Section x financial report
1、 Audit report
Type of audit opinion qualified opinion
Signing date of audit report: April 26, 2022
Name of audit institution: Zhongshen Zhonghuan Certified Public Accountants (special general partnership)
Audit Report No.: zhsz (2022) 0510282
Name of certified public accountant: Wang Bing, Wu Xiafei
Audit report
Zhong Huan Shen Zi (2022) No. 0510282 Modern Avenue Group Co.Ltd(002656) all shareholders:
1、 Reservations
We have audited the financial statements of Modern Avenue Group Co.Ltd(002656) (hereinafter referred to as "your 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, in addition to the possible impact of the matters described in the "basis for forming a qualified opinion", the attached financial statements are prepared in accordance with the accounting standards for business enterprises in all material aspects, and fairly reflect the consolidated and the company's financial position as of December 31, 2021 and the consolidated and the company's operating results and cash flow in 2021.
2、 Basis for forming reservations
Investment in Nanjing Jiayuan New Energy Vehicle Co., Ltd
As described in notes VI and 9 to the financial statements and notes XV, 8 and (6), your company increased the capital of Nanjing Jiayuan New Energy Vehicle Co., Ltd. (hereinafter referred to as the "target company") by RMB 24 million through the subsidiary Foshan Taiyuan No. 1 equity investment partnership (limited partnership), accounting for 16.70% of the equity of the target company.
As we have not obtained the financial report and other relevant financial information of the subject company and the relevant information on the use of funds of RMB 24 million as of the date of issuance of this report, we are unable to judge the impact of the above matters on the changes in the fair value of other equity instrument investments and whether there are other related relationships (except the related relationships disclosed in the notes), and our audit scope is limited.
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 your 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 expressing qualified opinions.
3、 Other information
The management of your company 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 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. As mentioned in the above "basis for forming qualified opinions", we are unable to obtain sufficient and appropriate audit evidence on your company's investment in Nanjing Jiayuan New Energy Vehicle Co., Ltd. Therefore, we are unable to determine whether there is any material misstatement in other information related to the matter.
4、 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. In addition to the "basis for forming qualified opinions", we determined that the following matters are the key audit matters that need to be communicated in the audit report.
(I) bad debt provision for other receivables
Key audit matters how to deal with them in the audit
Please refer to "notes IV and 10" and "notes" in the financial report. Our audit procedures include:
6、 5 (2) "and" note VI, 41 ". 1) Tested and evaluated the key internal related to the impairment of other receivables of the company. As of December 31, 2021, your company consolidated capital control, reviewed the management's analysis of the recoverability of other receivables and the process of evaluating the book balance of other receivables in the balance sheet;
44727886686 yuan, bad debt provision 31471013361 yuan 2) for other receivables that individually assess credit risk and withdraw bad debt provision, the book value is 13256873325 yuan. Among other accounts, we understand the reasons for the judgment of the management and evaluate the rationality of the accounts receivable from the controlling shareholder Guangzhou Ruifeng group in the accounts receivable for which the bad debt provision is withdrawn;
The total amount of the Company Limited (hereinafter referred to as "Ruifeng group") is 3) for other receivables with risk assessment and bad debt provision of 24198378791 yuan, accounting for the total amount of other receivables, we evaluated the rationality of portfolio division, tested the accuracy of expected credit loss of 54.10% and bad debt provision of 24198378791 yuan, accounting for other ratios;
76.89% of bad debt provision for receivables. Your company conducted a separate impairment test on this sum of money 4) for other receivables that assessed credit risk individually and accrued in full, and found that this sum of money decreased significantly. We consulted the litigation situation of the debtor and evaluated the debtor's repayment ability; Due to the situation of value, it is expected that it can not be recovered, so the letter confirmation procedure is implemented for this other receivable at the end of the period. 5) for other important receivables in the reporting period.
Key audit matters how to deal with them in the audit
Bad debt reserves are accrued for the uncollected part of the collection.
