Fuda Alloy Material Co.Ltd(603045)
January 2020 September 2021
Pro forma audit report
catalogue
1、 Audit report Page 1-3 II. Preparation for consolidated financial statements Page 4-5
(I) prepare for the consolidated balance sheet Page 4
(II) prepare for the consolidated income statement Page 5
3、 Notes to the consolidated financial statements for reference Page 6-122
4、 Other matters - restrictions on the sending object and use of audit reports
Our report is only for the purpose of preparing for the asset restructuring described in Note 2 to the consolidated financial statements, and should not be sent to or used by other parties other than the parties related to the asset restructuring.
5、 Responsibilities of management and governance for preparing for the consolidated financial statements
Fuda Alloy Material Co.Ltd(603045) the management of the company (hereinafter referred to as the management) is responsible for preparing the pro forma consolidated financial statements according to the preparation basis described in note III to the pro forma consolidated financial statements, and designing, implementing and maintaining necessary internal control so that the pro forma consolidated financial statements are free from material misstatement due to fraud or error.
When preparing the pro forma consolidated financial statements, the management is responsible for evaluating the sustainable operation ability of Fuda Alloy Material Co.Ltd(603045) company, disclosing matters related to sustainable operation (if applicable), and applying the assumption of sustainable operation, unless liquidation is planned, operation is terminated or there is no other realistic choice.
Fuda Alloy Material Co.Ltd(603045) corporate governance (hereinafter referred to as governance) is responsible for supervising the financial reporting process of Fuda Alloy Material Co.Ltd(603045) company.
6、 Responsibilities of certified public accountants for the audit of consolidated financial statements for reference
Our goal is to obtain reasonable assurance on whether the consolidated financial statements for reference are free from material misstatement due to fraud or error, and issue an audit report containing audit opinions. Reasonable assurance is a high-level assurance, but it does not guarantee that the audit performed in accordance with the audit standards will always be found when a major misstatement exists. Misstatement may be caused by fraud or error. If it is reasonably expected that the misstatement alone or in summary may affect the economic decisions made by the statement users based on the pro forma consolidated financial statements, the misstatement is generally considered to be significant.
In the process of carrying out the audit work in accordance with the audit standards, we use professional judgment and maintain professional doubt. At the same time, we also carry out the following work:
（1） Identify and assess the risks of material misstatement of the pro forma consolidated financial statements due to fraud or error, design and implement audit procedures to deal with these risks, and obtain sufficient and appropriate audit evidence as the basis for issuing audit opinions. Since fraud may involve collusion, forgery, intentional omission, misrepresentation or override of internal control, the risk of failing to find major misstatement caused by fraud is higher than that caused by error.
（2） Understand the internal control related to audit in order to design appropriate audit procedures, but the purpose is not to
Fuda Alloy Material Co.Ltd(603045)
Notes to consolidated financial statements for reference
January 1, 2020 to September 30, 2021
Monetary unit: RMB 1. Basic information of the company
Fuda Alloy Material Co.Ltd(603045) (hereinafter referred to as the company or the company) was initiated and established by natural persons Wang Dawu, Hu Xingfu, ye Xuanxian, Lin wanhuan, Zhou Shiyuan, Bao beihui, Li Fengfei and Qian Chaobin. It was registered with Yueqing Administration for Industry and Commerce on April 5, 1999 and headquartered in Wenzhou, Zhejiang Province. The company now holds a business license with a unified social credit code of 9133 Shahe Industrial Co.Ltd(000014) 556603xa. The company's shares were listed and traded on the Shanghai Stock Exchange in May 2018. As of September 30, 2021, the total share capital of the company was 137.62 million shares, all of which were shares with unlimited sales conditions.
The company belongs to electrical machinery and equipment manufacturing industry. The main business activities include the manufacturing, processing, scientific research and development, sales and technical services of electrical materials and electrical materials containing silver alloy, silver smelting and processing, sales of precious metals, and import and export business. The company included 38 companies including Wenzhou Weida precious metal powder material Co., Ltd., Zhejiang JINDA Flexible Intelligent Equipment Co., Ltd., Wenzhou Ruida New Material Co., Ltd. Fuda Alloy Material Co.Ltd(603045) materials (Europe) Co., Ltd. and the reorganized Cayman aluminum (Sanmenxia) Co., Ltd. into the scope of the pro forma consolidated financial statements. For details, see notes 7 and 8 to the pro forma consolidated financial statements.
