We are required to perform preliminary analytical procedures as part of our risk assessment procedures to:

(1) Assist in obtaining our overall understanding of the entity and its environment, and
(2) Obtain a general understanding of the content of the financial statements and significant operational or accounting chang
occurred since the prior audit engagement.

Such risk assessment procedures familiarize us with the entity’s liquidity and profitability and helps us to identify matters tha
entity’s ability to continue as a going concern. Performing preliminary analytical procedures involves looking for unusual cha
statements, or the absence of expected changes, to help us identify risks of material misstatement. [2700.01]

We shall evaluate whether unusual or unexpected relationships that have been identified in performing analytical procedu
related to revenue accounts, may indicate risks of material misstatement due to fraud. [2700.18]

The following guidance relates to procedures for the following activities:

1. Obtain financial and nonfinancial information
2. Compare the information
3. Discuss unusual or unexpected significant fluctuations or relationships with management
4. Further analysis of financial information

Obtain financial and nonfinancial information

To perform Preliminary Analytical Procedures, we may obtain the most-recent financial information prepared by the Entity a
financial information in a comparable format. [2700.03]

We may also wish to obtain the Entity’s current-period budgets, forecasts, or other documentation if we believe they were p
reasonable assumptions. This information, if available, may be used to develop expectations about the current-period financ
[2700.04]

In addition to financial information, nonfinancial information may be useful in performing Preliminary Analytical Procedures.
information may be used in determining whether the current-period information is consistent with our general understandin
operations.
For example, information that Management may be using includes production capacity, quantities purchased and sold, and h
[2700.05]

Compare the information

We may use the information obtained to make comparisons, ordinarily using the current-period interim financial information
financial information and/or current-period budgets. In making these comparisons, our objective is to identify conditions tha
material misstatement (whether from fraud or error) of the financial statements. We may do this by considering the followin
• Unusual changes or the absence of expected changes in account balances
• Unusual changes or the absence of expected changes in key financial relationships
• Key financial and nonfinancial relationships
• Production capacity in relation to recorded sales and changes in inventories
• Physical limitations on inventory storage in relation to inventory balances. [2700.06]
Determining which comparisons and measures to perform is a matter of professional judgment depending on the circumstan
changes that have occurred over time, the current-period information is compared to prior-period information. Comparison
current-period and prior-period financial information may include calculating the following:
• Monetary changes in account balances
• Percentage changes for the current period, compared with percentage change for similar prior periods. [2700.07]

Simple comparisons between the current-period account balances and those of the prior period may reveal new accounts no
accounts that are no longer in use, or accounts with significantly increased or decreased balances. To determine whether an
indicative of risk of material misstatement, we may consider them in the context of our current understanding of the Entity.
includes the following:
• The Entity and the environment in which it operates
• Information regarding changes and anticipated changes in operations and Accounting Policies obtained through ongoing co
Entity since the last audit engagement, as well as meetings and discussions with senior management held to update our over
our understanding of the Entity and its environment. [2700.08]

From this information, we may obtain an understanding of the changes we anticipate in the current-period information as co
prior period. For example, we may expect sales to be approximately X percent higher than for the same period last year as a
the sales force. [2700.09]

Given the purpose of Preliminary Analytical Procedures, we do not develop precise expectations of the recorded amounts, no
to document our anticipated results. [2700.10]

Discuss unusual or unexpected significant fluctuations or relationships with management

Appropriate corroborative audit evidence obtained during Preliminary Analytical Procedures differs from the extent of corrob
obtained when performing substantive analytical procedures. The objective of Preliminary Analytical Procedures is to identif
material misstatement and other information which may influence the development of our audit plan, whereas Substantive A
are used to obtain sufficient appropriate audit evidence. [2700.12]

We may discuss the results with management and determine whether they offer plausible explanations for the fluctuations.
explanations are consistent with our understanding of the Entity and its environment. We may consider examining supportin
evidence if we believe this to be necessary. [2700.13]

Our inquiries of management are high-level in nature and are directed toward identifying possible causes of the fluctuations
effect, if any, on the nature, timing, and extent of our audit procedures. Our inquiries help us obtain a greater understanding
environment and current-period operations. [2700.14]
Further analysis of financial information
This further analysis may be performed to help narrow the cause of a fluctuation to a particular account balance or group of
helps us in our assessment of risk to pinpoint risks of material misstatement to classes of transactions, account balances and
Assertions and to develop an appropriate audit plan. [2700.16]

