Lixin Zhonglian Certified Public Accountants (special general partnership)
About Cloud Live Technology Group Co.Ltd(002306)
Verification opinions of the letter of concern
To: the first Department of listed company management of Shenzhen Stock Exchange
The letter of concern about Cloud Live Technology Group Co.Ltd(002306) (hereinafter referred to as the letter of concern) sent by your department, which was transferred from Cloud Live Technology Group Co.Ltd(002306) (hereinafter referred to as the letter of concern), has been received. We attach great importance to it and have carefully studied the problems related to the reply of accountants. The reply to the letter of concern is as follows:
1、 The third quarterly report of 2021 shows that as of September 30, 2021, your company has achieved operating revenue
27.30991 million yuan, net profit attributable to parent company -5.6953 million yuan, net profit attributable to parent company -9.3902 million yuan after deduction of non. Please explain the reason and rationality of the substantial increase in net profit in the fourth quarter of 2021, and whether it matches the changes in operating revenue. The annual audit accountant is requested to check the above problems and give clear opinions.
Company reply:
1. Reasons and rationality of the company’s sharp increase in net profit in the fourth quarter of 2021
In the first three quarters of 2021, the company realized an operating income of 273099100 yuan, the net profit attributable to shareholders of listed companies was -5695300 yuan, and the net profit attributable to shareholders of listed companies after deducting non recurring profits and losses was -9390200 yuan. The net profit attributable to shareholders of Listed Companies in the previous three quarters included 18.1029 million yuan of accrued share based payment expenses. Since the performance indicators set in the second phase of the restricted stock incentive plan have not been completed, the company, in accordance with the relevant provisions of the accounting standards and in communication with the annual audit accountant, offset the second phase of share based payment expenses accrued in 2021 on the balance sheet date, involving an amount of 13.45 million yuan, resulting in a significant increase in the net profit of the company in the fourth quarter of 2021.
The reversal of the accrued share based payment expenses this time is the accounting treatment made by the company in combination with the performance assessment set up by the equity incentive plan, in accordance with the relevant provisions of the accounting standards and after communicating with the annual audit accountant, which is in line with the actual situation of the company and the relevant provisions of the accounting standards and is reasonable.
2. Does the sharp increase in net profit in the fourth quarter match the changes in operating revenue
As mentioned above, the substantial increase in the company’s net profit in the fourth quarter of 2021 is due to the reversal of the accrued share based payment expenses under the restricted stock incentive plan. After excluding the accounting treatment factors of the reversal of the share based payment expenses, the company’s actual loss in the fourth quarter of 2021 was 2-3 million yuan, which matched the changes in operating revenue. Accountant’s reply:
The company’s substantial growth in the fourth quarter of 2021 was mainly due to the failure to complete the performance indicators set in the second phase of the restricted stock incentive plan, and the company offset the accrued share based payment expenses. Therefore, the accountant’s verification procedures are as follows:
1. Obtain the equity incentive plan, the resolutions of the board of directors and the shareholders’ meeting, and check the terms and conditions of equity incentive.
2. By checking the share based payment grant agreement, the number of shares granted, the time of grant, the terms of grant and the vesting conditions used in the share based payment calculation table of the management are verified, and the calculation accuracy of the share based payment calculation table of the management is checked;
3. By comparing relevant historical data, review whether the management can achieve the expectations of restrictive conditions and the rationality of the estimation of the number of share options that can meet the exercise conditions.
4. Checked whether the information related to share based payment has been properly presented and disclosed in the financial statements. The accountant believes that: according to the relevant provisions of Article 6 of the accounting standards for Business Enterprises No. 11 – share based payment: if the right can be exercised only after completing the services in the waiting period or meeting the specified performance conditions, the equity settled share based payment in exchange for employee services should be based on the best estimate of the number of exercisable equity instruments on each balance sheet date in the waiting period, According to the fair value of the equity instrument on the grant date, the services obtained in the current period shall be included in the relevant costs or expenses and capital reserve, that is, the enterprise shall estimate the number of equity instruments granted on each balance sheet date in the waiting period according to the expected satisfaction of the non market conditions in the service term conditions and performance conditions.
In the absence of cancellation of the share based payment plan, if it has been determined that the non market conditions in the service term conditions and performance conditions cannot be met, or it is expected that the non market conditions in the service term conditions and performance conditions corresponding to the unlocking batch in the future will not be met, the relevant expenses of share based payment may not be recognized in the current period, And the share based payment expenses (if any) corresponding to these batches that have been accumulated and recognized in the previous period shall be reversed. Cloud Live Technology Group Co.Ltd(002306) since the performance indicators set in the second phase of the restricted stock incentive plan have not been completed, the accrued share based payment expenses shall be reversed, which is in line with the relevant provisions of the accounting standards for business enterprises.
3、 In response to the inquiry letter of the 2020 annual report, your company said that the top five suppliers have no affiliated relationship with the company and its subsidiaries and are not affiliated parties of the company. However, some recent media reports show that the registered address of relevant suppliers is close to your subsidiary, and the telephone number is the same as your subsidiary. Please further check whether the top five suppliers of your company in 2020 and 2021 have related relationships with your company and its subsidiaries, whether there are non related transactions, and whether there are fictitious operating revenues or profits. The annual audit accountant is requested to check the above problems and give clear opinions.
