Securities code: Hubei Yihua Chemical Industry Co.Ltd(000422) securities abbreviation: Hubei Yihua Chemical Industry Co.Ltd(000422) Announcement No.: 2022038 Hubei Yihua Chemical Industry Co.Ltd(000422)
With regard to the announcement on the provision for asset impairment in 2021, the company and all members of the board of supervisors guarantee that the information disclosed is true, accurate and complete without false records, misleading statements or major omissions.
Hubei Yihua Chemical Industry Co.Ltd(000422) (hereinafter referred to as “the company”) in accordance with the relevant provisions of the accounting standards for business enterprises, the guidelines for self discipline supervision of listed companies of Shenzhen Stock Exchange No. 1 – standardized operation of listed companies on the main board and the guidelines for business handling of listed companies of Shenzhen Stock Exchange No. 2 – matters related to the disclosure of periodic reports, the company announced the relevant information of the provision for asset impairment of the company in 2021 as follows:
1、 Overview of the provision for asset impairment this time
(I) basis and reasons for withdrawing asset impairment provision this time
In accordance with the relevant requirements of the accounting standards for business enterprises, the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 1 – standardized operation of listed companies on the main board and the business handling guidelines for listed companies of Shenzhen Stock Exchange No. 2 – matters related to periodic report disclosure, in order to more truly and accurately reflect the asset status and financial status of the company as of December 31, 2021, The company and its subsidiaries conducted a comprehensive inventory of inventory, fixed assets, long-term equity investment and other assets. On the basis of inventory, the net realizable value of various inventories, the variable cash of fixed assets and long-term equity investment are fully analyzed and evaluated, and the impairment provision is made for the assets that may have asset impairment losses.
(II) asset scope, amount and reporting period to be included in the provision for asset impairment this time
After the company and its subsidiaries conduct a comprehensive inventory and asset impairment test of assets with possible signs of impairment at the end of 2021, including inventory, fixed assets, long-term equity investment and other assets, it is proposed to withdraw a total of 55122275356 yuan of asset impairment reserves in 2021. The details are as follows:
Proportion of net assets with provision for impairment at the beginning of the year to the end of 2021 (%)
1、 Inventory -3898390044 2.48%
2、 Long term equity investment -2921590130 1.86%
3、 Impairment loss of fixed assets – 22461486746 14.32%
4、 Impairment loss of construction in progress -2584008436 16.47%
Total -55122275356 35.13%
Note: for details, please refer to “VII. Notes to consolidated financial statements” in section XII “financial report” of the 2021 annual report disclosed by the company on the same day.
On August 16, 2021, the company opened the website at www.cn.info.com.cn In the announcement on the provision for asset impairment in the half year of 2021 disclosed, the provision for asset impairment of 6261511757 yuan for assets with possible signs of impairment in the first half of 2021 has been included in the total provision for impairment in 2021.
(III) accounting treatment method
The company conducts impairment test on fixed assets, construction in progress, long-term equity investment, intangible assets and other long-term assets on the balance sheet date. If the impairment test results show that the recoverable amount of the asset is lower than its book value, the impairment provision shall be withdrawn according to the difference and included in the impairment loss.
The recoverable amount is the higher one between the net amount of the fair value of the asset minus the disposal expenses and the present value of the expected future cash flow of the asset. The provision for asset impairment is calculated and recognized on the basis of individual assets. If it is difficult to estimate the recoverable amount of individual assets, the recoverable amount of the asset group is determined by the asset group to which the asset belongs. Asset group is the smallest asset portfolio that can generate cash inflow independently.
2、 The approval procedures for the withdrawal of asset impairment reserves this time
According to the relevant provisions of the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 1 – standardized operation of listed companies on the main board and the business handling guidelines for listed companies of Shenzhen Stock Exchange No. 2 – matters related to the disclosure of periodic reports, the company’s provision for asset impairment this time needs to fulfill the obligation of information disclosure and does not need to be submitted to the board of directors and the general meeting of shareholders for deliberation. The provision for asset impairment this time does not involve related party transactions.
3、 The impact of the current provision for asset impairment on the company
The company’s provision for asset impairment in 2021 totaled 55122275356 yuan, reducing the company’s net profit attributable to the owner of the parent company by 47206326941 yuan in 2021 and the owner’s equity attributable to the owner of the parent company by 47206326941 yuan at the end of 2021. The provision for asset impairment in this year has been audited by an accounting firm.
The provision for impairment in this year complies with the requirements of accounting standards and relevant policies and the actual situation of the company. There is no behavior damaging the interests of the company and shareholders and no manipulation of profits. 4、 The board of directors’ statement on the rationality of the company’s provision for asset impairment indicates that the company’s provision for asset impairment this time complies with and complies with the provisions of the accounting standards for business enterprises and relevant accounting policies of the company. The basis for the provision for asset impairment is sufficient, reflects the principle of prudence in accounting treatment, and is conducive to objectively and fairly reflecting the value and financial status of the company’s assets, Make the company’s accounting information about asset value more authentic, reliable and reasonable. Therefore, we unanimously agree on the provision for asset impairment of the company this time.
It is hereby announced.
Hubei Yihua Chemical Industry Co.Ltd(000422)
Board of directors
April 7, 2022
