Securities code: China Zhonghua Geotechnical Engineering Group Co.Ltd(002542) securities abbreviation: China Zhonghua Geotechnical Engineering Group Co.Ltd(002542) Announcement No.: 2022016 China Zhonghua Geotechnical Engineering Group Co.Ltd(002542)
Announcement on the provision for asset impairment and the recognition of changes in the fair value of other equity instrument investments in 2021
The company and all members of the board of directors guarantee that the information disclosed is true, accurate and complete without false records, misleading statements or major omissions.
China Zhonghua Geotechnical Engineering Group Co.Ltd(002542) (hereinafter referred to as "the company") held the 13th interim meeting of the 4th board of directors and the 10th interim meeting of the 4th board of supervisors on March 18, 2022 to consider and adopt the proposal on withdrawing provision for asset impairment and recognizing changes in fair value of other equity instrument investments in 2021 respectively. In accordance with the relevant provisions of the Listing Rules of Shenzhen Stock Exchange and the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 1 - standardized operation of listed companies on the main board, the specific circumstances are hereby announced as follows: I. overview of the provision for asset impairment and the recognition of changes in the fair value of other equity instrument investments this time
In order to truly reflect the company's financial position and operating results, in accordance with the relevant provisions of the accounting standards for business enterprises, the company has comprehensively checked and analyzed the signs of impairment of the value of relevant assets in the consolidated statements as of December 31, 2021, tested according to the asset category, made provision for impairment of assets that may have impairment losses, and recognized the changes in the fair value of other equity instrument investments held.
2、 Specific information such as the asset scope, total amount and reasons for the provision for asset impairment this time
The company conducted a comprehensive inventory and impairment test of assets that may have signs of impairment at the end of 2021. In 2021, the company plans to withdraw a total of 313100300 yuan of impairment reserves for various assets, as follows:
The proposed provision for impairment of the project (10000 yuan) accounts for the proportion of net profit attributable to shareholders of Listed Companies in 2020
Bad debt loss of notes receivable 160668 8.69%
Bad debt loss of accounts receivable 1072696 58.00%
Bad debt loss of other receivables 117.28 0.63%
Bad debt loss of long-term receivables -86.38 -0.47%
Contract asset impairment loss 694399 37.55%
Goodwill impairment loss 1200150 64.89%
Total 3131003 169.29%
Note: the above data has not been audited, and the final result shall be subject to the audit data.
1. Reasons for withdrawing bad debt provision for notes and accounts receivable
Withdrawal standard of bad debt provision for notes receivable and accounts receivable of the company:
For notes receivable and accounts receivable, whether there is a significant financing component or not, the company always measures its loss reserves according to the amount equivalent to the expected credit loss in the whole duration.
When the information of expected credit loss cannot be evaluated by a single financial asset at a reasonable cost, the company divides the notes receivable and accounts receivable into a combination according to the characteristics of credit risk, and calculates the expected credit loss on the basis of the combination. The basis for determining the combination is as follows:
A. Notes receivable
·Bill receivable Portfolio 1: bank acceptance bill
·Bill receivable portfolio 2: commercial acceptance bill
B. Accounts receivable
·Accounts receivable Portfolio 1: accounts receivable from state-owned enterprise customers
·Accounts receivable portfolio 2: accounts receivable from private enterprise customers
·Accounts receivable portfolio 3: accounts receivable from related parties
For bills receivable 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 default risk exposure and the expected credit loss rate for the whole duration.
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 / overdue days of accounts receivable and the expected credit loss rate for the whole duration, and calculates the expected credit loss.
For receivables with significant single amount, the company will conduct impairment test separately. The financial assets that have not been impaired shall be tested separately, including the impairment test in the financial asset portfolio with similar credit risk characteristics. Receivables with impairment loss confirmed in single test will no longer be included in the portfolio of receivables with similar credit risk characteristics for impairment test.
During the reporting period, the company plans to withdraw 160668 million yuan of bad debt reserves for bills receivable and 1072696 million yuan of bad debt reserves for accounts receivable.
2. Reasons for withdrawing bad debt provision for other receivables
The withdrawal standard of bad debt provision for other receivables of the company is:
The company divides other receivables into several combinations according to the characteristics of credit risk, and calculates the expected credit loss on the basis of the combination. The basis for determining the combination is as follows:
·Other receivables Portfolio 1: deposits and deposits receivable
·Other receivables portfolio 2: reserve fund receivable
·Other receivables portfolio 3: other receivables
For other receivables divided into portfolios, the company 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.
During the reporting period, the company plans to withdraw bad debt provision of RMB 1172800 for other receivables.
3. Reasons for withdrawing bad debt provision for long-term receivables
The withdrawal standard of bad debt provision for long-term receivables of the company is:
The company's long-term receivables include project accounts receivable and other accounts. For the quality assurance deposit receivable, project payment receivable, installment sales commodity payment receivable and installment service payment receivable, 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 throughout the duration.
During the reporting period, the company plans to withdraw bad debt reserves of -863800 yuan for long-term receivables.
4. Reasons for the provision for impairment of contract assets
For contract assets, regardless of whether there is a significant financing component, the company always measures its loss reserves according to the amount equivalent to the expected credit loss in the whole duration.
When the information of expected credit loss cannot be evaluated by a single financial asset at a reasonable cost, the company divides the contract assets into portfolios according to the characteristics of credit risk, and calculates the expected credit loss on the basis of the portfolio. The basis for determining the portfolio is as follows:
·Contract Portfolio 1: product sales
·Contract portfolio 2: Engineering Construction
For the contract assets 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 for the whole duration.
During the reporting period, the company plans to withdraw 694399 million yuan of impairment provision for contract assets.
5. Reasons for provision for impairment of goodwill
The standard of the company's provision for the value of Goodwill: on the balance sheet date, the company shall make provision for the impairment of goodwill for the difference between the recoverable amount and the book value of the asset group where the goodwill belongs.
According to the relevant requirements of accounting standards, the goodwill impairment test is conducted for the asset groups of each acquired subsidiary related to goodwill, and the goodwill impairment provision is made for the goodwill generated by the acquisition at the merger level according to the goodwill impairment test results. According to the preliminary impairment test of the company, during the reporting period, it is expected that the goodwill impairment provision involved in the merger and acquisition of subsidiaries Beijing Theme latitude urban planning and Design Institute Co., Ltd., Shanghai Qiangqiang Foundation Engineering Co., Ltd., Shanghai Yuanyuan Foundation Engineering Co., Ltd., Shanghai Lixing engineering technology development Co., Ltd. and Zhejiang Zhongqing International Aviation Club Co., Ltd. will be about 120015 million yuan, The final withdrawal amount will be determined after the company hires an evaluation institution and audit institution with securities qualification to conduct evaluation and audit.
6. Included in the reporting period
The reporting period for the impairment provision of various assets is from January 1, 2021 to December 31, 2021.
3、 Specific changes in fair value of other equity instrument investments
In 2021, the adverse effects of the epidemic and stricter supervision continued. Based on the principle of prudence, according to the unaudited owner's equity attributable to the parent company of Renren Holding Co., Ltd. at the end of 2021, the company recognized the fair value of its equity investment as 1199700 yuan, and included 516800 yuan of the difference between the fair value of the investment and the book value (1716500 yuan) in other comprehensive income.
4、 The provision for asset impairment and the recognition of the impact of changes in the fair value of other equity instrument investments on the company
The provision for credit impairment, provision for asset impairment and recognition of changes in the fair value of other equity instrument investments comply with the relevant provisions of the accounting standards for business enterprises and the company's internal control system, follow the principles of prudence and rationality, comply with the actual situation of the company, and can more truly and accurately reflect the company's financial situation and operating results. 1. The impact of the provision for credit impairment and asset impairment on the company
Therefore, the net profit within the scope of the company's consolidated statements in 2021 will be reduced by 2835323 million yuan and the owner's equity will be reduced by 2835323 million yuan. The credit impairment provision and asset impairment provision of the company have not been audited by the accounting firm, and the final data shall be subject to the financial data audited by the accounting firm.
2. The company recognizes the impact of changes in the fair value of other equity instrument investments on the company
All changes in the fair value of this investment in other equity instruments are included in other comprehensive income, reducing the company's other comprehensive income by 516800 yuan in 2021 and the owner's equity by 516800 yuan at the end of 2021. The changes in the fair value of other equity instrument investments recognized by the company this time have not been audited by the accounting firm, and the final data shall be subject to the financial data audited by the accounting firm.
5、 Explanation by the board of directors on the reasonableness of the provision for asset impairment and the recognition of changes in the fair value of other equity instrument investments
The company's provision for asset impairment and recognition of changes in the fair value of other equity instrument investments this time comply with the provisions of the accounting standards for business enterprises and relevant accounting policies of the company, comply with the principle of prudence, and fully and fairly reflect the company's financial status and operating results, so as to make the company's accounting information more authentic, reliable and reasonable. The company agrees to withdraw the provision for asset impairment and recognize the changes in the fair value of other equity instrument investments.
6、 Opinions of independent directors
The company's provision for asset impairment and recognition of changes in the fair value of other equity instrument investments are based on sufficient basis, in line with the provisions of the accounting standards for business enterprises and the company's accounting policies, and in line with the actual situation of the company. The decision-making process complies with the relevant requirements of laws and regulations, and there is no situation that damages the interests of the company and all shareholders, especially minority shareholders. It is agreed that the company should withdraw the provision for asset impairment and recognize the changes in the fair value of other equity instrument investments.
7、 Opinions of the board of supervisors
The company's provision for asset impairment and recognition of changes in the fair value of other equity instrument investments are based on sufficient basis, which fairly reflects the company's financial status and operating results, the decision-making procedures are legal and compliant, and there is no situation that damages the interests of the company and all shareholders. It is agreed that the company's provision for asset impairment and recognition of changes in the fair value of other equity instrument investments.
8、 Documents for future reference
1. Resolutions of the 13th extraordinary meeting of the Fourth Board of directors of the company;
2. The board of directors' statement on the reasonableness of the company's provision for asset impairment and recognition of changes in the fair value of other equity instrument investments in 2021;
3. Independent opinions of independent directors on matters related to the 13th interim meeting of the Fourth Board of directors;
4. Resolutions of the 10th extraordinary meeting of the 4th board of supervisors of the company. It is hereby announced.
China Zhonghua Geotechnical Engineering Group Co.Ltd(002542) board of directors
March 18, 2022
