Audit report
Yksz (2022) No. 01620053 Lingnan Eco&Culture-Tourism Co.Ltd(002717) all shareholders:
1、 Audit opinion
We have audited the financial statements of Lingnan Eco&Culture-Tourism Co.Ltd(002717) (hereinafter referred to as " Lingnan Eco&Culture-Tourism Co.Ltd(002717) "), 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 Lingnan Eco&Culture-Tourism Co.Ltd(002717) 2021 as of December 31, 2021 and the operating results and cash flows of 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 Lingnan Eco&Culture-Tourism Co.Ltd(002717) , 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.
(I) recognition of project contracting business income
1. Event description
As stated in notes IV (30) and VI (47) of the financial statements, the recognition of project construction contract revenue has a significant impact on the company's operating results. The engineering contract services provided belong to the contractual obligations performed within a certain period of time, and the revenue is recognized according to the performance progress Lingnan Eco&Culture-Tourism Co.Ltd(002717) project contract revenue is mainly recognized by the input method, which involves the significant judgment and estimation of the management, including the judgment and estimation of the estimated total contract revenue, the estimated total contract cost and the performance progress. In view of the importance of engineering construction contract revenue and its recognition involves significant judgment and estimation, we regard it as a key audit matter.
2. Audit response
(1) Evaluated and tested the management's internal control related to the revenue recognized by the project construction contract input method, including the recognition of the estimated total contract revenue, the estimated total contract cost and the performance progress; (2) Compare the actual cost of the company's historical completed projects with the estimated total cost, and judge the experience and ability of the company's management to confirm the estimated total cost;
(3) Obtain the engineering contract of major projects in the reporting period, review the key terms in the engineering contract, verify the accuracy of the estimated total contract revenue and the estimated total contract cost, and extract the confirmation letter of Engineering output value of major projects sealed by the engineering owner or supervisor;
(4) Visit and check the major projects in the reporting period, and interview with the owner to understand the relevant situation of the project;
(5) Spot check the original cost vouchers of major engineering projects in the reporting period, and recalculate the accuracy of income recognition according to the input method. We have implemented analytical review procedures for the gross profit margin of major contract projects and abnormal projects.
(6) Implement the cut-off test procedure to check whether the revenue and cost of relevant engineering construction contracts are recorded in the appropriate accounting period.
(II) impairment of goodwill
1. Event description
As stated in "note VI (20)" of the financial statements, as of December 31, 2021, Lingnan Eco&Culture-Tourism Co.Ltd(002717) the original value of goodwill in the consolidated balance sheet is 1.084 billion yuan, the provision for impairment of goodwill is 218 million yuan, and the net book value of goodwill is 867 million yuan. As the impairment test of goodwill needs to evaluate the present value of the estimated future cash flow of relevant asset groups, involving the significant judgment and estimation of the management, and considering the importance of goodwill to the overall financial statements, we regard the impairment of goodwill as a key audit matter.
2. Audit response
(1) Review the management's recognition of the asset group and the method of allocating goodwill to the asset group;
(2) Understand the historical performance and development plan of each asset group, as well as the development trend of macro economy and its industry;
(3) Evaluate the assumptions and methods adopted by the management in estimating the recoverable amount of the asset group;
(4) Review the rationality of the cash flow forecast data and the discount rate adopted, including the expected output value, future price, growth rate, expected gross profit margin and relevant expenses of the asset group, and compare and analyze with the historical data of the relevant asset group;
(5) Evaluate the competence, evaluation process and independence of external valuation experts employed by the management.
(III) accounts receivable, contract assets and impairment reserves
1. Event description
As stated in "note IV (XI)", "note IV (XIII)", "note VI (III)" and "note VI (VIII)" of the financial statements, Lingnan Eco&Culture-Tourism Co.Ltd(002717) accounts receivable and contract assets shall calculate the loss reserve according to the amount equivalent to the expected credit loss in the whole duration. As of December 31, 2021, the book balance of accounts receivable in Lingnan Eco&Culture-Tourism Co.Ltd(002717) consolidated balance sheet is RMB 2.602 billion, the bad debt provision of accounts receivable is RMB 415 million, the book balance of contract assets is RMB 8.010 billion, and the provision for impairment of contract assets is RMB 425 million. For accounts receivable and contract assets with significant single amount and credit impairment, the management separately determines the credit loss by estimating the expected cash flow received based on the objective evidence of credit impairment and considering the forward-looking information. For the accounts receivable and contract assets other than the credit loss determined separately, the management adopts the impairment matrix to determine the credit loss based on the common credit risk characteristics, and the expected credit loss rate is determined based on the historical actual loss rate of Lingnan Eco&Culture-Tourism Co.Ltd(002717) and considering the forward-looking information. The determination of the provision for credit losses of accounts receivable and contract assets involves the use of significant accounting estimates and judgments by the management, and the impairment of accounts receivable and contract assets is important to the overall financial statements. For the above reasons, we identified the impairment of accounts receivable and contract assets as key audit matters.
2. Audit response
(1) We understand the management's key internal control over financial reporting related to credit control, account recovery and assessment of impairment provision, and evaluate and test the design and operation effectiveness of these internal controls;
(2) We evaluated the reasonableness of accounting estimates related to impairment provision, such as the financial status and credit rating of the counterparty;
(3) We checked the accounts receivable aging and historical repayment records, and rechecked the management's prediction of accounts receivable recovery;
(4) Evaluate the rationality of the management's provision for the impairment loss of accounts receivable in combination with the characteristics of credit risk and aging analysis, and implement the letter of credit procedure of accounts receivable and the collection after the inspection period;
(5) We select accounts receivable and contract assets with significant amount or high risk to independently test their recoverability.
When evaluating the recoverability of relevant accounts receivable, we checked relevant supporting evidence, including subsequent collection, customer's credit history, operation and repayment ability.
4、 Other information
Lingnan Eco&Culture-Tourism Co.Ltd(002717) Management (hereinafter referred to as management) is responsible for other information. Information included in our annual audit report and other information not included in our annual 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 going concern ability of Lingnan Eco&Culture-Tourism Co.Ltd(002717) and disclosing the matters related to going concern (if applicable), and applying the going concern assumption, unless the management plans to liquidate Lingnan Eco&Culture-Tourism Co.Ltd(002717) , terminate the operation or has no other realistic choice.
Supervise the financial reporting process.
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 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 Lingnan Eco&Culture-Tourism Co.Ltd(002717) going concern ability. 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 Lingnan Eco&Culture-Tourism Co.Ltd(002717) unable to continue to operate.
(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 the entity or business activities in Lingnan Eco&Culture-Tourism Co.Ltd(002717) to express an audit opinion on the consolidated 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.
China certified public accountant of Asia Pacific (Group) accounting firm
(special general partnership)
China. Beijing China Certified Public Accountant
April 29, 2002
Consolidated balance sheet
Prepared by: Lingnan Eco&Culture-Tourism Co.Ltd(002717) December 31, 2021 amount unit: RMB
Project note VI December 31, 2021 December 31, 2020
Current assets:
Monetary capital (I) 153124756630265436162563 trading financial assets derivative financial assets
Notes receivable (II) 571704775519453271 accounts receivable (III) 218728560385180295161771 accounts receivable financing (IV) 15500 China Vanke Co.Ltd(000002) 11920000 prepayment (V) 158040541589251882740 other receivables (VI) 28915751429366186089
