Securities code: Zhejiang Reclaim Construction Group Co.Ltd(002586) securities abbreviation: ST sea reclamation Announcement No.: 2022087 Zhejiang Reclaim Construction Group Co.Ltd(002586)
Announcement on uncovered losses reaching one third of the total paid in share capital
The company and all members of the board of directors guarantee that the contents of the announcement are true, accurate and complete without false records, misleading statements or major omissions.
Zhejiang Reclaim Construction Group Co.Ltd(002586) (hereinafter referred to as “the company”) held the 50th meeting of the 6th board of directors and the 22nd Meeting of the 6th board of supervisors on April 28, 2022, and deliberated and adopted the proposal on making up losses up to one third of the total paid in share capital. The proposal still needs to be submitted to the general meeting of shareholders for deliberation. The details are hereby announced as follows:
1、 Overview of the situation
According to the audit of zhongxinghua Certified Public Accountants (special general partnership), the net profit attributable to the shareholders of the listed company in 2021 was -2737502832 yuan, the accumulated outstanding loss of the company was -102282460912 yuan, the paid in share capital was 114422371400 yuan, and the outstanding loss of the company exceeded one-third of the total paid in share capital. According to the company law, the articles of association and other relevant provisions, this matter needs to be submitted to the general meeting of shareholders for deliberation.
2、 Main reasons for losses
(I) the company has made impairment provision for the goodwill formed by its acquisition of 8945975% equity of Shanghai Millennium urban planning and Engineering Co., Ltd. (hereinafter referred to as “Shanghai Millennium”) in 2017.
(II) in 2019 and 2020, the company made provision for the losses of the controlling shareholders such as Chang’an bank, Gu Wenju, Shao Zhiyun and Wang Chongliang in violation of guarantees and capital occupation, resulting in significant changes in the company’s net profit after deducting non recurring profits and losses.
(III) due to the impact of covid-19 pneumonia epidemic, the effective commencement time of various engineering projects of the company was delayed. Due to the failure of some personnel to arrive in time and the increase of epidemic prevention and control measures and procedures, the project progress and construction speed lagged behind the plan, resulting in a significant decline in the company’s operating income compared with the same period of last year.
(IV) affected by the change of financing environment and the company’s ST, the bank has difficulties in new financing, the PPP investment projects with large income and high relative gross profit margin in the company’s main business lack financial support, and the project progress slows down. At the same time, the newly undertaken business has decreased significantly compared with previous years, resulting in a significant decline in the company’s operating revenue and gross profit. (V) due to the rapid changes in the environment of the film and television industry, the business benefits of cultural and creative related subsidiaries are poor. According to the principle of prudence, the company has made impairment provision for long-term equity investment.
3、 Measures to be taken to cover losses
(I) the company actively cooperates to promote the bankruptcy reorganization of the controlling shareholder, has successfully introduced strategic investors, and has eliminated the impact of the controlling shareholder’s illegal guarantee, capital occupation and other matters on the company’s operation and performance by transferring the illegal capital usufruct to the strategic investors.
(II) in the follow-up, we will resume the company’s Bank credit investigation as soon as possible, broaden financing channels, meet the capital needs of PPP and other investment projects, and improve the contribution of the project to the company’s performance.
(III) the company will focus on the main business and clean up the sidelines, and promote the disposal of cultural and creative assets and low-benefit investment projects through equity transfer and cooperation; The company will strengthen the market expansion of its main business, give full play to its advantages in qualification, performance, technology and talents, and further improve its market share and business performance.
(IV) the company has restored the control of Shanghai millennium, and the follow-up company will strengthen the standardized management of its subsidiaries to improve its business performance and return on investment.
4、 Documents for future reference
1. Resolution of the 50th meeting of the 6th board of directors of the company
2. Resolution of the 22nd Meeting of the 6th board of supervisors of the company
It is hereby announced.
Zhejiang Reclaim Construction Group Co.Ltd(002586)
Board of directors
April 30, 2002
