Explanation on the reply to the questions related to accountants in the inquiry letter on the reorganization of Sichuan Development Lomon Co.Ltd(002312)
Chuan Hua Xin Zong a (2022) No. 0014 Shenzhen Stock Exchange:
Sichuan Huaxin (Group) certified public accountants firm (special general partnership) (hereinafter referred to as "we", "the firm" or "Sichuan Huaxin") has carefully verified the issues related to accountants mentioned in the inquiry letter on restructuring of Sichuan Development Lomon Co.Ltd(002312) (hereinafter referred to as " Sichuan Development Lomon Co.Ltd(002312) " and "the company") received by Sichuan Development Lomon Co.Ltd(002312) (hereinafter referred to as "permitted restructuring inquiry letter [2022] No. 1"), The reply to your office is as follows:
If there is no special explanation, the discrepancy between the total number and the mantissa of the sum of the sub item values in the response to this feedback is caused by rounding.
Question 2. 5:
According to the report, as of December 31, 2020, the projects under construction of Tianrui mining include 300000 t / a purified phosphoric acid, 2 million T / a phosphorus concentrate transportation and 2 million T / a phosphate ore mining and dressing projects, with book balances of 31.2556 million yuan, 9.8932 million yuan and 586.0495 million yuan respectively; Tianrui mining has made an impairment provision of RMB 18.2556 million for the 300000 t / a purified phosphoric acid project and a full impairment provision for the 2 million T / a phosphorus concentrate transportation project. In 2021, Tianrui mining made an impairment provision of RMB 272 million for the 2 million T / a phosphate ore mining and dressing project and transferred it to fixed assets.
(1) Please supplement and disclose the specific information of the above three projects, including project initiation and filing time, investment scale, investment period, construction method, investment amount of each phase, investment progress and cost collection.
(2) Please explain the reasons for the stagnation of the 300000 t / a purified phosphoric acid and 2 million T / a phosphorus concentrate transportation projects, the specific situation of the advance land payment and the judgment basis of the recoverable amount.
(3) Please explain the time when the impairment signs of 2 million T / a phosphate rock mining and beneficiation project appear and are withdrawn, the adequacy of the provision for impairment and whether the time of conversion to fixed assets comply with the relevant provisions of the accounting standards for business enterprises.
The financial advisor and accountant are requested to check and give clear opinions.
Sichuan Development Lomon Co.Ltd(002312) reply is as follows:
1、 Please supplement and disclose the specific information of the above three projects, including project initiation and filing time, investment scale, investment period, construction method, investment amount of each phase, investment progress and cost collection.
As of December 31, 2020, there are three projects under construction in the book of Tianrui mining, including 2 million T / a phosphate mining and beneficiation project, 300000 t / a purified phosphoric acid and 2 million T / a phosphate concentrate transportation project. Among them, the 2 million T / a phosphate mining and beneficiation project is the mining and beneficiation project currently used by Tianrui mining. As of September 30, 2021, It has been completed and put into use. The construction of 300000 t / a purified phosphoric acid and 2 million T / a phosphorus concentrate transportation projects has been suspended due to the impact of planning adjustment. The details of the above three projects are as follows:
Unit: 10000 yuan
2 million T / a phosphate rock 2 million T / a phosphate rock mining 300000 t / a purified phosphorus 2 million T / a phosphate concentrate mining project - mining worker
Beneficiation project - acid transportation project of beneficiation project
Cheng
Project initiation and filing time: 2009-2012-2016
Investment scale 107971.00 290400.00 38556.00
2011-
2021 (already in 2009, 2018)
term of investment
Completed in August 2021 - suspended in 2016
(and converted to fixed assets)
Construction method self construction self construction self construction
2 million T / a phosphate rock 2 million T / a phosphate rock mining 300000 t / a purified phosphorus 2 million T / a phosphate concentrate mining project - mining worker
Beneficiation project - acid transportation project of beneficiation project
Cheng
1790.51 in 2019 --- investment in each phase
Capital: 4127.78 in 2020 --- 3160.78 from January to September 2021 --- investment as of September 30, 2021
100% suspended construction
speed of progress
Note: the 2 million T / a phosphate rock mining and beneficiation project includes mining engineering and beneficiation engineering. The 2 million T / a phosphate rock mining and beneficiation project mining engineering in the above table was converted to fixed assets in December 2016, with a fixed assets conversion amount of 459.1564 million yuan. The 2 million T / a phosphate rock mining and beneficiation project mentioned below does not include mining engineering.
