Securities code: Welle Environmental Group Co.Ltd(300190) securities abbreviation: Welle Environmental Group Co.Ltd(300190) Announcement No.: 2022020 bond Code: 123049 bond abbreviation: convertible bond
Welle Environmental Group Co.Ltd(300190)
Announcement on the provision for asset impairment
The board of directors and 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.
In accordance with the accounting standards for business enterprises, the company’s accounting policies and other relevant provisions, and based on the principle of prudence, Welle Environmental Group Co.Ltd(300190) (hereinafter referred to as “the company”) made a comprehensive inventory of various receivables, inventories, fixed assets, long-term equity investment, construction in progress, intangible assets, goodwill and other assets at the end of 2021 within the scope of consolidated statements on December 31, 2021, The possibility of impairment of various assets has been fully evaluated and analyzed, and the corresponding impairment loss has been accrued for the assets with signs of impairment. Now the specific situation of this accrual is announced as follows:
1、 Overview of the provision for asset impairment this time
According to the evaluation and analysis results, the total amount of credit impairment losses and asset impairment losses in 2021 is 9652305722 yuan. The details are as follows:
(I) credit impairment loss
Current amount of the project (yuan)
Bad debt loss of accounts receivable -8351611487
Bad debt loss of other receivables -478122710
Impairment loss of notes receivable -4463204
Total -8834197401
（2） Asset impairment loss
Current amount of the project (yuan)
Inventory falling price loss and contract performance cost minus
Loss value -32124557
Contract asset impairment loss 437533859
Goodwill impairment loss -1223517623
Total -818108321
2、 Description of credit impairment loss and asset impairment loss withdrawn this time
(I) description of credit impairment loss
On the basis of expected credit loss, the company accrues impairment provision and recognizes credit impairment loss for financial assets measured at amortized cost, debt instrument investment measured at fair value and whose changes are included in other comprehensive income, financial guarantee contract, etc. 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 and all cash flows of expected income discounted by the enterprise according to the original effective interest rate, that is, the present value of all cash shortages. For bills receivable, accounts receivable and other receivables without major financing components, the Company simplifies the measurement of loss reserves according to the expected credit loss of the whole duration.
The credit impairment loss accrued in the current period is 8834197401 yuan.
(II) description of inventory falling price loss and contract performance cost impairment loss
At the end of the period, on the basis of a comprehensive inventory of the inventory, the company shall withdraw the inventory falling price reserve for the part of the inventory that is expected to be irrecoverable due to damage, all or part of the inventory is obsolete or the sales price is lower than the cost, as well as the loss part expected to exist in the project contract. The provision for inventory falling price shall be withdrawn according to the difference between the cost of a single (or category) inventory item and its net realizable value. The net realizable value of inventories held for the execution of sales contracts or labor contracts shall be calculated based on the contract price. If the quantity of inventories held is more than the quantity ordered in the sales contract, the net realizable value of inventories in excess shall be calculated based on the general sales price; The net realizable value of inventory without sales contract is calculated based on the general sales price; If the estimated total cost of the project contract exceeds the estimated total revenue of the contract, the estimated loss shall be recognized as the current expense, and the accrued provision for estimated contract loss shall be listed as the provision for inventory falling price in the statement.
The provision for impairment loss of inventory falling price and contract performance cost in this period is 32124557 yuan.
(III) description of impairment loss of contract assets
The company lists contract assets in the balance sheet according to the relationship between performance obligations and customer payment. The consideration that the company has the right to receive for transferring goods and other assets or providing services to customers is listed as contract assets. Contract assets are presented separately in the balance sheet. The contract assets under the same contract are listed in net amount. If the net amount is the debit balance, it is listed in the item of “contract assets” or “other non current assets” according to its liquidity. The contract assets and contract liabilities under different contracts cannot offset each other. 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.
The impairment loss of contract assets in the current period was reversed by 437533859 yuan.