This further analysis may include the following:

• Calculating measures and ratios — Indicators of liquidity, activity, profitability, leverage, productivity, and valuation. Deter
and ratios to calculate is a matter of professional judgment, depending on the circumstances. Measures used need to be we
conditions indicative of risks of material Misstatements or the Entity’s circumstances and industry.
• Making additional comparisons of the current-period recorded amounts to independent information or benchmarks. We m
comparisons between:
o Budget and recorded amounts
o Parallel operations
o Entity and industry or competitors. [2700.17]

Evaluation and findings

The evaluation and findings resulting from the preliminary analytical procedures should be documented on the Summary tab

The Preliminary Analytical Procedures performed may help us to identify Risks of material misstatement as well as significant
accounting changes that may affect our audit plan (e.g., new locations, products, and transactions). [2700.19]
 sment procedures to:

ificant operational or accounting changes that may have

ity and helps us to identify matters that call into question the
dures involves looking for unusual changes in the financial
misstatement. [2700.01]

tified in performing analytical procedures, including those

ud. [2700.18]

gement

al information prepared by the Entity and the prior-period

cumentation if we believe they were prepared using

tations about the current-period financial information.

ming Preliminary Analytical Procedures. Nonfinancial

nsistent with our general understanding of business

y, quantities purchased and sold, and headcount statistics.

nt-period interim financial information, with the prior-period

ur objective is to identify conditions that may indicate risks of
may do this by considering the following:
udgment depending on the circumstances. In looking at
prior-period information. Comparisons over time using
wing:

milar prior periods. [2700.07]

ior period may reveal new accounts not previously used,

ed balances. To determine whether any such changes are
r current understanding of the Entity. This understanding

g Policies obtained through ongoing communications with the

management held to update our overall audit strategy and

n the current-period information as compared with that of the

han for the same period last year as a result of an increase in

pectations of the recorded amounts, nor is there a requirement

ment
edures differs from the extent of corroborative audit evidence
nary Analytical Procedures is to identify potential risks of
f our audit plan, whereas Substantive Analytical Procedures

ible explanations for the fluctuations. It is important that the

We may consider examining supporting documentary

ing possible causes of the fluctuations and determining their

help us obtain a greater understanding of the Entity and its
particular account balance or group of account balances. This
of transactions, account balances and disclosures and related

age, productivity, and valuation. Determining which measures

tances. Measures used need to be well suited to identifying
nd industry.
dent information or benchmarks. We may consider making

d be documented on the Summary tab.

rial misstatement as well as significant operational or

ransactions). [2700.19]
This workbook may be used to assist us in performing year-to-year comparisons of balance-sheet and income-statement fina
ratio analysis related to liquidity, operating, profitability, and leverage. These ratios may be tailored as necessary.
The cash flow statement is part of the financial statements and shall be analyzed as well in the dedicated worksheet.
Fill out only the cells in white.

The worksheets provided herein are not all-inclusive. Accordingly, the blank worksheet entitled "Other Analytical Procedure
perform any other procedures considered necessary; delete if not used. Sources of data which may be useful in performing
include the following:
· Budgets and Forecasts
· Competitors' Financial Statements (https://intellinet.deloitte.com)
· Industry Statistics

To tailor this workbook to the financial statement line items used by the entity, we consider the following:

When using Trial Balance function within AS/2

When we are using the Trial Balance function of AS/2, we can make a direct link between the data entered in Trial Balance an
- Open the Trial Balance with the relevant data to copy
- Go to the "Comparative View" (under View and then Balances)
- Go to the appropriate level (for example "FS Lines"), by clicking on the tabs at the left-bottom of the screen
- Right-click on the cell of the year and the row to copy and select "copy"
- Go to this workbook and choose the proper white cell on tab "Balance sheet" or "Income statement" in the same column/p
- Go to "AS/2 Tools" and select "Paste TB links" or just hit CTRL+ALT+L at the same time
(Use the sum formula in the cells to summarize more then one "FS Lines" items or "Notes Lines";
Insert the links only once, next years use the "Update TB links" or CTRL+ALT+F9)

When using the entity's balance sheet and income statement

When we want to use the reporting form as prepared by the entity, consider adding the tabs with this data to this workbook
between the entity's layout and the classifications used on the tabs "Balance Sheet" and "Income Statement". In this way, we
variance analysis on the financial line items as used within the entity and make use of the ratio-analysis by creating a link to t
and "Income Statement".