2、 Relevant information of major asset restructuring plan and transaction object
（1） Major asset restructuring plan
The transaction plan includes: 1 Major asset replacement; 2. Issue shares to purchase assets; 3. Share transfer; 4. Raise supporting funds. The aforesaid major asset replacement, issuance of shares, purchase of assets and transfer of shares are effective at the same time and on the premise of each other, which together constitute an integral part of this major asset restructuring. If any one of them fails to obtain the required approval (including but not limited to the approval of the internal competent approval authorities of relevant parties and the approval of relevant government departments), this major asset restructuring will not take effect from the beginning; The raising of supporting funds is based on the premise of major asset replacement, issuance of shares to buy assets and share transfer. Its success does not affect the implementation of major asset replacement, issuance of shares to buy assets.
1. Major asset replacement
The company takes all assets and liabilities as disposed assets as of the benchmark date and replaces the equivalent part of all shares held by Hangzhou Jinjiang Group Co., Ltd. (hereinafter referred to as Jinjiang Group) in Cayman aluminum (Sanmenxia) Co., Ltd. (hereinafter referred to as Sanmenxia aluminum company) as of the benchmark date. The final undertaking subject of disposed assets is Wang Dawu or the third party designated by Wang Dawu.
According to the assets appraisal report (szybz [2021] No. 020695) issued by Zhongshui Zhiyuan Assets Appraisal Co., Ltd. (hereinafter referred to as "szyb"), taking September 30, 2021 as the appraisal base date, the appraisal result of asset-based method is selected as the final appraisal conclusion. The appraisal value of the proposed assets in this transaction is 1026270800 yuan, The transaction price of the assets purchased is determined to be 1030 million yuan through negotiation by all parties.
According to the appraisal report zjhpbz (2022) No. 6103 issued by Beijing zhongqihua Assets Appraisal Co., Ltd. (hereinafter referred to as "zhongqihua"), taking September 30, 2021 as the appraisal base date and the appraisal result of income method as the final appraisal conclusion, the appraisal value of 100% equity of Sanmenxia Aluminum Co., Ltd. in this transaction is 15568 million yuan. After friendly negotiation between the two parties, The transaction price of 100% equity of Sanmenxia aluminum company is 15560 million yuan.
2. Issue shares to purchase assets
In this transaction, the price of the assets purchased is 1030 million yuan, the price of the equity of Sanmenxia aluminum company held by Jinjiang Group is 48771108 million yuan, and the above difference is 38471108 million yuan. Except Jinjiang Group, the price of the equity of Sanmenxia aluminum company held by other shareholders of Sanmenxia aluminum company is 106828892 million yuan, For the balance of assets held by Jinjiang Group and the equity of Sanmenxia aluminum company held by other shareholders of Sanmenxia aluminum company, the company shall purchase it by issuing shares.
The pricing benchmark date for the purchase of assets by issuing shares this time is the announcement date of the resolution of the 32nd meeting of the sixth board of directors of the company. The issuing price of shares for the purchase of assets by issuing shares this time is 11.99 yuan / share, which is no less than 90% of the average stock price of 120 trading days before the pricing benchmark date, which is in line with the relevant provisions of the reorganization management measures. During the period from the pricing benchmark date to the issue date, if the company has ex right and ex interest matters such as dividend distribution, share distribution, conversion of capital reserve into share capital, the issue price will be adjusted accordingly in accordance with the relevant rules of the exchange.
3. Transfer of shares
Wang Dawu and Wang Zhongnan intend to transfer their 7249741 shares and 406560 shares with unlimited sales conditions, totaling 7656301 shares, to Jinjiang Group or its designated entity; The parties confirm that the transfer price per share is 24.82 yuan / share, and the total transfer consideration is 1900294 million yuan. Jinjiang Group or its designated entity will use cash to pay the consideration for the transferred target shares.
After the completion of this transaction, the company will hold 100% equity of Sanmenxia aluminum company, the controlling shareholder of the company will be changed to Jinjiang Group, and the actual controller will be changed to Xie Zhenggang.
4. Raise supporting funds
In this transaction, the company plans to raise supporting funds by non-public offering of shares through inquiry, with a total supporting financing amount of no more than 300 million yuan, which will be used for the alumina project with an annual output of 1.2 million tons of Guangxi Tiandong Jinxin Chemical Co., Ltd. (hereinafter referred to as Jinxin chemical) and repayment of bank loans. If the amount of the matching funds raised this time does not exceed 100% of the transaction price of the assets purchased by issuing shares in this transaction (excluding the transaction price corresponding to the part of the underlying assets invested by the counterparty in cash within six months before and during the suspension of this transaction), the number of shares issued by matching financing will not exceed 30% of the total share capital of the company after this transaction.
If the aforesaid pricing method and issuance quantity are inconsistent with the latest regulatory requirements of the securities regulatory authority, the relevant parties will make corresponding adjustments according to the latest regulatory opinions of the regulatory authority.
