Venture(US:VEMLY) Zheng Quan Zhi Xing·2025-07-23 19:13Audit Opinion - The audit report concludes that the financial statements of Guangdong Institute of Building Science Group Co., Ltd. (hereinafter referred to as "the Company") fairly reflect its financial position as of December 31, 2022, 2023, and 2024, in accordance with accounting standards [1][2][3]. Key Audit Matters - Revenue recognition is identified as a key audit matter due to its significant impact on the Company's profits and the complexity of its revenue streams. The audit involved evaluating internal controls, testing key controls, and verifying the accuracy of revenue recognition through various procedures [1][2]. - The recoverability of accounts receivable and contract assets is another key audit matter, with the Company reporting accounts receivable and contract assets totaling RMB 618.2 million and RMB 134.0 million in provisions for bad debts and impairment, respectively. The audit assessed management's estimates and judgments regarding the recoverability of these assets [2][3]. Management and Governance Responsibilities - The management of the Company is responsible for preparing financial statements that fairly present the Company's financial position and for maintaining necessary internal controls to prevent material misstatements due to fraud or error. The governance layer oversees the financial reporting process [2][3]. Company Overview - The Company was established on December 25, 2013, and has undergone several changes in its capital structure, with a registered capital of RMB 313.9 million as of December 31, 2024. The major shareholder is Guangdong Provincial Construction Engineering Group Co., Ltd., holding 73.62% of the shares [3][4]. Financial Reporting Basis - The financial statements are prepared based on the going concern assumption and in accordance with the accounting standards issued by the Ministry of Finance. The reporting period is from January 1 to December 31 each year [11][12]. Accounting Policies - The Company adopts specific accounting policies and estimates that reflect its operational characteristics, including revenue recognition and the treatment of financial instruments. The financial statements are presented in Renminbi [11][12]. Financial Instruments - Financial assets are classified at initial recognition based on the business model and cash flow characteristics. The Company categorizes its financial assets into those measured at amortized cost, those measured at fair value with changes recognized in other comprehensive income, and those measured at fair value with changes recognized in profit or loss [20][21]. Consolidation and Control - The Company consolidates its financial statements based on control, including all subsidiaries. Internal transactions are eliminated in the consolidation process, and any losses from impairment are fully recognized [9][10]. Revenue and Expense Recognition - The Company recognizes revenue based on the completion of performance obligations and assesses the timing of revenue recognition to ensure it aligns with the accounting period [11][12]. Cash and Cash Equivalents - Cash and cash equivalents are defined as cash on hand and deposits that are readily available for payment. The Company ensures that its cash management practices align with its operational needs [17][18]. Conclusion - The audit report and financial statements provide a comprehensive overview of the Company's financial health, operational structure, and adherence to accounting standards, reflecting its commitment to transparency and accountability in financial reporting [1][2][3].