Securities code: Dynagreen Environmental Protection Group Co.Ltd(601330) securities abbreviation: Dynagreen Environmental Protection Group Co.Ltd(601330) Announcement No.: pro 2022016 convertible bond Code: 113054 convertible bond abbreviation: Green convertible bond
Dynagreen Environmental Protection Group Co.Ltd(601330)
Announcement on the provision for asset impairment
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 announcement, and bear individual and joint liabilities for the authenticity, accuracy and completeness of its contents.
Dynagreen Environmental Protection Group Co.Ltd(601330) (hereinafter referred to as “the company”) held the fifth meeting of the Fourth Board of directors and the third meeting of the Fourth Board of supervisors on March 29, 2022, deliberated and adopted the proposal on withdrawing asset impairment of Ninghe straw project. The details are hereby announced as follows:
1、 Overview of the provision for asset impairment this time
In order to objectively reflect the financial situation and operating results of the company in 2021, according to the accounting standards for business enterprises and other relevant regulations, the company and its subsidiaries conducted impairment test on relevant assets with signs of impairment at the end of the year based on the principle of prudence. According to the test, the company needs to make provision for asset impairment in 2021, totaling 183752200 yuan.
2、 Description of the specific circumstances of the provision for asset impairment
(I) method, basis and standard of provision for impairment
According to the accounting standards for Business Enterprises No. 8 – asset impairment and the relevant provisions of the accounting policies implemented by the company: if there are signs of asset impairment, its recoverable amount shall be estimated. The recoverable amount shall be determined according to the net amount of the fair value of the asset minus the disposal expenses, the present value of the expected future cash flow of the asset and zero, whichever is the highest. If the measurement result of the recoverable amount shows that the recoverable amount of the asset is lower than its book value, the book value of the asset shall be written down to the recoverable amount, and the written down amount shall be recognized as asset impairment loss and included in the current profit and loss, and the corresponding asset impairment provision shall be withdrawn at the same time.
(II) details of provision for impairment
1. Accrued amount
At the end of 2021, the company conducted an impairment test on Tianjin Ninghe straw incineration power generation project (hereinafter referred to as “Ninghe straw project”). The test results showed that the recoverable amount of Ninghe straw project was lower than the book value, and the provision for asset impairment was required. According to the test, the provision for asset impairment of Ninghe straw project was 183752200 yuan in 2021.
2. Reasons for impairment
Due to the poor quality of local straw and the long settlement cycle of national renewable energy subsidy funds, resulting in poor cash flow and high financial expenses, Ninghe straw project has continued to suffer losses since it was put into operation in 2017, and the impairment provision of RMB 125478 million has been withdrawn in 2019 (the company’s consolidated statement standard); Affected by the change of national renewable energy subsidy policy, 503887 million yuan of impairment provision has been withdrawn in 2020. In February 2021, affected by the improvement of environmental protection emission standards in Tianjin, the furnace of Ninghe straw project was shut down for transformation. In the second half of the year, the local straw supply price increased significantly, so the operation had not been resumed by the end of the year. The company has hired an asset appraisal institution in December 2021 to evaluate the recoverable amount of Ninghe straw project. It is estimated that the discounted value of future cash flow of Ninghe straw project is negative and the recoverable amount is zero. As of December 31, 2021, the net book value of BOT assets of Ninghe straw project was 183752200 yuan, and the impairment provision of 183752200 yuan should be made in full, and the full amount of the impairment provision should be included in the profit and loss of the company in 2021.
3、 Impact of provision for impairment on the company’s operating performance
In 2021, the company made a provision for asset impairment of 183752200 Yuan due to the above matters, and the full amount of the provision for impairment was included in the company’s profit and loss in 2021, reducing the company’s net profit of 183752200 yuan in 2021.
4、 Opinions of the board of directors on the provision for asset impairment
The board of directors of the company believes that the provision for asset impairment of the company’s subsidiaries is made according to the actual situation, which is in line with the provisions of the accounting standards for business enterprises and the company’s financial management system, and reflects the company’s financial status and operating results fairly and accurately. It agrees to withdraw the provision for asset impairment this time.
5、 Independent opinions of independent directors on the provision for asset impairment
The independent directors of the company believe that the provision for asset impairment this time complies with the relevant provisions of the accounting standards for business enterprises and the company’s financial management system, and the relevant review procedures are legal and compliant. After the provision for asset impairment is withdrawn this time, the company’s financial statements can more fairly reflect the company’s financial situation and operating results, and help to provide investors with more authentic, reliable and accurate accounting information. There is no situation that damages the interests of the company and all shareholders, especially small and medium-sized shareholders. We agree to withdraw the provision for asset impairment this time.
6、 Opinions of the Audit Committee on the provision for asset impairment
The audit committee of the company believes that the provision for asset impairment this time complies with the relevant provisions of the accounting standards for business enterprises and the company’s financial management system, and the basis for the provision for asset impairment is sufficient. After the provision for asset impairment is made, the company’s financial statements can more fairly reflect the company’s financial status and operating results, make the company’s accounting information more reasonable, and there is no damage to the interests of the company and all shareholders, Agree to withdraw the provision for asset impairment this time and submit the proposal to the board of directors of the company for deliberation.
7、 Opinions of the board of supervisors on the provision for asset impairment
The board of supervisors of the company believes that the company’s provision for asset impairment in accordance with the accounting standards for business enterprises and the relevant provisions of the company’s financial system is in line with the actual situation of the company, can more fairly reflect the company’s financial status and operating results, and the relevant decision-making procedures are in line with the provisions of laws and regulations. It agrees to withdraw the provision for asset impairment this time.
It is hereby announced.
Dynagreen Environmental Protection Group Co.Ltd(601330) board of directors
March 30, 2022
