Suya Jincheng Certified Public Accountants (puttong partnership) suyashen [2022] No. 616
Audit report
Oriental Energy Co.Ltd(002221) all shareholders:
1、 Audit opinion
We have audited the financial statements of Oriental Energy Co.Ltd(002221) (hereinafter referred to as Oriental Energy Co.Ltd(002221) company), including the consolidated balance sheet and balance sheet as of December 31, 2021, the consolidated income statement and income statement, consolidated cash flow statement and cash flow statement, consolidated statement of changes in owner's equity and 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 provisions of the accounting standards for business enterprises in all material aspects and fairly reflect the financial position of Oriental Energy Co.Ltd(002221) company as of December 31, 2021 and the operating results and cash flow of 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. According to the code of professional ethics for Chinese certified public accountants, we are independent of Oriental Energy Co.Ltd(002221) 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.
1. Revenue recognition
Please refer to the accounting policies described in note 26 of "important accounting policies and accounting estimates" in note 3 to the financial statements and note 46 of "notes to main items of consolidated financial statements" in note 5.
Key audit matters how to deal with them in the audit
Our main audit procedures for revenue recognition include: understanding and evaluating the effectiveness of the management's internal control design related to revenue recognition, and testing the effectiveness of its key control operation.
Select samples to check the sales contract, identify the performance obligations contained in the contract, confirm and evaluate the performance time point of the performance obligations, identify the contract terms and conditions related to the transfer of commodity control, and evaluate whether the revenue recognition policies of different businesses comply with the main business objectives of Oriental Energy Co.Ltd(002221) company Butane complies with the accounting standards for business enterprises.
Sales and the production and sales of propylene and polypropylene are divided into business types or product types. There are both wholesale business, retail business and bank transfer analysis procedures for the income and gross profit margin. The gross profit margin of the current period and the previous period is compared, and the export trade is analyzed. The operating income of 2021 is 263.67 to judge the rationality of the change of income and gross profit margin. RMB100mn As revenue is one of the key performance indicators for the revenue transactions recorded in this year according to different business types of Oriental Energy Co.Ltd(002221) company, and Oriental Energy Co.Ltd(002221) accesses samples, for entrepot trade, check invoices, sales contracts and employee equity incentives, so there are data such as management agreement, letter of guarantee and payment records; For the export to achieve specific goals or expectations and manipulate the receipt and sales, check the inherent risks of customs declaration, invoice, packing list and the confirmation time point of sales contract. Therefore, we, together with, bill of lading or cargo right transfer notice and money recovery, identify revenue recognition as key audit information; For Chinese sales, check invoices and sales contracts. And warehouse out documents, goods right transfer documents, money recovery records and other data, and evaluate whether the relevant revenue recognition complies with the accounting policies of the company for revenue recognition.
For the revenue transactions recorded before and after the balance sheet date, select samples and check the delivery documents and other supporting documents to evaluate whether the revenue is recorded in the appropriate accounting period. Evaluate the appropriateness of income presentation and disclosure of different business types.
2. Inventory existence and valuation
Please refer to the accounting policies described in note 10 of "important accounting policies and accounting estimates" in note 3 to the financial statements and note 9 of "notes to main items of consolidated financial statements" in note 5.
Key audit matters how to deal with them in the audit
Our main audit procedures for inventory existence and valuation include:
Understand and evaluate the management's internal control design related to inventory confirmation, and test its operation effectiveness.
Check the internal audit process of the company's inventory statistical report.
Implement the inventory supervision procedure, prepare the inventory supervision report, verify the difference between the counted inventory and the book inventory, whether it is stored by other units, and check with the storage account of the leasing unit of propane and butane in the foreign Oriental Energy Co.Ltd(002221) company. Leasing warehouse and storage for a third party. Implement the confirmation procedure for the inventory stored in external units, and confirm the quantity and status of the inventory to the third party who holds the authenticity and amount accuracy of the public inventory and the company's inventory. The company's financial statements have a great impact, so we check the relevant input of propane and butane stored in our company, identify the inventory existence and pricing, identify the warehouse and delivery records, and confirm the storage quantity to the owner.
For key audit matters. Select samples to check the propane and butane warehousing standing book, commodity inspection report, customs declaration form, warehousing acceptance form, cargo right transfer form and other warehousing data, and check with the financial book. For the sales outbound inventory, obtain the bill of lading, outbound weighing record and other data, and check with the financial account. Conduct valuation test on the inventory, confirm whether the cost unit price retained at the end of the period is reasonable, prepare the backward rolling table of operating cost, and check whether the purchase, sales and inventory of the inventory are normal as a whole.
4、 Other information
Oriental Energy Co.Ltd(002221) the management of the company (hereinafter referred to as the management) is responsible for other information. The company's annual audit report and other information not included in the company's annual 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 Oriental Energy Co.Ltd(002221) company, disclosing matters related to going concern and applying the going concern assumption, unless the management plans to liquidate Oriental Energy Co.Ltd(002221) company, terminate operation or have no other realistic choice.
The management is responsible for supervising the financial reporting process of Oriental Energy Co.Ltd(002221) 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 Oriental Energy Co.Ltd(002221) 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 Oriental Energy Co.Ltd(002221) company to be unable to continue its business.
(5) Evaluate the overall presentation, structure and content (including disclosure) 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 Oriental Energy Co.Ltd(002221) company to express audit opinion on the 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.
Su yajincheng certified public accountants China Certified Public Accountant: Yu Longbin
(special general partnership) (project partner)
Chinese certified public accountant: Wu Yaling
Nanjing, China April 20, 2002
1. Consolidated balance sheet
Prepared by: Oriental Energy Co.Ltd(002221)
December 31, 2021