If available, other information such as disclosures can be considered as well.

When using the entity's cash flow statement

When we want to use the reporting prepared by the entity, consider adding tabs with this to this workbook and perform a de
data.
As there is a variety of possible cash flow statement formats, a high-level format has been provided in the worksheet "Cash F
results of our analytical review.
This procedure should be considered only If a cash flow statement is available at the time of our preliminary analytical review

Changing the "standard" wording and classification on tabs "Balance Sheet" and "Income Statement"
In case we want to change the wording and classifications used on the tabs "Balance Sheet and "Income Statement", one sho
ratios are calculated using the names defined to the specific cells. Deleting or adding cells to the balance sheet and income st
effect that the formulas are giving errors and/or is giving incorrect output. To overcome this, we can consider adding addition
which the line item descriptions and figures are inserted which are used by the entity and use the "standard" line items to su
(using the sum function). In this way the form can be made more entity-specific and the ratios can also be used.
ance-sheet and income-statement financial data, as well as
ay be tailored as necessary.
ell in the dedicated worksheet.

t entitled "Other Analytical Procedures" may be used to

ata which may be useful in performing additional procedures

nsider the following:

een the data entered in Trial Balance and this work book:

-bottom of the screen

ome statement" in the same column/period and click on it

e
tes Lines";

he tabs with this data to this workbook and make a link

nd "Income Statement". In this way, we are able to perform the
the ratio-analysis by creating a link to the tabs "Balance Sheet"

this to this workbook and perform a detailed review using this

been provided in the worksheet "Cash Flow" to summarize the

me of our preliminary analytical review.

ome Statement"
heet and "Income Statement", one should understand that the
ells to the balance sheet and income statement could have the
e this, we can consider adding additional rows to the sheets in
and use the "standard" line items to summarize these rows
e ratios can also be used.
 -
Codes Note line 31/12/20X2
111 Cash 25,786,195,149
131 Short-term trade receivables 17,646,848,625
132 Short-term advances to suppliers 8,768,133,585
136 Other short-term receivables 223,910,925
141 Inventories 145,515,039,553
149 Provision for devaluation of inventories -8,400,944,404
151 Short-term prepayments 5,591,673,177
152 Value added tax deductibles 70,845,689,529
216 Other long-term receivables 2,847,598,000
221 Tangible fixed assets 953,951,847,515
227 Intangible assets 74,227,082,381
242 Long-term construction-in-progress 144,547,957,600
261 Long-term prepayments 103,887,984,632
311 Short-term trade payables 222,451,204,127
312 Short-term advancespayable
Taxes and amounts from customers
to the 560,262,277,507
313 State budget 2,890,020,291
314 Payables to employees 74,259,169,361
315 Short-term accrued expenses 35,725,117,819
319 Other current payables 2,136,287,408
342 Long-term provisions 1,401,293,529
411 Owner's contributed capital 907,893,911,127
421 Accumulated loss -261,580,264,903
511 Sales -1,375,234,858,751
632 Cost of goods sold 1,285,665,521,604
641 Selling expenses 23,831,493,227
642 Administration expenses 53,522,876,159
515 Financial income -6,002,973,783
635 Financial expenses 4,218,108,216
711 Other income -295,888,133
811 Other expenses 314,740,589
8211 Corporate income tax expenses 2,796,196,174
 - Variance
31/12/20X1 Amount % Mapping
19,130,573,580 6,655,621,569 35% Cash and Cash equivalent
3,169,386,519 14,477,462,106 457% Accounts Receivable (net)
1,970,607,925 6,797,525,660 345% Advance to suppliers
65,778,737,124 -65,554,826,199 -100% Other Current Assets
107,149,824,640 38,365,214,913 36% Inventory
-9,462,008,163 1,061,063,760 -11% Inventory
2,501,506,284 3,090,166,893 124% Other Current Assets
62,090,385,092 8,755,304,437 14% Other Current Assets
4,544,696,000 -1,697,098,000 -37% Other Long-Term Assets
789,391,527,843 164,560,319,672 21% Property, Plant & Equipment (net)
47,786,462,552 26,440,619,829 55% Intangible Assets
106,102,656,613 38,445,300,986 36% Construction in progress
68,401,831,219 35,486,153,413 52% Other Long-Term Assets
417,965,150,708 -195,513,946,581 -47% Trade Payables
410,191,086,700 150,071,190,807 37% Advances from customers
5,869,266,076 -2,979,245,785 -51% Tax Payables to the State budget
65,929,225,093 8,329,944,268 13% Payable to employees
1,435,635,157 34,289,482,663 2388% Accrual
2,915,185,863 -778,898,455 -27% Other Current Liabilities
840,769,881 560,523,648 67% Other Long-Term Liabilities
641,309,411,127 266,584,500,000 42% Common Equity or Paid in Capital
-277,899,543,376 16,319,278,473 -6% Retained Earnings
-721,931,473,978 -653,303,384,773 90% Net Revenue / Sales
786,493,392,190 499,172,129,414 63% Cost of Sales / Cost of Goods Sold
12,905,533,137 10,925,960,091 85% Selling and Marketing
42,898,607,291 10,624,268,868 25% Administration
-1,358,716,356 -4,644,257,427 342% Financial income
2,925,033,329 1,293,074,887 44% Financial expenses
-147,679,346,837 147,383,458,704 -100% Other income
74,502,350 240,238,239 322% Other expense
5,134,493,775 -2,338,297,601 -46% Income Taxes
 Balance Sheet

