About China Greatwall Securities Co.Ltd(002939)
Reply to the feedback on the application documents for non-public offering of shares (Revised Version) China Securities Regulatory Commission:
According to the requirements of the feedback on China Greatwall Securities Co.Ltd(002939) non-public development bank stock application documents (hereinafter referred to as "feedback") attached to the notice on the first feedback on the examination of administrative licensing projects of China Securities Regulatory Commission (No. 212540) issued by your commission on October 19, 2021, China Greatwall Securities Co.Ltd(002939) (hereinafter referred to as " China Greatwall Securities Co.Ltd(002939) ", "the issuer" and "the company") have joined hands with China Securities Co.Ltd(601066) (hereinafter referred to as "the sponsor"), Beijing Guofeng law firm (hereinafter referred to as "the issuer's lawyer") Deloitte Touche Tohmatsu (special general partnership) (hereinafter referred to as "Deloitte") and Daxin Certified Public Accountants (special general partnership) (hereinafter referred to as "Daxin") carefully checked and discussed the questions raised in the feedback one by one. The specific circumstances are as follows.
The abbreviation in this reply has the same meaning as the abbreviation in the due diligence report on China Securities Co.Ltd(601066) non public development bank shares.
catalogue
Question 1. The application materials show that the scope of the applicant's consolidated statements includes some structured entities. Please add: (1) the specific situation of the structured entity in the reporting period, whether it is included in the scope of consolidation, and the basis for its inclusion or exclusion from the scope of consolidated statements; Whether the applicant has any disclosure terms or guarantee obligations for the structured entities not included in the consolidation scope, and whether the accounting meets the provisions. (2) The specific composition and actual operation of off balance sheet businesses, and whether there are major risks that have not been fully disclosed. The recommendation institution and the accountant are requested to explain the verification process, methods and conclusions and express clear opinions 4 question 2. With regard to financial assets (including but not limited to financial assets bought for resale, accounts receivable, trading financial assets, financed funds, etc.), the applicant is requested to supplement: (1) please explain the basis and implementation of the classification of the company's financial assets in combination with the specific business processes and internal control measures of the company; Whether the same securities are accounted for in different types of financial assets and why. (2) Please explain the reasons for the fluctuation of the ending balance of various financial assets, the specific details and risk status of the underlying assets of financial assets, and on this basis, explain the accounting policies, specific standards, testing process and results related to the impairment of financial assets; Whether the provision for impairment at the end of each reporting period is sufficient. (3) Please explain the investment income, net profit and loss from changes in fair value, other comprehensive income, etc. of various financial assets during the reporting period, as well as the recognition basis. The recommendation institution and the accountant are requested to explain the verification process, methods and conclusions and express clear opinions 23 question 3. About commodity trading business. During the reporting period, the income of the applicant's bulk commodity trading business increased significantly. Please add: (1) the business model, profit model, main customers and suppliers, risk points and the formulation and implementation of risk control system of bulk commodity trading business, and the reasons for the significant growth during the reporting period. (2) Combined with the business model and the main liability terms agreed in the business development, analyze and explain whether the total amount method is adopted to confirm whether the income meets the provisions of accounting standards and industry practices. (3) The comprehensive profitability of commodity trading business, whether the income profit margin is reasonable, whether there is significant difference with comparable companies in the industry and the reasons. (4) Whether the transaction is essentially financing or leasing. The recommendation institution and the accountant are requested to explain the verification process, methods and conclusions and express clear opinions 66 question 4. According to the application materials, the operating profit of each period of the "other business" in the applicant's segment report is negative. Please supplement the reasons and rationality of the annual losses of other business segments in the reporting period; Implementation and effectiveness of risk control. The recommendation institution and the accountant are requested to explain the verification process, methods and conclusions and express clear opinions seventy-six
