Jilin Xidian Pharmaceutical Technology Development Co., Ltd
audit report
Dhsz [2022] No. 001402
Dahua Certified Public Accountants (special general partnership)
DaHuaCertifiedPublicAccountants（SpecialGeneralPartnership）
Jilin Xidian Pharmaceutical Technology Development Co., Ltd
Audit report and financial statements
(from January 1, 2021 to December 31, 2021)
Contents page 1. Audit report 1-6 II. Audited financial statements
Balance sheet 1-2 income statement 3 cash flow statement 4 statement of changes in shareholders' equity 5-6 notes to financial statements 1-64
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] 001402 all shareholders of Jilin West Point Pharmaceutical Technology Development Co., Ltd.:
1、 Audit opinion
We have audited the financial statements of Jilin West Point Pharmaceutical Technology Development Co., Ltd. (hereinafter referred to as West Point pharmaceutical), including the balance sheet as of December 31, 2021, the income statement, cash flow statement, 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 major aspects and fairly reflect the financial position of West Point pharmaceutical as of December 31, 2021 and the operating results and cash flow of 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 West Point pharmaceutical 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. We shall not express an opinion on these matters based on the overall audit of the financial statements.
We confirm that the recognition of operating revenue is a key audit matter that needs to be communicated in the audit report.
1. Event description
For the accounting policies and carrying amount information related to the recognition of operating income of West Point pharmaceutical, please refer to note III / (XXVIII) and note V / Note 27 of the financial statements.
In 2021, the operating revenue of West Point pharmaceutical was 28565593211 yuan; In 2020, the operating income of West Point pharmaceutical was 28631871928 yuan.
As the operating income is one of the key performance indicators of West Point pharmaceutical, there is an inherent risk that the management manipulates the revenue recognition in order to achieve specific goals or expectations, and there may be a risk of material misstatement whether the operating income is true and accurate and whether it is included in the appropriate accounting period. Therefore, we regard the recognition of operating income as a key audit matter.
2. Audit response
Our important audit procedures for the recognition of operating revenue include:
(1) Understand and evaluate the design of management's internal control related to the recognition of operating revenue, and test the effectiveness of the implementation of key control activities;
(2) Interview with the management and select samples to check the sales contracts to evaluate whether the revenue recognition accounting policies of West Point pharmaceutical meet the requirements of the accounting standards for business enterprises;
(3) Implement analytical procedures for revenue and cost. Compare and analyze the sales revenue and gross profit margin of West Point pharmaceutical in the reporting period by product category, sales region and sales customers; (4) Select customers by sampling and implement the letter confirmation procedure for their transaction volume and accounts receivable balance during the reporting period;
(5) Inquire the industrial and commercial data of major customers (dealers) during the reporting period through public information, and check whether there is a relationship with West Point pharmaceutical;
(6) Select samples by sampling to check the sales contract or order, sales invoice, delivery order, receipt confirmation and other supporting documents related to revenue recognition;
(7) Perform a cut-off test. For the revenue recognized before and after the balance sheet date at the end of each reporting period, select samples to check the delivery order, receipt and other relevant supporting documents, and evaluate whether the revenue recognition is recorded in the appropriate accounting period.
Based on the audit work performed, we believe that the accounting policies adopted by West Point pharmaceutical in the recognition of operating income are reasonable and correctly recorded in the appropriate accounting period.
4、 Other information
The management of West Point pharmaceutical 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
The management of West Point pharmaceutical 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.
In preparing the financial statements, the management of West Point pharmaceutical is responsible for evaluating the sustainable operation ability of West Point pharmaceutical, disclosing matters related to sustainable operation (if applicable), and applying the assumption of sustainable operation, unless the management plans to liquidate West Point pharmaceutical, terminate operation or has no other realistic choice.
The management is responsible for supervising the financial reporting process of West Point pharmaceutical.
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.
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 the sustainable operation ability of West Point pharmaceutical. 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 lead to West Point's inability to continue as a going concern.
5. Evaluate the overall presentation, structure and content of the financial statements, and evaluate whether the financial statements fairly reflect relevant transactions and events.
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 Dahua Shenzi [2022] No. 001402 audit report) Dahua Certified Public Accountants (special general partnership) Chinese certified public accountant:
(project partner) Gao Shimao, Beijing, China
Chinese certified public accountant:
Tian leibin April 22, 2002
Balance sheet
December 31, 2021
Prepared by: Jilin Xidian Pharmaceutical Technology Development Co., Ltd. (unless otherwise specified, the amount unit is RMB). Closing balance of asset note V closing balance of last period
Current assets:
Notes to monetary funds 11486 Cecep Techand Ecology&Environment Co.Ltd(300197) 210773607672 notes to trading financial assets 26500000000
Derivative financial assets
Notes receivable note 321365769382168841064 notes receivable note 437076209303490491479 accounts receivable financing
Advance payment note 5613031682426265535 other receivables note
