Annual report on The Great Wall Of Culture Group Holding Co.Ltd.Guangdong(300089)
Inquiry letter
Gem annual report inquiry letter [2022] No. 195 The Great Wall Of Culture Group Holding Co.Ltd.Guangdong(300089) board of directors:
Our department paid attention to the following situations in the post review of your 2021 annual report:
1. On April 6, 2022, the progress announcement of other risk warning situations disclosed by your company showed that the decision on administrative punishment identified that the original actual controller Cai Tingxiang and other related parties occupied 453.83 million yuan of the company's funds for non-profit, and the accumulated repayment was 176.5 million yuan. As of the announcement date, the occupied balance was 277.33 million yuan. On April 29, 2022, the 2021 annual report and other documents disclosed by the company showed that the company conducted a self-examination on the occupation of funds. Cai Tingxiang and other related parties identified in the decision on administrative punishment occupied 453.83 million yuan of funds, including 352.89 million yuan of the company's headquarters and 100.98 million yuan of the subsidiary of Beijing feicui Education Technology Group Co., Ltd. (hereinafter referred to as feicui Education); In addition, the company's headquarters occupied 94 million yuan in 2019. Cai Tingxiang and other related parties occupied 599.78 million yuan and repaid 227.68 million yuan. As of the end of the reporting period, the occupied balance was 37.209 million yuan (including 100.98 million yuan of jadeite education subsidiary).
(1) Please supplement the occupier of 94 million yuan of new capital occupied in 2019 and its relationship with CAI Tingxiang, the reasons for the difference between the accumulated occupation amount and the accumulated repayment amount disclosed in the 2021 annual report and the amount disclosed on April 6, 2022, and the accuracy of the relevant amount.
(2) At the end of the reporting period, the book balance of other receivables listed by your company for the occupation of funds by Cai Tingxiang and other related parties was 27.112 million yuan. For Chaozhou Mingyuan Ceramics Co., Ltd., Chaozhou Fengxi Jinhui ceramic raw material factory and Chaozhou Yuanfa Ceramics Co., Ltd. (hereinafter referred to as the three ceramic companies), 56.28%, 51.84% and 13.53% of bad debt reserves were withdrawn respectively, with a total withdrawal ratio of 47.71%. Please clarify whether other receivables of CAI Tingxiang and other related parties not confirmed by the company comply with the relevant provisions of the accounting standards in combination with the background and mode of CAI Tingxiang and other related parties occupying the funds of feicui education subsidiary and the creditor's right and debt relationship with the company; In combination with CAI Tingxiang's performance ability, assets held and realizable situation, and repayment amount during the reporting period, supplement the basis and prudence of withdrawing bad debt provision for other receivables.
(3) Please add whether your company has taken effective measures such as litigation and property preservation in time, investigated the responsibilities of relevant personnel, and earnestly safeguarded the legitimate rights and interests of listed companies and small and medium-sized investors in accordance with Article 5.9 of the guidelines for self discipline supervision of listed companies No. 2 - standardized operation of companies listed on GEM.
Ask the accountant to check the first two questions and give clear opinions.
2. Your company retroactively adjusted the accounting errors in the financial statements of 2020. Because the court ruled that the debt transfer agreement signed by the company with Shenzhen Oriental Land Group Co., Ltd. and Guangzhou Junlong Trade Co., Ltd. (hereinafter referred to as Junlong trade) was invalid, the company's transfer of 100% equity of Henan Green Great Wall Porcelain Art Co., Ltd. (hereinafter referred to as great wall porcelain art) to Junlong trade has lost the transaction basis, Accordingly, the accounting subjects of other equity instrument investment and other receivables were adjusted. The equity of great wall porcelain art was transferred to Junlong trading on January 16, 2020, and Junlong trading pledged the equity of great wall porcelain art to the company on September 4, 2020.
