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Sun Create Electronics Co.Ltd(600990)
audit report
Dhsz [2022] 006587
Dahua Certified Public Accountants (special general partnership)
DaHuaCertifiedPublicAccountants（SpecialGeneralPartnership）
Sun Create Electronics Co.Ltd(600990)
Audit report and financial statements
(from January 1, 2021 to December 31, 2021)
Contents page 1. Audit report 1-6 II. Audited financial statements
Consolidated balance sheet 1-2 consolidated income statement 3 consolidated cash flow statement 4 consolidated statement of changes in shareholders' equity 5-6 parent company balance sheet 7-8 parent company income statement 9 parent company cash flow Table 10 changes in shareholders' equity of parent company 11-12 notes to financial statements 1-108
Dahua Certified Public Accountants (special general partnership) 12 / F, building 7, yard 16, Middle West Fourth Ring Road, Haidian District, Beijing [100039] Tel: 86 (10) 58350011 Fax: 86 (10) 58350006 www.dahua-cpa. com. Audit report
Dahuashen Zi [2022] No. 006587 Sun Create Electronics Co.Ltd(600990)
1、 Audit opinion
We have audited the financial statements of Sun Create Electronics Co.Ltd(600990) (hereinafter referred to as Sun Create Electronics Co.Ltd(600990) ), 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 relevant notes to 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 Sun Create Electronics Co.Ltd(600990) 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 Sun Create Electronics Co.Ltd(600990) , 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. These matters should be handled in order to audit the financial statements as a whole and form an audit opinion
Dhsz [2022] 006587 audit report
We will not comment on these matters separately.
We confirm that the following matters are the key audit matters that need to be communicated in the audit report.
1. Revenue recognition of radar and radar supporting;
2. Rationality of the provision for inventory falling price reserves.
(I) revenue recognition of radar and radar supporting equipment
1. Item description
Please refer to "note IV / (XXXIV) revenue" and "note VI / note 38 operating revenue and operating cost" of the financial statements for the accounting policies related to revenue recognition and the carrying amount of operating revenue Sun Create Electronics Co.Ltd(600990) in 2021.
Sun Create Electronics Co.Ltd(600990) is mainly engaged in the production and sales of radar and radar supporting, public safety and other commodities. In 2021, the company's radar and radar supporting commodities recognized operating revenue of 1.309 billion yuan, accounting for 41.63% of the revenue, mainly domestic sales revenue.
Sun Create Electronics Co.Ltd(600990) when performing the performance obligation in the contract, that is, when the customer obtains the control of relevant goods or services, the revenue is recognized according to the transaction price apportioned to the performance obligation.
According to the relevant provisions of the sales contract, after the company delivers the radar and radar supporting goods to the customer, the sales revenue shall be recognized with the customer acceptance certificate obtained.
Since Sun Create Electronics Co.Ltd(600990) lists the operating revenue as the key performance indicator, there is an inherent risk that the management manipulates the revenue recognition time and amount in order to achieve specific goals or expectations. Therefore, we identify the revenue recognition of radar and radar supporting as key audit matters.
2. Audit response
Our audit procedures for revenue recognition mainly include:
(1) Understand and evaluate the effectiveness of the design and operation of key internal controls related to revenue recognition;
(2) Understand and evaluate Sun Create Electronics Co.Ltd(600990) 's revenue recognition policy through reviewing major sales contracts and interviews with management;
(3) For the main sales customers of radar and radar supporting products during the reporting period, we take
Dhsz [2022] 006587 audit report
Obtain and spot check the relevant sales contract, sales delivery note, shipping note and other original materials, compare them with the actual sales situation according to the terms of the sales contract or order, and check the corresponding customer acceptance in combination with the shipping note;
(4) Extract the sales volume of major customers in the reporting period, send a letter for confirmation, and implement the substitution procedure for the unresponsive customers to confirm that the sales revenue is consistent with the book value;
(5) Collect the revenue transactions in the months before and after the reporting period, select samples, check the delivery order and other supporting documents, and conduct a deadline test on the revenue recognition time point to evaluate whether there is a cross period situation of revenue.
(6) In combination with the company's sales contract and return policy, check the return during the reporting period to evaluate whether there is a large amount of return after the reporting period.
Based on the audit work performed, we believe that the accounting treatment made by Sun Create Electronics Co.Ltd(600990) management on the revenue recognition of radar and radar supporting is reasonable.
(II) rationality of provision for inventory falling price
1. Item description
As of December 31, 2021, Sun Create Electronics Co.Ltd(600990) inventory balance was 1.842 billion yuan and inventory falling price reserve balance was 124 million yuan. Due to the large ending inventory balance and the impact of market environment and electronic product price fluctuation, the management needs to make significant judgment when determining the net realizable value of inventory. Whether the provision for inventory falling price is sufficient has a great impact on the financial statements. Therefore, we determine the provision for inventory falling price as a key audit matter.
2. Audit response
The relevant procedures we implement for inventory falling price reserves mainly include:
(1) Understand, evaluate and test the internal control design and implementation related to inventory falling price reserves to evaluate whether the internal control of inventory falling price reserves is compliant and effective;
(2) Check the quantity and status of inventories in combination with the inventory supervision procedures, focus on the long-term inventory, and analyze the adequacy of the provision for depreciation of inventories with signs of impairment; (3) Obtain the calculation table of the company's inventory falling price reserves, and analyze the net realizable value of inventory and inventory
Dhsz [2022] 006587 audit report
Recheck the amount of impairment provision, and check the estimated selling price and selling expenses when the management determines the net realizable value with the actual amount, so as to evaluate whether the judgment made by the management in determining the net realizable value of inventory is reasonable;
(4) Check whether the accounting treatment of withdrawal or write off in the current period is correct, the changes of inventory falling price reserves withdrawn in previous years in the current period, and analyze whether the withdrawal of inventory falling price reserves is sufficient. Based on the audit work performed, we believe that Sun Create Electronics Co.Ltd(600990) management's judgment and estimation on the provision for inventory falling price reserves are reasonable.
4、 Other information
The 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
Sun Create Electronics Co.Ltd(600990) 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, Sun Create Electronics Co.Ltd(600990) management is responsible for assessing Sun Create Electronics Co.Ltd(600990) '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 Sun Create Electronics Co.Ltd(600990) , terminate the operation or has no other realistic choice.
The management is responsible for supervising the financial reporting process of Sun Create Electronics Co.Ltd(600990) .
6、 Responsibilities of certified public accountants for the audit of financial statements
Dhsz [2022] 006587 audit report
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 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 Sun Create Electronics Co.Ltd(600990) 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 Sun Create Electronics Co.Ltd(600990) unable to continue to operate.
5. Evaluate the overall presentation, structure and content of the financial statements, and evaluate whether the financial statements fairly reflect relevant transactions and events.
In fact
