catalogue
1、 About accounts receivable Page 1-4 II. About accounts receivable financing Page 5-6 III. provision for inventory falling price Page 6-8 IV. accounting of associated enterprises Page 9-10
Special description of inquiry letter
TJH [2022] No. 565
Shenzhen Stock Exchange:
We have received the inquiry letter on the annual report of Zhejiang Yonggui Electric Equipment Co.Ltd(300351) 2021 (GEM annual report inquiry letter [2022] No. 41, hereinafter referred to as the inquiry letter) transferred from Zhejiang Yonggui Electric Equipment Co.Ltd(300351) or the company. We have carefully checked the financial matters that need to be explained in the inquiry letter, and now the report is explained as follows.
1、 Article 3 of the inquiry letter: the annual report shows that the book balance of the company’s accounts receivable at the end of the period is 730498600 yuan, an increase of 25.39% over the beginning of the period. The bad debt provision of 8.7167 million yuan was withdrawn in the current period, and 9.8767 million yuan of bad debt provision of accounts receivable was recovered or transferred in the current period due to the signing of debt settlement agreement and litigation. Please specify:
(1) Combined with the expected credit loss model, aging distribution, customer credit risk status, post period collection and bad debt provision of Companies in the same industry, explain whether the provision for bad debts of accounts receivable is sufficient.
(2) The details of the company’s signing of the debt settlement agreement, including the signing time, the main contents of the agreement, the company’s recovery of accounts, etc., and whether the relevant accounting treatment complies with the accounting standards for business enterprises.
The annual audit accountant shall check and give clear opinions.
（1） Combined with the expected credit loss model, aging distribution, customer credit risk status, post period collection and bad debt provision of Companies in the same industry, explain whether the provision for bad debts of accounts receivable is sufficient
1. The bad debt provision of the company’s accounts receivable in 2021 is as follows:
Closing balance
Category book balance bad debt provision
Amount proportion amount withdrawal ratio book value
(%) cases (%)
Bad debt provision for single withdrawal 10078664358 13.8010062221352 99.8416443006
Bad debt reserves withdrawn by portfolio 62971197703 86.203895114883 6.1959076082820
Total 73049862061 100.0013957336235 19.1159092525826
As shown in the above table, the bad debt provision of the company’s accounts receivable includes the bad debt provision withdrawn by single item and the bad debt provision withdrawn by combination. The bad debt provision withdrawn by combination is withdrawn according to the aging combination.
2. Analysis of bad debt provision proportion of accounts receivable with bad debt provision by combination
(1) Combined with the calculation of expected credit loss model
In accordance with the relevant provisions of the accounting standards for business enterprises, combined with the customer’s credit status, the company’s product characteristics and the actual situation over the years, the company has formulated the following policies for measuring the expected credit loss of receivables according to the combination:
The basis for determining the portfolio of projects and the method of measuring expected credit loss
Referring to the experience of historical credit loss, combined with the current situation and the aging prediction of accounts receivable aging combination for 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
The recovery rate of accounts receivable is calculated based on the actual recovery of each account age of the company in 2021, and the expected default loss rate of each account age is calculated as follows:
Aging migration rate default loss rate
Within 1 year (including, the same below) 5.63% 1.91%
92.17% and 33.85% in 1-2 years
2-3 years 55.10% 36.72%
More than 3 years 66.65%
The bad debt amount of aging portfolio is calculated according to the default loss rate as follows:
Aging ending balance default loss rate bad debt provision
Within 1 year: 58351736870 1.91% 1112107058
1-2 years 3 Inner Mongolia Mengdian Huaneng Thermal Power Corporation Limited(600863) 989 33.85% 1218790407
2-3 years 573078863 36.72% 210459175
More than 3 years 445517981 66.65% 296923782
Subtotal 62971197703 4.51% 2838280422
(2) The accrual proportion of aging combination of Companies in the same industry is as follows:
Company name within 1 year 1-2 years 2-3 years 3-4 years 4-5 years more than 5 years
China Railway Signal & Communication Corporation Limited(688009) 0.50% 5.00% 10.00% 42.25% 42.25% 42.25%
Beijing Jiaoda Signal Technology Co.Ltd(300851) 5.00% 10.00% 20.00% 30.00% 50.00% 100%%
Ravel 3.00% 10.00% 20.00% 50.00% 80.00% 100.00%
Beijing Tieke Shougang Railway-Tech Co.Ltd(688569) 3.56% 15.13% 33.19% 54.87% 100.00% 100.00%
Average 3.02% 10.03% 20.80% 44.28% 68.06% 80.75%
Zhejiang Yonggui Electric Equipment Co.Ltd(300351) company 5.00% 10.00% 30.00% 100.00% 100.00% 100.00%
According to the above table, calculated by the expected loss model, the amount of bad debt reserves withdrawn by the company according to the combination is 283828 million yuan, and the actual amount withdrawn by the company is 389511 million yuan; Compared with the bad debt accrual ratio of Companies in the same industry, the company’s accrual is relatively sufficient.
