Securities code: Henan Huaying Agricultural Development Co.Ltd(002321) securities abbreviation: ST Huaying Announcement No.: 2022044 Henan Huaying Agricultural Development Co.Ltd(002321) announcement on provision for asset impairment and scrapping of some assets 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.
Henan Huaying Agricultural Development Co.Ltd(002321) (hereinafter referred to as “the company”) held the 57th meeting of the 6th board of directors and the 26th meeting of the 6th board of supervisors on April 28, 2022, deliberated and adopted the proposal on the provision for asset impairment and scrapping of some assets in 2021. The relevant information is hereby announced as follows:
1、 Provision for impairment of assets and scrapping of some assets in 2021
1. Overview of the provision for asset impairment this time
The creditors of the company applied to Xinyang intermediate people’s Court (hereinafter referred to as “Xinyang intermediate people’s court”) for reorganization of the company in May 2021. In June 2021, Xinyang intermediate people’s court decided to start pre reorganization of the company and appointed the manager during the pre reorganization period. During the period of reorganization, the appraiser sorted out the assets of the company and the asset manager carried out the pre appraisal. On November 20, 2021, Xinyang intermediate people’s court officially ruled on reorganization, and the appraisal institution issued the asset appraisal report with November 20, 2021 as the appraisal base date. On December 22, 2021, Xinyang intermediate people’s court ruled to approve the company’s reorganization plan, and the company’s reorganization entered the implementation stage of the reorganization plan.
According to the provisions of the reorganization plan, the part of the company’s existing assets that affects the profitability of the listed company, including foreign creditor’s rights such as other receivables and prepayments, continuous losses and foreign investment that is no longer in operation, shall be stripped by means of public auction, public sale, agreement transfer and other legal means with reference to the auction law of the people’s Republic of China and relevant provisions and the appraisal value in principle, To prevent it from further eroding the profits of listed companies, so as to improve the company’s asset structure and optimize the quality and profitability of the company’s assets.
In accordance with the accounting standards for Business Enterprises No. 8 – impairment of assets, the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 1 – standardized operation of listed companies on the main board and the relevant accounting policies of the company, in order to more truly, accurately and fairly reflect the financial status, asset value and operating results of the company as of December 31, 2021, the company and its subsidiaries Other receivables and other assets have been comprehensively checked. Based on the principle of prudence, the company has accrued impairment reserves for relevant assets with signs of impairment and possible asset impairment losses. The details are as follows:
Amount of provision for asset impairment in 2021 (10000 yuan)
Asset impairment loss:
Long term equity investment 1121150
Fixed assets 2614731
Construction in progress 304440
Right to use assets 106159
Intangible assets 9185447
Deferred income tax assets 1.78
Other non current assets 4317299
Inventory falling price reserves 232.76
Subtotal 17672680
Credit impairment loss: bad debt provision of accounts receivable
Bad debt provision for other receivables 11813683
Subtotal 11813683
Total 29486363
The reporting period for the provision for asset impairment is from January 1, 2021 to December 31, 2021.
2. Scrapping of some assets
According to the inventory results of various production, office and other assets of the company in 2021, considering that some housing structures, production equipment, office equipment and other assets can no longer be used due to aging and serious damage, they are applied for scrapping. The details are as follows:
Unit: Yuan
Original book value of asset category accumulated depreciation book value
Electronic equipment 1058832110163323424998
Houses and buildings 14589746677328249908011307247597
Structures and ancillary facilities 1180081984671295131508786853
Machinery and equipment 46426050141422845650032045
Transportation equipment 946261878338149911244688
Total 16339303670446156748911877736181
2、 Specific description of the provision for asset impairment and scrapped assets withdrawn this time
1. Description of provision for credit impairment loss
For receivables and contract assets without major financing components, the company measures the loss reserves according to the amount equivalent to the expected credit loss in the whole duration.
For receivables with significant financing components, the company measures the loss reserves based on the amount of expected credit loss in the next 12 months or the whole duration according to whether its credit risk has increased significantly since initial recognition.
In addition to the accounts receivable and contract assets that individually assess credit risk, they are divided into different combinations based on their credit risk characteristics:
Basis for determining project portfolio
Aging portfolio this portfolio is the accounts receivable whose credit risk is mainly related to aging.
Combination of related parties within the scope of consolidation this combination is the receivables of related parties included in the scope of consolidated statements
Withdrawal methods of bad debt reserves for different combinations:
Project accrual method
Aging combination aging analysis method
No bad debt provision will be made for the combination of related parties within the consolidation scope
Combined withdrawal method of withdrawing bad debt reserves by aging analysis method
Accrual proportion of aging accounts receivable (%)
Within 1 year (including 1 year, the same below) 5
Accrual proportion of aging accounts receivable (%)
1-2 years 10
2-3 years 20
3-4 years 50
4-5 years 50
More than 5 years 100
2. Statement of provision for asset impairment loss
For non current and non-financial assets such as fixed assets, construction in progress, intangible assets with limited service life, investment real estate measured in cost mode and long-term equity investment in subsidiaries, joint ventures and associated enterprises, the company determines whether there are signs of impairment on the balance sheet date. If there are signs of impairment, the recoverable amount shall be estimated and impairment test shall be conducted. Goodwill, intangible assets with uncertain service life and intangible assets that have not yet reached the usable state shall be subject to impairment test every year regardless of whether there are signs of impairment.
If the impairment test results show that the recoverable amount of the asset is lower than its book value, the impairment provision shall be withdrawn according to the difference and included in the impairment loss. The recoverable amount is 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. The fair value of assets is determined according to the price of sales agreement in fair transaction; If there is no sales agreement but there is an active asset market, the fair value shall be determined according to the buyer’s bid of the asset; If there is no sales agreement and an active asset market, the fair value of the asset is estimated based on the best available information. Disposal expenses include legal expenses related to the disposal of assets, relevant taxes, handling expenses and direct expenses incurred to make the assets marketable. The present value of the estimated future cash flow of an asset is determined by selecting an appropriate discount rate according to the estimated future cash flow generated during the continuous use and final disposal of the asset. The provision for asset impairment is calculated and recognized on the basis of individual assets. If it is difficult to estimate the recoverable amount of individual assets, the recoverable amount of the asset group is determined by the asset group to which the asset belongs. Asset group is the smallest asset portfolio that can generate cash inflow independently.
Once the impairment loss of the above assets is recognized, it will not be reversed in the subsequent period.
3. Description of partial asset retirement
Due to the inventory and cleaning of the company’s assets at the end of 2021, it is found that the above scrapped assets have no use value due to obsolescence and serious damage, and can not bring inflow to the company’s business activities. According to the prudence principle of accounting standards for business enterprises, this part of assets are scrapped.
3、 The impact of the provision for impairment and scrapping of some assets on the company
This time, the provision for asset impairment is 1767268000 yuan, the provision for credit impairment is 1181368300 yuan, and the asset scrap is 118777400 yuan, which reduces the total profit of the company in 2021 by 3067413700 yuan. The company’s provision for asset impairment has been audited by an accounting firm.
4、 Explanation of the board of directors on the rationality of withdrawing asset impairment reserves and scrapping some assets
The provision for asset impairment and some asset scrapping of the company this time comply with the provisions of the accounting standards for business enterprises and relevant accounting policies of the company, reflect the principle of prudence and comply with the actual situation of the company. The provision for impairment of assets and the scrapping of some assets can more objectively and fairly reflect the company’s financial situation, asset value and operating results.
5、 Opinions of independent directors
The provision for asset impairment and some asset scrapping of the company this time comply with the provisions of the accounting standards for business enterprises and the company’s accounting policies, follow the principle of prudence and objectivity, have sufficient basis, and the relevant procedures are legal and compliant; After the impairment and scrapping of some assets, the company’s financial statements can objectively and fairly reflect the company’s asset status and operating results. The decision-making procedures for the provision for asset impairment and part of asset scrapping this time comply with the requirements of relevant laws and regulations, and there is no situation that damages the interests of the company and all shareholders, especially minority shareholders. We agree to the provision for asset impairment and part of asset scrapping this time.
6、 Opinions of the board of supervisors
The provision for impairment of assets and scrapping of some assets of the company this time comply with the accounting standards for business enterprises and the actual situation of the company. The basis for the provision for impairment and scrapping of some assets is sufficient, which can more objectively and fairly reflect the asset status and operating results of the company, and there is no damage to the interests of the company and all shareholders. The board of supervisors agrees to the provision for impairment of assets and scrapping of some assets this time.
It is hereby announced
