Fujian Cosunter Pharmaceutical Co.Ltd(300436)
audit report
Dhsz [2022] No. 0010676
Da Hua Certified Public Accountants (special general partnership)
Fujian Cosunter Pharmaceutical Co.Ltd(300436)
Audit report and financial statements
(from January 1, 2021 to December 31, 2021)
Contents page I. audit report 1-7 II. Audited financial statements
Consolidated balance sheet 1-2 consolidated income statement 3-3 consolidated cash flow statement 4-4 consolidated statement of changes in shareholders’ equity 5-6 parent company balance sheet 7-8 parent company income statement 9-9 parent company cash flow statement 10-10 statement of changes in shareholders’ equity of the parent company 11-12 notes to financial statements 1-109
Dahua Certified Public Accountants (special general partnership) 12 / F, building 7, No. 16 courtyard, Middle West Fourth Ring Road, Haidian District, Beijing [100039] Tel: 86 (10) 58350011 Fax: 86 (10) 58350006 www.dahua-cpa com. Audit report
Dhsz [2022] No. 0010676 Fujian Cosunter Pharmaceutical Co.Ltd(300436) :
1、 Audit opinion
We have audited the financial statements of Fujian Cosunter Pharmaceutical Co.Ltd(300436) (hereinafter referred to as the company or Fujian Cosunter Pharmaceutical Co.Ltd(300436) ), 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 financial position of Fujian Cosunter Pharmaceutical Co.Ltd(300436) the consolidated and parent company as of December 31, 2021 and the operating results and cash flow of the consolidated and parent company 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 Cosunter Pharmaceutical Co.Ltd(300436) , 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.
We confirm that the following matters are the key audit matters that need to be communicated in the audit report. 1. R & D expenditure
2. Investment income of associates
（1） R & D expenditure
1. Event description
See note VI, note 14 and note VI and note 39 of the financial statements for relevant information. The capitalized balance of R & D expenditure is 25.28 million yuan and the expensed amount of R & D expenditure is 689894 million yuan.
Due to the following conditions:
(1) R & D expenditure is the main expenditure field of pharmaceutical enterprises, with large investment amount and long duration, and there is an inherent risk of adjusting profits;
(2) The division standard of capitalization and expense of R & D expenditure is directly related to the company’s business performance and other key indicators. It can be capitalized only when the capitalization conditions are met. To confirm whether the R & D expenditure meets the capitalization conditions requires significant accounting judgment and estimation by the management.
To this end, we have identified the accuracy of the expensed amount and the capitalized amount in the R & D expenditure as the key audit matters.
2. Audit response
The important audit procedures we have implemented include:
(1) Understand the research direction, specific contents, main cooperation units and R & D cycle of the project by querying the R & D project initiation documents;
(2) Check the clinical approval documents to determine whether the research and development project is in the research stage or development stage;
(3) Check relevant contracts, invoices, internal payment approval forms, etc., and check whether relevant expenditures are related to the project and clinical stage;
(4) Analyze the main expenses of R & D expenditure, analyze the reasons for their changes, and understand the rationality of the differentiation of R & D technical service fees;;
(5) Implement letter confirmation procedures for important cooperation units, inquire about the project R & D progress, contract terms, current balance and settlement, so as to verify the accuracy of expenses;
(6) Spot check the salary, depreciation and other expenses of R & D personnel, and check whether they are consistent with relevant subjects;
(7) Carry out cut-off test on R & D expenditure, check the development expenditure Sub Ledger and vouchers before and after the balance sheet date, and determine whether there is cross period phenomenon.
Based on the audit work performed, we believe that the relevant judgments and estimates of the management on the expensing and capitalization of R & D expenditure are reasonable, the basis is sufficient and the measured amount is accurate.
（2） Investment income
1. Event description
See note VI and note 42 for relevant information. The consolidated financial statements reflect an investment income of 266773 million yuan. The long-term equity investment income calculated by the equity method is an important source of profit in the current period. Whether the investment income accounting is accurate or not has a significant impact on the financial statements. Therefore, we determine the investment income calculated by the equity method as a key audit matter.
2. Audit response
The important audit procedures we have implemented include:
(1) Understand and evaluate the effectiveness of management’s design and operation of key internal controls related to investment;
(2) Check the investment contract and articles of association, understand the main contract terms, and evaluate whether it is appropriate to calculate the investment income according to the equity method;
(3) Communicate with the management of the joint venture to understand the operating performance and financial status of the joint venture and the important judgments and estimates made in the preparation of financial information;
(4) Obtain the audit report of the joint venture, communicate with the certified public accountants of the important joint venture, obtain and evaluate the conclusions and opinions of the component Certified Public Accountants on the financial information prepared by the important joint venture, evaluate the audit evidence obtained by the component Certified Public Accountants on the financial information of the component, and implement analytical review procedures for the important items in the statements of the joint venture;
(5) Recalculate the amount of investment income calculated by the company to associated enterprises according to the equity method, and check whether the accounting treatment of the company’s equity method is correct;
(6) Check whether the information related to the investment income accounted by the equity method has been properly presented in the financial statements.
Based on the audit work performed, we believe that the management’s measurement of investment income accounted by equity method is accurate.
4、 Other information
Fujian Cosunter Pharmaceutical Co.Ltd(300436) management is responsible for other information. Other information includes the information covered in the 2021 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 understand 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
Fujian Cosunter Pharmaceutical Co.Ltd(300436) the management is responsible for preparing the financial statements in accordance with 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 due to fraud or error.
When preparing the financial statements, Fujian Cosunter Pharmaceutical Co.Ltd(300436) management is responsible for assessing Fujian Cosunter Pharmaceutical Co.Ltd(300436) ‘s ability to continue as a going concern, disclosing matters related to going concern (if applicable), and applying the assumption of going concern, unless the management plans to liquidate Fujian Cosunter Pharmaceutical Co.Ltd(300436) , terminate the operation or has no other realistic choice.
The management is responsible for supervising the financial reporting process of Fujian Cosunter Pharmaceutical Co.Ltd(300436) .
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 in order to design appropriate audit procedures, but the purpose is not to express opinions 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 a conclusion on the appropriateness of the going concern assumption used by the management. 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 Fujian Cosunter Pharmaceutical Co.Ltd(300436) going concern ability. If we conclude that there are significant uncertainties, the auditing standards require us to draw the attention of report 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 Cosunter Pharmaceutical Co.Ltd(300436) 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 Cosunter Pharmaceutical Co.Ltd(300436) to express an opinion on the financial statements. We are responsible for guiding, supervising and executing the group audit. We are fully responsible for the audit opinion.
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.
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(there is no text on this page, which is the signature and seal page of dahuashen Zi [2022] No. 0010676 audit report) Dahua Certified Public Accountants (special general partnership) Chinese certified public accountant:
(project partner) Wang Qinglian, Beijing, China
Chinese certified public accountant:
