Inquiry letter on the annual report of Leon Technology Co.Ltd(300603)
Gem annual report inquiry letter [2022] No. 420 Leon Technology Co.Ltd(300603) board of directors:
Our department paid attention to the following situations in the post review of your company's 2021 annual report: 1 According to the annual report, according to the performance compensation agreement signed with the counterparties of major asset restructuring, such as Jinpo and Qian Chifeng, your company recognized the income from changes in fair value of 629557 million yuan according to the expected number of compensation shares and the closing price of the company's shares at the end of 2021.
(1) Your company is requested to disclose the details of the accounts receivable that have not been recovered as of the agreed period, including but not limited to the cause, time, aging, amount, name of the receivable object, whether there is a relationship with the company and the counterparty, the provision for bad debt reserves in each year, the reasons for failure to recover in time, etc.
(2) In combination with the specific contents and implementation of the agreement, your company is requested to supplement the accounting treatment basis and compliance of matters related to performance compensation, as well as the impact on your company's financial statements in 2021.
(3) Your company is requested to disclose in detail the recognition of operating income since the consolidation of the restructuring target, and in combination with the business model of the restructuring target, product and business characteristics, major customers, whether there is any affiliated relationship or capital exchange with the company and counterparties, sales policy and sales collection, effectiveness of internal financial control, etc., and in accordance with the relevant provisions of accounting standards for Business Enterprises No. 14 - income, Explain whether the relevant sales behaviors meet the conditions for revenue recognition. If yes, please fully state whether it is necessary to retroactively adjust the financial statements of previous years.
The accountant is requested to check and give a clear opinion, and explain the audit procedures and coverage, procedure effectiveness and audit conclusion adopted for the authenticity of the income of the restructuring object.
2. At the end of the reporting period, the book balance of your company's accounts receivable was 1314241800 yuan, the balance of bad debt provision was 402832300 yuan, the withdrawal proportion was 30.65%, and the balance of bad debt provision accounted for 41.62% of the operating revenue in the reporting period. Accounts receivable accounted for 63.72% of current assets, of which accounts receivable aged more than one year accounted for 79.48%.
(1) Your company is requested to disclose the name of the top ten accounts receivable customers, the corresponding sales content, the recognized sales revenue, the book balance of accounts receivable, the aging, the accrued bad debt reserves and the subsequent collection of accounts, and whether the debtor has any association or investment relationship with the company, shareholders holding more than 5% shares, directors, supervisors and senior personnel, And explain whether the top ten customers of accounts receivable pay the money according to the contract one by one. If not, please explain the reasons and the countermeasures the company has taken and plans to take.
(2) Please explain whether the provision for bad debts of accounts receivable is reasonable and sufficient in combination with the aging distribution of accounts receivable, customer credit status and industry characteristics, the historical loss rate of accounts receivable in previous years calculated based on the migration model, the overdue situation of accounts receivable at the end of the reporting period in recent three years, the collection situation after the reporting period and other factors, Whether there is a situation that accounts receivable cannot be recovered due to the recognition of false sales revenue in previous years and the provision of bad debts is significant.
Ask the accountant to check the above matters, and explain the audit procedures, coverage, effectiveness and audit conclusions adopted for the authenticity of accounts receivable and corresponding sales revenue, the timeliness and sufficiency of bad debt provision.
3. During the reporting period, your company achieved an operating income of 9677653 million yuan, a year-on-year decrease of 3.84%, and the net cash flow from operating activities was -742558 million yuan, a year-on-year decrease of 94.16%, including 1464592 million yuan in cash paid to and for employees, a year-on-year increase of 44.75%. From 2018 to 2020, the net cash flow generated by your company's operating activities was -241337200 yuan, 2012224 million yuan and -382456 million yuan respectively.
(1) Please make supplementary disclosure of the main composition of cash paid to and for employees, and explain the reasons and rationality of the sharp increase in cash paid to and for employees during the reporting period despite the decline in operating income in combination with the number and composition of employees, performance evaluation standards and their changes, salary level and their changes, and the situation of comparable companies in the same industry. (2) Please supplement the reasons and rationality for the large fluctuation of net cash flow from operating activities and the sharp decline of net cash flow from operating activities in 2021 in combination with the characteristics of your industry, procurement and sales policies, sales collection and the situation of comparable companies in the same industry.