The cost collection of construction in progress projects of Tianrui mining includes construction engineering expenses, installation engineering expenses, equipment procurement expenses and deferred expenses to be apportioned and included in the value of each fixed asset. For the expenses of various projects under construction, the cost collection method of Tianrui mining is as follows:
For construction project expenditure, on the basis of the cost agreed in the contract signed with the construction unit, Tianrui mining confirms the construction project cost according to the estimated progress of the project, confirms the equipment procurement expenditure cost when the purchased equipment is transported to the project site, and confirms the installation project expenditure when the equipment needs to be installed is completed. Deferred expenses include management fees, feasibility study fees, temporary facilities fees, supervision fees, taxes to be borne, borrowing costs meeting capitalization conditions, etc. this part of expenses is included in the project cost when actually incurred, and deferred expenses are apportioned among different types of assets by appropriate methods.
2、 Please explain the reasons for the stagnation of the 300000 t / a purified phosphoric acid and 2 million T / a phosphorus concentrate transportation projects, the specific situation of the advance land payment and the judgment basis of the recoverable amount.
(I) 300000 t / a purified phosphoric acid project
1. Reasons for project stagnation
On February 16, 2012, Sichuan Chemical Industry Holding (Group) Co., Ltd., the then controlling shareholder of Tianrui mining, signed the investment agreement on Mabian phosphate ore mining and dressing and downstream projects with the people's Government of Mabian Yi Autonomous County. According to the overall development plan of Sichuan Chemical Industry Holding (Group) Co., Ltd. and the overall development plan of phosphate ore resources in Mabian County, It is planned to build a phosphorus chemical industry project in xueshankou, Mabian county.
In order to solve the problems of urban planning and environmental protection, Mabian county government has greatly adjusted the functional positioning of xuekoushan area and cancelled the setting of xuekoushan Industrial Park. As of the date of this reply, the 300000 t / a purified phosphoric acid project has been stagnant, and there is no plan for continuous construction.
2. Specific conditions of land advance payment and judgment basis of recoverable amount
According to the investment progress of the project, Tianrui mining prepaid 20 million yuan of land to the government of Mabian Yi Autonomous County on January 15, 2013 for the construction of Phosphorus Chemical Industrial Park in xuekou mountain. Due to the suspension of the implementation of the project and the cancellation of the setting of xuekoushan industrial park by the government, Tianrui mining communicated and coordinated with the government of Mabian Yi Autonomous County in April 2018 and asked it to return the above land payment. In 2018, the government of Mabian Yi Autonomous County organized relevant departments to verify the early-stage investment of xuekoushan Phosphorus Chemical Industrial Park (mainly the expenditure of land acquisition, demolition and seedling compensation). According to the verification and communication results, after deducting the above project investment, the management of Tianrui mining estimated that the recoverable Land Fund balance was about 13 million, Therefore, Tianrui mining made an impairment provision of 7 million yuan for the land in 2018. In January 2022, after on-site confirmation with Mabian County Natural Resources Bureau, Mabian County Natural Resources Bureau recognized the relevant rights and interests of Tianrui mining's advance land payment, and after Mabian County Natural Resources Bureau inquired the internal financial records, the balance of the project payment was not less than 13 million yuan. For prudence, Tianrui mining still confirmed its estimated recoverable advance land payment with 13 million yuan.
