Palm Eco-Town Development Co.Ltd(002431) attention letter verification opinion letter KSH Zi [2022] No. zb013
Lixin Certified Public Accountants (special general partnership)
Reply to Shenzhen Stock Exchange's letter of concern for palm Ecological Town Development Co., Ltd
Xin Hui Shi Han Zi [2022] No. zb013 Shenzhen Stock Exchange gem company management department:
The letter of concern on Palm Eco-Town Development Co.Ltd(002431) issued by your ministry (company department concern letter [2022] No. 14, hereinafter referred to as the "concern letter") has been received on January 17, 2022 as the financial report audit institution of Palm Eco-Town Development Co.Ltd(002431) (hereinafter referred to as " Palm Eco-Town Development Co.Ltd(002431) " or "the company"), We (hereinafter referred to as "Lixin" or "audit institution") have carefully discussed the issues raised in the letter of concern and verified the relevant matters. The specific instructions are as follows:
[item 4] the announcement shows that for the debt restructuring in July and December 2021, your company will return the credit impairment losses of 28.82 million yuan and 31.9 million yuan accrued from Guiyang Baiyun city investment in the early stage, accounting for 137.24% of your company's audited net profit in 2020, which will have a positive impact on your company's operating performance in 2021. Please explain the specific impact of the above-mentioned debt restructuring on your company's profit and loss, the time and basis of profit and loss recognition, relevant accounting treatment process and compliance, and whether there is any sudden profit creation at the end of the year in combination with the deliberation procedures and delivery time points required to sign relevant agreements. The annual audit accountant of your company is requested to check and give clear opinions.
Company reply:
(1) Review procedures and effective time of the agreement related to the two creditor's rights and debt restructuring matters:
1. The first debt restructuring
On July 9, 2021, the company held the 29th meeting of the Fifth Board of directors, deliberated and adopted the proposal on the company's debt restructuring. According to the relevant provisions of the Listing Rules of Shenzhen Stock Exchange, the company has applied to Shenzhen stock exchange for exemption from the deliberation procedure of the general meeting of shareholders on this matter, and the deliberation procedure of the proposal on the reorganization of the company's creditor's rights and debts has been completed.
According to the main terms of the creditor's right transfer agreement and the creditor's right and debt offset agreement signed by the company and Chengdu Qiankun Investment Co., Ltd. (hereinafter referred to as "Chengdu Qiankun"): the agreement is signed and sealed by the company and Chengdu Qiankun respectively, and Guizhou Donghuang ecological science and technology Development Co., Ltd. (hereinafter referred to as "Guizhou Donghuang") The creditor's right transfer agreement signed by Sichuan Xingfu palm Landscape Engineering Co., Ltd. (hereinafter referred to as "Sichuan Xingfu") and Chengdu Qiankun Investment Co., Ltd. and the creditor's right and debt offset agreement signed by the company and Chengdu Qiankun shall take effect at the same time.
2. The second debt restructuring
The company held the 37th meeting of the 5th board of directors on December 31, 2021, deliberated and adopted the proposal on the company's debt restructuring. This matter needs to be submitted to the first extraordinary general meeting of shareholders of the company in 2022 for deliberation.
On December 31, 2021, the company signed the creditor's rights transfer and offset agreement with Chengdu Qiankun.
(2) Specific impact of debt restructuring on the company's profit and loss, time point and basis of profit and loss recognition: as of December 31, 2020, the company has recognized 13671.97 yuan of accounts receivable with Guiyang Baiyun Urban Construction Investment Group Co., Ltd. (hereinafter referred to as "Guiyang Baiyun urban investment"), and 8005.44 yuan of impairment has been accrued.
1. The first debt restructuring
According to the matters related to the debt restructuring and the agreement, the accounts receivable of Guiyang Baiyun Chengtou decreased by 34.2512 million yuan due to the debt restructuring, and the accrued bad debt provision of 28.82 million yuan corresponding to this part of the amount was also offset accordingly. This event will affect the current profit and loss of the company by 28.82 million yuan.
According to the creditor's rights transfer agreement: "... (2) after the above-mentioned creditor's rights transfer, the amount payable by the debtor to the original creditor shall be directly paid and paid off by the debtor to the new creditor; the creditor's rights and debts relationship between the debtor and the original creditor of the transferred part shall be lost..." and
In the agreement on cancellation of creditor's rights and debts "... The parties agree and confirm that the above creditor's rights of Party A and Party B are offset by each other in equal amount; after offset, the creditor's rights of Party A and Party B under this agreement will be lost..."
In combination with the relevant terms agreed in this agreement, there are no other conditions attached after the agreement takes effect, the risk of deferred payment and the risk of debtor default have been completely transferred, the relationship between creditor's rights and debts can be considered to have been completely eliminated, and the relevant creditor's rights and debts meet the conditions for the final recognition of financial assets / liabilities. Therefore, the company believes that it can recognize the relevant profits and losses of financial asset transfer and debt restructuring when the agreement takes effect. The transferred creditor's rights and offset creditor's rights of the company are equally lost according to the relevant provisions of the agreement when the agreement takes effect. The recognition time point of profit and loss corresponding to this event shall be the effective date of the agreement.
