Zhejiang Tiantie Industry Co.Ltd(300587) ZTC CGHs Zi (2022) No. 318088
catalogue
audit report
Consolidated and company balance sheet 1-2
Consolidated and corporate income statement 3
Consolidated and company cash flow statement 4
Consolidated and statement of changes in shareholders’ equity 5-8
Notes to financial statements 9-127
audit report
ZTE CGHs Zi (2022) No. 318088 Zhejiang Tiantie Industry Co.Ltd(300587) all shareholders:
1、 Audit opinion
We have audited the financial statements of Zhejiang Tiantie Industry Co.Ltd(300587) (hereinafter referred to as ” Zhejiang Tiantie Industry Co.Ltd(300587) 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 financial statements in 2021.
In our opinion, the attached financial statements have been prepared in accordance with the provisions of the accounting standards for business enterprises in all material aspects, and give a fair view of the consolidated and company’s financial position of Zhejiang Tiantie Industry Co.Ltd(300587) company as of December 31, 2021, and the consolidated and company’s operating results and cash flows 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 Zhejiang Tiantie Industry Co.Ltd(300587) 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. We shall not express an opinion on these matters based on the overall audit of the financial statements. We confirm that the following matters are the key audit matters that need to be communicated in the audit report. (I) impairment of accounts receivable
1. Item description
As stated in the accounting policies described in “III. 9. Financial instruments” and “v. 4. Accounts receivable” in the notes to the financial statements, as of December 31, 2021, the book balance of accounts receivable of Zhejiang Tiantie Industry Co.Ltd(300587) company was 133637076235 yuan and the bad debt provision was 17508172341 yuan The management of Zhejiang Tiantie Industry Co.Ltd(300587) company (hereinafter referred to as “the management”) confirms the bad debt provision based on the recoverability of accounts receivable. The management shall divide the portfolio based on the aging and customer credit, adjust the historical loss rate of the portfolio with similar credit risk characteristics with the combination, estimate the present value of future cash flow, and consider the forward-looking information, And determine the accrued bad debt reserves. As the amount of accounts receivable is significant and the impairment test of accounts receivable involves significant management judgment, we determine the impairment of accounts receivable as a key audit event.
2. Audit response
For the impairment of accounts receivable, our main audit procedures are as follows:
(1) Understand, evaluate and test the internal control process of bad debt provision for accounts receivable of Zhejiang Tiantie Industry Co.Ltd(300587) company;
(2) Review the subsequent actual write off or reversal of accounts receivable for which bad debt reserves have been accrued in previous years, and evaluate the accuracy of previous forecasts of the management;
(3) Review the relevant considerations and objective evidence of the management’s impairment test on accounts receivable, and evaluate whether the management has fully identified the accounts receivable that have been impaired;
(4) Evaluate the rationality of the management’s classification of the combination according to the characteristics of credit risk for the accounts receivable that are tested for impairment by combination; Evaluate the rationality of the impairment test method of the management according to the historical loss rate of the portfolio with similar credit risk characteristics and relevant observable data reflecting the current situation (including the withdrawal proportion of bad debt reserves of each portfolio); Test the accuracy and completeness of the data used by the management (including the aging of accounts receivable) and whether the calculation of bad debt reserves is accurate;
(5) Check the post period collection of accounts receivable and evaluate the rationality of the management’s provision for bad debts of accounts receivable;
(6) Check whether the presentation and disclosure of information related to the impairment of accounts receivable in the financial statements are sufficient and appropriate.
(II) revenue recognition
1. Item description
As stated in the accounting policies described in “III. 25. Revenue recognition” and “v. 44. Operating revenue and operating costs” in the notes to the financial statements, the main business income of Zhejiang Tiantie Industry Co.Ltd(300587) company in 2021 was 164239410852 yuan, an increase of 37.01% over 2020. As revenue is one of the key performance indicators of Zhejiang Tiantie Industry Co.Ltd(300587) company and the current period has a significant increase over the previous period, There is an inherent risk that the management manipulates revenue recognition in order to achieve specific goals or expectations. Therefore, we determine revenue recognition as a key audit matter.
2. Audit response
For revenue recognition, our main audit procedures are as follows:
(1) Understand and evaluate the internal control of sales and collection cycle, and test the effectiveness of control implementation;
(2) Through sample sales contracts and interviews, understand and evaluate the revenue recognition policies, select samples to check the sales contracts, identify the contract terms and conditions related to individual performance obligations and control transfer, and evaluate whether the revenue recognition policies of Zhejiang Tiantie Industry Co.Ltd(300587) company meet the requirements of accounting standards for business enterprises;
(3) Check the supporting documents related to revenue recognition, including sampling and testing the sales revenue of important customers of the company, and check the signing and approval of relevant sales contracts, invoices, shipping notes, documents for customer acceptance and confirmation and other evidence;
(4) Implement letter confirmation procedures for important customers this year;
(5) Check the business income recognized before and after the balance sheet date by sampling, and check the supporting documents such as the delivery note and the documents accepted and confirmed by the customer, so as to evaluate whether the income is recognized in an appropriate period;
(6) Check whether the presentation and disclosure of income related information in the financial statements are sufficient and appropriate.
4、 Other information
The management is responsible for other information. Other information includes the information covered in the 2021 annual report of Zhejiang Tiantie Industry Co.Ltd(300587) 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
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 sustainable operation ability of Zhejiang Tiantie Industry Co.Ltd(300587) company, disclosing matters related to sustainable operation (if applicable), and applying the assumption of sustainable operation, unless the management plans to liquidate Zhejiang Tiantie Industry Co.Ltd(300587) company, terminate operation or have no other realistic choice.
The management is responsible for supervising the financial reporting process of Zhejiang Tiantie Industry Co.Ltd(300587) 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 Zhejiang Tiantie Industry Co.Ltd(300587) 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 Zhejiang Tiantie Industry Co.Ltd(300587) 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 Zhejiang Tiantie Industry Co.Ltd(300587) 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 statements to the management on compliance with the professional ethics requirements related to independence, and communicate with the management on 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. Zhongxingcai Guanghua certified public accountants, Chinese Certified Public Accountants:
(special general partnership) (project partner)
Chinese certified public accountant:
Beijing, China April 22, 2022
Balance sheet
Prepared by: Zhejiang Tiantie Industry Co.Ltd(300587) unit: RMB
Project notes December 31, 2021 December 31, 2020
Consolidated company
Current assets:
Monetary capital v. 162164104043529870050132345954798016455 Shenzhen Weiye Decoration Group Co.Ltd(300621) trading financial assets v. 22300000 China Vanke Co.Ltd(000002) 300000 Shenzhen Fountain Corporation(000005) 0000 Shenzhen Fountain Corporation(000005) 000000000 derivative financial assets
Notes receivable V, 3117298140661308517206565441067295592299201 accounts receivable V, 4116128903894733256833309266385793860337240104 accounts receivable financing V, 512066382125445076514791542438992384984810 prepayments V 61535169143110383277211831852651201449239 other receivables v. 7418036447020871972490571582665012520699243 including: interest receivable
Dividends receivable
Inventory v. 83683356026422440388