The company’s main businesses are rail transit and industrial connectors, on-board and energy information connectors, etc., of which the revenue of rail transit and industrial connectors is 6642088 million yuan, accounting for 58.97% of the operating revenue. This part of customers are mainly in the rail transit industry, such as the enterprises under CRRC, and the overall collection risk of accounts receivable is small; Most of the bad debt reserves withdrawn by the company according to the single item are formed by the vehicle and energy information business. Affected by the overall impact of the industry, some customers in the new energy vehicle industry have deteriorated and went bankrupt, resulting in a large collection risk of the company’s accounts receivable. The company has withdrawn the single bad debt reserves according to the collection possibility of specific customers. For the accounts receivable for which bad debt reserves are individually accrued, the company adopts a variety of methods to collect; At the same time, the company has gradually learned the lessons of the new energy vehicle industry and sought the cooperation of high-quality new energy customers in the process of business development to promote the benign development of the company’s business.
As of March 31, 2022, the company has received a total of 219 million yuan of accounts receivable, which accounts for 34.74% of the combined provision for bad debts.
（2） The details of the company’s signing of the debt settlement agreement, including the signing time, main contents of the agreement, the company’s recovery of accounts, etc., and whether the relevant accounting treatment complies with the accounting standards for business enterprises
The relevant customers whose bad debt reserves are reversed or recovered in 2021 are as follows:
Unit: 10000 yuan
Customer name opening book opening bad book current period reversal or recovery current period write off closing book balance account provision bad debt provision amount accounts receivable amount
Zhidou electric vehicle 67 Springsnow Food Group Co.Ltd(605567) 6055 231.77652878 Co., Ltd
Shandong Deyang electronics 256.80 256.80 112.71 144.09 Technology Co., Ltd
Shenzhen Wuzhoulong 163.98 163.98 110.00 53.98
Automobile Co., Ltd
Other customers 392454389033 474.70 62.23340579
Total 11105871107166 929.18 116.211007866
Zhidou Electric Vehicle Co., Ltd.: in July 2020, the people’s Court of Ninghai County, Zhejiang Province made a civil ruling ((2020) zhe 0226 Po No. 9-2), approving the reorganization plan of Zhidou Electric Vehicle Co., Ltd. as an ordinary creditor, the company chose the settlement scheme of “cash + equity”. 10% of the principal amount of the creditor’s rights shall be paid off in cash in two phases, 50% of the distributable amount shall be paid off within one month after the ruling and approval of the reorganization plan, and the remaining 50% shall be paid off in the seventh month; 90% of the principal amount is converted into Zhidou company or the equity of the reorganized investor is paid off. According to the restructuring plan, the company received the first cash settlement amount of 2317700 yuan in 2021.
Shandong Deyang Electronic Technology Co., Ltd.: in January 2021, the people’s Court of Yinan County, Shandong Province made (2021) Lu 1321 Po Shen No. 1 civil ruling to accept the bankruptcy liquidation of Shandong Deyang Electronic Technology Co., Ltd. In March 2021, the first creditors’ meeting of Shandong Deyang Electronic Technology Co., Ltd. voted and approved the settlement agreement (Draft). According to the draft, the part of the creditor’s rights less than 50000 will be paid off in full, and the part of the creditor’s rights more than 50000 will be paid off at the proportion of 50%. According to the draft, the company received a payment of 1127100 yuan in 2021.
Shenzhen Wuzhoulong Automobile Co., Ltd.: according to the implementation settlement agreement signed between Sichuan Yonggui Technology Co., Ltd., a wholly-owned subsidiary of the company, and Shenzhen Wuzhoulong Automobile Co., Ltd. in June 2021, the company paid 1.1 million yuan to Sichuan Yonggui Technology Co., Ltd. to settle the creditor’s rights and debts of both parties. The company will write off the remaining receivables.
For more than 20 other customers, the company collected the accounts receivable through various ways, including reaching a settlement or litigation mediation through collection, prosecution, recovery of the other party’s bankruptcy liquidation, cancellation of the original contract, etc., and the bad debt provision was transferred back to RMB 4.747 million and the bad debt provision was written off to RMB 622300.
（3） Verification procedure and conclusion
1. Understand the key internal controls related to the impairment of accounts receivable, evaluate the design of these controls, determine whether they have been implemented, and test the operation effectiveness of relevant internal controls;
2. Review the subsequent actual of accounts receivable for which bad debt reserves have been accrued in previous years
