Securities code: China Railway Prefabricated Construction Co.Ltd(300374) securities abbreviation: China Railway Prefabricated Construction Co.Ltd(300374) Announcement No.: 2022017
China Railway Prefabricated Construction Co.Ltd(300374)
With regard to the announcement of the company's provision for credit and asset impairment losses in 2021, the company and all members of the board of directors guarantee that the content of information disclosure is true, accurate and complete without false records, misleading statements or major omissions.
China Railway Prefabricated Construction Co.Ltd(300374) (hereinafter referred to as "the company") was called on March 23, 2022
The fourth meeting of the Fourth Board of directors and the third meeting of the Fourth Board of supervisors were held. The meeting considered and adopted the proposal on withdrawing credit and asset impairment losses in 2021. It is more authentic and accurate based on the principle of prudence in accordance with the requirements of relevant provisions such as the standardized operation of companies listed on the gem of Shenzhen Stock Exchange, the self regulatory guide for companies listed on the gem of Shenzhen Stock Exchange No. 1 - business handling, and the company's accounting policies
Accurately reflect the company's asset status and financial status as of December 31, 2021, and the company's annual accrual in 2021
Credit impairment loss and asset impairment loss totaled 9170531986 yuan.
1、 Summary of credit loss and asset impairment loss accrued this time
(I) reasons for withdrawing credit impairment loss and asset impairment loss
In accordance with the accounting standards for business enterprises and other relevant provisions, in order to truly and accurately reflect the company as of 2021
Financial status as of December 31, the company's accounts receivable within the scope of consolidated statements as of December 31, 2021
Items, contract assets, inventories, fixed assets and other assets were tested for impairment. After the impairment test, some assets have certain signs of impairment. Based on the principle of prudence, the company accrues credit impairment loss and asset impairment loss for relevant assets with signs of impairment.
(II) detailed statement of accrued credit impairment loss and asset impairment loss
Monetary unit: Yuan
Accrued amount of category items in the current period
Impairment loss of notes receivable -6111723 credit impairment loss (loss expressed with "-")
Impairment loss of accounts receivable - 6176712774)
Impairment loss of other receivables -125625704
Subtotal -6308450201
Impairment loss of contract assets -710763970
Asset impairment loss (loss expressed with "-" inventory falling price loss -1900357388
(fill in with "-" fixed assets impairment loss -247664602
Impairment loss of other non current assets -3295825
Subtotal -2862081785
Total -9170531986
(III) recognition standard and withdrawal method of credit impairment loss and asset impairment loss withdrawn this time
1. Accrual basis and method of credit impairment loss
The company conducts accounting treatment for impairment of financial instruments based on expected credit losses and recognizes loss reserves. Expected credit loss refers to the weighted average value of credit loss of financial instruments weighted by the risk of default. Credit loss refers to the difference between all contract cash flows receivable according to the contract discounted at the original effective interest rate and all cash flows expected to be received, that is, the present value of all cash shortages.
Based on the judgment of the management, the company shall analyze and withdraw the bad debt reserves for the receivables with significantly different credit risk characteristics one by one. In addition to the individually recognized receivables, the receivables shall be divided into several combinations according to the credit risk characteristics, and the expected credit loss shall be calculated on the basis of the combination.
(1) Individual identification
On the balance sheet date, when the recognition risk of a single item of accounts receivable is significantly higher than that of the combination, the single recognition method is selected for the provision of bad debt reserves for accounts receivable.
(2) Accrued by portfolio
According to the characteristics of credit risk, the company divides notes receivable, accounts receivable, other accounts receivable and long-term accounts payable into several combinations, and accrues the expected credit loss on the basis of the combination.
① For notes receivable and accounts receivable, whether there is a significant financing component or not, the company measures the loss reserve according to the expected credit loss throughout the duration.
When single notes receivable and accounts receivable cannot obtain the information to evaluate the expected credit loss at a reasonable cost, the company divides notes receivable and accounts receivable into several combinations based on the characteristics of credit risk
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 throughout the duration, and calculates the expected credit loss. The basis for determining the combination of accounts receivable is as follows:
Accounts receivable Portfolio 1: accounts receivable from central enterprise customers
Accounts receivable portfolio 2: accounts receivable from customers within the consolidation scope of China Railway Engineering Group Co., Ltd
Accounts receivable portfolio 3: accounts receivable from local governments and local state-owned enterprise customers
Accounts receivable portfolio 4: accounts receivable from China National Railway Group Co., Ltd
Accounts receivable portfolio 5: accounts receivable from overseas enterprise customers
Accounts receivable portfolio 6: accounts receivable from other customers
For bills receivable divided into portfolios, the company refers to the experience of historical credit loss, 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.
The basis for determining the combination is as follows:
Bill receivable Portfolio 1: commercial acceptance bill
Bill receivable portfolio 2: bank acceptance bill
② When individual other receivables and long-term receivables cannot obtain the information to evaluate the expected credit loss at a reasonable cost, the company divides other receivables and long-term 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: advances receivable
Other receivables portfolio 3: other receivables
Long term receivables Portfolio 1: Project receivables and lease receivables
Long term receivables portfolio 2: other receivables
For long-term project receivables and lease receivables, the company refers to the experience of historical credit loss, 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 throughout the duration. For other receivables and long-term receivables classified into combinations other than lease receivables, the expected credit loss is calculated through the default risk exposure and the expected credit loss rate in the next 12 months or the whole duration.