(IV) relevant description of the company’s goodwill impairment loss
The recognition standard and accrual method of the company’s goodwill impairment provision are as follows: the company conducts impairment test on the asset group or combination of asset groups containing overall goodwill, calculates the present value (recoverable amount) of the expected future cash flow of the asset group or combination of asset groups, and compares it with the fair value of the asset group or combination of asset groups. If the recoverable amount of relevant asset group or combination of asset groups is lower than its fair value, Impairment loss is recognized for the difference. The amount of goodwill impairment accrued by the company this time is 1223517623 yuan, as follows:
1. Welle Environmental Group Co.Ltd(300190) (Suzhou) Energy Technology Co., Ltd
(1) Description of goodwill formation
On October 27, 2016, the seventh meeting of the third board of directors of the company deliberated and approved the proposal on the company’s plan of issuing shares and paying cash to purchase assets and raising supporting funds, and other proposals related to the purchase of assets by issuing shares. The company purchased Chen Weizu, Zhang Qunhui The 100% equity of Suzhou Hanfeng Technology Development Co., Ltd. (now renamed Welle Environmental Group Co.Ltd(300190) (Suzhou) Energy Technology Co., Ltd.) (hereinafter referred to as ” Welle Environmental Group Co.Ltd(300190) energy”) held by 19 shareholders including Xu Yankai, with a transaction price of 600 million yuan, including 75% of the transaction consideration paid by issuing shares, totaling 45 million yuan; Pay 25% of the transaction consideration in cash, totaling 150 million yuan.
The subject matter of this transaction is evaluated using the asset-based method and the income method. According to the enterprise value evaluation report (h.d.z.z.p.b. [2016] No. 0936166) issued by Shanghai Dongzhou asset evaluation Co., Ltd., an asset evaluation institution with securities business qualification, as of the benchmark date of August 31, 2016, the evaluation value of 100% equity of Welle Environmental Group Co.Ltd(300190) energy was RMB 603 million. After negotiation between the trading parties, The transaction price of 100% equity of Welle Environmental Group Co.Ltd(300190) energy is 60 million yuan. According to the accounting standards for business enterprises and other relevant provisions, the difference of 48402393 yuan between the merger cost and the fair value share of Welle Environmental Group Co.Ltd(300190) energy identifiable net assets on the purchase date is recognized as goodwill.
(2) The company’s provision for impairment of goodwill formed by the acquisition of 100% equity of Welle Environmental Group Co.Ltd(300190) energy
Based on the principle of prudence, the company hired professional appraisal institution Jinzheng (Shanghai) Assets Appraisal Co., Ltd. to evaluate the recoverable amount of the asset group related to the goodwill formed by Welle Environmental Group Co.Ltd(300190) energy on the benchmark date of December 31, 2021. The Welle Environmental Group Co.Ltd(300190) energy assets and liabilities divided into the asset group include operating assets, fixed assets, intangible assets and operating liabilities. The present value (recoverable amount) of the estimated future cash flow of the asset group uses the evaluation results of the asset evaluation report on the recoverable amount of the asset group related to goodwill involved in the impairment test of the goodwill formed by the acquisition of Welle Environmental Group Co.Ltd(300190) energy right by Welle Environmental Group Co.Ltd(300190) proposed by Jinzheng (Shanghai) asset evaluation Co., Ltd. (Jinzheng pingbao Zi [2021] No. 0054). Based on the comprehensive analysis of the long-term cooperation agreement signed by Welle Environmental Group Co.Ltd(300190) energy, sales contracts, orders on hand, the proportion of historical operating revenue, growth trend and reasons for changes, the impact of macroeconomic situation and industry development trend on the overall change trend of future operating revenue, as well as the development direction of the enterprise in the future, the operating revenue, operating costs, taxes and surcharges, sales expenses The fluctuation of management expenses, R & D expenses, income tax expenses, net profit before interest and after tax, depreciation and amortization, capital expenditure and working capital increase are predicted. The free cash flow of the asset group in the future is discounted and summed up, and the value of operating assets of the asset group is 1141000000 yuan, with a discount rate of 9.4%.
