Nanning Sugar Industry Co., Ltd
Securities code: Nanning Sugar Industry Co.Ltd(000911) securities abbreviation: Nanning Sugar Industry Co.Ltd(000911) Announcement No.: 2022020 Nanning Sugar Industry Co.Ltd(000911)
Announcement on the provision for asset impairment
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.
Nanning Sugar Industry Co.Ltd(000911) (hereinafter referred to as ” Nanning Sugar Industry Co.Ltd(000911) ” the company “) deliberated and approved the proposal on the company’s provision for asset impairment at the 11th meeting of the 7th board of directors and the 11th meeting of the 7th board of supervisors held on April 25, 2022. The provision for asset impairment needs to be submitted to the general meeting of shareholders of the company for deliberation. The details are hereby announced as follows:
1、 Overview of the provision for asset impairment this time
In order to truly reflect the company’s financial status and operation as of December 31, 2021, based on the principle of prudence, in accordance with the provisions of accounting standards for Business Enterprises No. 8 – asset impairment and the requirements of annual report audit and internal control audit in 2021, after analysis, the parent company plans to withdraw all kinds of asset impairment reserves of -208064 million yuan, and the subsidiary company plans to withdraw all kinds of asset impairment reserves of 19.608 million yuan, The provision for impairment in the consolidated statements is 441595 million yuan (offset). The provision for impairment this time does not involve related party transactions. The details are as follows:
Unit: 10000 yuan
Accrued this year
Project consolidation (offset to parent company and subsidiaries)
(elimination)
Bad debt provision 874.00 -410288 441.09
Inventory falling price reserves 218788202224 165.64
Provision for impairment of fixed assets 135407135407
Total 441595 -208064196080
Note: consolidation refers to the asset impairment loss accrued in the consolidated statement after consolidation offset.
2、 Provision for impairment of assets of subsidiaries directly under the company is as follows:
(I) provision for bad debts
1. Recognition standard and withdrawal method of credit impairment of the company’s receivables (including accounts receivable, other receivables, etc.):
Nanning Sugar Industry Co., Ltd
(1) Recognition criteria for withdrawing bad debt reserves:
The company checks the book value of receivables on the balance sheet date. If there are the following objective evidence indicating the impairment of receivables, the impairment provision shall be withdrawn: ① the debtor has serious financial difficulties; ② The debtor violates the terms of the contract (such as default or overdue payment of interest or principal); ③ The debtor is likely to go bankrupt or carry out other financial restructuring; ④ Other objective basis indicating the impairment of receivables.
(2) Withdrawal method of bad debt provision:
Accounts receivable Portfolio 1: accounts receivable Nanning Sugar Industry Co.Ltd(000911) consolidated customers
Accounts receivable portfolio 2: accounts receivable from other customers
If the company no longer reasonably expects the contractual cash flow of financial assets to be recovered in whole or in part, the book balance of the financial assets shall be written down directly. This write down constitutes the derecognition of relevant financial assets. This usually occurs when the company determines that the debtor has no assets or source of income to generate sufficient cash flow to repay the amount to be written down. However, according to the procedures for the company to recover the due amount, the written down financial assets may still be affected by the execution activities.
If the written down financial assets are recovered later, they shall be included in the profits and losses of the current period as the reversal of impairment losses.
2. Withdrawal amount of bad debt provision for accounts receivable of the company:
During the reporting period, the bad debt provision of the parent company was -410288 million yuan. Among them, the bad debt provision for accounts receivable is -465263 million yuan, the bad debt provision for other accounts receivable is 5.0175 million yuan (mainly for the provision of bad debt provision for the advance of agricultural materials), and the bad debt provision for long-term accounts receivable is 480000 yuan;
The bad debt provision of the company’s consolidated statements is 8.74 million yuan. Among them, the bad debt provision for accounts receivable is 2.7871 million yuan, the bad debt provision for other accounts receivable is 5.473 million yuan (mainly for the provision of bad debt for the advance of agricultural materials), and the bad debt provision for long-term accounts receivable is 480000 yuan.
3. Reasons for the decrease of bad debt provision:
The recovery of loans was accelerated, the balance of accounts receivable decreased, and the provision for bad debts in the consolidated statements was 8.74 million yuan, a decrease of 88.15% over the previous year.
(II) provision for inventory falling price
1. Provision method for inventory falling price reserves: 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.
Nanning Sugar Industry Co., Ltd
On the balance sheet date, if the inventory cost is higher than its net realizable value, the inventory falling price reserves shall be accrued. The company usually withdraws the inventory falling price reserve according to a single inventory item. On the balance sheet date, if the influencing factors of previously writing down the inventory value have disappeared, the inventory falling price reserve is reversed within the originally withdrawn amount. 2. During the reporting period, the company made provision for inventory falling price of 218788 million yuan, mainly due to:
(1) Due to the excessive investment in the sugar cane base transferred by Xiangshan sugar factory and Dongjiang sugar factory in the early stage, the annual amortization of the entry cost is about 60 million yuan, resulting in the high cost of machine-made sugar. Xiangshan sugar factory has withdrawn 9.0459 million yuan of inventory falling price reserve for machine-made sugar, and Dongjiang sugar factory has withdrawn 110524 million yuan of inventory falling price reserve for machine-made sugar; Lingli coke has been overstocked for many years, the inventory cost is higher than the market price, and the provision for falling price is 124100 yuan
(2) Due to the sharp drop in the sales price of melt blown cloth at the end of the year, Qiaohong company has accrued an inventory falling price reserve of RMB 1524200 for the inventory of melt blown cloth.
(3) As the sales price fell and the cost was higher than the market price, Shuya’s products were deposited with a falling price reserve of 132200 yuan.
(III) provision for impairment of fixed assets
1. According to Article 6 of the accounting standards for Business Enterprises No. 8 – asset impairment, “if there are signs of asset impairment, the recoverable amount of the asset shall be estimated, and the recoverable amount shall be determined according to the higher of 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”. The margin spinning production line and melt blown cloth production line of Qiaohong company, a subsidiary controlled by the company, have few orders, and the cash flow generated by the products can not cover the depreciation of the current period, so there are signs of impairment.
2. During the reporting period, the company made a provision for impairment of fixed assets of 135407 million yuan, mainly because there were few orders for the double spinning production line and melt blown cloth production line of Qiaohong company, and the equipment was basically in a semi idle state. The impairment test was carried out on it, and the provision for impairment was 135407 million yuan.
3、 Explanation of the board of directors on the rationality of the company’s provision for asset impairment
The board of Directors believes that according to the accounting standards for Business Enterprises No. 8 – asset impairment, the provision for asset impairment is fully based and fairly reflects the financial situation of the company.
4、 Impact of the current provision for asset impairment on Listed Companies
The company withdraws bad debt provision, inventory falling price provision and fixed asset impairment provision, debits “credit impairment loss” and “asset impairment loss”, and credits “bad debt provision”, “inventory falling price provision” and “fixed asset impairment provision”.
The provision for asset impairment is reduced by 441595 million yuan in the consolidated statement of 2021.
Nanning Sugar Industry Co., Ltd
5、 Opinions of independent directors
The company’s provision for asset impairment this time is to ensure the standardized operation of the company, adhere to prudent accounting principles, avoid financial risks, truly reflect the company’s financial situation and operating results, help to provide reliable and accurate accounting information, and do not damage the legitimate rights and interests of the company and minority shareholders. It is agreed that the company should withdraw the provision for asset impairment this time.
6、 Opinions of the board of supervisors
The board of supervisors believes that the company’s provision for asset impairment in accordance with the accounting standards for business enterprises and relevant regulations is in line with the actual situation of the company and can more fairly reflect the company’s asset status after the provision, and agrees to withdraw the provision for asset impairment this time.
7、 Directory of documents for future reference
1. Resolutions of the 11th meeting of the 7th board of directors of the company;
2. Resolutions of the 11th meeting of the 7th board of supervisors of the company;
3. Special instructions and independent opinions of independent directors on matters related to the 11th meeting of the seventh board of directors.
It is hereby announced.
Nanning Sugar Industry Co.Ltd(000911) board of directors April 27, 2022
