About Hainan Ruize New Building Material Co.Ltd(002596)
Inquiry letter of 2021 Annual Report
Annual report inquiry letter [2022] No. 39 of the company Department Hainan Ruize New Building Material Co.Ltd(002596) board of directors:
In the process of reviewing your company’s 2021 annual report (hereinafter referred to as “annual report”), our department has paid attention to the following matters:
1. Your company acquired 100% equity of Guangdong lvrun Environmental Technology Co., Ltd. (hereinafter referred to as “Guangdong lvrun”) by issuing shares to purchase assets in 2018. The performance commitment period of Guangdong lvrun is from 2017 to 2020. The four annual completion rates during the performance commitment period are 103.89%, 101.12%, 92.44% and 108.08% respectively, and the overall completion rate is 101.59%. According to the annual report, Guangdong lvrun achieved a net profit of 676376 million yuan in 2021, a year-on-year decrease of 67.34%. Your company has accrued a provision for goodwill impairment of 6505266 million yuan. Please your company:
(1) List the main financial data and operation data of Guangdong lvrun from 2017 to 2021, briefly analyze its operation and main changes, and explain in detail the reasons and rationality of the sharp decline of Guangdong lvrun’s performance after the performance commitment period in combination with the industry development, competition pattern, market position and management stability, as well as whether there is any false increase of profits and cross period adjustment of profits in the early stage.
(2) Explain the specific test situation and rationality of this goodwill impairment test, including but not limited to the main assumptions, test methods, parameter selection and basis, specific test process, etc.
(3) Compare and analyze whether the relevant assumptions and parameters of this goodwill impairment test are significantly different from those of the goodwill impairment test in 2020. If so, please explain in detail the reasons and rationality of the difference, and further explain whether there is profit adjustment by using unreasonable asset impairment losses during the reporting period.
The annual audit accountant shall check and give clear opinions.
2. According to the annual report, your company has delayed the construction of haojiawan Guzhai tourism poverty alleviation infrastructure construction project in Sinan County, PPP project for tourism infrastructure construction in Luodian county and PPP project for rural residential environment improvement and poverty alleviation in GuanZhai Town, Liuzhi special district. As of December 31, 2021, the book balance of contract assets formed by the above three projects is 1271121 million yuan and the book value is 963975 million yuan; In 2021, your company accrued an impairment of 195230400 yuan for the above items, with a year-on-year increase of 262.53%. Please your company: (1) list the completion progress, asset status, settlement amount and payment collection of the above three projects, specify the specific reasons for the early construction delay of the above three projects, the main measures and feasibility of your company to solve and eliminate the construction delay during the reporting period, and whether there are substantive obstacles to the promotion of relevant projects.
(2) Explain in detail the process and basis of withdrawing the impairment of contract assets, and in combination with question (1), explain the rationality of your company’s large amount withdrawing the impairment of contract assets in this period, and whether there is any situation of profit adjustment by using unreasonable asset impairment loss.
The annual audit accountant shall check and give clear opinions.
3. At the end of the reporting period, the balance of accounts receivable of your company was 2 Shenzhen Lihexing Co.Ltd(301013) 5 million yuan, and the bad debt loss accrued in the current period was 1666737 million yuan, including 550309 million yuan of bad debt reserves accrued individually and 1116428 million yuan of bad debt reserves accrued in combination. Please your company:
(1) For accounts receivable with single provision for bad debts, explain the division basis of their single assessment of credit risk and the accuracy of the provision for bad debts in the current period.
(2) As for the accounts receivable for which the bad debt provision is made in combination, your company’s main business includes commercial concrete, cement, landscaping and municipal sanitation. Please explain the rationality of the combined provision for bad debt of accounts receivable according to the unified bad debt provision proportion, and whether it is enough to truly reflect the financial situation of the company.
(3) The top five accounts receivable of your company at the end of the period are 406432900 yuan in total, and the corresponding bad debt reserves are 316512700 yuan in total. Please disclose the customer name of relevant accounts receivable, the amount of revenue recognized, the proportion of accounts receivable in the amount of revenue and the aging of accounts, and explain the reason and rationality of the high proportion of bad debt provision. The annual audit accountant shall check and give clear opinions.
As of the date of disclosure, the total number of shares held by Feng Hailin and Zhang Yilin, the controlling shareholder of your company, and the total number of shares of your company accounted for 2674437% of the total shares of your company, accounting for 390037% of the total shares of your company; 111392742 frozen shares, accounting for 25.97% of the shares held by them.
Please explain in detail the reasons for the pledge and freezing of the above shares, and in combination with the performance ability and additional guarantee ability of the actual controller and its concerted actors, the recent stock price trend of the company, explain whether the above Pledged Shares have the risk of closing positions, the impact of such stock pledge and freezing on your company’s production and operation, the stability of control and other aspects, and the countermeasures.
5. According to the annual report and relevant documents, as of December 31, 2021, the balance of current funds receivable from related parties of your company was 629068 million yuan, and the balance of bad debt provision was 35.203 million yuan. The relevant capital transactions were operating transactions.
Please explain the specific contents, occurrence time and account age of various current accounts with related parties, whether there is occupation of non operating funds or external financial assistance, and the reason and rationality of the high proportion of bad debt reserves of current accounts receivable from related parties. The annual audit accountant shall check and give clear opinions.
6. According to the annual report, in view of the early advance of the company’s commercial concrete business and landscaping business and the slow recovery of the project, the total amount of debt financing of the company has been high in recent years, and the loan extension has occurred during the reporting period, so there is liquidity risk.
Please supplement and disclose the details of the main interest bearing liabilities, including debt type, debt amount, interest, maturity, repayment arrangement, etc., and explain the future debt repayment arrangement, whether the company has sufficient solvency and whether there is the risk of project shutdown or delay due to capital problems in combination with the current discretionary monetary capital and cash flow of the company.
Please make a written statement on the above issues, submit the relevant explanatory materials to our department for disclosure before April 14, 2022, and send a copy to the dispatched office at the same time.
We are writing to inform you that
Shenzhen Stock Exchange
Listed company management department I
April 2, 2022
