catalogue
1、 Audit report Page 1-6 II. Financial statements Page 7-14
(I) consolidated balance sheet Page 7
(II) balance sheet of the parent company Page 8
(III) consolidated income statement Page 9
(IV) profit statement of the parent company Page 10
(V) consolidated cash flow statement Page 11
(VI) cash flow statement of the parent company Page 12
(VII) consolidated statement of changes in owner’s equity Page 13
(VIII) statement of changes in owner’s equity of the parent company Page 14 III. notes to financial statements Page 15-95
Audit report
TJS [2022] No. 2-297
Kaiyuan Education Technology Group Co.Ltd(300338) all shareholders:
1、 Audit opinion
We have audited the financial statements of Kaiyuan Education Technology Group Co.Ltd(300338) (hereinafter referred to as Kaiyuan Education Technology Group Co.Ltd(300338) company), 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 owner’s 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 material aspects and fairly reflect the consolidated and parent company’s financial position of Kaiyuan Education Technology Group Co.Ltd(300338) company as of December 31, 2021, as well as the consolidated and parent company’s operating results and cash flow 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 Kaiyuan Education Technology Group Co.Ltd(300338) 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、 Significant uncertainties related to going concern
We remind users of the financial statements that, as stated in Note 2 (II) to the financial statements, the net profits of Kaiyuan Education Technology Group Co.Ltd(300338) company from 2019 to 2021 were -622611600 yuan, -786124100 yuan and -461674900 yuan respectively. The company continued to suffer huge losses, and the operation of the company was greatly affected by the epidemic; As of December 31, 2021, the book value of the company’s goodwill was 386126800 yuan, the current liabilities were higher than the current assets by 810304800 yuan, the balance of available monetary funds in the book was 290539 million yuan, and the balance of bank loans due within one year was 575387 million yuan. The above matters or circumstances indicate that there are major uncertainties that may lead to major doubts about the sustainable operation ability of Kaiyuan Education Technology Group Co.Ltd(300338) company. This matter does not affect the audit opinion issued.
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 matters described in the section “significant uncertainties related to going concern”, we determine that the following matters are key audit matters that need to be communicated in the audit report.
（1） Goodwill impairment
1. Event description
See notes III (XVII) and V (I) 18 to the financial statements for relevant information disclosure.
As of December 31, 2021, the original book value of the goodwill of Kaiyuan Education Technology Group Co.Ltd(300338) company was RMB 141422600, the provision for impairment was RMB 1028099200, and the book value was RMB 386126800. The management of Kaiyuan Education Technology Group Co.Ltd(300338) company (hereinafter referred to as the management) shall conduct impairment test on goodwill when there are signs of impairment in the asset group or combination of asset groups related to goodwill and at the end of each year. The management shall conduct impairment test on goodwill in combination with its related asset group or asset group combination, and the recoverable amount of relevant asset group or asset group combination shall be calculated and determined according to the present value of estimated future cash flow. The key assumptions used in the impairment test include: income growth rate in the detailed forecast period, growth rate in the sustainable forecast period, gross profit margin, discount rate, etc.
As the amount of goodwill is significant and the goodwill impairment test involves significant management judgment, we determine the impairment of goodwill as a key audit event.
2. Audit response
For goodwill impairment, our audit procedures mainly include:
(1) Review the management’s forecast of the present value of future cash flow and actual operating results in previous years, and evaluate the accuracy of the management’s past forecast;
(2) Understand and evaluate the competence, professional quality and objectivity of external valuation experts employed by the management; (3) Evaluate the rationality and consistency of the methods used by the management in the impairment test;
(4) Evaluate the rationality of the key assumptions adopted by the management in the impairment test, and review whether the relevant assumptions are consistent with the overall economic environment, industry conditions, business conditions, historical experience and other assumptions used by the management related to the financial statements;
(5) Test the accuracy, completeness and relevance of the data used by the management in the impairment test, and review the internal consistency of relevant information in the impairment test;
(6) Test whether the management’s calculation of the present value of the estimated future cash flow is accurate;
(7) Check whether the information related to goodwill impairment has been properly presented in the financial statements.
（2） Revenue recognition
1. Event description
See notes III (XXI), V (II) 1 and XIV (I) to the financial statements for relevant information disclosure.
