Accountant's opinions on the reply of Xinghui environmental protection materials Co., Ltd. to the inquiry letter on the annual report of Xinghui environmental protection materials Co., Ltd. (GEM annual report inquiry letter [2022] No. 9)
Snzzz [2022] No. 22 Jointo Energy Investment Co.Ltd.Hebei(000600) 042
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Accountant's opinions on the reply of Xinghui environmental protection materials Co., Ltd. to the inquiry letter on the annual report of Xinghui environmental protection materials Co., Ltd. (GEM annual report inquiry letter [2022] No. 9)
Snzzz [2022] No. 22 Jointo Energy Investment Co.Ltd.Hebei(000600) 042 Shenzhen Stock Exchange gem company management department:
We have received your inquiry letter (GEM annual report inquiry letter [2022] No. 9) on the annual report of Xinghui environmental protection materials Co., Ltd. (hereinafter referred to as the "inquiry letter") from Xinghui environmental protection materials Co., Ltd. (hereinafter referred to as "the company" or "Xinghui environmental materials"). In this regard, we have carefully studied it, and according to the requirements of the inquiry letter, the relevant problems of Xinghui ring materials are explained as follows:
At the end of the reporting period, the balance of your company's prepayment was 827173 million yuan, an increase of 71.202 million yuan or 618.32% over the beginning of the period, accounting for 26.61% of current assets, mainly due to the increase of the company's prepayment for raw materials during the reporting period. The total amount of the top five prepayments at the end of the period was 796257 million yuan, accounting for 96.26%. Please supplement and disclose the top five prepayments of your company, including the counterparty, transaction amount, transaction time, transaction background, whether it is a related party, etc., and the situation of Companies in the contract industry, explain the reasons and rationality of the substantial increase of prepayments of your company, whether it conforms to industry practices, whether there are transactions without commercial substance, and whether it occupies the funds of listed companies. Ask the accountant to check and give clear opinions.
reply:
(I) reply of the company
1. Reasons for the substantial increase in the company's prepayments
The balance of prepayment at the end of the reporting period was 827173 million yuan, an increase of 71.202 million yuan or 618.32% over the balance of prepayment at the beginning of the reporting period of 115154 million yuan. The main reason is that the company's production capacity is in the climbing period. Considering the expansion of production and operation demand and the change of raw material market price, the company purchased styrene and rubber at the end of December 2021, and prepaid the supplier's raw material payment according to the contract. Among them, styrene prepaid to CNOOC Shell Petrochemical Co., Ltd. will arrive on January 13, 2022; Prepayment China Petroleum & Chemical Corporation(600028) Chemical Sales Co., Ltd. South China branch
Arrived on January 15; Styrene prepaid to CNOOC Ningbo Daxie Petrochemical Co., Ltd. will arrive on January 11, 2022; The rubber prepaid to Liaoning North dynaso Synthetic Rubber Co., Ltd. arrived on January 17, 2022
The total amount is 796257 million yuan, accounting for 96.26% of the total ending balance of prepayments. The payment shall be received and settled before January 17, 2022. The purchased raw materials are used for daily production.
