Guangdong Vtr Bio-Tech Co.Ltd(300381) 2021
audit report
Zhitong Certified Public Accountants (special general partnership)
catalogue
Audit report 1-5 consolidated and company balance sheet 1-2 consolidated and company income statement 3
Consolidated and company cash flow statement 4
Consolidated and statement of changes in shareholders’ equity 5-8 notes to financial statements 9-99
Zhitong Certified Public Accountants (special general partnership)
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audit report
Zhi Tong Shen Zi (2022) No. 442a012521 Guangdong Vtr Bio-Tech Co.Ltd(300381) all shareholders:
1、 Audit opinion
We have audited the financial statements of Guangdong Vtr Bio-Tech Co.Ltd(300381) (hereinafter referred to as Guangdong Vtr Bio-Tech Co.Ltd(300381) 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 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 financial position of Guangdong Vtr Bio-Tech Co.Ltd(300381) company as of December 31, 2021 and the consolidated and operating results and cash flow of the 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 Guangdong Vtr Bio-Tech Co.Ltd(300381) 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
See notes III, 25, V and 36 to the financial statements for relevant information disclosure.
1. Item description
The main business income of Guangdong Vtr Bio-Tech Co.Ltd(300381) company in 2021 was 18382145 million yuan. It is mainly the sales revenue of steroid hormone API, biological enzyme preparation products and functional feed additives. Due to the importance of revenue to the overall financial statements and the risk of material misstatement whether the revenue is included in the appropriate accounting period completely and accurately, we recognize the revenue as a key audit event.
2. Audit response
We have mainly implemented the following audit procedures for revenue recognition:
(1) Understand and evaluate the internal control design related to revenue cycle, and test the effectiveness of key control processes;
(2) Select a sample to check the sales contract, identify the contract terms and conditions related to the transfer of commodity control, and evaluate whether the revenue recognition policy meets the requirements of the accounting standards for business enterprises.
(3) Implement analytical review procedures, including analyzing the annual and monthly income of major products, changes of major customers and sales prices, and analyzing the rationality of changes in gross profit margin according to product categories and market and industry trends;
(4) Select a sample of the revenue recognized in the current period and check the documents in the transaction process, including customs declaration, bill of lading, delivery note, invoice, collection voucher, waybill and other materials;
(5) According to the sampling principle, the letter confirmation procedure is implemented for the main customers and transactions, and the substitution test is performed for the unresponsive part to judge the authenticity of the sales revenue;
(6) We inquire the relevant personnel of Guangdong Vtr Bio-Tech Co.Ltd(300381) company by inquiring the industrial and commercial data of the customer to confirm whether there is an association relationship between the customer and Guangdong Vtr Bio-Tech Co.Ltd(300381) company;
(7) A sampling test is conducted on the sales revenue recognized before and after the balance sheet date to evaluate whether the sales revenue is recognized in an appropriate period.
(II) provision for impairment of goodwill
See notes III, 20 and V, 14 of the financial statements for relevant information disclosure.
1. Item description
On December 31, 2021, the original book value of goodwill in the consolidated financial statements of Guangdong Vtr Bio-Tech Co.Ltd(300381) company was 531754600 yuan, and the amount of goodwill impairment provision was 135695200 yuan.
The management conducts impairment test on goodwill every year, and compares the book value of the asset group containing goodwill with its recoverable amount to determine whether it is necessary to accrue impairment. The recoverable amount is calculated by the present value of the estimated future cash flow. As the goodwill impairment test process involves the significant judgment of the management, the test results largely depend on the estimates and assumptions made by the management, such as the estimation of the expected future cash flow and discount rate of the asset group. These estimates are affected by the management’s judgment on the future market and the economic environment. Adopting different estimates and assumptions will have a great impact on the recoverable value of the assessed goodwill. Therefore, we identified the impairment of goodwill as a key audit event.
2. Audit response
(1) Understand the calculation method of the present value of future cash flow adopted by the management, review the division of the asset group or combination of asset groups where the goodwill is located by the management, and evaluate whether the method adopted by the management in preparing the discounted cash flow forecast meets the requirements of the accounting standards for business enterprises; In combination with the actual operation of the asset group and the analysis and prediction of the market, check the data used in the cash flow prediction with the historical data and other supporting evidence to analyze its rationality;
(2) Evaluate the competence, professional quality and objectivity of the experts employed by the management in the impairment test; (3) Evaluate the rationality of the valuation methods, relevant assumptions and discount rate adopted by professional evaluation institutions and management in the goodwill impairment test;
(4) Check the management’s prediction of future cash flow and the calculation of the present value of future cash flow;
(5) Check the disclosure compliance of goodwill impairment test in the financial statements.
4、 Other information
The management of Guangdong Vtr Bio-Tech Co.Ltd(300381) company is responsible for other information. Other information includes the information covered in the 2021 annual report of Guangdong Vtr Bio-Tech Co.Ltd(300381) 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
Guangdong Vtr Bio-Tech Co.Ltd(300381) the management of the company 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 Guangdong Vtr Bio-Tech Co.Ltd(300381) company, disclosing matters related to sustainable operation (if applicable), and applying the assumption of sustainable operation, unless the management plans to liquidate Guangdong Vtr Bio-Tech Co.Ltd(300381) company, terminate operation or has no other realistic choice.
The management is responsible for supervising the financial reporting process of Guangdong Vtr Bio-Tech Co.Ltd(300381) 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 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 Guangdong Vtr Bio-Tech Co.Ltd(300381) 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 Guangdong Vtr Bio-Tech Co.Ltd(300381) 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 Guangdong Vtr Bio-Tech Co.Ltd(300381) company to express an 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.
Zhitong certified public accountants China Certified Public Accountants
(special general partnership) (project partner)
Chinese certified public accountant
Beijing, China April 22, 2002
Consolidated and company balance sheet
December 31, 2021
Prepared by: Guangdong Vtr Bio-Tech Co.Ltd(300381) unit: RMB