Question 5. The applicant is requested to supplement: (1) the basic situation and current progress of the company's pending litigation during the reporting period; (2) Whether the company has accrued the estimated liabilities and whether the relevant accounting treatment complies with the relevant provisions of the accounting standards. The recommendation institution and the accountant are requested to explain the verification process, methods and conclusions and express clear opinions Question 6: Please add that the cash flow from operating activities has been negative for three consecutive years; And whether the reason and rationality of the mismatch with the net profit are consistent with those of comparable companies in the same industry. The recommendation institution and the accountant are requested to explain the verification process, methods and conclusions and express clear opinions 87 question 7. The fund to be raised by the applicant in this non-public offering of shares shall not exceed 10 billion yuan for capital intermediary business, securities investment business and debt repayment. Please specify the investment or development of the above businesses during the reporting period, the future development plan, the specific investment content of the raised funds, the calculation basis of the investment amount, the rationality and necessity of this financing, and whether it is conducive to maximizing the use effect of the raised funds. The recommendation institution is requested to give verification opinions 92 question 8. Huaneng capital services Co., Ltd. (hereinafter referred to as Huaneng capital), Shenzhen Energy Group Co.Ltd(000027) (hereinafter referred to as Shenzhen Energy Group Co.Ltd(000027) ) and Shenzhen xinjiangnan Investment Co., Ltd. (hereinafter referred to as Shenzhen xinjiangnan) subscribe for the non-public offering of shares, of which Huaneng capital is the controlling shareholder of the company, Shenzhen Energy Group Co.Ltd(000027) Shenzhen xinjiangnan is a shareholder holding more than 5% of the company's equity. (1) please explain Shenzhen Energy Group Co.Ltd(000027) whether Shenzhen xinjiangnan meets the provisions of Articles 7 and 8 of the detailed rules for the implementation of non-public offering of shares by listed companies, and ask the sponsor and the applicant's lawyer to give verification opinions. (2) The actual controller of the above-mentioned issuing object is requested to issue and publicly disclose the commitment that he and the subject under his control will not reduce the shares of the company from six months before the pricing benchmark date to six months after the completion of this issuance. (3) The sponsor and the lawyer of the applicant are requested to check the source of the subscription funds of the above-mentioned issuing objects. If the subscription funds come from their own funds or legally self raised funds, please check whether there are external raising, holding on behalf of others, structured arrangements, or direct or indirect use of the funds of the listed company and its related parties for this subscription. (4) The applicant is requested to clarify the subscription quantity or subscription range of Shenzhen xinjiangnan in accordance with Article 11 of the detailed rules for the implementation of non-public offering of shares by listed companies, and disclose the matter in the plan for non-public offering of shares 98 question 9. Please explain whether the company controls or participates in enterprises with real estate business. please
The sponsor and the applicant's lawyer give verification opinions one hundred and one
Question 1. The application materials show that the scope of the applicant's consolidated statements includes some structured entities. Please add: (1) the specific situation of the structured entity in the reporting period, whether it is included in the scope of consolidation, and the basis for its inclusion or exclusion from the scope of consolidated statements; Whether the applicant has any disclosure terms or guarantee obligations for the structured entities not included in the consolidation scope, and whether the accounting meets the provisions.
(2) The specific composition and actual operation of off balance sheet businesses, and whether there are major risks that have not been fully disclosed. The recommendation institution and accountant shall explain the verification process, method and conclusion, and express clear opinions.
reply:
1、 The specific situation of the structured entity in the reporting period, whether it is included in the scope of consolidation, and the basis for its inclusion or exclusion from the scope of consolidated statements; Whether the applicant has any disclosure terms or guarantee obligations for the structured entities not included in the consolidation scope, and whether the accounting meets the provisions
(I) the specific situation of the structured entity in the reporting period, whether it is included in the scope of consolidation, and the basis for its inclusion or exclusion from the scope of consolidated statements
According to the relevant provisions of accounting standards for Business Enterprises No. 33 - consolidated financial statements, the consolidation scope of consolidated financial statements shall be determined on the basis of control; Control means that the investor has the power over the investee, enjoys variable returns through participating in relevant activities of the investee, and is able to use the power over the investee to affect its return amount. The definition of control includes three basic elements: one is that the investor has the power over the investee, the other is that it enjoys variable return due to its participation in relevant activities of the investee, and the third is that it has the ability to use the power over the investee to affect its return amount.
