Securities code: Shanxi Huayang New Materialco.Ltd(600281) stock abbreviation: Shanxi Huayang New Materialco.Ltd(600281) No.: pro 2022012 Shanxi Huayang New Materialco.Ltd(600281)
Announcement on the provision for impairment of large assets
The board of directors and all members of the board of 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.
Shanxi Huayang New Materialco.Ltd(600281) (hereinafter referred to as “the company”) convened the third meeting of the seventh board of directors in 2022 on April 18, 2022, and deliberated and adopted the proposal on the provision for impairment of large assets. The details are hereby announced as follows:
1、 Scope and total amount of provision for impairment of large assets this time
In accordance with the relevant provisions of the accounting standards for business enterprises and the company’s accounting policies, in order to truly and accurately reflect the company’s financial status and asset value, the company conducted an impairment test on the assets with signs of impairment within the scope of the consolidated statements, and accrued an impairment provision of 215504 million yuan according to the impairment test results, including an inventory depreciation provision of 267933 million yuan and a bad debt provision of -5.2429 million yuan for accounts receivable.
2、 Specific description of the provision for asset impairment this time
(I) description of provision for inventory falling price
1. Basis for withdrawing inventory falling price reserves
According to the accounting standards for business enterprises and the company’s accounting policies, on the balance sheet date, the inventory shall be measured at the lower of cost and net realizable value. When the inventory cost is lower than the net realizable value, the inventory shall be measured at cost; When the inventory cost is higher than the net realizable value, the inventory shall be measured according to the net realizable value, and the inventory falling price reserves shall be accrued according to the difference between the cost and the net realizable value and recorded in the current profit and loss. If the inventory falling price reserves are accrued for the sold inventory, the accrued inventory falling price reserves shall be carried forward to offset the current operating cost.
2. Specific conditions of withdrawing inventory falling price reserves
At the end of the reporting period, the prices of raw materials and inventory commodities of the company’s subsidiaries decreased compared with the beginning of the period. After the impairment test, the company accrued the inventory falling price reserve of 267933 million yuan this time.
(II) statement of provision for bad debts of receivables
1. Basis for withdrawing bad debt provision of accounts receivable
According to the accounting standards for business enterprises and relevant accounting policies, and taking full account of all reasonable and reliable information, the company estimates the expected credit losses of accounts receivable, other accounts receivable, dividends receivable and other receivables in a single or combined manner, and recognizes the impairment loss.
2. Details of withdrawing bad debt provision for accounts receivable
At the end of the reporting period, according to the impairment test results of accounts receivable, other receivables and dividends receivable, the company should withdraw 8.1188 million yuan of bad debt reserves of accounts receivable throughout the year, 133617 million yuan of bad debt reserves of accounts receivable have been withdrawn from January to September 2021, and -5.2429 million yuan of bad debt reserves of accounts receivable have been withdrawn this time.
3、 The impact of withdrawing the provision for impairment of large assets on the company
The provision for bad debts of receivables and inventory falling price reserves totaled 215504 million yuan, which will reduce the total profit of the company’s consolidated statements in 2021 by 215504 million yuan.
4、 Description of other matters
(I) through communication with ZTE caiguanghua Certified Public Accountants (special general partnership), the impairment provision of financial assets of 185465 million yuan recognized in the reporting period of the company is reclassified to the profit and loss of changes in fair value. This reclassification will not have an impact on the profit in the reporting period.
(II) according to the audit confirmation of ZTE caiguanghua Certified Public Accountants (special general partnership), the company made provision for asset impairment of 267933 million yuan and provision for credit impairment of 8.1188 million yuan in 2021, totaling 349121 million yuan. The total impact on the consolidated statement profit of the company in 2021 was -349121 million yuan.
5、 Explanation on the reasonableness of the provision for impairment of large assets made by the financial audit committee of the board of directors
The provision for asset impairment this time complies with the provisions of the accounting standards for business enterprises and the company’s accounting policies, can more truly and fairly reflect the company’s financial status and operating results, help to provide investors with more accurate accounting information, and there is no damage to the interests of the company and shareholders. Agree to withdraw the provision for asset impairment this time. 6、 Independent opinions of independent directors on the provision for impairment of large assets
The independent directors of the company believe that the company’s provision for asset impairment this time complies with the principle of prudence and can more truly and accurately reflect the company’s asset status and operating results in 2021. The company’s decision-making, deliberation and voting procedures comply with relevant laws, regulations and the articles of association, and there is no situation that damages the interests of the company and all shareholders, especially small and medium-sized shareholders. It is agreed that the provision for impairment of large assets of the company shall be withdrawn this time, and it is agreed to submit it to the general meeting of shareholders of the company for deliberation.
7、 Opinions of the board of supervisors on the provision for impairment of large assets
The board of supervisors of the company believes that the company’s provision for asset impairment in accordance with the accounting standards for business enterprises and relevant accounting policies can more fairly and truly reflect the company’s asset status, and the review procedures are legal and compliant. Agree to withdraw the provision for asset impairment this time.
It is hereby announced
Shanxi Huayang New Materialco.Ltd(600281) board of directors April 20, 2022