(II) reasons for stagnation of 2 million T / a phosphorus concentrate transportation project
Sichuan JIAHANG Pipeline Transportation Co., Ltd. (hereinafter referred to as "Jiahang pipeline") was established on March 29, 2016. It is a wholly-owned subsidiary of Tianrui mining, with a registered capital and paid in capital of RMB 10 million. The business scope of Jiahang pipeline: pipeline transportation, preliminary processing and sales of mineral products, wharf management, automobile transportation and waterway transportation.
Jiahang pipeline mainly undertakes the 2 million T / a phosphorus concentrate transportation project, which is planned to be used for the 2 million T / a concentrate transportation of Tianrui mining. If the pipeline transportation project is completed, the concentrate transportation cost from Tianrui mining to Jinsha River Wharf will be greatly reduced.
Due to the impact of tailings pond leakage, the beneficiation unit of Tianrui mining can not be used normally before 2021. At the same time, the regional distribution of main customers in the downstream of Tianrui mining is mainly sold in Sichuan, and the amount of ore taking the Yangtze River route is small. The income from the continuous investment of the above pipeline transportation project is expected to be low. Therefore, after the project was suspended in 2018, there is no plan to continue the construction until the date of this reply. Jiahang pipeline has fully accrued 9.8932 million impairment reserves for the project in 2018.
3、 Please explain the time when the impairment signs of 2 million T / a phosphate rock mining and beneficiation project appear and are withdrawn, the adequacy of the provision for impairment and whether the time of conversion to fixed assets comply with the relevant provisions of the accounting standards for business enterprises.
(I) occurrence of impairment signs and withdrawal time point of 2 million T / a phosphate rock mining and beneficiation project
The 2 million T / a phosphate ore mining and beneficiation project is the mining project and beneficiation project currently used by Tianrui mining. The beneficiation project mainly includes two core facilities: washing plant and tailings pond. Among them, for the 291.7745 mu of land occupied by the tailings pond under the 2 million T / a phosphate ore mining and dressing project of Tianrui mining, Tianrui mining has obtained the temporary land use license of Mabian natural resources linxu (2021) Zi No. 015 and 016 issued by the natural resources bureau of Mabian County, which is valid from September 6, 2021 to September 5, 2023.
According to the regulations on the implementation of the land administration law of the people's Republic of China (Order No. 743 of the State Council) which came into force on September 1, 2021 "Article 20 where land needs to be temporarily used for construction projects and geological exploration, it shall not occupy or occupy as little cultivated land as possible. Temporary land shall be approved by the Department in charge of natural resources of the people's government at or above the county level, and the term shall generally not exceed two years; temporary land for the construction of energy, transportation, water conservancy and other infrastructure with a long construction period shall not exceed four years; legal and administrative Unless otherwise provided by laws and regulations. The land user shall complete the land reclamation within one year from the date of expiration of the temporary land use to make it available for use. Among them, if the cultivated land is occupied, the planting conditions shall be restored ".
According to the notice of the Ministry of natural resources on regulating the management of temporary land issued by the Ministry of natural resources on November 4, 2021, it is also clear that the service life of temporary land generally does not exceed two years. The temporary land used for the construction of energy, transportation, water conservancy and other infrastructure construction projects with a long construction period shall not exceed four years. The temporary land user shall complete the land reclamation within one year from the date of expiration of the temporary land. The county (city) department in charge of natural resources shall supervise the temporary land user's performance of the reclamation obligations according to law, order the correction within a time limit for the failure to restore the planting conditions within the time limit and the violation of the provisions on land reclamation, and punish it in accordance with the provisions of laws and regulations.
According to No. 8 of the accounting standards for business enterprises, there are signs of impairment of assets and other assets in the current period, or the assets may be impaired in the current market according to the accounting standards for Business Enterprises No. 8. According to the above regulations issued in 2021, the service life of temporary land is further required
