Audit report Fujian Sunner Development Co.Ltd(002299)
Rong Cheng Shen Zi [2022] No. 361z0212
Rongcheng Certified Public Accountants (special general partnership)
Beijing, China
catalogue
Serial number content page number
1 audit report 1 – 6
2 consolidated balance sheet 1
3 consolidated income statement 2
4 consolidated cash flow statement 3
5 consolidated statement of changes in shareholders’ equity 4 – 5
6 balance sheet of parent company 6
7 income statement of parent company 7
8 cash flow statement of parent company 8
9. Statement of changes in shareholders’ equity of the parent company 9 – 10
10 notes to the financial statements 11 – 136
Audit report
Rong Cheng Shen Zi [2022] No. 361z0212 Fujian Sunner Development Co.Ltd(002299) all shareholders:
1、 Audit opinion
We have audited the financial statements of Fujian Sunner Development Co.Ltd(002299) (hereinafter referred to as Fujian Sunner Development Co.Ltd(002299) 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 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 consolidated and parent company’s financial position of Fujian Sunner Development Co.Ltd(002299) company 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 Fujian Sunner Development Co.Ltd(002299) 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
See note 3-27 and note 5-39 of the financial statements.
Fujian Sunner Development Co.Ltd(002299) company’s main income comes from the sales of frozen chicken products and meat products. Its products are mainly supplied to large catering chain enterprises, farmers’ wholesale markets, food processing plants, chain supermarkets and other market fields Fujian Sunner Development Co.Ltd(002299) the company recognizes the sales revenue when the control of the goods is transferred to the customer.
Since revenue is one of the key performance indicators of Fujian Sunner Development Co.Ltd(002299) company, there is an inherent risk that the management of Fujian Sunner Development Co.Ltd(002299) company (hereinafter referred to as “management”) manipulates the time point of revenue recognition in order to achieve specific goals or expectations. We determine revenue recognition as a key audit matter.
2. Audit response
The relevant procedures we have implemented for the key audit matter of revenue recognition mainly include:
(1) Understand the internal control related to revenue recognition, evaluate its design effectiveness, and test the effectiveness of internal control operation;
(2) Identify the contract terms related to the transfer of commodity control and evaluate whether the revenue recognition policies of Fujian Sunner Development Co.Ltd(002299) company comply with the relevant requirements of the accounting standards for business enterprises through interviews with the management and the selection of sales contracts for inspection;
(3) Analyze the changes of revenue and gross profit margin in this year in combination with product category, sales channel type and main business customers, and pay attention to whether there are abnormal fluctuations;
(4) Combined with the sales revenue, select the sample accounts receivable, implement the letter confirmation procedure, and check the letter confirmation results with the book records;
(5) Select the revenue transaction sample, check the supporting documents of revenue recognition such as sales contract, order, delivery order, invoice and customer receipt, and evaluate whether the revenue recognition complies with the accounting policies of the company;
(6) Check the revenue transactions before and after the balance sheet date, check the supporting documents of revenue recognition such as delivery note and customer receipt, and evaluate whether the revenue is recorded in the appropriate accounting period.
(II) provision for inventory falling price reserves
1. Item description
See note 3-12 and note 5-7 of the financial statements.
As of December 31, 2021, the book balance of inventory of Fujian Sunner Development Co.Ltd(002299) company was 255665955162 yuan, accounting for 15.00% of total assets, and the balance of inventory falling price reserves was 3147286390 yuan.
Fujian Sunner Development Co.Ltd(002299) the inventory of the company is measured according to the lower of cost and net realizable value. The net realizable value of inventory is the estimated selling price of inventory minus the estimated cost to be incurred at completion, estimated selling expenses and relevant taxes. When determining the net realizable value of inventories, it shall be based on the conclusive evidence obtained, and consider the purpose of holding inventories and the impact of events after the balance sheet date.
As the ending inventory amount of Fujian Sunner Development Co.Ltd(002299) company is significant and the determination of the net realizable value of inventory involves the significant judgment of the management, we determine the provision for inventory falling price as a key audit matter.
2. Audit response
The relevant procedures we implemented for the key audit matter of the provision for inventory falling price mainly include:
(1) Understand the internal control related to the provision of inventory falling price reserves, evaluate its effectiveness, and test the effectiveness of key control operations;
(2) Evaluate whether the provision method for inventory falling price reserves is appropriate and in line with the relevant requirements of the accounting standards for business enterprises; (3) Interview with the management to understand and evaluate the source and rationality of the estimated selling price of finished products at the end of the period, and select the main finished products to test whether the value is accurate;
(4) Interview with the management and evaluate whether the parameters related to the calculation of net realizable value of consumptive biological assets (including survival rate, feed meat ratio, estimated selling price of finished products after processing, etc.) are accurate and reasonable in combination with historical data; (5) Obtain the calculation table of inventory falling price reserves prepared by the management, check whether it complies with the relevant accounting policies of the company, and check the calculation accuracy.
4、 Other information
The management is responsible for other information. Other information includes the information covered in the 2021 annual report of Fujian Sunner Development Co.Ltd(002299) 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 Fujian Sunner Development Co.Ltd(002299) company, disclosing matters related to going concern (if applicable), and applying the going concern assumption, unless the management plans to liquidate Fujian Sunner Development Co.Ltd(002299) company, terminate operation or have no other realistic choice.
The management is responsible for supervising the financial reporting process of Fujian Sunner Development Co.Ltd(002299) 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 Fujian Sunner Development Co.Ltd(002299) 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 Fujian Sunner Development Co.Ltd(002299) 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 on the financial information of entities or business activities in Fujian Sunner Development Co.Ltd(002299) company to express an 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 (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.
(there is no text on this page, which is the signature and seal page of Fujian Sunner Development Co.Ltd(002299) Rongcheng Shenzi [2022] No. 361z0212 audit report.)
Rongcheng certified public accountants China Certified Public Accountants:
(special general partnership) Li Shiqian (project partner)
Chinese certified public accountant:
Zhong Xinyi
Beijing, China Certified Public Accountant:
Lin Zongcai
April 20, 2022
Consolidated balance sheet
December 31, 2021
Prepared by: Fujian Sunner Development Co.Ltd(002299) unit: RMB currency: RMB
Project notes December 31, 2021 December 31, 2020 project notes December 31, 2021 December 31, 2020
Current assets: current liabilities:
Monetary capital v. 1494842
