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Asia Pacific (Group) Certified Public Accountants (special general partnership)
Verification opinions on Guangdong Shenglu Telecommunication Tech.Co.Ltd(002446) concern letter Shenzhen Stock Exchange:
Guangdong Shenglu Telecommunication Tech.Co.Ltd(002446) (hereinafter referred to as ” Guangdong Shenglu Telecommunication Tech.Co.Ltd(002446) ” and “the company”) received the attention letter on Guangdong Shenglu Telecommunication Tech.Co.Ltd(002446) issued by Shenzhen Stock Exchange on January 6, 2022 (company Department attention letter [2022] No. 5), and Asia Pacific (Group) Certified Public Accountants (special general partnership) (hereinafter referred to as “the exchange”) served as the auditor of Guangdong Shenglu Telecommunication Tech.Co.Ltd(002446) 2020 annual report, According to the requirements of the letter of concern, the exchange has carefully checked the issues mentioned in the letter of concern that need to be explained or commented by accountants. The verification status and verification opinions on relevant issues are described as follows:
Question 1. Please specify the specific information of the debt collateral provided by Luo Jianping and Guo Yiqin to your company, the specific disposal procedures of the debt collateral that your company has started or plans to start, and the legal means that have been taken or plans to take; In combination with the valuation of debt collateral and the expected recovery of disposal funds, as well as the possibility of your company recovering 402 million yuan of debt, explain the specific impact of the debt default of Luo Jianping and Guo Yiqin on the amount of the above debt impairment provision and the main financial data of 2021. The annual audit accountant shall check and give opinions.
Accountant’s verification opinion:
1. For the specific disposal procedures of debt collateral that the company has started or plans to start, the legal means taken or plans to take are as follows:
Up to now, the debt collateral of Luo Jianping and Guo Yiqin to the company are: 5105513 shares of Guangdong Shenglu Telecommunication Tech.Co.Ltd(002446) shares under Guo Yiqin’s name, 70% equity of Hezheng culture media (Guangdong) Co., Ltd., 65.69% equity of Shanghai cosmic Electric Appliance Co., Ltd. and 90% equity of Dongguan Yayin electronic Technology Co., Ltd.
After Luo Jianping and Guo Yiqin defaulted on repaying their debts on December 25, 2021, the company immediately sent them a letter on debt call, arranged Beijing Dacheng (Shenzhen) law firm to send them a lawyer’s letter, and sent special personnel to Dongguan to interview Luo Jianping and Guo Yiqin, urging them to repay their debts as soon as possible or put forward practical solutions, It is also required to truthfully provide information about the property owned or controlled by the individual and his spouse.
The company has applied to Foshan intermediate people’s court for enforcement and received the notice of acceptance of enforcement cases by Foshan intermediate people’s Court ((2022) Yue 06 Zhi No. 53). Subsequently, the company will implement enforcement procedures on the property of Luo Jianping and Guo Yiqin in accordance with the relevant enforcement procedures of the people’s court.
2. Specific impact of the amount of provision for impairment of creditor’s rights and main financial data in 2021
The valuation of debt collateral and the expected recovery of disposal funds are still under the evaluation and verification of external evaluation experts. For the time being, it is impossible to determine the specific impact of the debt default of Luo Jianping and Guo Yiqin on the company’s provision for impairment of the above-mentioned creditor’s rights and the main financial data in 2021.
3. Verification procedures
During the audit of the company’s 2021 financial statements, our main audit procedures for the above matters include:
(1) Check and verify the debt call letter, lawyer’s letter, pledge agreement, etc;
(2) Read the resolutions of the board of directors, the resolutions of the shareholders’ meeting and the company’s announcement;
(3) Check the industrial and commercial registration change documents and other materials;
(4) Communicate or intend to communicate with external third parties and understand the specific progress;
(5) Communicate with the management to understand the situation;
(6) Verification of the assessed value of the collateral.
Question 2. The deferred payment agreement stipulates that if Luo Jianping and Guo Yiqin fail to pay 102 million yuan before December 25, 2021, the deferred payment agreement will be terminated, and the debt of 402 million yuan will not be postponed. At the same time, for the unpaid part of 402 million yuan after December 25, 2021, Luo Jianping Guo Yiqin shall pay liquidated damages to the company at 0.03% of the unpaid amount. Please explain your company’s accounting treatment of liquidated damages for overdue debts in combination with the performance ability of Luo Jianping and Guo Yiqin. The annual audit accountant shall check and give opinions.
