Securities code: 600688 stock abbreviation: Sinopec Shanghai Petrochemical Company Limited(600688) No.: pro 2022-07
China Petroleum & Chemical Corporation(600028) Shanghai Petrochemical Co., Ltd
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.
China Petroleum & Chemical Corporation(600028) Shanghai Petrochemical Co., Ltd. (“the company” or “the company”) held the 8th meeting of the 10th board of supervisors on February 9, 2022 and the 14th meeting of the 10th board of directors on February 10, 2022. The meeting deliberated and agreed that the company will make provision for asset impairment in 2021, as follows: 1 Overview of the provision for asset impairment this time
In order to objectively reflect the financial situation and operating results of the company in 2021, according to the accounting standards for business enterprises and other relevant provisions, based on the principle of prudence, the company conducted an impairment test on relevant assets that may show signs of impairment at the end of the year. According to the test, in 2021, the company plans to withdraw a total of 766897100 yuan of impairment reserves due to the above matters.
2、 Description of specific conditions of withdrawing asset impairment reserves
1. Method, basis and standard of withdrawing impairment provision
According to the accounting standards for Business Enterprises No. 1 – Inventory: it is measured according to the lower of the cost and net realizable value on the balance sheet date. When the net realizable value is lower than the cost, the inventory falling price reserves are accrued.
According to the accounting standards for Business Enterprises No. 8 – asset impairment: 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. 2. Details of provision for impairment
In 2021, the company conducted an impairment test on assets with signs of impairment, and plans to withdraw an impairment provision of 766.8971 million yuan, mainly including 150.8826 million yuan for inventory, 587.6228 million yuan for fixed assets and 28.3917 million yuan for long-term equity investment.
3、 Impact of provision for impairment on the company’s financial position
In 2021, the company plans to withdraw a total of 766897100 yuan of asset impairment reserves due to the above matters. The withdrawn impairment reserves are planned to be fully included in the company’s operating performance in 2021, reducing the company’s consolidated net profit of 582270800 yuan in 2021.
4、 Opinions of the board of directors
The board of directors of the company believes that the company’s provision for asset impairment based on the actual situation is in line with the provisions of the accounting standards for business enterprises and the company’s financial management system, reflects the company’s asset status fairly and accurately, and agrees to withdraw the provision for asset impairment this time.
5、 Opinions of independent directors
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. After the provision for asset impairment is withdrawn this time, the company’s financial statements can more fairly reflect the company’s financial situation and operating results, and help to provide investors with more authentic, reliable and accurate accounting information. There is no situation that damages the interests of the company and all shareholders, especially small and medium-sized shareholders. We agree to withdraw the provision for asset impairment this time.
6、 Opinions of the board of supervisors
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 above data are only preliminary accounting data and have not been audited by certified public accountants. The specific and accurate financial data shall be subject to the audited 2021 annual report officially disclosed by the company. Please pay attention to the investment risks.
8、 Directory of documents for future reference
Minutes and resolutions of the 14th meeting of the Sinopec Shanghai Petrochemical Company Limited(600688) 10th board of directors
Minutes and resolutions of Sinopec Shanghai Petrochemical Company Limited(600688) the 8th meeting of the 10th board of supervisors
Independent opinions of Sinopec Shanghai Petrochemical Company Limited(600688) independent directors on the provision for asset impairment
It is hereby announced.
Board of directors of Shanghai Petrochemical Co., Ltd. February 10, 2002