2. The second debt restructuring
According to the matters related to the debt restructuring and the agreement, the company's accounts receivable of Guiyang Baiyun Chengtou decreased by 31.9 million yuan due to the debt restructuring, and the accrued bad debt provision of 31.9 million yuan corresponding to this part of the amount was also written off accordingly. This event will affect the current profit and loss of the company by 31.9 million yuan.
According to the agreement on assignment and set off of creditor's rights: "... (1) Party A and Party B agree that Party B will transfer the above listed creditor's rights of [31900000.00] (in words: Thirty one million nine hundred thousand yuan) to the debtor The principal and all other relevant rights shall be transferred to Party A, and Party A agrees to accept the above creditor's rights of Party B. Party B shall notify the debtor of the transfer of creditor's rights within 5 days from the date of signing this agreement, and submit the relevant supporting documents of the notice of creditor's rights transfer to Party A (including but not limited to the cover of EMS mail containing the debtor's legal receiving address and the name of the mailed document, and the mail signing record of the other party). (2) After the above creditor's rights are transferred, the amount payable by the debtor to Party B shall be directly paid or offset by the debtor to Party A; The creditor's right and debt relationship between Party B and the debtor with respect to the transferred principal of [31900000.00] yuan and all other relevant rights is lost. " In combination with the relevant terms agreed in this agreement, there are no other conditions attached after the agreement takes effect, the risk of deferred payment and the risk of debtor default have been completely transferred, the relationship between creditor's rights and debts can be considered to have been completely eliminated, and the relevant creditor's rights and debts meet the conditions for the final recognition of financial assets / liabilities. Therefore, the company believes that it can recognize the relevant profits and losses of financial asset transfer and debt restructuring when the agreement takes effect. The transferred creditor's rights and offset creditor's rights of the company are equally lost according to the relevant provisions of the agreement when the agreement takes effect.
The recognition time point of profit and loss corresponding to this event shall be the effective date of the agreement.
(3) Relevant accounting treatment
1. The first debt restructuring is as follows:
Account amount of event direction (10000 yuan)
According to the accounts payable borrowed from Chengdu by Guizhou Donghuang and Sichuan Xingfu - Guizhou Donghuang and Sichuan 3425.12
The creditor's right transfer agreement signed by Qiankun will be beneficial to 2
Suppliers (Guizhou Donghuang, Sichuan Xingfu)
Accounts payable converted into accounts payable to Chengdu Qiankun loan accounts payable - Chengdu Qiankun 3425.12
Other receivables borrowed - Chengdu Qiankun 3425.12 according to the credit transfer agreement signed between the company and Chengdu Qiankun
According to the agreement, Guiyang Baiyun Chengtou's 3425.12 loan receivables from Guiyang Baiyun Chengtou are converted into other receivables from Chengdu Qiankun, and the accrued credit impairment is offset at 2882.00 of bad debt provision:
Loan credit impairment loss 2882.00
The company offsets the creditor's rights and debts of accounts payable - Chengdu Qiankun 3425.12 and other receivables - Chengdu Qiankun 3425.12 in accordance with the creditor's rights and debts offset agreement
2. The second debt restructuring is as follows:
① According to the creditor's right transfer and offset agreement, the company converts the accounts receivable from Guiyang Baiyun Chengtou into other accounts receivable from Guizhou meizhuang Gaoyuan Industrial Co., Ltd. (hereinafter referred to as "meizhuang Gaoyuan"), and offsets the accrued credit impairment at the same time:
Debit: other receivables - meizhuang Gaoyuan 31.9 million yuan
Credit: accounts receivable - Guiyang Baiyun city investment 31.9 million yuan
Debit: bad debt reserves 31.9 million yuan
Credit: credit impairment loss of 31.9 million yuan
② Because the purpose of the company's acquisition of the accounts receivable of meizhuang Gaoyuan is to offset the company's accounts payable to meizhuang Gaoyuan at the end of the period, and the amount of the company's accounts payable to meizhuang Gaoyuan at the end of the period is much larger than the accounts receivable obtained through debt replacement, all companies believe that there is a positive and feasible subsequent offset for the accounts receivable of meizhuang Gaoyuan in the future. At the end of the period, the company recognized the newly formed other receivables of meizhuang Gaoyuan individually and estimated that the credit impairment risk of this amount was low.
(4) Is there any sudden profit making at the end of the year
Since the substantive controller of the company was replaced by the Department of finance of Henan Province in 2019, the new management of the company has implemented the debt of the company's accounts receivable as the key work content based on the company's operating conditions, and made some progress. Solving the debt problem of the company's accounts receivable through debt restructuring will help to reduce the company's debt pressure, improve the company's financial situation and reduce the company's operating risk, which is in line with the interests of all shareholders of the company. Based on the actual operating conditions of the company in 2021, there is no sudden profit creation at the end of the year.
Accountant's verification opinion:
Our audit of the company's financial statements in 2021 is still in progress, and we will pay full attention to the possible impact of factors such as whether the company has a relationship with Chengdu Qiankun and other subjects related to debt restructuring on the accounting treatment of relevant debt restructuring transactions. Our verification opinions on this matter shall be subject to our final opinions after completing the audit of the company's 2021 financial statements.
Lixin Certified Public Accountants (special general partnership) January 28, 2022
