Securities code: China State Construction Engineering Corporation Limited(601668) stock abbreviation: China State Construction Engineering Corporation Limited(601668) No.: pro 2022021 announcement on the provision for asset impairment in 2021
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.
China State Construction Engineering Corporation Limited(601668) (hereinafter referred to as “the company”) deliberated and adopted the proposal on the provision for asset impairment of CSCEC at the 15th meeting of the third board of directors and the 10th meeting of the third board of supervisors held on April 15, 2022. The details are hereby announced as follows:
1、 Overview of the provision for asset impairment this time
In order to objectively and fairly reflect the company’s financial position and operating results in 2021, in accordance with the accounting standards for business enterprises and the company’s accounting policies and other relevant provisions, and based on the principle of prudence, the company has conducted a comprehensive inventory and impairment test on all kinds of assets within the scope of the consolidated financial statements as of December 31, 2021, and accrued impairment reserves for assets with signs of impairment according to the test results. In 2021, the company made a total provision for impairment of RMB 12.63 billion. The specific provision for impairment is as follows:
1. Provision for impairment of accounts receivable and other financial assets
The company adopts the expected credit loss method to withdraw the impairment provision for notes receivable, accounts receivable, other receivables, long-term receivables, creditor’s rights investment and other financial assets. In 2021, the company made a comprehensive assessment of the recoverability of financial assets in combination with the risk characteristics, customer nature, aging distribution, post period collection and other information of the above financial assets at the end of the year, and accrued a credit impairment provision of 9.21 billion yuan.
2. Provision for impairment of contract assets
The company lists the contract assets or contract liabilities in the balance sheet according to the relationship between performance obligations and customer payment, and lists the contract assets and contract liabilities under the same contract in net amount after offsetting each other. According to the nature of contract assets, they are mainly divided into unconfirmed investment project funds, quality assurance deposit, completed but unsettled funds, real estate contract assets, etc. For contract assets, the company adopts the expected credit loss method with reference to financial assets to withdraw impairment reserves. In 2021, the company assessed the credit risk loss and made provision for the impairment of contract assets of RMB 3.27 billion in combination with the customer’s credit status of contract assets at the end of the year and the prediction of future economic conditions.
3. Provision for impairment of other assets
The company evaluates and tests the impairment of inventory, intangible assets, goodwill and other assets in accordance with the accounting standards for business enterprises and the company’s accounting policies. In 2021, the impairment provision is 150 million yuan.
2、 Impact of the current provision for impairment on the company
In 2021, the company’s provision for asset impairment will increase the credit impairment loss of the consolidated financial statements by 9.21 billion yuan, the asset impairment loss by 3.42 billion yuan and the total profit of the company’s consolidated financial statements by 12.63 billion yuan. 3、 Relevant decision-making procedures
The provision for impairment has been reviewed at the 8th meeting of the audit and Risk Management Committee of the 3rd board of directors and approved at the 15th meeting of the 3rd board of directors and the 10th meeting of the 3rd board of supervisors. The independent directors of the company have expressed their independent opinions on the provision for impairment.
The audit and Risk Management Committee of the board of directors of the company believes that the decision-making procedure for withdrawing the provision for impairment is in line with the accounting standards for business enterprises and the relevant provisions of the company’s accounting policies and accounting estimates, can fairly reflect the asset status of the company, is in line with the interests of the company and all shareholders, and does not damage the legitimate rights and interests of the company and minority shareholders. It agrees with the company’s plan for withdrawing the provision for impairment in 2021, And submit the matter to the board of directors for deliberation. The board of directors of the company believes that the company withdraws the provision for impairment according to the accounting policies, accounting estimates, relevant internal control systems of the company and the actual situation of the company’s assets. The basis for the provision for impairment this time is sufficient and fairly reflects the status of the company’s assets. It agrees that the company withdraws the provision for impairment of RMB 12.63 billion in 2021.
The independent directors of the company believe that the provision for impairment of the company this time complies with the provisions of the accounting standards for business enterprises and relevant accounting policies of the company and the actual situation of the company; The accrual basis is sufficient, the deliberation and decision-making procedures are legal, and the company’s financial report truly and accurately reflects the company’s financial situation and asset value, which helps to provide investors with true and reliable accounting information, and there is no situation that damages the interests of the company’s shareholders, especially small and medium-sized investors. The independent directors agreed to the company’s provision for impairment this time.
The board of supervisors of the company believes that the decision-making procedure of the company’s provision for impairment this time is legal and based on sufficient basis, the provision complies with the accounting standards for business enterprises and the company’s accounting policies, and the financial statements after the provision fairly reflect the company’s assets, and agree with the company’s provision for impairment this time.
4、 Documents for future reference
1. Resolutions of the 15th meeting of the third board of directors of the company;
2. Resolutions of the 10th meeting of the third board of supervisors of the company;
3. Independent opinions of independent directors on the provision for asset impairment in 2021.
It is hereby announced.
China State Construction Engineering Corporation Limited(601668) board of directors April 15, 2002