Current period vs.

Current period Prior period Prior period

BALANCE SHEET 31/12/20X2 31/12/20X1 Difference % Difference Amount

Enter debits as positive amounts and credits as negative amounts.

Cash and Cash equivalent 25,786,195,149 19,130,573,580 34.8% 6,655,621,569

Accounts Receivable (net) 17,646,848,625 3,169,386,519 456.8% 14,477,462,106
Advance to suppliers 8,768,133,585 1,970,607,925 345% 6,797,525,660

QUICK ASSETS 52,201,177,358 24,270,568,024 115.1% 27,930,609,334

Inventory 137,114,095,149 97,687,816,477 40.4% 39,426,278,672

Other Current Assets 76,661,273,631 130,370,628,500 -41.2% (53,709,354,869)

TOTAL CURRENT ASSETS 265,976,546,138 252,329,013,001 5.4% 13,647,533,137

Property, Plant & Equipment (net) 953,951,847,515 789,391,527,843 20.8% 164,560,319,672 {f}
Intangible Assets 74,227,082,381 47,786,462,552 55.3% 26,440,619,829
Construction in progress 144,547,957,600 106,102,656,613 36% 38,445,300,986
Prepaid Assets - - - -
Other Long-Term Assets 106,735,582,632 72,946,527,219 46.3% 33,789,055,413

TOTAL ASSETS 1,545,439,016,265 1,268,556,187,228 21.8% 276,882,829,037

Trade Payables 222,451,204,127 417,965,150,708 -47% (195,513,946,581) {h}

Advances from customers 560,262,277,507 410,191,086,700 37% 150,071,190,807
Tax Payables to the State budget 2,890,020,291 5,869,266,076 -51% (2,979,245,785)
Payable to employees 74,259,169,361 65,929,225,093 13% 8,329,944,268
Accrual 35,725,117,819 1,435,635,157 2,388% 34,289,482,663
Other Current Liabilities 2,136,287,408 2,915,185,863 -27% (778,898,455)
Other Long-Term Liabilities 1,401,293,529 840,769,881 67% 560,523,648

TOTAL LIABILITIES 899,125,370,042 905,146,319,478 -0.7% (6,020,949,436)

Common Equity or Paid in Capital 907,893,911,127 641,309,411,127 42% 266,584,500,000

Retained Earnings -261,580,264,903 -277,899,543,376 -6% 16,319,278,473

TOTAL EQUITY 646,313,646,223 363,409,867,751 77.8% 282,903,778,473

TOTAL LIABILITIES & EQUITY 1,545,439,016,265 1,268,556,187,228 21.8% 276,882,829,037

828308934.xlsx
Page 13 of 19
 Income Statement

Current period % of Net Prior period % of Net Current period vs.