(1) When replying to the inquiry letter of our 2020 annual report, your company said that the court's judgment had no material impact on the equity transfer, so it was not necessary to correct the relevant accounting treatment in 20182020. Before this correction, the 2020 financial statements confirmed the book balance of other receivables of 148.32 million yuan, bad debt provision of 59.33 million yuan and disposal profit and loss of 56.44 million yuan for the equity transfer; After correction, the investment in other equity instruments was increased by 123.58 million yuan and other payables by 34.59 million yuan. Please explain the reason and rationality of the change between this accounting error correction and the judgment that does not need to be adjusted in the previous period, the specific process of accounting error correction and the basis for adjusting all adjusted subjects, as well as the corrected amount of assets, liabilities, net assets and net profit in 2020 and its proportion in the corrected amount.
(2) Please supplement your company to explain whether there is any change in the arrangement of equity transfer and payment of great wall porcelain art between the company and Junlong trade. If not, please supplement the reason and rationality of no impairment of investment in other equity instruments at the end of 2021 in combination with the assets and realizability held by Junlong trade and whether it is repaid on schedule during the reporting period; If yes, please add the specific arrangements for recovering the equity of great wall porcelain art and exercising the relevant pledge rights, and add the accuracy of reporting the investment in other equity instruments of RMB 123.58 million at the end of 2020 and 2021 in combination with its main assets. The accountant shall, in combination with the certification materials required to be submitted by the company and the audit procedures implemented, supplement the specific basis for issuing an opinion, and further explain whether the relevant accounting treatment is suspected of avoiding the delisting risk warning of the company's shares due to negative net assets in 2020.
(3) Your company has disposed of the equity of great wall porcelain art since 2016, and it is still listed as a subsidiary in the 2017 and 2018 annual reports. The main assets are three land use rights. Please supplement the amount of land use right related to great wall porcelain art reported in the company's 2017 and 2018 annual reports, and ask the then accountant to explain the main audit procedures, audit evidence and audit conclusions obtained for the land use right, as well as whether the audit evidence is sufficient and appropriate and sufficient to support the audit conclusion.
3. At the end of 2020, your company predicts that the revenue growth rate of the subsidiary Henan Zhiyou Zhenlong Education Technology Co., Ltd. (hereinafter referred to as Henan Zhiyou) from 2021 to 2025 will be 69.90%, 26.62%, 25.11%, 17.91% and 6.46% respectively, and the discount rate will be 14.98%. In that year, only 47.43 million yuan of goodwill impairment provision will be made, and the net assets at the end of the period will be 101.54 million yuan. The qualified opinion issued by the then accountant does not involve goodwill impairment. At the end of the reporting period, your company predicted that the revenue growth rates of Henan Zhiyou from 2022 to 2026 were - 10.19%, 27.95%, 7.00%, 6.00% and 5.00% respectively, and the discount rate was 16.19%. Therefore, the provision for impairment of goodwill was 188.78 million yuan.
(1) Please supplement the financial indicators such as revenue, revenue growth rate, gross profit margin and net profit margin of Henan Zhiyou in the first three years during the goodwill impairment assessment at the end of 2020, and the basis and rationality of selecting revenue growth rate, gross profit margin and net profit margin in the forecast period in combination with the above financial indicators, orders on hand and other key indicators reflecting future performance.
The then accountant is requested to supplement whether the specific audit evidence obtained is sufficient and appropriate, and whether it is sufficient to support the audit conclusion that "there is no significant irrationality in the prediction data of goodwill impairment".
(2) Please explain the reason and rationality of the difference between the income and net profit of Henan Zhiyou in 2021 and the forecast data, the basis for determining the parameters selected for the goodwill impairment assessment at the end of the reporting period, and the reason and rationality of the change from the previous assessment. Ask the accountant to check and give clear opinions.
4. At the end of the reporting period, the net assets of your company were - 285.99 million yuan; The equity purchase amount payable to Henan Zhiyou decreased by 84.08 million yuan. The specific repayment methods are as follows: Henan Zhiyou terminated the house purchase contract with Henan xinkaiyuan Hengyu industrial real estate Co., Ltd. (hereinafter referred to as Henan xinkaiyuan), and Henan xinkaiyuan returned the house purchase amount of 31.57 million yuan to Zhengzhou Yuanhong enterprise Management Consulting Co., Ltd. (hereinafter referred to as Zhengzhou Yuanhong), the former shareholder of Henan Zhiyou; Henan Zhiyou transferred the book value of the training fee receivable of 26.07 million yuan to Zhengzhou Yuanhong; The company and sun Guangming paid 5 million yuan and 10 million yuan respectively. Please consider the reasons and commercial rationality of giving priority to paying debts to Zhengzhou Yuanhong under the circumstances of negative net assets and extremely difficult production and operation, whether there are other interest arrangements with the actual controller and directors and supervisors of the company, and whether it is conducive to safeguarding the interests of listed companies and minority shareholders.