2. Accrual basis and method of asset impairment loss
Provision for impairment of contract assets shall be made according to the expected credit loss method. No matter whether it contains major financing components or not, the company measures its loss reserves according to the amount of expected credit loss in the whole duration on the balance sheet date. If the expected credit loss is greater than the carrying amount of the current contract asset impairment reserves, the difference is recognized as impairment loss, otherwise it is recognized as impairment gain. If the actual impairment loss occurs, it is determined that the relevant contract assets cannot be recovered and written off after approval.
The provision for impairment of inventories shall be made according to the measurement method of the lower of cost and net realizable value. When the net realizable value is lower than the cost, the inventory falling price reserves shall be withdrawn. For the inventory with large quantity and low unit price, the inventory falling price reserves shall be withdrawn according to the inventory category; For other inventories, the inventory falling price reserves shall be withdrawn according to the difference between the cost of a single inventory item and its net realizable value. After the provision for inventory falling price is made, if the factors affecting the previous write down of inventory value have disappeared, resulting in the net realizable value of inventory being higher than its book value, it shall be reversed from the amount of inventory falling price provision that has been made, and the reversed amount shall be included in the current profit and loss. Net realizable value refers to the amount of the estimated selling price of inventory minus the estimated cost to be incurred at the time of completion, estimated selling expenses and relevant taxes in daily activities. When determining the net realizable value of inventories, it shall be based on the conclusive evidence obtained, and consider the purpose of holding inventories and the impact of events after the balance sheet date.
According to the provisions of accounting standards for Business Enterprises No. 4 - fixed assets and accounting standards for Business Enterprises No. 8 - asset impairment, during the reporting period, the company conducted an impairment test on the fixed assets of Kashgar factory and considered that some assets had certain signs of impairment. According to the appraisal results, the company withdraws the impairment of fixed assets with signs of impairment in the appraisal results based on the principle of prudence.
2、 The impact of the accrued credit and asset impairment losses on the company's financial position
The total amount of credit and asset impairment losses accrued this time is 9170531986 yuan, which will reduce the net profit of the company's consolidated statements in 2021 by 7112434708 yuan, and correspondingly reduce the owner's equity of the company by 7112434708 yuan at the end of 2021.
3、 Explanation on the rationality of the current provision for credit and asset impairment losses
The company's provision for credit impairment loss and asset impairment loss this time complies with the accounting standards for business enterprises and relevant accounting policies of the company, reflects the principle of accounting prudence and conforms to the actual situation of the company. The accrual of credit impairment loss and asset impairment loss can more fairly reflect the company's financial status, asset value and operating results as of December 31, 2021, making the company's accounting information more reasonable.
4、 The decision-making procedure of the current provision for impairment
The provision for impairment has been deliberated and approved at the fourth meeting of the Fourth Board of directors and the third meeting of the Fourth Board of supervisors. The independent directors of the company expressed their independent opinions on this matter and agreed to withdraw the credit impairment loss and asset impairment provision this time. In accordance with the relevant provisions of the rules for the listing of shares of companies listed on the gem, the standardized operation of the gem, the self regulatory guide for companies listed on the gem of Shenzhen Stock Exchange No. 1 - business handling and the articles of association, the provision for asset impairment does not need to be submitted to the general meeting of shareholders for deliberation.
5、 Independent opinions of independent directors on the accrual of credit and asset impairment losses
The independent directors expressed independent opinions on the company's provision of credit and asset impairment losses in 2021, and believed that the company's provision of credit and asset impairment losses this time was based on the principle of accounting prudence and maintained the principle of consistency, in line with the relevant provisions of the accounting standards for business enterprises and the actual situation of the company's assets, fairly reflected the company's asset status, and helped to provide investors with more authentic and reliable accounting information, No damage to the interests of minority shareholders and the company. After withdrawing the credit and asset impairment loss this time, it can more fairly reflect the financial situation of the company and agree to withdraw the credit and asset impairment loss this time.
6、 Audit opinions of the board of supervisors on the accrual of credit and asset impairment losses
The board of supervisors of the company believes that the decision-making procedure for withdrawing credit and asset impairment losses this time complies with the accounting standards for business enterprises and the relevant provisions of the company's accounting policies and accounting estimates, can fairly reflect the asset status of the company, is in line with the interests of the company and all shareholders, and does not damage the legitimate rights and interests of the company and minority shareholders. It agrees with the company's plan for withdrawing credit and asset impairment losses this time.
Documents for future reference
1. Resolutions of the fourth meeting of the Fourth Board of directors;
2. Independent opinions of independent directors on matters related to the fourth meeting of the Fourth Board of directors; 3. Resolution of the third meeting of the Fourth Board of supervisors. It is hereby announced.
China Railway Prefabricated Construction Co.Ltd(300374) board of directors March 24, 2022