Prior period
INCOME STATEMENT FY 20X2 Sales FY20X1 Sales Difference % Difference Amount

Net Revenue / Sales -1,375,234,858,751 100% -721,931,473,978 100% 90.5% (653,303,384,773) {v}
Cost of Sales / Cost of Goods Sold 1,285,665,521,604 -93% 786,493,392,190 -109% 63.5% 499,172,129,414

GROSS PROFIT -89,569,337,147 7% 64,561,918,212 -9% -238.7% (154,131,255,359)

Administration 53,522,876,159 -4% 42,898,607,291 -6% 24.8% 10,624,268,868 {m}

Selling and Marketing 23,831,493,227 -2% 12,905,533,137 -2% 84.7% 10,925,960,091 {m}
Financial income -6,002,973,783 0% -1,358,716,356 0% 341.8% (4,644,257,427)
Financial expenses 4,218,108,216 0% 2,925,033,329 0% 44.2% 1,293,074,887

OPERATING INCOME -13,999,833,328 1% 121,932,375,612 -17% -111.5% (135,932,208,940)

Interest Expense - 0% - 0% - -
-
INCOME BEFORE TAXES -13,999,833,328 1% 121,932,375,612 -17% -111.5% (135,932,208,940)

Income Taxes 2,796,196,174 0% 5,134,493,775 -1% - (2,338,297,601)

INCOME AFTER TAXES -11,203,637,154 1% 127,066,869,387 -18% -108.8% (138,270,506,540)

Deferred tax - 0% - 0% 100.0% -

INCOME BEFORE EXTRAORDINARY -11,203,637,154 1% 127,066,869,387 -18% -108.8% (138,270,506,540)

ITEMS

Other income/expense 18,852,456 0% -147,604,844,487 20% 100.0% 147,623,696,943

NET INCOME -11,184,784,698 1% -20,537,975,100 3% 45.5% 9,353,190,402

828308934.xlsx
Page 14 of 19
{f}

{h}

{m}

{v}
{f}

{h}

{m}

{v}
 Ratios

Annual Ratio Report

Current period Prior period

31/12/20X2 Change % Change 31/12/20X1 Definition
Liquidity Ratios
Current Ratio 0.3 -0.30 -50.6% 0.6 See comment
Quick Ratio 0.1 0.00 0.8% 0.1 See comment
Cash Ratio 0.0 -0.02 -36.8% 0.0 See comment
Days in Receivables (5) -3.08 192.3% (2) See comment
Working Capital Ratio 0.0 0.16 -120.2% -0.1 See comment
Comments on the Liquidity Ratios:
- Current Ratio:…
+
+
- Quick Ratio:
+
+
- RA days:
+
+

Operating Ratios
Asset Turnover -1.0 0.16 -14.1% -1.1 See comment
Days in Inventory -39 6 -14.1% -45 See comment
Days in Trade Payables -63 128.16 -67.0% -191 See comment
Working Capital Turnover -2.8 -1.73 161.4% -1.1 See comment
Comments on the Operating Ratios:
- Inventories Days:
+
+
- AP Days:
+
+

828308934.xlsx
Page 17 of 19
Template 122XX, UNDERSTAND ENTITY-LEVEL CONTROLS
This Template should only be used for financial statement audits performed in accordance with ISA.

GENERAL INSTRUCTIONS

This Template may be used to document:

• Our understanding of the key elements of the entity-level components of internal control (control environment, risk assessment, information and communication, and monitoring), the sources
from which information was obtained, and the risk assessment procedures performed. This information may be documented within the “Control Environment,” “Risk Assessment,” “Info System &
Communication,” and “Monitoring” worksheets of this Template
• Our evaluation of the design of relevant entity-level controls and determination of whether they have been implemented (our evaluation is required to include procedures in addition to inquiry
of the entity’s personnel). This information, and any risks identified in obtaining an understanding of the internal control components, may be documented within the “D&I” section for each
worksheet of this Template.

This Template should NOT be used to document understanding and testing of any controls considered direct and precise or any controls that are being used to directly address a ROMM (which
are usually direct and precise controls) - the standard template for documenting business process controls should be used instead. Based on this understanding, the level of documentation herein
is not expected to be in as much detail as would be expected for direct and precise controls.

