Vontron Technology Co.Ltd(000920) 2021 annual audit report
catalogue
1、 Audit report Page 1-6 II. Financial statements Page 7-16
(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 13-14
(VIII) statement of changes in owner's equity of the parent company Page 15-16
3、 Notes to the financial statements Page 17-98
Audit report
TJS [2022] No. 1-603
Vontron Technology Co.Ltd(000920) all shareholders:
1、 Audit opinion
We have audited the financial statements of Vontron Technology Co.Ltd(000920) (hereinafter referred to as Vontron Technology Co.Ltd(000920) 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 accounting standards for business enterprises in all material aspects, and fairly reflect the consolidated and parent company's financial position of Vontron Technology Co.Ltd(000920) 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. According to the code of professional ethics for Chinese certified public accountants, we are independent of Vontron Technology Co.Ltd(000920) 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. 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.
（1） Impairment of accounts receivable
1. Event description
See note III (x) and note V (I) 3 of the financial statements for relevant information disclosure.
As of December 31, 2021, the book balance of accounts receivable of Vontron Technology Co.Ltd(000920) company was RMB 257405 million, the bad debt provision was RMB 1.615 million, and the book value was RMB 241255 million.
Vontron Technology Co.Ltd(000920) the management of the company (hereinafter referred to as the management) measures its loss reserves according to the expected credit loss amount equivalent to the whole duration based on the credit risk characteristics of various accounts receivable and the combination of individual accounts receivable or accounts receivable. For accounts receivable whose expected credit loss is measured on a single basis, the management comprehensively considers the reasonable and reliable information about past events, current situation and future economic situation forecast, estimates the expected cash flow received, and determines the bad debt provision to be withdrawn accordingly; For accounts receivable that measure the expected credit loss on the basis of portfolio, the management divides the portfolio according to whether the sales business is a dealer, refers to the historical credit loss experience, and adjusts it according to forward-looking estimates. For accounts receivable that do not contain major financing components, Vontron Technology Co.Ltd(000920) company measures the loss reserve according to the expected credit loss amount equivalent to the whole duration.
As the amount of accounts receivable is significant and the impairment of accounts receivable involves significant management judgment, we determine the impairment of accounts receivable as a key audit event.
2. Audit response
(1) Understand the key internal controls related to the impairment of accounts receivable, evaluate the design of these controls, determine whether they have been implemented, and test the operation effectiveness of relevant internal controls;
(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 credit risk assessment of accounts receivable, and evaluate whether the management has properly identified the credit risk characteristics of various accounts receivable;
(4) For accounts receivable whose expected credit loss is measured on the basis of portfolio, evaluate the rationality of the management's division of portfolio according to the characteristics of credit risk; Evaluate the rationality of the expected credit loss rate determined by the management based on historical credit loss experience and forward-looking estimation; Test the accuracy and completeness of the data used by the management (including accounts receivable aging, historical loss rate, migration rate, etc.) and whether the calculation of bad debt reserves is accurate; (5) Implement the letter confirmation procedure for the balance of accounts receivable with significant ending balance, frequent transactions or long aging in the reporting period by sampling, and check the letter confirmation results with the amount recorded in the book;
(6) Check the post period collection of accounts receivable and evaluate the rationality of the management's provision for bad debts of accounts receivable;
(7) Check whether the information related to the impairment of accounts receivable has been properly presented in the financial statements. （2） Revenue recognition
1. Event description
See note III (XXII), note V (II) 1 and note XIII (I) of the financial statements for relevant information disclosure.
Vontron Technology Co.Ltd(000920) the company's operating income mainly comes from the sales of membrane products, plant fiber products and other products, as well as membrane separation and reclaimed water reuse based on membrane products. In 2021, the operating revenue of Vontron Technology Co.Ltd(000920) company was 1380819400 yuan, of which the operating revenue of membrane products and plant fiber products was 1198862200 yuan, accounting for 86.82% of the operating revenue.
The company mainly sells membrane products and plant fiber products, both of which belong to the performance obligation to be performed at a certain point in time. The revenue recognition of domestic products shall meet the following conditions: domestic sales revenue shall be recognized when the company transports the products to the delivery place agreed in the contract and the customer confirms acceptance, has received the price or obtained the right to receive payment, and the relevant economic benefits are likely to flow in. Export revenue is recognized when the company has declared the products according to the contract, obtained the bill of lading, received the payment for goods or obtained the collection power, and the relevant economic benefits are likely to flow in.
As operating revenue is one of the key performance indicators of Vontron Technology Co.Ltd(000920) company, there may be inherent risks that the management may achieve specific goals or expectations through inappropriate revenue recognition. Therefore, we identified revenue recognition as a key audit matter.
2. Audit response
(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) Check the sales contract, understand the main contract terms or conditions, and evaluate whether the revenue recognition method is appropriate.
(3) Analyze the operating revenue and gross profit margin according to the year, products and customers, identify whether there are significant or abnormal fluctuations, and find out the causes of fluctuations;
(4) For domestic sales revenue, check the supporting documents related to revenue by sampling, including sales contract, order, sales invoice, delivery note and bank receipt; For export revenue, obtain the information of E-port and check it with the book records, and check the sales contract, export declaration form, freight bill of lading and other supporting documents by sampling;
(5) Combined with the letter of accounts receivable, the current sales volume is confirmed to the main customers by sampling;
(6) Check the collection after the period, especially pay attention to the uncollected payment beyond the credit period;
(7) 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;
(8) Check whether the information related to operating income has been properly presented in the financial statements.
4、 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.
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 Vontron Technology Co.Ltd(000920) company, disclosing matters related to sustainable operation (if applicable), and applying the assumption of sustainable operation, unless liquidation is planned, operation is terminated or there is no other realistic choice.
Vontron Technology Co.Ltd(000920) corporate governance (hereinafter referred to as governance) is responsible for supervising the financial reporting process of Vontron Technology Co.Ltd(000920) 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 to design appropriate audit procedures.
（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 Vontron Technology Co.Ltd(000920) 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 Vontron Technology Co.Ltd(000920) 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 Vontron Technology Co.Ltd(000920) company to express an audit opinion 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:
April 29, 2002
Consolidated balance sheet
December 31, 2021
Huihe form 01 prepared by: Vontron Technology Co.Ltd(000920)