4. At the end of the reporting period, the book balance of your company's inventory was 129355 million yuan, an increase of 8.27% over the beginning of the period, and no provision for impairment was made. Among them, the inventory of goods was 364865 million yuan, an increase of 70.08% over the beginning of the period.
(1) Please supplement and disclose the specific information of various inventories, including but not limited to the purpose of goods preparation, product category, whether they are customized products, stock age distribution, etc., and explain the reasons and rationality for the significant increase of inventory goods compared with the beginning of the period.
(2) Your company, in combination with industry characteristics, market demand, product price change trend, inventory age, measurement of net realizable value, orders in hand and subsequent sales, and comparable companies in the same industry, please supplement whether the company has not made impairment provision for inventory, whether it is prudent and reasonable, and whether it complies with the relevant provisions of the accounting standards for business enterprises.
Ask the accountant to check the above matters, and explain the audit procedures and coverage, program effectiveness and audit conclusion for the authenticity and accuracy of the inventory.
5. Your company completed the acquisition of 100% equity of Hangzhou wochi Technology Co., Ltd. (hereinafter referred to as "wochi technology") and Guangzhou Dayi Internet Technology Co., Ltd. (hereinafter referred to as "Dayi Internet") in January 2019, resulting in goodwill of 10 Shenergy Company Limited(600642) 00 yuan and 344867900 yuan respectively. In 2020, your company made an impairment provision of 798871400 yuan for the goodwill formed by the acquisition of wachi technology, and did not make an impairment provision for the goodwill formed by the acquisition of freshman Internet. During the reporting period, your company made an impairment provision of 261192800 yuan for the goodwill formed by the acquisition of wachi technology and 1515656 million yuan for the goodwill formed by the acquisition of freshman Internet.
Please add whether the determination method, relevant important assumptions and key parameters of the recoverable amount in this year's goodwill impairment test are consistent with those in the formation of goodwill and the previous year's goodwill impairment test. If not, please further explain the differences and their reasons, and whether there is a situation of adjusting profits by making provision for goodwill impairment, Whether it complies with the relevant provisions of accounting standards for Business Enterprises No. 8 - asset impairment and accounting supervision risk tips No. 8 - goodwill impairment. Ask the accountant to check the above matters, explain the audit procedures and audit evidence obtained for the goodwill impairment test, and express clear opinions on whether the time point and amount of the provision for goodwill impairment are appropriate.
6. At the end of the reporting period, the amount of assets with limited ownership or use right of your company was 6514213 million yuan, accounting for 28.94% of the company's total assets at the end of the reporting period. The main reason for the restriction was loan mortgage (pledge).
(1) Your company is requested to disclose the transaction matters or financing arrangements, the whereabouts of funds, the term of restriction or the lifting of restrictions and other specific conditions involved in the restricted assets, and to explain whether there is any final flow of funds to related parties or other parties with potential related relationships or interest arrangements with controlling shareholders, actual controllers, directors, supervisors and other senior personnel.
(2) Please specify the impact of the limited ownership or use right of relevant assets on the daily business activities of your company, and fully remind the relevant risks.
Ask the accountant to check and give clear opinions.
7. At the end of the reporting period, the book balance of your company's investment real estate was 326337 million yuan, an increase of 100% over the beginning of the period, all of which were formed by the transfer in of fixed assets.
Please supplement and disclose the specific changes of investment real estate during the reporting period, including but not limited to the basic information of houses and buildings, transfer in time, amount involved, transfer in reason, current use, etc., and explain the impact on the company's production and operation, and whether the relevant accounting treatment complies with the relevant provisions of the accounting standards for business enterprises. Ask the accountant to check and give clear opinions. Please make a written statement on the above issues, submit the relevant explanatory materials to our department and disclose them to the public before June 1, 2022, and send a copy to the listed company supervision department of Xinjiang securities regulatory bureau.
This is to inform you.
Gem company management department may 22, 2022
