Securities code: Xinjiang Tianshan Cement Co.Ltd(000877) securities abbreviation: Xinjiang Tianshan Cement Co.Ltd(000877) Announcement No.: 2022015 Xinjiang Tianshan Cement Co.Ltd(000877)
Announcement on provision for asset impairment and write off of bad debts 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.
Xinjiang Tianshan Cement Co.Ltd(000877) (hereinafter referred to as "the company" or "the company") held the 5th meeting of the 8th board of directors on March 21, 2022, deliberated and adopted the proposal on withdrawing impairment provision in 2021 and the proposal on writing off bad debts in 2021. According to the relevant provisions of the accounting standards for business enterprises and the company's accounting policies, the company and its affiliated companies conducted a comprehensive inventory of receivables, inventories, fixed assets, construction in progress, intangible assets, goodwill and other assets at the end of 2021, conducted an impairment test on the assets and goodwill with signs of impairment, and made an impairment provision for the assets with signs of impairment according to the test results. At the same time, in combination with the actual situation of the company, in accordance with the principles of legal compliance, standardized operation, examination and approval one by one and account cancellation case filing, the receivables that have been on account for a long time and cannot be recovered in the business process of the company and its affiliated companies shall be written off with December 31, 2021 as the base date.
1、 Provision for impairment
(I) accrual basis and method
According to the accounting standards for business enterprises, bad debt reserves are withdrawn for all receivables according to the expected amount of credit loss in the whole duration. Taking December 31, 2021 as the base date, other assets and goodwill with signs of impairment are tested for impairment, and impairment reserves are accrued for relevant assets according to the test results.
(II) amount and reason of provision for impairment
1. Provision for bad debts of accounts receivable and other receivables
The company accrues bad debt reserves for all receivables according to the expected credit loss amount in the whole duration. In 2021, the bad debt provision for accounts receivable was 7837798 million yuan, and the bad debt provision for other accounts receivable was 7024301 million yuan. In 2021, the above total bad debt provision was 14862099 million yuan.
2. Provision for bad debts of prepayments
The company affiliated to the company and Tan Guoren, the former shareholder of Yunnan Yongbao Special Cement Co., Ltd., submitted a written arbitration on the equity transfer to China International Economic and Trade Arbitration Commission. The Arbitration Commission made a final award on December 25, 2021. According to the arbitration results, the bad debt provision for prepayments was RMB 1351128 million.
3. Inventory falling price reserves
On the balance sheet date, inventories shall be measured at the lower of cost and net realizable value. If the inventory cost is higher than its net realizable value, the inventory falling price reserves shall be accrued and included in the current profits and losses. At the end of the reporting period, the company and its affiliated companies conducted a comprehensive inventory and impairment test of inventories. Some of the company's inventories showed signs of impairment. The company made provision for falling price according to the difference between the net realizable value and the cost. In 2021, the company made provision for falling price of inventories of RMB 170865 million.
4. Provision for impairment of fixed assets
After the impairment test, the company and its affiliated companies withdraw 1532554 million yuan of fixed asset impairment reserves for the supporting assets of the production line and the fixed assets whose recoverable amount is lower than the book value according to the evaluation and audit results.
5. Provision for impairment of construction in progress
According to the basis and inspection results of the provision for impairment of construction in progress, the provision for impairment of construction in progress that has been suspended for a long time and is not expected to restart construction in the future is RMB 262289300. 6. Provision for impairment of intangible assets
The impairment test is conducted according to the difference between the book value and the recoverable amount. The affiliated company has the possibility of postponing mining in the later stage of the mine, and the provision for impairment of intangible assets is 54.689 million yuan. 7. Provision for impairment of goodwill
The company conducted an impairment test on the goodwill allocated to the asset group portfolio according to the test results, and made a provision for goodwill impairment of 1869885200 yuan according to the test results.
2、 Write off of bad debts
(I) write off of accounts receivable
The accounts receivable written off this time involve 148 customers, with a total write off amount of 962388 million yuan. The details are as follows:
S / N write off customer aging amount (10000 yuan) whether write off reason is closed
Associated party
1 1 2-3 years 50.00 customer bankruptcy, no enforceability 2 1 3-4 years 200.00 no property, aging 3 9 4-5 years 683.49 long, unable to recover, etc. 4 137 more than 5 years 869039
Total 148962388
(II) write off of other receivables
Other receivables written off this time involve 29 customers, with a total write off amount of 2245959000 yuan. The details are as follows:
S / N write off customer aging amount (10000 yuan) whether write off reason is closed
Associated party
1 1-2 years 250963 customer goes bankrupt, has no enforceability, 2 1 3-4 years 1.02 no property, the aging time is more than 3 27 5 years, 1994894 is long, and cannot be recovered, etc
Total 292245959
3、 Impact of withdrawing impairment provision and writing off bad debts on the company
In 2021, the company and its affiliated companies made a provision for asset impairment of 53577781 million yuan, which is expected to reduce the total profit of 53577781 million yuan in 2021.
The relevant impairment reserves comply with the accounting standards for business enterprises and relevant systems of the company, and there is no behavior damaging the interests of the company and shareholders.
For the bad debts of 3208347 million yuan written off this time, the company and its affiliated companies have made full provision for bad debts. The written off bad debts meet the requirements of accounting policies and the actual situation of relevant companies. The written off customers do not involve the company's related parties and do not harm the interests of the company and shareholders. Relevant companies have established and filed all write off details for future reference accounts as write off records, kept asset management, retained recourse materials, and continued to implement the person in charge to track at any time. If the other party is found to be solvent, it will be recourse immediately.
4、 Opinions of the board of directors
The board of directors of the company believes that the provision for asset impairment and write off of bad debts this time comply with the accounting standards for business enterprises and relevant regulations and the actual situation of the company's development, can more truly and fairly reflect the actual financial situation and operating results of the company, and there is no behavior damaging the interests of the company and shareholders. Agree to withdraw the provision for asset impairment and write off bad debts this time.
5、 Independent opinions of independent directors
Independent opinions of independent directors: the provision for impairment and write off of bad debts of the company this time comply with the provisions of the accounting standards for business enterprises and relevant accounting policies of the company, comply with the actual situation of the company, objectively and fairly reflect the financial situation of the company, and there is no damage to the interests of the company and all shareholders, especially small and medium-sized shareholders. The review procedures comply with relevant laws and regulations and the articles of association. Therefore, we agree to the proposal on the provision for impairment in 2021 and the proposal on the write off of bad debts in 2021.
6、 Review opinions of the board of supervisors
The board of supervisors carefully checked the company's provision for asset impairment and write off of bad debts. The board of supervisors believed that the provision for asset impairment and write off of bad debts met the requirements of relevant laws and regulations, complied with the company's financial reality, did not involve the company's related parties, and did not damage the interests of the company and shareholders. The board of directors reviewed the legality and compliance of the company's decision-making procedures for the provision for asset impairment and the write off of bad debts. The board of supervisors agreed to withdraw the provision for asset impairment and write off bad debts.
7、 Documents for future reference
1. Resolution of the 5th meeting of the 8th board of directors of the company
2. Independent opinions of independent directors
3. Review opinions of the board of supervisors
It is hereby announced.
Xinjiang Tianshan Cement Co.Ltd(000877) board of directors March 21, 2022
