TCL Technology Group Co., Ltd
audit report
Dhsz [2022] No. 000588
Dahua Certified Public Accountants (special general partnership)
TCL Technology Group Co., Ltd
Audit report and financial statements
(from January 1, 2021 to December 31, 2021)
Contents page I. audit report 1-7 II. Audited financial statements
Consolidated balance sheet 1-2 consolidated income statement 3 consolidated cash flow statement 4-5 consolidated statement of changes in shareholders’ equity 6-7 parent company balance sheet 8-9 parent company income statement 10 parent company cash flow statement 11-12 statement of changes in shareholders’ equity of the parent company 13-14 notes to financial statements 15-164
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. 000588 all shareholders of TCL Technology Group Co., Ltd.:
1、 Audit opinion
We have audited the financial statements of Tcl Technology Group Corporation(000100) (hereinafter referred to as ” Tcl Technology Group Corporation(000100) “), 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 notes to relevant financial statements in 2021.
In our opinion, the attached financial statements are prepared in accordance with the accounting standards for business enterprises in all material aspects, and fairly reflect the financial position of Tcl Technology Group Corporation(000100) 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 Tcl Technology Group Corporation(000100) , 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.
We confirm that the following matters are the key audit matters that need to be communicated in the audit report. For revenue recognition, please refer to the accounting policies described in note III, 36 “revenue recognition” of the financial statements and note V, 58 business income.
Key audit matters and audit response
Our important audit procedures for revenue recognition include:
⚫ Understand and evaluate whether the management’s key internal control companies related to revenue recognition have an operating revenue of about 163.5 billion yuan in the current period, and whether the design and operation of the system are effective;
Compared with the operating income of 76.7 billion yuan in the previous period, the operating income increased by about 868. Understand and evaluate the management’s choice and implementation of policies related to revenue recognition ⚫
Billion yuan, a year-on-year increase of 113%. Whether the implementation meets the requirements of accounting standards for business enterprises;
Since operating revenue is the key operating indicator of the company, there are problems that the management wants to achieve specific goals or expectations ⚫ Select a sample of revenue transactions recorded in this year, check the inherent risk of manipulating the time point of revenue recognition due to the transaction process, and the relevant documents in the, including delivery order, customer signing record, sales invoice, customs declaration, fund collection voucher and other supporting documents; Revenue recognition in this period has a great impact on the financial statements, so we recognize revenue recognition as a key audit ⚫ Select a sample of revenue transactions recorded before and after the balance sheet date
matter.
Check the delivery order and other supporting documents to evaluate whether the revenue is recorded in the appropriate accounting period;
⚫ Obtain the company’s sales list of the current year, implement analytical review procedures for operating income, and judge the rationality of changes in income and gross profit margin of the current period;
⚫ Implement letter confirmation procedures to important customers to verify the sales amount and balance of accounts receivable in the current period;
⚫ Check whether the information related to income has been properly presented and disclosed in the financial statements;
Based on the audit work performed, we believe that the company’s revenue recognition meets the relevant requirements of the accounting standards for business enterprises.
3、 Key audit matters (Continued)
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. For related party transactions, please refer to “X. related parties and related transactions” in the notes to the financial statements
Key audit matters and audit response
Our important audit procedures for affiliated exchanges include:
⚫ Understand and evaluate the internal control of the management in identifying and disclosing the relationship between related parties and the daily related party transactions of the company in 2021, and review the effectiveness of the design and implementation of internal control; Yuan, an increase of about 26% over the previous period. Obtain information from the management on the relationship between related parties and the integrity of their transactions ⚫
The completeness of the disclosure of related parties and related transactions and the relevant statements, and obtain the related party relationship statement provided by the management
Check the authenticity of the transaction and the fairness of the transaction price with the information obtained from other public channels; It will have a significant impact on the fair presentation of the financial statements. Therefore, we will ⚫ Check the customers, suppliers and other related parties that have business with the company, and identify whether there is any omission of related parties. At the same time, obtain relevant information and identify it as key audit matters. The resolutions of the board of directors and the shareholders’ meeting related to related party transactions, check the decision-making authority and procedures of related party transactions, judge the legality and compliance of related party transactions, and whether they have been properly authorized and approved;
⚫ Compare the sales price of related parties with that of similar products of non related parties to judge the fairness of the price of related transactions;
⚫ Obtain the details of the amount and balance of related party transactions, and check the financial vouchers corresponding to the transaction and the attached contracts or orders, transfer orders, statements, invoices and bank statements for the selected specific samples
According to; In addition, the amount and balance of related party transactions of important related parties shall be subject to the sending procedures;
⚫ Understand and evaluate the internal control of the management in identifying and disclosing the relationship between related parties and their transactions, and review the effectiveness of the design and implementation of internal control;
Based on the audit work performed, we believe that the integrity of the management’s disclosure of related party relationships, the authenticity of related party transactions and the fairness of transaction prices are reasonable.
4、 Other information
Tcl Technology Group Corporation(000100) group 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
Tcl Technology Group Corporation(000100) 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, Tcl Technology Group Corporation(000100) management is responsible for assessing Tcl Technology Group Corporation(000100) ‘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 Tcl Technology Group Corporation(000100) , terminate the operation or has no other realistic choice. The management is responsible for supervising the financial reporting process of Tcl Technology Group Corporation(000100) .
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
