Audit Report
Dahua Certified Public Accountants (Special General Partnership)
Audit Report No. Dahua Audit [2025] 0011003670
To all shareholders of Luoyang Xinqianglian Slewing Bearing Co., Ltd.:
1. Audit Opinion
We have audited the financial statements of Luoyang Xinqianglian Slewing Bearing Co., Ltd. (hereinafter referred to as "the Company"), including the consolidated and parent company balance sheets as of December 31, 2024, the consolidated and parent company income statements, consolidated and parent company cash flow statements, consolidated and parent company statements of changes in equity, and the related notes to the financial statements. In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and its financial performance and cash flows for the year then ended in accordance with the Accounting Standards for Business Enterprises.
2. Basis for Audit Opinion
We conducted our audit in accordance with the auditing standards for certified public accountants in China. The section of the audit report titled "Responsibilities of Certified Public Accountants for the Audit of Financial Statements" further explains our responsibilities under these standards. In accordance with the Code of Ethics for Certified Public Accountants in China, we are independent of the Company and have fulfilled our other ethical responsibilities. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
3. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the current period. These matters were addressed in the context of our audit of the financial statements as a whole and in forming our opinion thereon, and we do not provide a separate opinion on these matters. The key audit matters identified in our audit include:
- Provision for Bad Debts on Accounts Receivable
- Revenue Recognition
(1) Provision for Bad Debts on Accounts Receivable
- Description of the Matter For the accounting policy and book value of accounts receivable, please refer to the notes to the consolidated financial statements, Note 3 (13) and Note 5, Note 4. As of December 31, 2024, the original value of accounts receivable in the consolidated financial statements was 1,598,277,800 yuan, with a provision for bad debts of 231,950,000 yuan, accounting for 15.98% of total assets. The Company recognizes provisions for bad debts based on expected credit losses, requiring management to assess expected credit losses over the entire duration of accounts receivable, considering historical default loss experience, current economic conditions, and forward-looking information, which involves significant accounting estimates and judgments by management. Therefore, we identified the provision for bad debts on accounts receivable as a key audit matter.