Securities code: Shanghai Lily&Beauty Cosmetics Co.Ltd(605136) securities abbreviation: Shanghai Lily&Beauty Cosmetics Co.Ltd(605136) Announcement No.: 2022016 Shanghai Lily&Beauty Cosmetics Co.Ltd(605136)
Announcement on the provision for asset impairment in 2021
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.
Shanghai Lily&Beauty Cosmetics Co.Ltd(605136) (hereinafter referred to as “the company” or ” Shanghai Lily&Beauty Cosmetics Co.Ltd(605136) “) held the 22nd Meeting of the second board of directors on March 1, 2022 in the form of on-site communication meeting. The meeting deliberated and adopted the proposal on the provision for asset impairment in 2021.
The proposal still needs to be submitted to the general meeting of shareholders for deliberation.
The details are as follows:
1、 Overview of provision for asset impairment
In order to objectively and fairly reflect the asset status, based on the principle of prudence, the company conducted a comprehensive impairment test on inventories, other receivables, accounts receivable and other assets at the end of 2021 in accordance with the accounting standards for business enterprises and relevant accounting policies of the company, and made an impairment provision of 6557066266 yuan for some assets that may have impairment losses, Including 156769883 yuan for accounts receivable, 368249045 yuan for other accounts receivable and 6032047338 yuan for inventory falling price loss. The amount of impairment provision withdrawn in the reporting period accounted for 15.96% of the audited net profit in 2021. Relevant details are as follows:
Increase in December 2020, decrease in current year and reversal of provision on December 31, 2021
Accounts receivable 17466586167620753 – 10850870174236469
Other receivables 1404326656629103573 -2608545281772575701
Total 1421793242796724326 -2717053981946812170
Unit: RMB
Increase in December 2020 and decrease in this year withdrawn on December 31, 2021 and written off on December 31, 2021
stock
Falling price 78800431666032047338 0.00443882894112834 Shanghai Yanpu Metal Products Co.Ltd(605128) 189801051 preparation note 1: there may be differences in the mantissa between the above total and the calculated value of direct addition and subtraction of each sub item value, which are caused by rounding. Note 2: the difference between the provision for bad debts of accounts receivable and other accounts receivable in the current period and the reversal in the current period is included in the account of credit impairment loss in the income statement. Note 3: the difference between the current withdrawal of inventory falling price reserves and the current reversal is included in the asset impairment loss account in the income statement.
2、 Recognition standard and method of the current provision for asset impairment 1. Description of the provision for impairment of financial assets (accounts receivable and other receivables):
The company recognizes the loss reserves on the basis of expected credit losses for financial assets measured at amortized cost, debt instrument investments and financial guarantee contracts measured at fair value and whose changes are included in other comprehensive income.
Taking into account the reasonable and reliable information about past events, current situation and prediction of future economic conditions, and taking the risk of default as the weight, the company calculates the probability weighted amount of the present value of the difference between the cash flow receivable under the contract and the cash flow expected to be received, and recognizes the expected credit loss.
On each balance sheet date, the company measures the expected credit losses of financial instruments in different stages. If the credit risk of the financial instrument has not increased significantly since the initial recognition, it is in the first stage, and the company measures the loss reserves according to the expected credit loss in the next 12 months; If the credit risk of a financial instrument has increased significantly since its initial recognition, but there is no credit impairment, it is in the second stage. The company measures the loss provision according to the expected credit loss of the whole duration of the instrument; If a financial instrument has been impaired since its initial recognition, it is in the third stage. The company measures the loss provision according to the expected credit loss of the whole duration of the instrument.
For the financial instruments in phase I and phase II, the company calculates the interest income according to the book balance and effective interest rate without deducting the impairment provision. For the financial instruments in the third stage, the interest income shall be calculated according to the book balance minus the amortized cost after the provision for impairment and the effective interest rate.
For accounts receivable formed from daily business activities such as sales of goods and provision of labor services, whether there is a major financing component or not, the company measures the loss reserves according to the expected credit loss throughout the duration.
