Securities code: Xi’An Manareco New Materials Co.Ltd(688550) securities abbreviation: Xi’An Manareco New Materials Co.Ltd(688550) Announcement No.: 2022018 Xi’An Manareco New Materials Co.Ltd(688550)
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 legal responsibility for the authenticity, accuracy and integrity of its contents according to law.
Xi’An Manareco New Materials Co.Ltd(688550) (hereinafter referred to as “the company”) held the fifth meeting of the third board of directors and the fifth meeting of the third board of supervisors on April 15, 2022, deliberated and adopted the proposal on the provision for asset impairment in 2021. The specific situation is hereby announced as follows:
1、 Overview of the provision for asset impairment this time
In accordance with the accounting standards for business enterprises and the relevant provisions of the company’s accounting policies and accounting estimates, in order to truly and accurately reflect the company’s financial position as of December 31, 2021 and the operating results of 2021, based on the principle of prudence, the company recognized a total of 396961 million yuan of asset impairment losses in 2021, which are detailed as follows:
Remarks on the amount accrued in 2021
No. (10000 yuan)
1. Asset impairment loss 330030 inventory depreciation reserves and engineering material depreciation reserves
Provision for bad debts of accounts receivable, provision for bad debts of other receivables 266931 and provision for impairment of creditor’s rights investment
Total 396961-
2、 Specific description of the provision for asset impairment
(I) credit impairment loss
Considering all reasonable and based information, including forward-looking information, the company estimates the expected credit loss of financial assets measured at amortized cost in a single or combined way. After testing, the company accrued 6.6931 million yuan of credit impairment loss of accounts receivable, other accounts receivable and debt investment in 2021.
(II) asset impairment loss
1. Inventory falling price reserves:
According to the accounting standards for business enterprises and the company’s accounting policies, the company conducts impairment test on the inventory items on the balance sheet date. If the inventory cost is higher than its net realizable value, the inventory falling price reserves shall be withdrawn. The net realizable value of inventory is the amount after the estimated selling price of inventory minus the estimated cost to be incurred at the time of completion, estimated selling expenses and relevant taxes. When determining the net realizable value of inventories, it shall be based on the conclusive evidence obtained, and consider the purpose of holding inventories and the impact of events after the balance sheet date. The company usually accrues the inventory falling price reserves according to the inventory category items. On the balance sheet date, if the influencing factors of the previous write down of inventory value have disappeared, the inventory falling price reserves are reversed within the originally accrued amount. After testing, the company accrued 315499 million yuan of inventory falling price reserves in 2021.
2. Provision for impairment of engineering materials:
On the balance sheet date, the company judges whether there are signs of possible impairment of assets. If there are signs of impairment, the company will estimate its recoverable amount and conduct impairment test. The recoverable amount is determined according 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. When the recoverable amount of an asset or asset group is lower than its book value, the company will write down its book value to the recoverable amount, and the written down amount will be included in the current profit and loss, and the corresponding asset impairment provision will be withdrawn at the same time. Once the asset impairment loss is recognized, it will not be reversed in subsequent accounting periods. According to the test, in 2021, the company made a provision for impairment of engineering materials of 1.4531 million yuan.
3、 The impact of the current provision for asset impairment on the company
The provision for impairment is included in the accounts of asset impairment loss and credit impairment loss, which has a total impact on the company’s total consolidated profit of 396961 million yuan in 2021 (the impact of income tax is not calculated in the total consolidated profit). 4、 Opinions of the board of directors on the provision for asset impairment this time
The board of Directors believes that the provision for asset impairment this time is based on the principle of prudence, in line with the accounting standards for business enterprises and the company’s accounting policies and other relevant provisions, fully and fairly reflects the company’s asset status, and agrees with the company’s provision for asset impairment this time.
5、 Independent opinions of independent directors on the provision for asset impairment this time
The independent directors believe that the decision-making procedure of the company’s provision for asset impairment is legal, in line with the relevant provisions of the accounting standards for business enterprises and the company’s accounting policies, can fairly reflect the company’s asset status, in line with the interests of the company and all shareholders, and there is no damage to the legitimate rights and interests of the company and minority shareholders.
6、 Opinions of the board of supervisors on the provision for asset impairment this time
The board of supervisors considered that the company’s resolution procedure for withdrawing the provision for asset impairment was legal and based on sufficient basis; The provision complies with the relevant provisions of the accounting standards for business enterprises and the actual situation of the company. After the provision, it can more fairly reflect the asset status of the company. The decision-making procedure of the proposal complies with the relevant provisions of relevant laws and regulations. It is agreed to withdraw the provision for asset impairment this time.
It is hereby announced.
Xi’An Manareco New Materials Co.Ltd(688550) board of directors April 18, 2022
