Securities code: Guangdong Kitech New Material Holding Co.Ltd(300995) securities abbreviation: Guangdong Kitech New Material Holding Co.Ltd(300995) Announcement No.: 2022013 Guangdong Kitech New Material Holding Co.Ltd(300995)
Announcement on the provision of credit impairment loss and asset impairment loss in 2021
The company and all members of the board of directors guarantee that the information disclosed is true, accurate and complete without false records, misleading statements or major omissions.
Guangdong Kitech New Material Holding Co.Ltd(300995) (hereinafter referred to as “the company”) conducted impairment test on the company’s assets in accordance with the principle of prudence in accordance with the self regulatory guidelines for companies listed on the gem of Shenzhen Stock Exchange No. 1 – business handling, the self regulatory guidelines for companies listed on the gem of Shenzhen Stock Exchange No. 2 – standardized operation of companies listed on the gem, and the company’s accounting policies. Taking December 31, 2021 as the base date, credit impairment losses and asset impairment losses are accrued for relevant assets within the scope of the consolidated accounting statements of the financial report of 2021. The details of this accrual are hereby announced as follows:
1、 Summary of credit impairment loss and asset impairment loss accrued this time
In order to objectively reflect the company’s financial situation and asset value, according to the accounting standards for business enterprises and other relevant regulations, after the company conducted a comprehensive inventory and asset impairment test on the assets with signs of impairment on December 31, 2021, it believed that some assets had certain signs of impairment loss. Based on the principle of prudence, the company made corresponding impairment reserves for the assets with possible signs of impairment. The total credit and asset impairment losses accrued in 2021 were 410461737 yuan, including 239211364 yuan of credit impairment losses and 171250373 yuan of asset impairment losses.
2、 Recognition standard and withdrawal method of credit impairment loss and asset impairment loss withdrawn this time
（1） Credit impairment loss
According to the accounting policies and accounting estimates implemented by the company, on the balance sheet date, the company always measures the loss provision of accounts receivable, whether or not it contains major financing components, according to the amount equivalent to the expected credit loss in the whole duration. The increase or reversal of the loss provision is included in the current profit and loss as impairment loss or gain. If there is objective evidence indicating that a certain account receivable has suffered credit impairment, the company shall withdraw bad debt provision for the account receivable and recognize the expected credit loss. When a single financial asset cannot evaluate the information of expected credit loss at a reasonable cost, the company divides the accounts receivable portfolio according to the characteristics of credit risk, and calculates the expected credit loss on the basis of the portfolio. The company will combine the accounts receivable divided into risk portfolio according to the aging of similar credit risk characteristics, refer to the experience of historical credit loss, combined with the current situation and the prediction of future economic conditions, prepare the comparison table between the aging of accounts receivable and the expected credit loss rate for the whole duration, and calculate the expected credit loss.
In 2021, a total of 239211364 yuan of credit impairment loss was withdrawn, including 234899331 yuan of bad debt loss of accounts receivable, 4372292 yuan of bad debt loss of other accounts receivable and 602.59 yuan of bad debt loss of notes receivable.
(II) asset impairment loss
According to the accounting policies and accounting estimates implemented by the company, on the balance sheet date, for the commodity inventories directly used for sale, such as inventory goods and materials used for sale, the inventory falling price reserves shall be accrued according to the difference between the net realizable value and the book cost of a single inventory item. If the goods in stock and materials for sale are directly used for sale, the net realizable value shall be determined by the amount of the estimated selling price of the inventory minus the estimated selling expenses and relevant taxes; For the inventory of materials to be processed, the net realizable value shall be determined by the estimated selling price of the finished products minus the estimated cost to be incurred at the time of completion, estimated selling expenses and relevant taxes; At the end of each year’s interim period and the end of the year, the company valuates according to the lower of inventory cost and net realizable value, calculates the estimated loss with allowance method, withdraws the inventory falling price reserves and records them into the current profit and loss.
The company checks fixed assets, construction in progress, intangible assets with limited service life and other items on each balance sheet date. When there are the following signs, it indicates that the assets may be impaired, and the company will conduct impairment test. For intangible assets with uncertain service life, whether there are signs of impairment or not, impairment test shall be carried out at the end of each year. If it is difficult to test the recoverable amount of a single asset, the test shall be based on the asset group or combination of asset groups to which the asset belongs. After the impairment test, if the book value of the asset exceeds its recoverable amount, the difference is recognized as impairment loss. Once the impairment loss of the above assets is recognized, it will not be reversed in subsequent accounting periods. The recoverable amount of an asset refers to 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.
Signs of impairment are as follows:
(1) The market price of assets has fallen sharply in the current period, and the decline is significantly higher than the expected decline due to the passage of time or normal use;
(2) The economic, technical or legal environment in which the enterprise operates and the market in which the assets are located will undergo significant changes in the current period or in the near future, which will have an adverse impact on the enterprise;
(3) The market interest rate or other market investment return rate has increased in the current period, which affects the discount rate of the enterprise in calculating the present value of the expected future cash flow of the asset, resulting in a significant reduction in the recoverable amount of the asset;
(4) There is evidence that the asset has become obsolete or its entity has been damaged;
(5) Assets have been or will be idle, terminated or planned to be disposed of in advance;
(6) The evidence in the internal report of the enterprise indicates that the economic performance of the assets has been or will be lower than the expectation, such as the net cash flow created by the assets or the operating profit (or loss) realized is far lower (or higher) than the expected amount; Other signs indicating that the assets may have been impaired.
In 2021, a total of 171250373 yuan of asset impairment loss was withdrawn, including 26779840 yuan of inventory depreciation loss and contract performance cost impairment loss and 144470533 yuan of fixed asset impairment loss. 3、 Impact of the current provision for impairment on the company
The total amount of credit impairment loss and asset impairment loss accrued by the company for the above matters in 2021 is 41046173700 yuan, which is included in the profit and loss of the company in 2021, resulting in a decrease of 41046173700 yuan in the total profit of the company’s consolidated statements in 2021. The accrued asset impairment loss and credit impairment loss have been audited and confirmed by ShineWing Certified Public Accountants (special general partnership).
4、 Explanation on the rationality of the provision for asset impairment this time
The company’s provision for credit impairment loss and asset impairment loss is in line with the provisions of the accounting standards for business enterprises and the company’s relevant accounting policies. It is fully based, reflects the principle of accounting prudence, and conforms to the company’s actual situation. After the provision for impairment loss, it can fairly reflect the company’s financial status, asset value and operating results as of December 31, 2021, making the company’s accounting information more authentic, reliable and reasonable. It is hereby announced!
Guangdong Kitech New Material Holding Co.Ltd(300995) board of directors April 15, 2022
