Inquiry letter on Dalian Thermal Power Co.Ltd(600719) 2021 Annual Report
Reply to relevant questions
Zhonghuan zhuanzi (2022) No. 3210078 listed company management department I of Shanghai Stock Exchange:
Zhongshen Zhonghuan Certified Public Accountants (special general partnership) (hereinafter referred to as "the firm" or "we"), as the auditor of the 2021 annual financial statements of Dalian Thermal Power Co.Ltd(600719) (hereinafter referred to as " Dalian Thermal Power Co.Ltd(600719) " or "the company"), issued the unqualified audit report of Zhong Huan Shen Zi [2022] No. 3210051 on April 27, 2022.
On May 12, 2022, the first Department of management of listed companies of Shanghai Stock Exchange issued the inquiry letter on the supervision of information disclosure of Dalian Thermal Power Co.Ltd(600719) 2021 annual report (hereinafter referred to as the "inquiry letter") No. [2022] 0358. Based on the audit of Dalian Thermal Power Co.Ltd(600719) relevant financial statements, we performed the verification procedures for the relevant questions in the inquiry letter that need our reply, The verification is explained as follows: Question 1 and 1 of the inquiry letter （1）：
1、 Fund occupation related
1. Occupation of non operating funds. According to the company's announcement and the negative opinion internal control audit report issued by the annual audit accountant, in 2021, the non operating occupation of the company's funds by the controlling shareholder Thermoelectric Group amounted to 491 million yuan, and the ending balance was 198 million yuan, accounting for 82.2% and 33.2% of the company's net assets respectively. The principal and interest of the funds were repaid in April 2022. The company is requested to make supplementary disclosure: (1) the starting time, return time, specific causes and interest calculation during the reporting period; The annual audit accountant is invited to comment on question (1). [company reply]
Start time of Occupied Funds: January 2021.
Return time of all occupied funds: on April 22, 2022, Thermoelectric Group has repaid all the principal and interest of the occupied funds.
Specific causes:
a. The cost of coal increased significantly, and the integration of capital procurement led to the formation of occupation
In 2021, the coal price continued to rise. The maximum price of 5000 calories of thermal coal in the long-term association was about 1700 yuan / ton, an increase of nearly 100% over the same period. The maximum price of coal in the market trade was about 2400 yuan / ton, an increase of nearly 200% over the same period. As of the end of December 2021, the coal procurement cost of thermoelectric group increased by about 300 million yuan over the same period, and the first quarter of 2022 increased by about 180 million yuan over the same period. In order to ensure that the heating of people's livelihood will not be affected, All capital resources of the whole group must be integrated to ensure coal procurement, so as to form a period of occupation.
b. Coal resources are extremely scarce, and temporary preparatory funds lead to occupation
Due to the limited production of coal origin, the coal supply has been greatly reduced, the transfer in volume of ports around the Bohai Sea is seriously insufficient, the cashing rate of long-term cooperation fluctuates greatly compared with the same period, and the average cashing rate from July to November is less than 60%. Most of the market trade coal is temporarily notified by suppliers, resulting in extremely unstable coal supply, more temporary preparation funds, and the sharp rise in the number of port anchorage waiting for shipment, resulting in a sharp rise in the length of queuing, "Coal grabbing" and no coal at the ship's arrival occur from time to time, resulting in the arrival of funds, but the coal is not supplied in time, resulting in occupation during the period.
c. The coal quality is extremely unstable, and the temporary allocation of resources leads to occupation
In the process of coal supply, after the coal arrives at the port, the actual calorific value, sulfur content, volatile matter and other indicators of the coal do not meet the requirements of the operation indicators of the power plant affiliated to Dalian Thermal Power Co.Ltd(600719) or the coal is urgently transferred to the demand unit due to the temporary shortage of coal in other subordinate power plants of Thermoelectric Group. Although thermoelectric group returned the overpaid coal payment to Dalian Thermal Power Co.Ltd(600719) , the coal failed to be transported to the power plant affiliated to Dalian Thermal Power Co.Ltd(600719) in time, resulting in temporary occupation.
d. Implement the government's supply guarantee requirements, and the increase of coal reserves leads to the formation of occupation
At the end of 2021, the provincial government issued an early warning for the coal reserve to reach 80% and 100% before the Spring Festival, and the reserve of Nina will be upgraded again before the end of 2021. Provincial and municipal government departments have repeatedly asked heating enterprises to increase procurement efforts and strictly implement coal reserves, so as to ensure that the established coal storage capacity is met by the end of October, and subsequent contracts are signed for the remaining amount of coal, so that they can be taken as needed. In order to implement the government's demand for supply guarantee, Dalian Thermal Power Co.Ltd(600719) increase reserves and fulfill social responsibilities, so the corresponding advance payment will be paid to thermoelectric group. However, due to the warming weather in late January 2022, the consumption of Donghai power plant is reduced, the failure of Beihai power plant and the saving of coal consumption by changing steam to water, the coal reserve exceeds the actual consumption, and Thermoelectric Group still needs to purchase coal. In order to reduce the consumption of funds, Dalian Thermal Power Co.Ltd(600719) sell the surplus reserve coal to thermoelectric group at the price at the beginning of the year to reduce the loss of inventory falling price. Due to the unified settlement after the planned heating season, the period occupation is formed.