6) due to other receivables, combined with the post period collection inspection, it is evaluated that the management has a large amount of bad debt reserves for bad accounts receivable, which has a greater impact on the financial statements and the rationality of the provision for heavy accounts.
And the provision of bad debt provision involves significant judgment of the management. 7) check the disclosure and estimation of information related to bad debt provision of other receivables in the financial report. Therefore, we identify this matter as the adequacy of key audit. matter.
(II) provision for inventory falling price reserves
Key audit matters how to deal with them in the audit
Please refer to "notes IV and 12" and "notes" in the financial report. Our audit procedures include:
6、 6 "and" note VI, 42 ". 1) Tested and evaluated the establishment of internal control related to inventory falling price reserves, and the effectiveness of your company's consolidated financial calculation and implementation as of December 31, 2021;
The book value of the inventory in the financial statements is 11870569429 yuan. 2) implement the sampling supervision procedure for the inventory to check the quantity and condition of the inventory, in which the book balance of the inventory is 26816920036 yuan, including the inventory, etc;
The falling price reserve is 14946350607 yuan. As your company's inventory 3) by comparing the recent sales unit price of similar and same state products, and the provision for inventory falling price with significant root balance involves the management's review of the change trend of future sales price of products according to seasonal characteristics, and the management's major judgments, assumptions and estimates, the inventory falling price standard is evaluated by estimating the net realizable value;
Prepare as key audit matters. 4) According to your company's inventory falling price reserve accrual policy, recalculate the inventory falling price reserve, and analyze whether the inventory falling price reserve accrual is sufficient;
5) Obtain the inventory age list of the inventory and carry out analytical procedures to judge whether there is a risk that the long inventory age will reduce the net realizable value of the inventory.
6) Check the adequacy of information disclosure related to inventory falling price reserves in the financial report.
(III) reversal of estimated liabilities
Key audit matters how to deal with them in the audit
Please refer to "note IV 27" and "note VI" in the financial report. Our audit procedures include:
27 "," note VI, 44 "and" note XIII, 2 ". 1) Understand and inquire about the progress of relevant litigation and estimated liabilities of the management. As of December 31, 2021, the confirmation basis and method of your company due to litigation;
The estimated balance of liabilities recognized in litigation matters is 10223111125 yuan. 2) Obtain the documents related to the litigation case, obtain the legal opinion issued by the handling of each litigation matter to the financial lawyer due to the amount of estimated liabilities related to the litigation matter, and evaluate the provision of estimated liabilities confirmed by the management
Key audit matters how to deal with them in the audit
The statement has a great impact, and whether it is appropriate to be born in view of the fact that relevant litigation cases have not yet been formed;
Before the effective judgment or withdrawal of the lawsuit, the pending litigation matters affect the financial statements. 3) query the litigation situation of your company through public channels to assess the possible impact of the management, involving the significant judgment made by the management and the integrity of the disclosure of litigation matters; Therefore, we recognize it as a key audit matter. 4) Check whether your company's accounting treatment, presentation and disclosure related to pending litigation matters are appropriate.
In addition to the "basis for forming qualified opinions", we determine that there are no other key audit matters that need to be communicated in our audit report. 5、 Responsibilities of management and governance for financial statements
The management of your company (hereinafter referred to as "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.
In preparing the financial statements, the management is responsible for assessing the company's ability to continue as a going concern, disclosing matters related to going concern (if applicable), and applying the going concern assumption, unless the management plans to liquidate the company, terminate the operation or has no other realistic choice.
The management is responsible for supervising the financial reporting process of your 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:
(I) 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.
(II) 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.
(III) evaluate the appropriateness of accounting policies selected by the management and the rationality of accounting estimates and related disclosures.
(IV) draw a conclusion on the appropriateness of the management's use of the going concern assumption. 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 your 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 your company to be unable to continue its business.
(V) evaluate the overall presentation, structure and content of the financial statements, and evaluate whether the financial statements fairly reflect relevant transactions and events.
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