5. At the end of 2020, the book balances of your company's overseas accounts receivable 1 (overdue for more than 1 year) and overseas accounts receivable 2 (overdue for more than 2 years) were 133.26 million yuan and 125.37 million yuan respectively, and 50% and 100% bad debt reserves were withdrawn respectively. At the end of the reporting period, the book balances of overseas accounts receivable 1 and 2 were 52.96 million yuan and 198.52 million yuan respectively, and the proportion of bad debt provision remained unchanged; The accountant was unable to express his opinion on the grounds that he sent the confirmation letter but did not receive the reply, and the company was unable to send the confirmation letter because the company failed to provide the exact confirmation address and contact person.
(1) Please explain the reason why you did not provide the certified address and contact person to the accountant, the authenticity of overseas accounts receivable and corresponding income in combination with the sales contract, sales invoice, delivery form, customs declaration, acceptance form and other supporting documents, and explain that you basically did not receive the payment in the reporting period in combination with the performance ability of the debtor, The caution of withdrawing bad debt provision only at 50% for overseas accounts receivable 1 overdue for more than one year.
(2) The accountant is requested to supplement the reasons for not adopting alternative audit procedures and whether adequate and appropriate audit procedures have been implemented in accordance with the relevant provisions of the audit standards.
6. At the end of the reporting period, the book balance of goods issued in your company's inventory was 42.52 million yuan, a year-on-year increase of 395%, accounting for 53% of the book balance of inventory, and the provision for falling price was 24.69 million yuan; The opening balance of fixed assets was 258.7 million yuan, a decrease of 79.23 million yuan and depreciation of 4.34 million yuan during the reporting period. Please add:
(1) The specific content, storage location and future sales of the issued goods, and the reasons and rationality for the large increase of the issued goods and the provision for large amount of falling price reserves upon issuance are supplemented in combination with the on-hand orders, revenue recognition policies and the basis for the provision for falling price reserves.
(2) The reasons for the decrease in the book balance of fixed assets during the reporting period and the recognition of profits and losses, and explain the reasons and rationality of the large difference between the depreciation provision and the depreciation ratio of 4.75% to 9.5% listed in "important accounting policies and accounting estimates".
Ask the accountant to check and give clear opinions.
7. Sun Guangming became the actual controller of your company in March 2021 by entrusting Cai Tingxiang with the voting rights corresponding to 29.82% of the equity. According to the company's 2020 annual report, as of April 24, 2021, the company had receivable 256 million yuan from three ceramic companies. The three ceramic companies promised to repay 76.8 million yuan before December 30, 2021 and 179.2 million yuan before December 30, 2022; If the three ceramic companies have not repaid before December 31, 2022, the outstanding part will be repaid in cash by Zhonglian reassurance Wine Co., Ltd. controlled by sun Guangming in June 2023. According to the company's 2021 annual report, sun Guangming did not get paid in the company. He repaid 42.21 million yuan to the company on behalf of CAI Tingxiang and other related parties, 10 million yuan to Zhengzhou Yuanhong on behalf of the company, and borrowed 30 million yuan to the company. Please supplement the performance of the commitments made by the three ceramic companies during the reporting period, the payment method and use of funds repaid by sun Guangming on behalf of CAI Tingxiang and other related parties to the company, whether sun Guangming will recover from the company for the repayment to Zhengzhou Yuanhong on behalf of the company, and further explain the rationality of compensating the arrears and providing liquidity support to the company in combination with the rights and returns obtained by sun Guangming through entrusted voting rights, Whether there are undisclosed agreements or arrangements.
Please make a written statement on the above issues, submit the relevant explanatory materials to our department for disclosure before May 11, 2022, and send a copy to the listed company supervision department of Guangdong securities regulatory bureau.
This is to inform you.
Gem company management department may 4, 2022