Interest calculation during occupation:
According to the time when the company pays the funds of Thermoelectric Group, combined with the settlement cycle between Thermoelectric Group and suppliers, the payment period is one month. If the funds are not repaid in the current month or the goods are not received in the next month, it will be regarded as the amount of funds occupied, so as to calculate the cumulative amount of funds occupied at the end of each month, and calculate the interest of funds occupied at the 1-year loan interest rate of the people's Bank of China of 4.35%. It is estimated that the total interest on capital occupation in 2021 is 462736375 yuan. The accumulated capital occupation amount and interest at the end of each month are shown in the following table:
Unit: Yuan
Cumulative capital occupation in 2021 total capital occupation interest capital occupation principal and interest
January 262718132
February 929177129595037289301275023
March 4551771295336826714594957694
April 105517712951650017110611457865
May 3825017197936741
June 51157156265213652367
July 128596461821854446912976127392
August 134984149664661621713661512394
September 157430472014893175415955076383
October 128116013655706854613080699093
November 212302456924644205521545785475
December 1937571071114719659219838447086
The total interest on capital occupation is 462736375
[accountant's reply] (I) main audit and verification procedures for the above matters:
1. Understand the causes of fund occupation through inquiry and communication with the company's management;
2. Obtain the subsidiary ledger of related transactions, check contracts, agreements, payment vouchers, etc., and check whether there is capital occupation;
3. Obtain the statement of fund occupation and understand whether the preparation process and method are reasonable;
4. Obtain the bank statement, check the relevant capital flow, and verify whether the data in the capital occupation table is true and complete;
5. Recalculate and verify whether the data in the capital occupation table is accurate.
(II) accountant's opinion:
Based on the above audit and verification procedures, the accountant believes that during the reporting period, the company's controlling shareholder Thermoelectric Group occupied the company's funds for non operation. In 2021, the accumulated funds occupied 49115710711 yuan and the accumulated repayment was 29740000000 yuan. As of December 31, 2021, the occupied principal and interest balance totaled 19838447086 yuan (including 19375710711 yuan of principal and 462736375 yuan of interest). The occupied principal and interest of the fund were repaid in April 2022. Question 2 and 4 of the inquiry letter:
2、 Related to the company's operation
4. About profitability. The annual report shows that the company uses coal as the main raw material to produce heat and power products through cogeneration. In 2021, the company's thermal products achieved an operating revenue of 567 million yuan, with a gross profit margin of - 1.63%, a year-on-year decrease of 24.11 percentage points; The revenue of power products was 80 million yuan, with a gross profit margin of 12.64%, an increase of 9.06 percentage points year-on-year. The company is requested to make supplementary disclosure: (1) the cost structure details of thermal and power products, and explain the reasons for the low gross profit margin of the above products and the negative gross profit margin of thermal products in combination with the price changes of coal and other main raw materials, and compare them with companies in the same industry to explain the rationality; (2) In combination with the changes in the cost composition of the company's thermal and power products and the relevant cost allocation and carry forward methods, explain the reasons and rationality of the different changes in the gross profit margin of relevant products, and whether the cost carry forward complies with the provisions of the accounting standards for business enterprises. Please comment on the annual audit accountant. [company reply]
(1) The detailed cost structure of thermal and power products, combined with the price changes of coal and other main raw materials, explain the reasons why the gross profit margin of the above products is low and the gross profit margin of thermal products is negative, and compare it with companies in the same industry to explain its rationality;
In 2021, the company completed 223.89 million kwh of on grid electricity, a year-on-year decrease of 79.33 million kwh, a decrease of 26.2%, and achieved a revenue of 80.86 million yuan, a year-on-year decrease of 22.55 million yuan, a decrease of 21.81%. The gross profit of power sales business was 10.22 million yuan, a year-on-year increase of 6.52 million yuan, with a gross profit of 12.64%, a year-on-year increase of 9.07 percentage points.
The company sold 306000 tons of steam, a year-on-year decrease of 66000 tons or 17.8%. The sales volume of high-temperature water was 431000 GJ, with a year-on-year increase of 24000 GJ, an increase of 6.1%; At the end of the period, the heating area was 17.82 million square meters, an increase of 85000 square meters over the previous year, an increase of 0.6%, and the income was 567.04 million yuan, an increase of 3.69 million yuan year-on-year. The gross profit of heating business was -9.23 million yuan, a year-on-year decrease of 135.85 million yuan, and the gross profit margin was -1.63%, a year-on-year decrease of 24.1 percentage points.
The main business of power and heat realized an operating income of 647.9 million yuan, a year-on-year decrease of 18.86 million yuan, a decrease of 2.83%; The operating cost was 646.9 million yuan, a year-on-year increase of 110.46 million yuan, an increase of 20.59%. The gross profit of main business was 990000 yuan, a year-on-year decrease of 129.32 million yuan, and the gross profit margin was 0.15%, a year-on-year decrease of 19.39 percentage points.
Attached table 1: gross profit of Dalian Thermal Power Co.Ltd(600719) electric and thermal products
Unit: 10000 yuan
The main business of electricity, heat, power and cogeneration of the project is 20212020 year-on-year 20212020 year-on-year 20212020 year-on-year
Operating income 808610342 - 21.81% 5670456334 0.66% 6479066676 - 2.83%
Operating cost 70649972 - 29.16% 5762643673 31.95% 6469053644 20.59%
Including: coal 41995058 - 16.98% 3425523642 44.89% 3845428700 33.99%
