Securities code: Sinochem International Corporation(600500) securities abbreviation: Sinochem International Corporation(600500) No.: 2022024
Bond Code: 175781 bond abbreviation: 21 Sinochem G1
Bond Code: 188412 bond abbreviation: Sinochem gy01
Bond Code: 185229 bond abbreviation: 22 Sinochem G1
Sinochem International Corporation(600500) (holding) Co., Ltd
Announcement on the company’s provision for goodwill 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 Sinochem International Corporation(600500) (holding) Co., Ltd. (hereinafter referred to as ” Sinochem International Corporation(600500) ” or “the company”) held the 24th Meeting of the 8th board of directors and the 17th meeting of the 8th board of supervisors on April 14, 2022, deliberated and approved the proposal on the company’s provision for goodwill impairment in 2021, and proposed to withdraw 351.5 million yuan of goodwill impairment provision in 2021. The specific contents of the company’s provision for goodwill impairment are as follows: I. overview of the provision for goodwill impairment
In August 2016, the company acquired 54.99% equity of halcyonagri Corporation Limited (hereinafter referred to as “halcyon company”), a Singapore listed company, through package deal M & A integration. The company was established in 2010 with a registered capital of S $95265500846 and is mainly engaged in planting, processing, marketing and exporting natural rubber. After business integration, as of December 31, 2021, the original value of goodwill corresponding to the natural rubber asset group of halcyon company held by the company was RMB 2902458600. In accordance with the accounting standards for Business Enterprises No. 8 – asset impairment and other relevant provisions, and based on the principle of prudence, the company hired zhongtongcheng Asset Appraisal Co., Ltd. (hereinafter referred to as “zhongtongcheng”) to evaluate the recoverable amount of the natural rubber asset group of halcyon company on December 31, 2021, which was audited by Ernst & Young Huaming certified public accountants, In 2021, the company made provision for impairment of goodwill of natural rubber asset group, equivalent to RMB 351.5 million.
2、 Specific conditions of withdrawing goodwill impairment reserves (I) industry conditions
There are unstable and uncertain factors in global economic recovery and epidemic prevention and control in 2021. The supply of rubber raw materials is insufficient and the price rises sharply, resulting in the squeeze on the profitability of the rubber processing industry; At the same time, the global supply chain cost continues to rise, and the transportation cost rises rapidly, further increasing the enterprise cost. It is expected that the natural rubber market will fluctuate for a long time in 2022, with uncertainty. (II) goodwill impairment assessment
In view of the above market conditions, Sinochem International Corporation(600500) hired a third-party appraisal institution zhongtongcheng to evaluate the recoverable amount of the natural rubber asset group where halcyon is located. The recoverable amount is determined according to the present value of the estimated future cash flow, which is determined based on the management’s profit forecast from 2022 to 2026. The key assumptions used in predicting the present value of future cash flow are: estimated sales revenue growth rate and discount rate based on the past performance of the asset group and the expectation of market development. (III) evaluation conclusion
Zhongtongcheng adopts the income method to evaluate the model. It is concluded that on the benchmark date of December 31, 2021, the recoverable amount of the natural rubber asset group is USD 674.35 million, and the corresponding book value is USD 7789214 million. Based on the above evaluation results, the impairment amount of the natural rubber asset group is USD 1045714 million. According to 54.99% of halcyon’s shares held by Sinochem International Corporation(600500) and 95.92% of halcyon’s total owner’s equity attributable to the parent company, the part attributable to Sinochem International Corporation(600500) is US $551552 million, equivalent to about RMB 35.15 million, forming the amount of goodwill impairment in Sinochem International Corporation(600500) 2021. 3、 Impact of provision for impairment of goodwill on the company
The goodwill impairment accrued by the company this time is directly included in the current profit and loss in 2021, resulting in a decrease of RMB 351.5 million in the company’s total profit and net profit attributable to the owners of the parent company in 2021. 4、 Explanation on the rationality of the provision for goodwill impairment this time
The provision for impairment of goodwill is made based on the principle of prudence and the actual situation of the company in accordance with the relevant provisions of the accounting standards for business enterprises and the relevant accounting policies of the company. The basis is sufficient and reasonable. After the provision for goodwill impairment is made, the company’s 2021 financial statements can more fairly reflect the company’s financial position, asset value and operating results as of December 31, 2021.
5、 Opinions of the board of supervisors
The board of supervisors of the company believes that the company’s provision for goodwill impairment in accordance with the accounting standards for business enterprises and relevant accounting policies of the company is in line with the actual situation of the company. After the provision for goodwill impairment, it can more fairly reflect the company’s asset status, financial status and operating results, and there is no situation that damages the interests of the company and all shareholders, especially minority shareholders, The decision-making procedure of the company’s board of directors on this proposal complies with the relevant provisions of relevant laws and regulations, and agrees to withdraw the provision for goodwill impairment this time. 6、 Opinions of independent directors
The independent directors of the company believe that the company’s provision for goodwill impairment is based on the principle of prudence, in line with the relevant provisions of the accounting standards for business enterprises and the actual situation of the company’s assets, and there is no situation that damages the interests of the company and all shareholders, especially minority shareholders. After the provision for goodwill impairment is withdrawn this time, the company’s financial statements can more fairly reflect the company’s financial situation, and it is agreed to withdraw the provision for goodwill impairment this time. 7、 The provision for impairment of goodwill needs to be submitted to the general meeting of shareholders for deliberation. 8、 Documents for future reference (I) resolutions of the 24th Meeting of the 8th board of directors of the company (II) resolutions of the 17th meeting of the 8th board of supervisors of the company (III) independent due diligence opinions of independent directors
It is hereby announced.
Board of directors of Sinochem International Corporation(600500) (holding) Co., Ltd. April 16, 2022
