Shanghai Hi-Road Food Technology Co.Ltd(300915) 2021 annual financial statements and audit report
catalogue
Content page
audit report
Consolidated balance sheet 1-2 as of December 31, 2021
Balance sheet 3-4 of the company as of December 31, 2021
Consolidated income statement for 2021 5
Profit statement of the company in 2021 6
Consolidated cash flow statement for 2021 7
Cash flow statement of the company in 2021 8
Consolidated statement of changes in owner’s equity in 2021 9-10
Statement of changes in owner’s equity of the company in 202111-12
Notes to financial statements 13-81
Audit report
Zhong Hui Zi (2022) No. 01137 Shanghai Hi-Road Food Technology Co.Ltd(300915) all shareholders:
(I) audit opinion
We have audited the financial statements of Shanghai Hi-Road Food Technology Co.Ltd(300915) (hereinafter referred to as ” Shanghai Hi-Road Food Technology Co.Ltd(300915) company”), including the consolidated and company’s balance sheet as of December 31, 2021, the consolidated and company’s income statement, consolidated and company’s cash flow statement, consolidated and 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 provisions of the accounting standards for business enterprises in all material aspects and fairly reflect the consolidated and financial position of Shanghai Hi-Road Food Technology Co.Ltd(300915) company as of December 31, 2021 and the consolidated and operating results and cash flow of the company in 2021.
(II) 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 Shanghai Hi-Road Food Technology Co.Ltd(300915) 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.
(III) key audit matters
Key audit matters are the most important matters that we consider to audit the financial statements of 2021 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.
The key audit matters identified in our audit are summarized as follows:
Key audit item I: recognition of operating revenue
Key audit event 2: provision for inventory impairment
1. Recognition of operating income
(1) Item description
The sales revenue of Shanghai Hi-Road Food Technology Co.Ltd(300915) company mainly comes from selling cream products to customers. After the receipt of goods is confirmed by the customer or after the customs declaration formalities are completed for overseas sales, Shanghai Hi-Road Food Technology Co.Ltd(300915) company recognizes that the main risks and rewards in the control of goods are transferred to the buyer, recognizes the sales revenue and carries forward the cost at the same time. As stated in “notes V and 31” of the financial statements in 2021, the operating income of Shanghai Hi-Road Food Technology Co.Ltd(300915) company was 746934400 yuan. As revenue is one of the company’s key business indicators, there is an inherent risk that the management manipulates the time point of revenue recognition in order to achieve specific goals or expectations. Therefore, we determine that operating revenue is recognized as a key audit event.
(2) Audit response
We have understood and evaluated the design of the management of Shanghai Hi-Road Food Technology Co.Ltd(300915) company (hereinafter referred to as the management) on the internal control in the sales process of Shanghai Hi-Road Food Technology Co.Ltd(300915) company from the approval of sales contract to the entry of sales revenue, and tested the effectiveness of the implementation of key controls; Through sampling inspection of sales contracts and interviews with management, we analyzed and evaluated the time point of control transfer related to the recognition of product sales revenue, and then evaluated the recognition policy of product sales revenue of Shanghai Hi-Road Food Technology Co.Ltd(300915) company; Check the supporting documents related to revenue recognition, including sales contract / order, sales invoice, sales delivery note / customs declaration, shipment note / bill of lading signed by customers, and check the supporting documents such as sales contract / order, sales delivery note and shipment note signed by customers for the sales revenue confirmed before and after the balance sheet date, so as to evaluate whether the sales revenue is recognized in an appropriate period; Analyze the operating revenue and gross profit margin by month and category, identify whether there are significant or abnormal fluctuations, and find out the causes of fluctuations; According to the characteristics and nature of customer transactions, select samples to implement letter confirmation procedures to confirm the balance of accounts receivable and the amount of sales revenue, and check the authenticity of the recognized revenue.
2. Provision for inventory impairment
(1) Item description
The main product of Shanghai Hi-Road Food Technology Co.Ltd(300915) company is whipped cream, and the sales revenue of this product accounts for more than 90% of the annual main business revenue. The inventory balance of Shanghai Hi-Road Food Technology Co.Ltd(300915) company is 1375888 million yuan on December 31, 2021 as described in “notes V and 6” of the financial statements. Cream products need low-temperature refrigeration and cold chain transportation. At the same time, the product is a raw material of baked food, which is directly related to food safety. Therefore, whether the relevant inventory has expired, damaged or returned, and whether the provision for impairment has been made should be regarded as a key audit matter.
(2) Audit response
We understand and evaluate the management’s design of the internal control of Shanghai Hi-Road Food Technology Co.Ltd(300915) company from raw material procurement to production, storage and transportation, and test the effectiveness of the implementation of key controls; We supervise the inventory of Shanghai Hi-Road Food Technology Co.Ltd(300915) company, check the quantity and condition of inventory and analyze the shelf life of products; We obtained the year-end inventory age list of Shanghai Hi-Road Food Technology Co.Ltd(300915) company, and analyzed whether the inventory falling price reserve is reasonable by analyzing the inventory with long inventory age in combination with the validity period of the product; We obtained the relevant non operating income and expenditure breakdown to analyze whether there were major product quality losses and compensation during the reporting period.
(IV) other information
The management of Shanghai Hi-Road Food Technology Co.Ltd(300915) company (hereinafter referred to as the management) is responsible for other information. Other information includes the information covered in the 2021 annual report of Shanghai Hi-Road Food Technology Co.Ltd(300915) 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.
(V) responsibilities of management and governance for financial statements
Shanghai Hi-Road Food Technology Co.Ltd(300915) the management of the company (hereinafter referred to as 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 Shanghai Hi-Road Food Technology Co.Ltd(300915) company, disclosing matters related to going concern and applying the going concern assumption, unless the management plans to liquidate Shanghai Hi-Road Food Technology Co.Ltd(300915) company, terminate operation or have no other realistic choice.
The management is responsible for supervising the financial reporting process of Shanghai Hi-Road Food Technology Co.Ltd(300915) company.
(VI) 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 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 Shanghai Hi-Road Food Technology Co.Ltd(300915) 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 lead to the inability of Shanghai Hi-Road Food Technology Co.Ltd(300915) company 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 Shanghai Hi-Road Food Technology Co.Ltd(300915) company to express audit opinions 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.
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Zhonghua Certified Public Accountants (special general partnership) Chinese certified public accountant Li Ming (project partner) Chinese certified public accountant Wang Yulin
Shanghai, China, April 21, 2022
Consolidated balance sheet as of December 31, 2021
(amount in RMB)
Project notes current assets as of December 31, 2021 and 2020:
Monetary capital v. 134241248404122909457711 trading financial assets v. 290059888889
Derivative financial assets
Notes receivable
Accounts receivable v. 334397009432504025894 accounts receivable financing
Prepayment v. 4756685766533608239 other receivables v. 57609979163897379 including: interest receivable
Dividends receivable
Inventory v. 6137588763166451379805 contract assets
Assets held for sale
Non current assets due within one year
V. other current assets