The company assesses the structured entities of the company's management or investment. After comprehensively considering the investment decision-making power owned by the company, the exposure of variable return and the use of investment decision-making power to affect variable return, the structured entities controlled by the company are included in the scope of consolidated statements. Specifically, the basis for the company to judge whether the structured entity is included in the consolidation scope is mainly as follows:
(1) Investment decision-making power owned by the company: the purpose of the company's structured subject is usually to manage, use or dispose of the funds delivered by the asset trustor for the benefit of the asset trustor. The relevant activities of the structured entity mainly include investment decision-making, disposal and recovery, etc. According to the contract, if the company, as the manager of the structured subject, has the major decision-making power such as the investment decision-making power of entrusted assets and the decision-making power of the settlement and disposal scheme of non-performing assets, or the company only acts as an investor, but has the decision-making power on the investment of the structured subject and enjoys the current rights, so that it has the ability to lead the relevant activities of the structured subject at present, Then the company is the main responsible person and has the leading power over the structured subject.
(2) Exposure to variable return: the company invests its own funds in the structured entity or acts as the manager of the structured entity, and receives performance compensation according to the performance of the structured entity. The return obtained by the company from the structured entity may change with the performance of the investee. The company enjoys variable returns by directly holding shares and collecting management fees and performance remuneration as a manager.
(3) The ability to use investment decision-making power to affect variable return: the company acts as the manager of the structured subject, or the company only acts as an investor, but has decision-making power on the investment of the structured subject. The company affects the variable return by determining or influencing the portfolio of products. The expected variable return enjoyed by the company accounts for a significant amount of the overall expected variable return of the structured entity or bears the variability of most of the variable returns (the company usually takes the variable return accounting for more than 30% as the standard to judge whether it is significant or not).
1. Structured entities included in the scope of consolidated financial statements
China Greatwall Securities Co.Ltd(002939) manage and invest in various structured entities in the process of carrying out business, such as securities investment funds, asset management plans, partnerships, etc. In terms of profit model, the company directly invests and holds structured entities included in the scope of consolidated financial statements to obtain investment income and income from changes in fair value; Some of the products are issued by the company, and the company collects management fee income and performance remuneration. As of December 31, 2018, December 31, 2019, December 31, 2020 and September 30, 2021, the number of structured entities included in the consolidated financial statements was 0, 19, 44 and 61 respectively, and the net assets of structured entities included in the consolidated financial statements were RMB 10000, RMB 3132523300, RMB 3078798400 and RMB 4951692900 respectively, The details are as follows:
Unit: 10000 yuan
No. structured entity name closing book value
September 30, 2021
1. Lingfeng investment Changliang No. 1 private investment fund 46395.50
2. Xingzheng asset management QDII global preferred No. 5 single asset management plan 30845.70
3. Jingshun Great Wall - China Greatwall Securities Co.Ltd(002939) Hongze No. 1 single asset management plan 21869.75
4 China Greatwall Securities Co.Ltd(002939) No. 1 single asset management plan 20757.98
5. China Resources trust - Ruizhi No. 28 collective fund trust plan 20656.65
6 Junze Zhicheng No. 1 private securities investment fund 18906.21
7 Jingshun Great Wall - China Greatwall Securities Co.Ltd(002939) Hongze No. 2 single asset management plan 18551.70
8. Investment portfolio of CCB trust Hengxin Antai bond investment collective fund trust plan phase 45 18231.26
9. Kaina Zhicheng No. 2 private securities investment fund 18068.75
No. structured entity name closing book value
10 Jingshun Great Wall - China Greatwall Securities Co.Ltd(002939) Hongze No. 3 single asset management plan 17967.05
11 kaina Zhicheng No. 1 private securities investment fund 16367.21
12 Great Wall Fund - China Greatwall Securities Co.Ltd(002939) Yuze No. 2 single asset management plan 15882.51
13 Great Wall Fund - China Greatwall Securities Co.Ltd(002939) Yuze No. 1 single asset management plan 14953.90
14. Furong Changying No. 3 single asset management plan 13256.89
15 GF Changying No.1 single asset management plan 13223.47
16 Huabao fund China Greatwall Securities Co.Ltd(002939) Houze No. 1 single asset management plan
