Fullink Technology Co.Ltd(301067)
Consolidated audit report for 2021
Anti counterfeiting No.: 0755202204013662763 Tianjian Certified Public Accountants (special general partnership) signed report No.: tianjianshen [2022] No. 7-183
Client: Fullink Technology Co.Ltd(301067)
Name of auditee: Fullink Technology Co.Ltd(301067) wechat scan to query the authenticity location of auditee: Shenzhen
Firm name: Tianjian Certified Public Accountants (special general partnership)
Report type: financial statement audit (unqualified opinion)
Report date: April 18, 2022
Filing date: April 18, 2022
Signature: Certified Public Accountant: Wang Zhen, Li Jianping
Fullink Technology Co.Ltd(301067)
2021 annual audit report
Firm name: Tianjian Certified Public Accountants (special general partnership)
Tel: 057189722900
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E-mail: [email protected].
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Anti counterfeiting inquiry telephone number: 075583515412
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catalogue
1、 Audit report Page 1-6 II. Financial statements Page 7-14
(I) consolidated balance sheet Page 7
(II) balance sheet of parent company Page 8
(III) consolidated income statement Page 9
(IV) profit statement of the parent company Page 10
(V) consolidated cash flow statement Page 11
(VI) cash flow statement of the parent company Page 12
(VII) consolidated statement of changes in owner’s equity Page 13
(VIII) statement of changes in owner’s equity of the parent company Page 14
3、 Notes to the financial statements Page 15-77
Audit report
TJS [2022] No. 7-183
Fullink Technology Co.Ltd(301067) all shareholders:
1、 Audit opinion
We have audited the financial statements of Fullink Technology Co.Ltd(301067) (hereinafter referred to as Fullink Technology Co.Ltd(301067) 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 owner’s equity and notes to relevant 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 Fullink Technology Co.Ltd(301067) company as of December 31, 2021, as well as 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 Fullink Technology Co.Ltd(301067) 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 do not
Express separate opinions on these matters.
（1） Revenue recognition
1. Event description
See note III (XIX) and note V (II) 1 of the financial statements for relevant information disclosure.
Fullink Technology Co.Ltd(301067) company’s operating income mainly comes from signal conversion expansion products, molds, precision structural parts and other products. In 2021, Fullink Technology Co.Ltd(301067) company’s operating revenue was 56929234080 yuan, including 47740658431 yuan of operating revenue from signal conversion products business, accounting for 83.86% of operating revenue; The operating income of mold and precision structural parts business was 8834765359 yuan, accounting for 15.52% of the operating income.
Recognition method of domestic sales revenue: Fullink Technology Co.Ltd(301067) company has delivered the products to the customer according to the contract, and the revenue is recognized in the month when the customer confirms that the commodity quantity and settlement amount are correct. Recognition method of export revenue: Fullink Technology Co.Ltd(301067) company shall recognize the revenue on the date stated in the bill of lading or customs declaration when it has declared the products according to the contract and obtained the bill of lading or customs declaration (if the bill of lading cannot be obtained in the warehouse designated by the customer).
Since operating revenue is one of the key performance indicators of Fullink Technology Co.Ltd(301067) company, there may be inherent risks that the management of Fullink Technology Co.Ltd(301067) company (hereinafter referred to as the management) may achieve specific goals or expectations through inappropriate revenue recognition. At the same time, revenue recognition involves significant judgment of the management. Therefore, we determine revenue recognition as a key audit matter.
2. Audit response
For revenue recognition, our audit procedures mainly include:
(1) Understand the key internal controls related to revenue recognition, evaluate the design of these controls, determine whether they are implemented, and test the operation effectiveness of relevant internal controls;
(2) Check the sales contract, understand the main contract terms or conditions, and evaluate whether the revenue recognition method is appropriate; (3) Implement substantive analysis procedures for operating revenue and gross profit margin on a monthly basis, products, customers, etc., identify whether there are significant or abnormal fluctuations, and find out the causes of fluctuations;
(4) For domestic sales revenue, check the supporting documents related to revenue recognition by sampling, including sales contract, order, sales invoice, delivery document, transportation document, customer receipt or statement, etc; For export revenue, obtain E-port Information and check with book records, and check relevant sales contracts, orders, export declaration forms, sales invoices, freight bills of lading and other supporting documents by sampling;
(5) Combined with accounts receivable correspondence, the sales amount is confirmed to major customers by sampling;
(6) A cut-off test is conducted on the operating income recognized before and after the balance sheet date to evaluate whether the operating income is
Confirmation in due course;
(7) Obtain the sales return records after the balance sheet date and check whether there is any situation that does not meet the conditions for revenue recognition on the balance sheet date;
(8) Check whether the information related to operating income has been properly presented in the financial statements.
（2） Net realizable value of inventories
1. Event description
See note III (IX) and note V (I) 8 of the financial statements for relevant information disclosure.
As of December 31, 2021, the book balance of inventories of Fullink Technology Co.Ltd(301067) company is RMB
12538319019 yuan, the falling price reserve is 125838637 yuan, and the book value is 12480382 yuan.
On the balance sheet date, inventories are measured at the lower of cost and net realizable value, and inventory falling price reserves are withdrawn according to the difference between the cost of a single inventory and the net realizable value. On the basis of considering the purpose of holding inventory, the management determines the estimated selling price according to the historical selling price, actual selling price, contract selling price, market selling price of the same or similar products, future market trend, etc., and determines the net realizable value of inventory according to the estimated selling price minus the estimated cost to be incurred at the time of completion, estimated selling expenses and relevant taxes.
Since the amount of inventory is significant and the determination of net realizable value of inventory involves significant management judgment, we determine the net realizable value of inventory as a key audit event.
2. Audit response
For the net realizable value of inventories, our audit procedures mainly include:
(1) Understand the key internal controls related to the net realizable value of inventories, evaluate the design of these controls and ensure
Determine whether it has been implemented and test the operation effectiveness of relevant internal controls;
(2) Review the management’s forecast of net realizable value of inventories and actual operating results in previous years, and evaluate the management
The accuracy of management’s past forecasts;
(3) Review the management’s forecast of the estimated selling price of inventory by sampling, and compare the estimated selling price with historical data, future situation, market information, etc;
(4) Evaluate the management’s estimate of the costs, selling expenses and relevant taxes to be incurred from the completion of the inventory
Rationality of;
(5) Test whether the management’s calculation of the net realizable value of inventory is accurate;
(6) Combined with inventory supervision, check whether there are long stock age, old model, decline in output, fluctuation of production cost or selling price, changes in technology or market demand in the ending inventory, and evaluate whether the management has reasonably estimated the net realizable value;
(7) Check whether the information related to the net realizable value of inventories has been properly presented in the financial statements.
4、 Other information
The management is responsible for other information. Other information includes the information covered in the 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 sustainable operation ability of Fullink Technology Co.Ltd(301067) company, disclosing matters related to sustainable operation (if applicable), and applying the assumption of sustainable operation, unless liquidation is planned, operation is terminated or there is no other realistic choice.
Fullink Technology Co.Ltd(301067) corporate governance (hereinafter referred to as governance) is responsible for supervising the financial reporting process of Fullink Technology Co.Ltd(301067) 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 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 Fullink Technology Co.Ltd(301067) 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 Fullink Technology Co.Ltd(301067) 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） Obtain sufficient and appropriate audit evidence for the financial information of entities or business activities in Fullink Technology Co.Ltd(301067) . 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 (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