When the information of expected credit loss cannot be evaluated by a single financial asset at a reasonable cost, the company divides the receivables into several combinations according to the characteristics of credit risk, calculates the expected credit loss on the basis of the combination, and determines the basis and withdrawal method of the combination as follows:
Accounts receivable portfolio accounts receivable aging portfolio
Receivables between related parties included in the consolidation scope
Portfolio aging portfolio
Deposit portfolio deposit and margin aging portfolio
Other aging combinations
For the accounts receivable divided into portfolio, the company refers to the historical credit loss experience, combined with the current situation and the prediction of future economic conditions, prepares the comparison table between the aging of accounts receivable and the expected credit loss rate for the whole duration, and calculates the expected credit loss. In addition, for other receivables divided into portfolios, the company refers to the historical credit loss experience, combined with the current situation and the prediction of future economic conditions, and calculates the expected credit loss through the default risk exposure and the expected credit loss rate in the next 12 months or the whole duration.
The company will include the loss reserves withdrawn or reversed into the current profits and losses.
It is estimated that the company will withdraw 156769883 yuan of bad debt provision for accounts receivable and 368249045 yuan of bad debt provision for other accounts receivable in 2021, which will be included in the current profit and loss.
The details are as follows:
Accrued amount of the project (RMB)
Bad debt provision for accounts receivable 156769883
Bad debt provision for other receivables 368249045
Total 525018928
2. Description of provision for inventory falling price reserves:
Inventories of the company are measured at the lower of cost and net realizable value. On the basis of a comprehensive inventory check, the company shall make provision for inventory falling price if the inventory cost is higher than its net realizable value due to unsalable, overstock, product renewal and other reasons, and record it into the current profit and loss. It is estimated that the company will withdraw the inventory falling price reserve of RMB 6032047338 in 2021, which will be included in the current profit and loss. The details are as follows:
Accrued amount of the project (RMB)
Goods in stock 6032047338
Issued goods 0.00
In transit inventory 0.00
Total 6032047338
3、 Impact of the current provision for asset impairment on Listed Companies
The provision for impairment of assets decreased the total profit of the company in 2021 by 6557066266 yuan.
4、 Decision making procedures performed by the company
The 22nd Meeting of the second board of directors of the company deliberated and adopted the proposal on the provision for asset impairment in 2021. The board of directors of the company believes that the company’s provision for asset impairment in accordance with the accounting standards for business enterprises and relevant regulations is in line with the actual situation of the company, and can more fairly and truly reflect the company’s assets and financial status after the provision, and 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 of the company is based on the principle of prudence and in accordance with the accounting standards for business enterprises, which can truly reflect the asset value and financial status of the company in 2021 and is conducive to the standardized operation of the company. The provision for asset impairment this time complies with the provisions of the Listing Rules of Shanghai Stock Exchange and the articles of association. There is no situation that damages the interests of the company and other shareholders, and does not have a significant impact on the company’s main business, financial status, operating results and cash flow.
6、 Opinions of the Audit Committee on the provision for asset impairment
The Audit Committee believes that the company plans to withdraw the provision for asset impairment in 2021, totaling 6557066266 yuan. The provision for asset impairment of the company is based on the principle of prudence and withdrawn in accordance with the accounting standards for business enterprises, which can truly reflect the asset value and financial status of the company in 2021 and is conducive to the standardized operation of the company. The provision for asset impairment this time complies with the provisions of the Listing Rules of Shanghai Stock Exchange and the articles of association. There is no situation that damages the interests of the company and other shareholders, and does not have a significant impact on the company’s main business, financial status, operating results and cash flow.
7、 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 relevant regulations is in line with the actual situation of the company, and can more fairly and truly reflect the company’s assets and financial status after the provision, and agrees to withdraw the provision for asset impairment this time. It is hereby announced.
Shanghai Lily&Beauty Cosmetics Co.Ltd(605136) board of directors March 3, 2022