The company hereby confirms that the impairment of goodwill formed by the acquisition of 100% equity of Welle Environmental Group Co.Ltd(300190) energy in this year is 709515418 yuan. After the impairment of goodwill is withdrawn this time, the remaining book value of the goodwill is 44135789280.98 yuan.
2. Beijing Huiheng Environmental Protection Engineering Co., Ltd
(1) Description of goodwill formation
On February 5, 2013, the fourth meeting of the second board of directors of the company deliberated and approved the proposal on the use of part of the over raised funds for foreign investment. The company invested and controlled Beijing Huiheng Environmental Protection Engineering Co., Ltd. (hereinafter referred to as “Beijing Huiheng”) with the over raised funds of 30 million yuan, of which 20 million yuan was used to transfer the contribution share of 5 million yuan from the original shareholder of Beijing Huiheng and 10 million yuan was used to subscribe for the newly increased registered capital of 2.5 million yuan, After the completion of the transaction, the company holds 60% equity of Huiheng. According to the appraisal report (syxb [2013] No. 009) issued by Jiangsu Yinxin assets appraisal and Real Estate Appraisal Co., Ltd., the appraisal value of all shareholders’ equity of Beijing Huiheng on the benchmark date of October 31st, 2012 was RMB 40.2 million. According to the accounting standards for business enterprises and other relevant regulations, The difference of 1563252763 yuan between the merger cost and the fair value of Beijing Huiheng’s identifiable net assets on the acquisition date is recognized as goodwill.
(2) The company’s provision for impairment of goodwill formed by the acquisition of Beijing Huiheng equity
Based on the principle of prudence, the company hired professional appraisal institution Jinzheng (Shanghai) Asset Appraisal Co., Ltd. to evaluate the recoverable amount of the asset group related to the goodwill formed by Beijing Huiheng on the benchmark date of December 31, 2021. The assets and liabilities of Beijing Huiheng divided into the asset group include operating assets, fixed assets, intangible assets and operating liabilities based on the appraisal scope of the benchmark date. The estimated recoverable amount of the asset group uses the recoverable amount of the asset group related to business reputation involved in the impairment test of the goodwill formed by the acquisition of the equity of Beijing Huiheng Environmental Protection Engineering Co., Ltd. (Jinzheng pingbao Zi [2021] No. 0057) of Jinzheng (Shanghai) asset evaluation Co., Ltd. on April 7, 2022 Results of the evaluation. According to the comprehensive analysis of the long-term cooperation agreement signed by Beijing Huiheng, sales contracts, orders on hand, the proportion of historical operating revenue, growth trend and reasons for change, the impact of macroeconomic situation and industry development trend on the overall change trend of future operating revenue, as well as the future development direction of the enterprise, the predicted future operating revenue, operating costs, taxes and surcharges, sales expenses Administrative expenses, R & D expenses, income tax expenses, net profit before interest and after tax, depreciation and amortization, capital expenditure and increase in working capital are analyzed and adjusted, and the future free cash flow of the asset group is discounted and summed up. The value of operating assets of the assessed asset group is RMB 15200000000, with a discount rate of 9.10%. The company hereby confirms that the impairment of goodwill formed by the acquisition of 100% equity of Beijing Huiheng in this year is 514 Xinjiang Guotong Pipeline Co.Ltd(002205) yuan. After the impairment of goodwill is withdrawn this time, the remaining book value of the goodwill is 1049250558 yuan.
3、 The impact of the current provision for asset impairment on the company
The amount of provision for asset impairment this time is 965231 million yuan, which is included in the company’s profit and loss in 2021, resulting in a decrease of 965231 million yuan in the net profit attributable to the shareholders of the listed company in the consolidated report of 2021. After the provision for asset impairment is made, the net profit attributable to the shareholders of the listed company in the consolidated statement of the company’s 2021 annual report is RMB 186250900.
It is hereby announced
Welle Environmental Group Co.Ltd(300190) board of directors April 15, 2022
