Securities code: Beijing North Star Company Limited(601588) securities abbreviation: Beichen industry Announcement No.: pro 2022013 bond Code: 151419 bond abbreviation: 19 Beichen F1
Bond Code: 162972 bond abbreviation: 20 Beichen 01
Bond Code: 188461 bond abbreviation: 21 Beichen G1
Bond Code: 185114 bond abbreviation: 21 Beichen G2
Beijing North Star Company Limited(601588)
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 report, and bear individual and joint liabilities for the authenticity, accuracy and completeness of its contents.
Beijing North Star Company Limited(601588) (hereinafter referred to as “the company” or “the company”) deliberated and adopted the proposal on the provision for asset impairment in 2021 at the 32nd meeting of the ninth board of directors held on March 16, 2022. The relevant information is hereby announced as follows:
1、 Provision for impairment of assets
In order to objectively and fairly reflect the financial and operating conditions of the company as of the end of 2021, based on the principle of prudence, the company has conducted impairment test on the assets of each company within the consolidation scope in accordance with Chinese accounting standards for business enterprises and Hong Kong financial reporting standards. According to the impairment test results, the company accrued a total of 884.84 million yuan of asset impairment reserves in 2021, including 669.09 million yuan of inventory depreciation reserves for real estate projects, 136.79 million yuan of investment real estate assets impairment reserves and 78.96 million yuan of fixed assets impairment reserves for investment property and hotel projects. The details are as follows:
The ending inventory shall be valued according to the principle of the lower of cost and net realizable value: on the basis of a comprehensive inventory of the inventory at the end of the year, the inventory falling price reserves shall be withdrawn for the part of the inventory whose cost is expected to be irrecoverable due to all or part of obsolescence or the sales price is lower than the cost. The provision for inventory falling price shall be withdrawn according to the difference between the cost of a single inventory item and its net realizable value.
At the end of 2021, considering the market conditions of the location of the real estate project, the positioning, development and sales plan of the project itself and other factors, the company conducted an impairment test on the net realizable value of the project, and accrued inventory falling price reserves for the inventory whose cost is higher than its net realizable value. After testing, in 2021, the company needs to withdraw inventory falling price reserves of RMB 669.09 million for real estate projects.
At the end of the period, investment real estate and fixed assets are valued according to the principle of the lower of recoverable amount and book value: when the recoverable amount of investment real estate and fixed assets is lower than its book value, the book value is written down to the recoverable amount.
At the end of 2021, taking into account the market conditions of the investment property and the location of the hotel, as well as the latest operation and investment plan of the project, the company conducted an impairment test on the recoverable amount of the project, and made provision for asset impairment for the investment real estate whose book value is higher than its recoverable amount. According to the test, in 2021, the company needs to make asset impairment provision of 136.79 million yuan for investment real estate and 78.96 million yuan for fixed assets.
2、 Relevant decision-making procedures
On March 16, 2022, the company successively held the meeting of the audit committee of the board of directors, the meeting of the board of directors and the meeting of the board of supervisors, deliberated and adopted the proposal on the provision for asset impairment in 2021, and the independent directors expressed their independent opinions.
The audit committee of the board of directors of the company believes that the decision-making procedure for withdrawing the provision for asset impairment this time complies with the relevant provisions of Chinese accounting standards for business enterprises, Hong Kong Financial Reporting Standards and the company’s accounting policies and accounting estimates. After withdrawing the impairment, the 2021 financial statements can fairly reflect the company’s asset status and operating results, agree with the company’s plan for withdrawing the provision for asset impairment in 2021, and submit the matter to the board of directors for deliberation.
The board of directors of the company believes that the provision for asset impairment this time is based on the principle of prudence, fully based and fairly reflects the company’s asset status, and agrees with the plan for the provision for asset impairment this time.
The independent directors of the company believe that the provision for asset impairment is based on the principle of prudence, in line with China’s accounting standards for business enterprises, Hong Kong Financial Reporting Standards and relevant provisions of the company, and in line with the actual situation of the company’s assets; The approval procedures for the provision for impairment are legal and compliant; It is not found that there is any damage to the interests of the company or shareholders, especially small and medium-sized shareholders, so it is agreed to withdraw the asset impairment provision plan this time.
The board of supervisors of the company believes that the decision-making procedure for withdrawing the impairment provision is legal and based on sufficient basis, and the withdrawal complies with the relevant provisions of the Chinese accounting standards for business enterprises and Hong Kong financial reporting standards. After the withdrawal, it fairly reflects the state of the company’s assets, and agrees with the company’s withdrawing the impairment provision this time.
3、 Impact of impairment provision on the company’s profits in 2021
In 2021, the company’s provision for asset impairment will reduce the total profit of the company’s consolidated financial statements by RMB 884.84 million, the net profit by RMB 830.91 million and the net profit attributable to the shareholders of the parent company by RMB 699.79 million, which has no significant impact on the company’s sustainable and stable operation.
It is hereby announced.
Beijing North Star Company Limited(601588) board of directors
March 17, 2022