2. Top five prepayment transactions of the company
Unit: 10000 yuan
Year order counterparty transaction time transaction background balance aging settlement proportion related number relationship
1 on December 30, 2021, CNOOC and shell petroleum produced styrene in 209412, and 25.31% of non Guan Chemical Co., Ltd. purchased internal parties in January 2022
China Petroleum & Chemical Corporation(600028) chemical styrene mining 1 year, purchased by feiguan 2 Sales Co., Ltd. on December 31, 2021, 186499, 22.55% in January 2022 with South China branch
2021 3 CNOOC Guangdong sales 202112.29 styrene production 181113 1 January 202221.90% non customs annual sales Co., Ltd. purchased the internal party CNOOC Ningbo styrene, and paid 158284 in advance 1 year non customs 4 Daxie Petrochemical Co., Ltd. 202112.29202219.14% of allied companies in January
Liaoning North Dana purchased non guan5 synthetic rubber on November 19, 2021, 202112.17, 609.49, and 7.37% of Lianfang Co., Ltd. in January 2022
Total 796257 96.26%
1 CNOOC and Shell Petroleum will produce styrene on December 15, 2020 for 566.25 years, and 49.17% of non Guan Chemical Co., Ltd. will purchase internal parties in January 2021
2. Ningbo Zhongzhe Products Co., Ltd. purchased styrene 232.09 on December 28, 2020. In January 2021, 20.15% non customs Co., Ltd. purchased the internal party
3 CNOOC Guangdong sales 202012.03 styrene production 129.06 1 year with 11.21% of January 2021 non Guan 2020 Sales Co., Ltd. to purchase the internal party 1 year CNOOC Ningbo styrene production 1 year with non Guan 4 Daxie Petrochemical Co., Ltd. 202012.03 purchase 176.00 1 year 202115.28% of allied companies
China The Pacific Securities Co.Ltd(601099) Finance
5. Property insurance shares include property insurance on December 31, 2020 and property insurance on January 31, 2021, with 3.43% of them not related to Shantou Zhongfei Lianfang Xinzhi company
Total 114292 99.24%
At the end of the reporting period, the top five prepayments of the company totaled 796257 million yuan, accounting for 96.26% of the total balance of prepayments at the end of the reporting period.
The top five prepayments of the company are used to purchase styrene and rubber, the main raw materials produced by the company.
3. Conclude the information of the company in the contract industry, and explain the rationality of the company's advance payment and whether it conforms to the industry practice.
(1) Settlement practices upstream and downstream of the industry
Polystyrene, one of the five general plastics produced by the company, is also a bulk commodity of chemical materials. It has a high degree of marketization and transparent price. In the internal transaction process of the industry, it is mainly settled in the way of payment before goods. Styrene, the main raw material purchased by the company, is highly concentrated in the Chinese industry. The industry mainly purchases in the form of payment before receipt. The main raw material rubber purchased by the company belongs to bulk commodities, with high degree of marketization and transparent price. The company and Liaoning North danaso Synthetic Rubber Co., Ltd., the main production supplier of rubber, mainly settle the payment after delivery, and Dongguan Sanbu Trading Co., Ltd., the main trading supplier, settle the payment after arrival. The settlement method is mainly through commercial negotiation and consensus confirmation between the transaction parties, and there is no obvious applicable industry practice.
(2) Prepayment balance of Companies in the same industry
Unit: 10000 yuan
Renxin Xincai Tianyuan Group Ningbo Changhong Polymer Scientific & Technical Inc(605008) Orinko Advanced Plastics Co.Ltd(688219) Miracll Chemicals Co.Ltd(300848) Xinghui environmental materials
December 31, 2021 undisclosed undisclosed undisclosed undisclosed undisclosed 150195827173
December 31, 20205375.56267988510 Saurer Intelligent Technology Co.Ltd(600545) 00716 201.74115154
Change 644.51% 618.32%
Note: the information of the above comparable companies is extracted from their periodic reports or prospectus publicly disclosed; Except Miracll Chemicals Co.Ltd(300848) , other comparable companies in the same industry have not publicly disclosed the prepayments in 2021.
As of the date of reply to this inquiry letter, comparable companies have only Miracll Chemicals Co.Ltd(300848) disclosed relevant data, and the balance of prepayments at the end of Miracll Chemicals Co.Ltd(300848) reporting period has increased by 644.51% compared with the previous period.
(3) Analysis of prepayment and inventory of the company
① The prepayments of the company during the reporting period are listed by purchase content:
Unit: ton, 10000 yuan
Payment: December 31, 2021 December 31, 2020
Nature quantity amount quantity amount
Advance payment for styrene 925907737898150955110340
Advance payment for rubber 552.27 760.69 3.17 3.04
Other prepayments - 132.06 - 45.09
Total - 827173 - 115154
The prepayment at the end of the reporting period is mainly used to purchase styrene and rubber, the main raw materials produced by the company. Purchasing by prepayment is in line with the contract, and the settlement mode is in line with the upstream and downstream settlement practices of the industry. The amount of advance payment at the end of the period is large, mainly because the company's production capacity is in a climbing period, and the company comprehensively considers the expansion of production and operation demand and the market of raw materials