Accountant’s verification opinion:
1. According to the deferred payment agreement, if Luo Jianping and Guo Yiqin fail to pay 102 million yuan before December 25, 2021, the deferred payment agreement will be terminated, and the debt of 402 million yuan will not be postponed. At the same time, for the unpaid part of 402 million yuan after December 25, 2021, Luo Jianping Guo Yiqin shall pay liquidated damages to the company at 0.03% of the unpaid amount. According to the debtor’s payment ability, the enterprise preliminarily evaluates that the liquidated damages for overdue debts may not be recoverable. The liquidated damages do not meet the recognition conditions of assets and income and are not included in the balance sheet and income statement, but are regarded as a contingent asset in the future reference account book. 2. Verification procedures: check the original documents of accounting vouchers, check the general ledger and Sub Ledger, recalculate the data of liquidated damages, etc.
Question 3. In reply to the inquiry letter of the 2021 annual report, your company said that as of December 31, 2020, the payments of Luo Jianping and Guo Yiqin had been overdue, and the company estimated that the expected credit loss rate was 20%. According to the debt book balance of 402 million yuan as of March 31, 2021, the bad debt provision of 80.4 million yuan in 2020 was withdrawn.
Please explain the rationality of the estimated expected credit loss rate of 20% in the early stage and whether the provision for bad debts in the early stage is sufficient. The annual audit accountant shall check and give opinions.
Accountant’s verification opinion:
1. According to the accounting policies and accounting estimates for the impairment of corporate financial instruments, the company combines other receivables according to similar credit risk characteristics (aging), and estimates the expected credit loss rate of bad debt provision of other receivables based on all reasonable and based information, including forward-looking information, as follows: the expected credit loss rate of other receivables within half a year is 1% The expected credit loss rate of other receivables from half a year to one year is 5%, the expected credit loss rate of other receivables from one to two years is 20%, the expected credit loss rate of other receivables from two to three years is 40%, and the expected credit loss rate of other receivables over three years is 100%. If there is objective evidence indicating that a certain other receivable has suffered credit impairment, the company shall separately withdraw bad debt provision for the other receivables and recognize the expected credit loss.
As of December 31, 2020, Luo Jianping and Guo Yiqin had paid 37.2 million yuan to the company, and the remaining unpaid amount was 442.8 million yuan, of which 82.8 million yuan had not been paid on schedule. If the payment is overdue, the company shall withdraw the advance payment of equity, creditor’s rights and performance compensation receivable from Luo Jianping and Guo Yiqin individually
For the current credit loss, the company estimates that the expected credit loss rate is 20%. According to the book balance of RMB 402 million as of March 31, 2021, it is necessary to withdraw the expected credit loss of RMB 80.4 million.
According to the letter of commitment issued by Luo Jianping and Guo Yiqin to the company on January 5, 2021, they requested to postpone the payment of the above 82.8 million yuan that was not paid on schedule, and pay liquidated damages to Guangdong Shenglu Telecommunication Tech.Co.Ltd(002446) according to the agreement. The promised payment plan is as follows: phase I: pay RMB 10.8 million and its corresponding liquidated damages before January 31, 2021; Among them, Guo Yiqin paid 10.8 million yuan and corresponding liquidated damages; Phase II: pay RMB 30 million and corresponding liquidated damages before March 31, 2021; Among them, Luo Jianping and Guo Yiqin paid 16.5 million yuan and 13.5 million yuan respectively and corresponding liquidated damages; Phase III: RMB 42 million and corresponding liquidated damages shall be paid before May 31, 2021; Among them, Luo Jianping and Guo Yiqin paid 23.1 million yuan and 18.9 million yuan and corresponding liquidated damages respectively. The subject matter price payable in phase IV and phase V shall be paid according to the amount and payment time agreed in the equity and creditor’s rights transfer agreement. RMB 180 million shall be paid to the company before June 30, 2021 and RMB 180 million shall be paid to the company before December 31, 2021. According to the credit 5C analysis method, although the amount that Luo Jianping and Guo Yiqin failed to pay on schedule was 82.8 million yuan as of December 31, 2020, Luo Jianping and Guo Yiqin paid on schedule according to the letter of commitment on and before April 14, 2021, and there was no further breach of contract, and there was no sign of further significant increase in credit risk. Therefore, we believe that it is reasonable and sufficient to estimate the expected credit loss rate of 20% on or before the reporting date April 14, 2021.
2. Verification procedures
1. Check and recalculate the amount of credit impairment loss, and recheck the accuracy of expected credit loss rate with general model;
2. Pay attention to the collection after the period of the letter of commitment;
Asia Pacific (Group) Certified Public Accountants (special general partnership)
January 11, 2022
