Securities code: 001979 securities abbreviation: China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) Announcement No. [cmsk] 2022-024 China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979)
Announcement on the provision for asset impairment in 2021
The company and all members of the board of directors guarantee that the contents of the announcement are true, accurate and complete without false records, misleading statements or major omissions.
In accordance with the relevant provisions of the accounting standards for business enterprises and the accounting policies of China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) (hereinafter referred to as “the company”), the company conducted an impairment test on the assets with signs of impairment as of December 31, 2021, and, based on the principle of prudence, made a provision for impairment of assets with possible impairment losses. The main information is as follows:
1、 Provision for asset impairment this time
Unit: 10000 yuan
Reason for accrual of impairment provision amount of accounts
Credit loss reserves 98096 credit loss reserves are accrued for individual credit loss reserves and category receivables according to credit risk characteristics.
Inventory falling price reserves 171898 inventories are measured at the lower of cost and net realizable value. When the net realizable value is lower than the cost, the inventory falling price reserves shall be withdrawn.
Provision for impairment of investment real estate 77901
The recoverable amount of investment real estate and long-term equity investment with signs of impairment is estimated. When the recoverable amount is lower than the book value of the long-term equity investment impairment provision 89292, the asset impairment provision shall be withdrawn according to the difference.
Total 437187
2、 Explanation on the rationality of the provision for asset impairment this time
1. Provision for credit losses
The company groups receivables according to the similarity and relevance of credit risk characteristics. These credit risks usually reflect the debtor’s ability to repay all due amounts in accordance with the contractual terms of these assets, and are related to the measurement of future cash flow of the inspected assets. The basis for determining each category and the provision method for credit loss are as follows:
Category name: basis for determining combination
This category is classified according to the credit risk characteristics of the debtor, mainly including the accounts receivable from the company’s low-risk associates, government departments and partners, reserve funds, deposits and other categories, and the possibility of bad debt loss of such accounts is very small.
This category is the normal risk category of the Department except for the low-risk category and the category of single provision for credit loss. The company makes provision for credit loss on the receivables of this category according to the aging analysis method in combination with historical experience, the debtor’s repayment ability at maturity and future cash flow.
The category of single withdrawal of credit loss reserves is accounts receivable with a single withdrawal of credit loss reserves of more than 10 million yuan.
Method of withdrawing credit loss reserves by category
The low-risk category shall be withdrawn according to zero to one thousandth of the balance of these categories
Normal risk category aging analysis method
The impairment test shall be conducted separately for the category of single provision for credit loss, and the provision for credit loss shall be made according to the difference between the present value of its future cash flow and its book value
At the end of the reporting period, the company conducted a separate impairment test on the receivables with single provision for credit loss according to the accounting policy of withdrawing the provision for credit loss of receivables, and withdrawn the provision for credit loss of 98.096 million yuan according to the difference between the present value of its future cash flow and its book value.
2. Inventory falling price reserves
During the reporting period, the sales prices of some real estate projects did not meet expectations. At the end of the reporting period, the company determines the net realizable value according to the market reference price and the amount of the estimated selling price of the inventory minus the estimated costs, selling expenses and relevant taxes to be incurred at the time of completion. When the net realizable value is lower than the cost, the inventory falling price reserve is withdrawn, totaling 1718.98 million yuan.
3. Provision for impairment of investment real estate
At the end of the reporting period, the company estimated the recoverable amount of investment real estate with signs of impairment according to the expected rental income and rental rate in the leasing market, and made provision for asset impairment according to the difference between its lower than the book value, with a total provision for impairment of investment real estate of 779.01 million yuan.
4. Provision for impairment of long-term equity investment
At the end of the reporting period, the long-term equity investment whose operation is lower than expected and there is no sign of improvement is judged to have signs of impairment. The company estimates the recoverable amount of such long-term equity investment, withdraws the provision for asset impairment according to the difference between its lower than the book value, and withdraws the impairment of long-term equity investment of RMB 892.92 million.
3、 The impact of the current provision for asset impairment on the company
The above provision for asset impairment totaled 4371.87 million yuan, reducing the company’s net profit attributable to shareholders of listed companies by 3455.62 million yuan in 2021.
The amount of provision for asset impairment this time is the preliminary calculation result of the company’s financial department, which has not been audited by an accounting firm. The final data shall be subject to the financial data audited by an accounting firm.
It is hereby announced.
China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) board of directors
February 24, 2002
