Changjiangrunfa Health Industry Co.Ltd(002435)
audit report
Hxsz (2022) No. 000614
Table of contents page 1, audit report 1-7 II, audited financial statements and notes
1. Consolidated and company balance sheet 8-112, consolidated and company income statement 12-133, consolidated and company cash flow statement 14-154, consolidated and company statement of changes in shareholders’ equity 16-195 Notes to financial statements 20-143 Hexin Certified Public Accountants (special general partnership)
April 28, 2002
Changjiangrunfa Health Industry Co.Ltd(002435) report body
Audit report
Hxsz (2022) No. 000614 Changjiangrunfa Health Industry Co.Ltd(002435) all shareholders:
1、 Audit opinion
We have audited the financial statements of Changjiangrunfa Health Industry Co.Ltd(002435) Industry Co., Ltd. (hereinafter referred to as ” Changjiangrunfa Health Industry Co.Ltd(002435) 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, 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 financial position of Changjiangrunfa Health Industry Co.Ltd(002435) company as of December 31, 2021 and the operating results and cash flow of the 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 Changjiangrunfa Health Industry Co.Ltd(002435) 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
Hexin Certified Public Accountants (special general partnership) 1
Changjiangrunfa Health Industry Co.Ltd(002435) report body
Item. 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:
(I) impairment of goodwill
1. Event description
As shown in note 5 (note 17) to the consolidated financial statements, as of December 31, 2021, the book value of the goodwill of Changjiangrunfa Health Industry Co.Ltd(002435) company totaled 1206718600 yuan. According to the accounting standards for business enterprises, the management of Changjiangrunfa Health Industry Co.Ltd(002435) company (hereinafter referred to as the management) shall conduct impairment test on goodwill every year Changjiangrunfa Health Industry Co.Ltd(002435) the company conducts impairment test on the acquired underlying assets involving goodwill as an asset group as a whole. The impairment test is based on the recoverable amount of the asset group containing goodwill. The recoverable amount of the asset group is determined according to the higher one between the present value of the expected future cash flow of the asset group and the net amount of the fair value of the asset minus the disposal expenses, Its estimated future cash flow is determined based on the five-year financial budget. As the amount of goodwill is significant and the impairment test process involves significant judgment, we identified the goodwill and impairment provision of Changjiangrunfa Health Industry Co.Ltd(002435) company as key audit matters. 2. Audit response
Our main audit procedures for the impairment of goodwill include: testing the key internal control related to the impairment of goodwill of Changjiangrunfa Health Industry Co.Ltd(002435) company, including understanding the division and value definition of asset group of Changjiangrunfa Health Industry Co.Ltd(002435) company; Review the appropriateness of impairment test methods and models determined by Changjiangrunfa Health Industry Co.Ltd(002435) company; Make use of the work of the experts hired by the management, pay full attention to the independence and professional competence of the experts and the rationality of the key assumptions and judgments adopted in the impairment test; Review the management’s estimation results of goodwill and its impairment, and evaluate whether the disclosure of financial statements is appropriate.
(II) revenue recognition
Hexin Certified Public Accountants (special general partnership) 2
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1. Event description
As shown in note V (note 41) to the consolidated financial statements, Changjiangrunfa Health Industry Co.Ltd(002435) company’s total operating income in 2021 was 43698151 million yuan. For sales in China, the company will deliver goods according to the contract and order signed with the customer, which will be accepted by the customer. When the payment has been received or the right to receive payment has been obtained, and the relevant economic benefits are likely to flow in, the revenue will be recognized. For export sales, the company will recognize the revenue when it has received the payment for goods or obtained the right to receive payment according to the contract, order, customs declaration, customs declaration procedures signed with the customer, and the relevant economic benefits are likely to flow in. As revenue is one of the key performance indicators of Changjiangrunfa Health Industry Co.Ltd(002435) company, there is an inherent risk that the management manipulates the time point of revenue recognition in order to achieve specific goals or expectations. Therefore, we determine the revenue recognition of Changjiang Runfa company as a key audit matter.
2. Audit response
We evaluate the design and implementation of internal control related to sales of Changjiangrunfa Health Industry Co.Ltd(002435) company; Test and evaluate key internal controls related to revenue; Perform analytical procedures such as gross profit margin analysis on income; Check the original data related to revenue recognition, including sales contract, order, delivery order, sales invoice, customs declaration procedures, etc; The amount of current sales revenue by letter to important customers; For the sales revenue recognized before and after the balance sheet date, check the supporting documents such as delivery note, customs declaration, logistics arrival record and acceptance confirmation voucher to evaluate whether the sales revenue is recognized in an appropriate period.
4、 Other information
The management is responsible for other information. Other information includes the information covered in the 2021 annual report of Changjiangrunfa Health Industry Co.Ltd(002435) 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.
Hexin Certified Public Accountants (special general partnership) 3
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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 going concern ability of Changjiangrunfa Health Industry Co.Ltd(002435) company, disclosing matters related to going concern (if applicable), and applying the going concern assumption, unless the management plans to liquidate Changjiangrunfa Health Industry Co.Ltd(002435) company, terminate operation or have no other realistic choice.
Changjiangrunfa Health Industry Co.Ltd(002435) corporate governance (hereinafter referred to as governance) is responsible for supervising the financial reporting process of Changjiangrunfa Health Industry Co.Ltd(002435) 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 auditing in accordance with the auditing standards, we use professional judgment and maintain professional suspicion.
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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. The risk of fraud, collusion or failure to control may be higher than that caused by the discovery of material misstatement or fraud.
(II) understand the internal control related to audit to design appropriate audit procedures.
(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 Changjiangrunfa Health Industry Co.Ltd(002435) 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 Changjiangrunfa Health Industry Co.Ltd(002435) 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.
(VI) obtain sufficient and appropriate audit evidence on the financial information of entities or business activities in Changjiangrunfa Health Industry Co.Ltd(002435) company to express 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,
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Including communicating 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.
Hexin Certified Public Accountants (special general partnership) Chinese certified public accountant:
(project partner)
Jinan, China Certified Public Accountant:
April 28, 2002
Hexin Certified Public Accountants (special general partnership) 6
Consolidated balance sheet
December 31, 2021
Prepared by: Changjiangrunfa Health Industry Co.Ltd(002435) unit: RMB currency: RMB
Project note V December 31, 2021 December 31, 2020
Current assets:
Monetary Fund
