600094: Announcement on the provision for asset impairment

Stock Code: 600094, 900940 stock abbreviation: Greattown Holdings Ltd(600094) , Greattown Holdings Ltd(600094) B No.: 2022-011

Greattown Holdings Ltd(600094)

Announcement on the provision for asset impairment

The board of directors and all directors of the company guarantee that there are no false records, misleading statements or major omissions in the contents of this announcement, and bear individual and joint liabilities for the authenticity, accuracy and completeness of its contents. Greattown Holdings Ltd(600094) (hereinafter referred to as “the company”) convened the 15th meeting of the 8th board of directors and the 12th meeting of the 8th board of supervisors on January 27, 2022, and deliberated and adopted the proposal on the provision for impairment of large assets. The details are hereby announced as follows:

1、 Overview of the provision for asset impairment this time

In order to objectively reflect the company’s financial situation and operating results in 2021, in accordance with the relevant provisions of the accounting standards for business enterprises, the articles of association and the company’s accounting policies, and based on the principle of prudence, the company and its subsidiaries conduct a comprehensive inventory and asset impairment test of assets with possible signs of value reduction at the end of 2021. According to the preliminary test of the company, in 2021, the company expects to withdraw the provision for impairment of various assets totaling 270 million yuan to 300 million yuan. This data has not been audited by the annual audit accountant. The specific data shall be subject to the audited 2021 annual report disclosed by the company.

2、 Details of the provision for asset impairment this time

(I) method of withdrawing provision for asset impairment

According to the accounting standards for Business Enterprises No. 8 – asset impairment and the relevant provisions of the accounting policies implemented by the company: if there are signs of asset impairment, its recoverable amount shall be estimated. The recoverable amount shall be determined according to the higher one between the net amount of the fair value of the asset minus the disposal expenses and the present value of the expected future cash flow of the asset. If the measurement result of the recoverable amount shows that the recoverable amount of the asset is lower than its book value, the book value of the asset shall be written down to the recoverable amount, and the written down amount shall be recognized as asset impairment loss and included in the current profit and loss, and the corresponding asset impairment provision shall be withdrawn at the same time.

(II) specific conditions of provision for impairment

Limited by the government department’s record management of real estate sales price, the sales record price of some new projects obtained in this period is lower than expected, while these projects are new investment projects of the company in 2017, and the land auction price is high, resulting in the sales record price lower than the book value; At the same time, affected by the real estate regulation and the tightening of the credit environment, the cooling of the new housing market and the downward pressure on prices are obvious. In order to speed up the sales of old projects to revitalize assets and realize cash return, the company has taken positive sales and management measures according to the market environment of different regions, but some inventories still show signs of impairment.

Therefore, in strict accordance with the relevant provisions of the accounting standards, the company conducted a comprehensive inventory and asset impairment test on the assets of the company and its subsidiaries that may have signs of impairment. The preliminary test results show that the net realizable value of some products in some regions is lower than the book value, so it is necessary to withdraw inventory falling price reserves, In 2021, the company expects to make a total of 270-300 million yuan of provision for impairment of various assets.

3、 Impact of provision for impairment on the company’s financial position

The above-mentioned company expects to make provision for asset impairment. The total amount of provision for impairment is 270-300 million yuan, which is planned to be fully included in the company’s operating performance in 2021. It is expected to reduce the company’s total profit in 2021 by 270-300 million yuan. This data has not been audited by the annual audit accountant, and the specific data shall be subject to the audited 2021 annual report disclosed by the company.

4、 Opinions of the board of directors on the provision for asset impairment

The board of directors of the company believes that the company and its subsidiaries withdraw the provision for asset impairment according to the actual situation, which is in line with the accounting standards for business enterprises and the provisions of the company’s financial management system, and reflects the company’s asset status fairly and accurately. It agrees to withdraw the provision for asset impairment this time.

5、 Independent opinions of independent directors on the provision for asset impairment

The independent directors of the company believe that the provision for asset impairment this time complies with the relevant provisions of the accounting standards for business enterprises and the company’s financial management system, and the relevant review procedures are legal and compliant. The provision for asset impairment this time fairly reflects the asset value of the company and does not harm the legitimate interests of the company and minority shareholders. They agree to the provision for asset impairment this time.

6、 Independent opinions of the board of supervisors on the provision for asset impairment

The board of supervisors of the company believes that the company’s provision for asset impairment in accordance with the accounting standards for business enterprises and the relevant provisions of the company’s financial system is in line with the actual situation of the company, can more fairly reflect the company’s financial status and asset value, and the relevant decision-making procedures comply with the provisions of laws and regulations. It agrees to withdraw the provision for asset impairment this time.

7、 Other explanatory matters

The asset impairment data is the preliminary calculation data of the company, which has not been audited by the annual audit accountant. The specific and accurate financial data are subject to the audited 2021 annual report officially disclosed by the company. Please pay attention to the investment risk.

It is hereby announced

Greattown Holdings Ltd(600094) daily report of the board of directors on January 29, 2022

(I) resolutions of the 15th meeting of the 8th board of directors

(II) resolutions of the 12th meeting of the 8th board of supervisors

(III) opinions of independent directors

(IV) opinions of the audit committee

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