To the extent management has appropriately documented entity-level controls, we may consider including such documentation in our working papers with appropriate cross references.

If we intend to use information obtained from previous experience with the entity, we are required to determine whether changes have occurred since the previous audit that may affect its
relevance to the current audit, and evaluate whether the prior-year information remains reliable. Our inquiries and other risk assessment procedures to obtain audit evidence about the design
and implementation of relevant controls provide us the basis for making this determination.

Worksheet (1): Understand internal control — Control environment

Use this worksheet to document our understanding of the entity’s control environment. The control environment comprises the conditions under which the entity’s accounting and internal
controls are designed and implemented. It includes the governance and management functions and the attitudes, awareness, and actions of those charged with governance and management
concerning the entity’s internal control and its importance in the entity. The control environment sets the tone of an entity, influencing the control consciousness of its people. It is the foundation
for all other components of internal control, providing discipline and structure to the manner in which the principal business activities are conducted and objectives established.

Some elements of an entity’s control environment have a pervasive effect on assessing the risks of material misstatement. The existence of a satisfactory control environment can be a positive
factor when we assess the risks of material misstatement. However, although it may help to reduce the risk of fraud, a satisfactory control environment is not an absolute deterrent to fraud.
Conversely, deficiencies in the control environment may undermine the effectiveness of controls, in particular in relation to fraud.

Refer to AAM 12200 for detailed policy and guidance with respect to understanding the control environment.

Worksheet (2): Understand internal control — Risk assessment

Use this worksheet to document our understanding of the entity’s risk assessment process. Identifying, analyzing, and managing risk is an ongoing process and a critical component of effective
internal control. Management needs to focus carefully on risks at all levels of the entity, including individual operating units and business processes, and take the necessary actions to manage
them.

The entity’s risk assessment process, as discussed in the context of being one of the components of internal control over financial reporting, relates to the achievement of an entity’s financial
reporting objectives and is performed by entity management.

The entity’s risk assessment process is not the same as the risk assessment process performed by us as part of our audit.

Refer to AAM 12200 for detailed policy and guidance with respect to understanding the entity’s risk assessment process.

Worksheet (3): Understand internal control — Information system and communication

Use this worksheet to document our understanding of the entity’s information system relevant to financial reporting and communication. Inquiries and other risk assessment procedures
concerning how the information systems affect internal control provide us with information about such matters as the important systems on which management relies to manage and control the
business; whether the systems provide the right information; whether management believes internally generated information is accurate, complete, and timely; and whether management
believes that different systems provide consistent information.

Refer to AAM 12200 for detailed policy and guidance with respect to understanding the information system relevant to financial reporting and communication.

This Template focuses on the system(s) and controls relevant to the financial reporting and communication processes, and is not designed to address processes and controls relevant to material
classes of transactions, account balances, and disclosures [significant accounts and disclosures].

Worksheet (4): Understand internal control — Monitoring

Use this worksheet to document our understanding of the entity’s monitoring of internal controls. Monitoring of controls is a process to assess the effectiveness of internal control performance
over time. It involves assessing the effectiveness of controls on a timely basis and taking necessary remedial actions. Management accomplishes monitoring of controls through ongoing activities,
separate evaluations, or a combination of the two. Ongoing monitoring activities are often built into the normal recurring activities of an entity and include regular management and supervisory
activities. The scope and frequency of separate evaluations will depend on an assessment of risks and the effectiveness of ongoing monitoring procedures.

Refer to AAM 12200 for detailed policy and guidance with respect to understanding monitoring of controls.

Design and implementation

Use this section within each worksheet to evaluate the design and determine implementation of relevant controls within the control environment, controls over the risk assessment process, the
information system relevant to financial reporting and communication, and monitoring components of internal control.

• Evaluate the design of the relevant controls by determining whether the controls, if operating as prescribed by persons possessing the necessary authority and competence to perform them
effectively and satisfy the entity’s control objectives.

• Determine that properly designed controls have been implemented by determining whether each control exists and whether the entity is using it. Concentrate in particular on the
implementation of controls because controls may be established but not acted upon.

If we determine that the design or implementation of a control within any of the components of internal control prevents it from being effective, consider whether a deficiency in internal control
exists. Document any deficiencies in internal control identified.

Risks of material misstatement and other significant findings or issues identified may be documented within the “D&I” section of this Template.