Company reply:
1. Some media reported clarification on the proximity of relevant suppliers’ registered address and the same telephone code number
After receiving this letter of concern, the company paid close attention to it and then reported to the media that Hainan Chunshi culture and Technology Co., Ltd. (hereinafter referred to as “Hainan Chunshi”), Hainan Guangyi Network Technology Co., Ltd. (hereinafter referred to as “Hainan Guangyi”), Hainan beluga Network Technology Co., Ltd. (hereinafter referred to as “Hainan beluga”) Hainan yuewan mutual Entertainment Network Technology Co., Ltd. (hereinafter referred to as “Hainan yuewan”) and other four suppliers sent letters to inquire about their similar registration places and the same industrial and commercial reserved telephone numbers. The above four units replied to the relevant situation and confirmed that they had no implicit relationship with Chongqing Weiyin, a subsidiary of the company; In addition, although the actual office of Hangzhou red grapefruit Network Technology Co., Ltd. mentioned by the media is similar to that of the company’s subsidiaries and the reserved contact information is the same as that of Hainan beluga, the company has no business dealings with the company and its subsidiaries, does not know each other and has not been able to inquire by letter. The relevant information after relevant inquiry is as follows:
(1) With regard to the same or similar registered addresses of relevant suppliers (Hainan Chunshi, Hainan Guangyi, Hainan beluga and Hainan yuewan): the shareholders of relevant suppliers are senior people who have been engaged in the game industry for many years, forming a certain business ecosystem. After industry exchanges, they know that they can enjoy certain preferential policies if they register and establish a company in Hainan Ecological Software Park, Therefore, the company was uniformly entrusted to register and establish a company in Hainan Ecological Software Park, and the park uniformly provided the registered address. Therefore, the registered addresses of relevant suppliers are the same or similar. The registered addresses of the above three units are 3001, floor 2, building A17, Hainan Ecological Software Park, high tech Industrial Demonstration Zone, Laocheng Town, Chengmai County, Hainan Province, The registered address of Hainan Guangyi is 1001, floor 1, building A17, Hainan Ecological Software Park, Laocheng high tech industry demonstration zone, Hainan Province, which is similar to the above three units.
In addition, according to the inquiry through public channels such as enterprise investigation and Tianyan investigation, there are many enterprises with the same or similar registration places as Hainan Chunshi, Hainan Guangyi, Hainan beluga and Hainan yuewan, including Hainan Futai Network Technology Co., Ltd., Chengmai jinchenghaoda Internet Technology Co., Ltd., Hainan camouflage Xinghui network technology Co., Ltd There are hundreds of Internet enterprises or other different types of enterprises, such as Hainan Hongrong Network Technology Co., Ltd., Hainan Youxi Network Technology Co., Ltd. and Hainan Coldplay Network Technology Co., Ltd. for details, see the annex (due to the large number of enterprises in the same place of registration, they are not listed one by one).
(2) About the same matters about the telephone number retained by relevant suppliers (Hainan Chunshi and Hainan beluga):
As mentioned earlier, Hainan Chunshi and the shareholders of Hainan beluga whale are senior people who have been engaged in the game industry for many years. They know each other. After industry exchanges, they learned that a company incorporated in Hainan Ecological Software Park can enjoy certain preferential policies. Therefore, they uniformly entrust personnel to register and establish a company in Hainan Ecological Software Park, Because the retention of personal mobile phone number in online public information will leak information, resulting in telephone harassment and fraud, the business handling personnel specially prepare a mobile phone number for retention. Therefore, there is a situation that the telephone number disclosed in the annual report is the same.
(3) As for the similarity between the actual office of individual suppliers (Hainan Chunshi) and the office of subsidiaries of the company: the actual office address of individual suppliers (Hainan Chunshi) and Chongqing Weiyin Hangzhou branch and its subsidiary Hangzhou Youling Network Technology Co., Ltd. are located in the park of Saiyin International Plaza, Yuhang District, Hangzhou, mainly because the park is the gathering place of Internet enterprises in Hangzhou, There is no relationship but similar office.
(4) The reserved telephone number for 2019 industrial and commercial annual review of individual suppliers (Hainan yueplay) is the same as that for 2020 industrial and commercial annual review of subsidiaries: mainly in order to avoid information disclosure due to the retention of personal mobile phone number in online public information, resulting in telephone harassment and fraud, the administrative personnel specially prepare a mobile phone number for the retention of industrial and commercial information, The administrative staff worked in Hangzhou yuewan, the parent company of Hainan yuewan in 2019, and retained the industrial and commercial information of Hainan yuewan with a specially prepared mobile phone number. In 2020, the company absorbed some teams of Hangzhou yueplay. After joining Chongqing Weiyin with Hangzhou yueplay team, its executives used the mobile phone number for the retention of Chongqing Weiyin’s industrial and commercial information in 2020.
2. Description of whether there is an association relationship between the company and the supplier
Through self-examination one by one, the top five suppliers of the company in 2020 and 2021 have no related relationship with the company and its subsidiaries in terms of assets, personnel, business, finance and institutions, and there is no non related transaction. The transactions between the company and the top five suppliers are priced at the market price, which is basically the same as that of other similar suppliers, and there is no fictitious business income or profit.
Accountant’s reply:
We found that the 2020 annual report and audit report disclosed by Cloud Live Technology Group Co.Ltd(002306) showed that Cloud Live Technology Group Co.Ltd(002306) was not associated with major suppliers. We have received a letter of concern and attach great importance to the relationship between Cloud Live Technology Group Co.Ltd(002306) and major suppliers. Up to now, we have not found any relationship between Cloud Live Technology Group Co.Ltd(002306) and major suppliers. With the progress of the audit, we may obtain new or further audit evidence. The specific audit opinion shall be subject to the audit report of Cloud Live Technology Group Co.Ltd(002306) 2021 annual financial statements issued by the exchange.
(there is no text on this page, which is only the seal page of the verification opinions of Lixin Zhonglian Certified Public Accountants (special general partnership) on the letter of concern for Cloud Live Technology Group Co.Ltd(002306) )
Lixin Zhonglian Certified Public Accountants (special general partnership) January 28, 2002
