responsible for guiding, supervising and implementing the group audit, and take 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.
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.
(there is no text on this page, which is the signature page of Jsti Group(300284) "2021 annual financial statement audit report" (Tianheng Shenzi (2022) No. 00815))
Tianheng Certified Public Accountants (special general partnership) Chinese certified public accountant:
(project partner)
Nanjing, China
Chinese certified public accountant:
April 17, 2022
Consolidated balance sheet
December 31, 2021
Prepared by: Jsti Group(300284) unit: RMB
Asset notes December 31, 2021 December 31, 2020
Current assets:
Monetary capital v. 1363728053199287477356472
Provision for settlement-
Lending funds-
Trading financial assets v. 21188018522710564770969
Derivative financial assets-
Notes receivable v. 313991920111951729553
Accounts receivable v. 445435181