The operating income of Kaiyuan Education Technology Group Co.Ltd(300338) company mainly comes from education and training and academic intermediary business. In 2021, Kaiyuan Education Technology Group Co.Ltd(300338) company’s operating revenue was 930830600 yuan, of which the operating revenue of education and training business was 720976100 yuan, accounting for 77.46% of the operating revenue, and the operating revenue of academic intermediary business was 164042400 yuan, accounting for 17.62% of the operating revenue, accounting for 95.08% of the operating revenue.
The education and training services provided by Kaiyuan Education Technology Group Co.Ltd(300338) company belong to the performance obligation to be performed within a certain period of time. The tuition fees are charged according to the type of courses agreed in the contract, and the revenue is recognized according to the performance progress during the period of providing services to students according to the expected amount of no refund The academic intermediary service provided by Kaiyuan Education Technology Group Co.Ltd(300338) company belongs to the performance obligation completed at a certain time point. According to the collection period and the agreed sharing proportion or commission rebate proportion agreed in the contract, the income amount is recognized at the fair value when the student confirms the admission status.
As operating revenue is one of the key performance indicators of Kaiyuan Education Technology Group Co.Ltd(300338) company, there may be inherent risks that the management may achieve specific goals or expectations through inappropriate revenue recognition. At the same time, revenue recognition involves complex information systems and major management judgments. Therefore, we identified revenue recognition as a key audit matter.
2. Audit response
For revenue recognition, our audit procedures mainly include:
(1) Understand the key internal controls related to revenue recognition, evaluate the design of these controls, determine whether they are implemented, and test the operation effectiveness of relevant internal controls;
(2) Understand the revenue recognition policies of comparable listed companies in the same industry, discuss the business characteristics of Kaiyuan Education Technology Group Co.Ltd(300338) company with the management, check the main business contracts, understand the contract terms or conditions related to revenue, and evaluate the appropriateness of revenue recognition policies;
(3) Analyze the income and gross profit margin of the current period and evaluate the overall rationality of the income;
(4) Select samples of the revenue confirmed in this period, check the registration information, collection receipts and bank transfer records, and check with the business system to check the authenticity of registration and collection;
(5) Obtain student information and implement analysis procedures, compare and analyze the non-financial information with financial information, and verify the authenticity of income from the aspects of student age, region and learning records;
(6) Implement the telephone inquiry procedure, and check the trainees’ name, registration time, registration course, collection amount and collection method through telephone inquiry to determine the authenticity of trainees and class hours;
(7) Implement the on-site visit procedure, select a certain sample size to visit the campus, understand the collection situation, the operation of class hour management system, and check the student sign in form; Understand the site rental cost of outlets and the salary level of teachers, and check with the actual book data to prove the rationality of income;
(8) Implement the letter confirmation procedure, and send letters to cooperative colleges and third parties with high academic income this year, including the ending balance, rebate and sharing amount in the reporting period, etc; To confirm the authenticity of the transaction by confirming the loan amount and the actual amount received from the partners who provide loans to the trainees;
(9) Obtain the admission list of academic intermediary business, select some students, check the admission notice, and check whether the students are admitted and meet the conditions for confirming income;
(10) Conduct a cut-off test on the operating income recognized before and after the balance sheet date to evaluate whether the operating income is recognized in an appropriate period;
(11) Check whether the information related to operating income has been properly presented in the financial statements.
5、 Other information
The management is responsible for other information. Other information includes the information covered in the 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. In this regard, we have nothing to report.
6、 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 Kaiyuan Education Technology Group Co.Ltd(300338) company, disclosing matters related to sustainable operation, and applying the assumption of sustainable operation, unless liquidation is planned, operation is terminated or there is no other realistic choice.
Kaiyuan Education Technology Group Co.Ltd(300338) corporate governance (hereinafter referred to as governance) is responsible for supervising the financial reporting process of Kaiyuan Education Technology Group Co.Ltd(300338) company.
7、 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. The risk of fraud, collusion or failure to control may be higher than that caused by the discovery of material misstatement or fraud.
（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 Kaiyuan Education Technology Group Co.Ltd(300338) 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 Kaiyuan Education Technology Group Co.Ltd(300338) 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 Kaiyuan Education Technology Group Co.Ltd(300338) 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 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. Tianjian Certified Public Accountants (special general partnership) Chinese certified public accountant:
(project partner)
Hangzhou, China Certified Public Accountant:
