Reply to the inquiry letter of Shenzhen Guohua Network Security Technology Co.Ltd(000004) 2021 Annual Report
Zhitong Certified Public Accountants (special general partnership)
Zhitong Certified Public Accountants (special general partnership) 22 Jianguomenwai street, Chaoyang District, Beijing, China
5th floor, set square, 100004
Tel. + 86 1085665588
Fax + 86 1085665120
www.grantthornton. cn.
About Shenzhen Guohua Network Security Technology Co.Ltd(000004)
Reply to inquiry letter of 2021 Annual Report
Zhi Tong Zhi Zi (2022) No. 440a010742 Shenzhen Stock Exchange:
Grant Thornton Certified Public Accountants (special general partnership) (hereinafter referred to as "we") was entrusted to audit the financial statements of Shenzhen Guohua Network Security Technology Co.Ltd(000004) (hereinafter referred to as " Shenzhen Guohua Network Security Technology Co.Ltd(000004) " or "the company") in 2021, including the consolidated and the company's balance sheet as of December 31, 2021, the consolidated and the company's income statement, consolidated and the company's cash flow statement, consolidated and the company's statement of changes in shareholders' equity and the notes to relevant financial statements in 2021, And issued the qualified opinion audit report of ztsz (2022) No. 440a016130 on April 29, 2022.
On May 5, 2022, we received the inquiry letter on the annual report of Shenzhen Guohua Network Security Technology Co.Ltd(000004) 2021 of Shenzhen Guohua Network Security Technology Co.Ltd(000004) forwarded by Shenzhen Guohua Network Security Technology Co.Ltd(000004) (annual report inquiry letter [2022] No. 180 of the company Department) (hereinafter referred to as the "inquiry letter"). According to the requirements of the inquiry letter, based on Shenzhen Guohua Network Security Technology Co.Ltd(000004) 's reply to the relevant questions of the inquiry letter and our audit procedures for Shenzhen Guohua Network Security Technology Co.Ltd(000004) 2021 annual financial statements, the relevant matters are explained as follows:
Inquiry letter question 1:
"The annual report shows that: (1) Zhitong Certified Public Accountants (special general partnership) (hereinafter referred to as" accountant ") has audited the financial statements of your company in 2021 and issued an audit report with qualified opinions. The matters involved include: first, the accuracy of capitalization measurement of development expenditure. As of December 31, 2021, the company's development expenditure has been transferred into intangible assets of 160826 million yuan in the current period, The company fails to provide relevant supporting evidence including the working hour records of R & D personnel; The second is the rationality of the third-party collection. Seven companies including Shandong Hengyu Information Technology Co., Ltd. paid a total of 270581 million yuan of the company's accounts receivable in the form of third-party payment this year. The income corresponding to the third-party collection was recognized in previous years. The accountant was unable to obtain sufficient and appropriate audit evidence on the rationality of the above-mentioned third-party collection, the book value of relevant accounts receivable and the corresponding income recognized in previous years, It is also uncertain whether it is necessary to adjust these amounts; (2) According to the special notes on the audit report with qualified opinions in 2021 issued by the accountant, the overall importance level of the company's consolidated financial statements is 7 million yuan.
Please add: (1) the specific basis for your company to transfer the development expenditure of RMB 160826 million into intangible assets in this period, whether it meets the capitalization conditions specified in the accounting standards for business enterprises, whether relevant evidence has been provided to the accountant, and whether there is any failure to provide evidence as required by the accountant. If so, please explain in detail; (2) The specific conditions of the above-mentioned seven companies involving third-party payment collection, including but not limited to the registration time, registered capital, legal representative, specific business cooperation with your company, whether there is an affiliated relationship or other relationship with your company, and the specific conditions of third-party payment collection, including but not limited to the payment collection agreement, time, amount, proportion, customer name, business, specific accounting treatment, etc, In combination with the above situation and the situation of Companies in the same industry, explain the reason and necessity of the third party's payment collection, whether it is commercially reasonable, whether there are additional conditions, whether it is in line with industry practices, whether there is a situation of fictitious income and payment collection by using external funds, and whether there are other third party payment collection and account cancellation in the reporting period, if so, please explain in accordance with the above requirements; (3) Please explain the details of your company's third-party collection and credit in 2018, 2019 and 2020 in accordance with the above requirements; (4) Whether the company has major defects in internal control according to the specific internal control conditions of the above matters.
Ask the accountant and the signing accountant to check and give clear opinions on the above matters (1), (2) and (4), and check and explain: (1) the audit procedures executed by the accountant, the audit evidence obtained, the audit evidence required but not obtained by the company, the amount and proportion of verification for the capitalization measurement of the above development expenditure and the third-party payment collection, And the specific situation that the obtained audit evidence fails to meet the audit requirements; (2) In combination with the overall impact of the above matters on the financial statements, the overall importance level of the company's financial statements and relevant internal control, please explain whether the above matters have a broad impact on the company's financial statements, and discuss in detail the rationality and appropriateness of the qualified opinion issued by the accountant, and whether it complies with the specific provisions of the guidelines for the application of regulatory rules - Audit No. 1 Whether there is a situation in which a qualified opinion replaces an unqualified opinion or negative opinion; (3) Whether the company uses external funds to make up income and payment collection; (4) The accountant is requested to provide relevant audit drafts for future reference.
”
[company reply]
Item (1): the specific basis for your company to transfer the development expenditure of 160826 million yuan into intangible assets in this period, whether it meets the capitalization conditions specified in the accounting standards for business enterprises, whether relevant evidence has been provided to the accountant, and whether there is any failure to provide evidence as required by the accountant. If so, please explain in detail.
reply:
During the reporting period, the amount of capitalized R & D investment was 160826 million yuan, accounting for 33.61% of R & D investment, an increase of 4.68 percentage points over the same period of last year, which was consistent with the increase of R & D investment in operating revenue.
During the reporting period, the company's R & D projects were mainly carried out at the level of its subsidiary Beijing Zhiyou Wangan Technology Co., Ltd. (hereinafter referred to as "Zhiyou Wangan") and its subsidiaries. During the reporting period, the company's R & D investment totaled 478452 million yuan, a year-on-year increase of 45.89%; The proportion of R & D investment in operating income was 16.56%, an increase of 4.87 percentage points over the same period of last year; With the increase of the company's R & D investment and the successful launch of some projects and reaching the sales state after passing the test, the capitalization amount of the company's R & D investment has also increased.
During the reporting period, the following three items of the subsidiary zhiyou.com security were transferred into intangible assets: mobile application security supervision and monitoring platform v2 0. Mobile application privacy compliance automatic detection platform v1 0. Hongmeng application reinforcement platform v1 0, totaling 160826 million yuan. In accordance with the relevant provisions of the accounting standards for Business Enterprises No. 6 - intangible assets on the capitalization of development expenditure, the company determines that the following conditions are met at the same time and makes corresponding accounting treatment: 1) it is technically feasible to complete the intangible assets so that they can be used or sold; 2) Having the intention to complete the intangible assets and use or sell them; 3) The ways in which intangible assets generate economic benefits, including being able to prove that there is a market for the products produced by using the intangible assets or the intangible assets themselves. If the intangible assets will be used internally, its usefulness shall be proved; 4) Have sufficient technical, financial and other resource support to complete the development of the intangible assets and have the ability to use or sell the intangible assets; 5) The expenditure attributable to the development stage of the intangible asset can be measured reliably. The company's accounting policy for the capitalization of R & D expenses is to divide the R & D internal R & D project expenditure into research stage expenditure and development stage expenditure. The expenditure in the research stage shall be included in the current profit and loss when it occurs. Expenditures in the development stage can only be capitalized if the above conditions are met at the same time. The company's research and development projects enter the development stage after meeting the above conditions and forming the project approval through technical feasibility and economic feasibility study. The capitalized expenditure in the development stage is listed as development expenditure on the balance sheet and transferred to intangible assets from the date when the project reaches its intended purpose. The above policies comply with the provisions on the capitalization of R & D expenses in the accounting standards for Business Enterprises No. 6 - intangible assets.
The company's R & D situation involves the R & D of basic technologies, customized development for specific key customers, exploratory development for new industry fields and the development of R & D capitalization projects. 1) For the R & D of basic technologies, including the R & D of software platforms and key components, the R & D results can not be sold separately, but need to be combined with the R & D investment in other aspects and finally complete the R & D work. Therefore, the research of basic technologies does not meet the conditions for entering the development stage and does not meet the provisions of the above standards. The company has not capitalized this type of R & D. 2) The characteristic of customized development for specific customers is that the purpose of R & D is not for the whole industry. Passing the test of specific customers means meeting the needs of specific customers. Therefore, the goal of R & D is to pass the test of specific customers. The development stage is short and accounts for a small proportion of the overall R & D. the company does not separate the research stage and development stage in R & D project management, which does not comply with the provisions of the above standards, Therefore, it is not capitalized. 3) In addition to the original business areas, the company is also actively expanding new industries. However, due to restrictions such as industry cognition and customer resources, there is great uncertainty about whether it can succeed in R & D, form mass sales and bring sufficient economic benefits to the company in the future. It does not meet the provisions of the above standards, and the company has not been capitalized.
As of the end of the reporting period, the company has 194 R & D personnel and has obtained 14 patent licenses and 88 software copyrights. The company has long been engaged in mobile network security business and deeply cultivated the mobile network security market. The company has carried out project research and development such as product upgrading for products with breakthrough in industry information and customer resources. Through the market and spatial capacity analysis and technical and economic feasibility analysis of various projects, the products developed are expected to realize mass external sales and bring sufficient economic benefits to the company. In terms of financial resources, the company has the ability to provide financial support for development through its own funds, bank loans and other ways. After the R & D project passes the test run and trial, it has the basic conditions to form a new product to a great extent, and the company has sufficient technical, financial and other resources to complete the development of the product through early technology accumulation. Therefore, after the research and development of such products pass the test and trial, they meet the relevant provisions of the accounting standards for Business Enterprises No. 6 - intangible assets.
During the reporting period, relevant internal and external evidences have been obtained for the three capitalization projects of the company. The internal evidences include the project initiation report, market analysis report, outline design specification, requirements specification, internal function and performance test report, deployment documents, user operation manual and released product list in the R & D process documents; External evidence includes third-party inspection reports, relevant software copyrights and software product certificates; In addition, the above three capitalized R & D projects have obtained or are applying for relevant software copyright and software product certificates during the reporting period, and multiple business contracts have occurred before or after December 31, 2021. The company believes that based on the above evidence, the above three R & D projects comply with the accounting policies of the company for the capitalization of R & D expenses, and the relevant accounting treatment complies with the relevant provisions of the accounting standards for business enterprises.
The company has provided the above-mentioned evidence materials to the annual audit accountant at the annual audit stage, but it still fails to provide evidence as required by the accountant. These evidences include the R & D project fund budget, man hour budget, man hour records of R & D personnel and other materials required by the accountant. The company's project plan has a clear allocation of R & D project personnel, but there is a lack of more relevant materials for recording and archiving. In the future, the company will improve the records and archiving of this link, increase man hour records and further improve process documents.
Item (2): the specific circumstances of the above seven companies involved in third-party payment collection, including but not limited to the time of registration, registered capital, legal representative, specific business cooperation with your company, whether there is an association or other relationship with your company, and the specific circumstances of third-party payment collection, including but not limited to the payment collection agreement, time, amount, proportion, customer name, business and specific accounting treatment, In combination with the above situation and the situation of Companies in the same industry, explain the reason and necessity of the third-party payment collection, whether it is commercially reasonable, whether there are additional conditions, whether it is in line with industry practices, whether there is a situation of fictitious income and payment collection by using external funds, and whether there are other third-party payment collection and account cancellation in the reporting period, if so, please explain in accordance with the above requirements.
reply:
The total payment amount of the above seven companies involving third-party payment collection is 270581 million yuan. The relevant details are as follows:
Compile