The raising of matching funds is based on the issuance of shares to purchase assets, but the success of the final supporting financing does not affect the implementation of the issuance of shares to purchase assets.
（2） Relevant information of transaction object
Sanmenxia Aluminum Co., Ltd. was established with the investment of Cayman Energy Development Co., Ltd. and registered with Sanmenxia Administration for Industry and Commerce on June 9, 2003. The registered capital of the company is 163991074000 yuan, and the registered social capital is 12067410000 yuan.
Sanmenxia Aluminum Co., Ltd. is a non-ferrous metal smelting and calendering manufacturing industry. The main business activities are the production and sales of alumina, aluminum hydroxide, caustic soda, metal gallium and other products; At the same time, it is engaged in some non-ferrous metal trading business.
Sanmenxia Aluminum Co., Ltd. included 37 subsidiaries including Jinxin chemical, Guangxi Tiandong Jinsheng Chemical Co., Ltd., Shanxi Fusheng Aluminum Co., Ltd., Xiaoyi Xing'an Chemical Co., Ltd., Zhejiang Anxin Trade Co., Ltd. and Hangjin International Trade Co., Ltd. in the scope of consolidated financial statements in the reporting period.
3、 Preparation basis of consolidated financial statements for reference
（1） The pro forma consolidated financial statements are prepared in accordance with the relevant provisions of the measures for the administration of major asset restructuring of listed companies and the standards for the contents and forms of information disclosure by companies that publicly issue securities No. 26 - major asset restructuring of listed companies (revised in 2022) issued by the China Securities Regulatory Commission, and are only used by the company to implement the major asset restructuring described in Note 2 to the pro forma consolidated financial statements.
（2） Except for the following matters, the accounting policies adopted by the company in preparing the consolidated financial statements for reference comply with the relevant provisions of the accounting standards for business enterprises and are prepared on the basis of going concern. The pro forma consolidated financial statements truly and completely reflect the pro forma consolidated financial position of the company on December 31, 2020 and September 30, 2021, as well as the pro forma consolidated operating results in 2020 and January September 2021.
1. This pro forma consolidated financial statement assumes that the major asset restructuring described in Note 2 of this pro forma consolidated financial statement has been implemented and completed at the earliest stage of this pro forma consolidated financial statement (January 1, 2020), that is, the structure after the completion of the above major asset restructuring transaction has existed on January 1, 2020.
2. This pro forma consolidated financial statement is based on the financial statements of the company for 2020 and January September 2021 audited by zhongtianyun Certified Public Accountants (special general partnership) and Sanmenxia aluminum company for 2020 and January September 2021 audited by Tianjian Certified Public Accountants (special general partnership), and is prepared according to the following methods.
(1) Purchase cost
As the company plans to complete this major asset restructuring by issuing shares to purchase assets, when preparing the pro forma consolidated financial statements, the company will take the total number of shares to be issued determined by the restructuring plan and the paid consideration calculated by the issuance price of RMB 14530 million as the purchase cost on January 1, 2020 in the pro forma consolidated financial statements, and recognize it as the owner's equity belonging to the parent company accordingly.
(2) The initial measurement of various assets and liabilities of Sanmenxia Aluminum Co., Ltd. on the assumed purchase date (January 1, 2020), and the subsequent measurement of various assets and liabilities according to the fair value shall be determined according to the fair value on January 1, 2020.
For various assets and liabilities subsequently measured according to historical cost (including various assets and liabilities not recognized in individual financial statements of Sanmenxia aluminum company, but recognized in the pro forma consolidated financial statements), the pro forma consolidated financial statements adjust and determine the fair value of various identifiable assets and liabilities of Sanmenxia aluminum company on January 1, 2020 based on the evaluation value on the evaluation basis date of this restructuring transaction, On this basis, subsequent measurement shall be made in the pro forma consolidated financial statements in accordance with the accounting policies and accounting estimates described in note IV. For the assets and liabilities existing on January 1, 2020 but not existing on the benchmark date of restructuring transaction evaluation, the book value shall be used for reference.
(3) Goodwill
In this pro forma consolidated financial statement, there is no difference between the above purchase cost and the fair value share of identifiable net assets of Sanmenxia Aluminum Co., Ltd. enjoyed by the reorganizer on the base date of evaluation of the reorganization transaction after the completion of the transaction, and goodwill is not recognized. There is no difference between the purchase cost and the fair value share of identifiable net assets of Sanmenxia aluminum company on January 1, 2020 according to the shareholding ratio, and the owner's equity attributable to the parent company will not be adjusted.
(4) List of equity items
In view of the special preparation purpose of the pro forma consolidated financial statements, the owner's equity of the pro forma consolidated financial statements is divided into "owner's equity attributable to the parent company" and "minority shareholders' equity"
