Securities code: Shenzhen Heungkong Holding Co.Ltd(600162) securities abbreviation: Shenzhen Heungkong Holding Co.Ltd(600162) Announcement No.: Lin 2022034 Shenzhen Heungkong Holding Co.Ltd(600162) about
Reply to the announcement of Shanghai Stock Exchange on the supervision of information disclosure of the company’s 2021 Annual Report
The board of directors and all 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. Risk tip: up to now, the company has received 1.04 billion yuan of performance commitment compensation paid by Nanfang Xiangjiang, and the remaining performance compensation to be paid is 996.89 million yuan. At present, the payment period of performance compensation agreed in the profit compensation agreement has expired. Due to the large amount of performance commitment compensation, Nanfang Xiangjiang failed to pay the full amount of performance compensation on schedule. We apologize for its failure to pay the remaining performance compensation on schedule. Meanwhile, Nanfang Xiangjiang issued a letter of commitment to the listed company on May 16, 2022, promising to submit a plan to repay the remaining performance compensation in installments to the board of directors of the listed company within 30 trading days after the letter of commitment was issued; In view of the large amount of the remaining performance compensation that Nanfang Xiangjiang, the performance commitment party, needs to pay to the company, there is uncertainty whether it can pay the remaining performance compensation; Nanfang Xiangjiang, the performance commitment party, has not submitted the plan of repaying the remaining performance compensation to the company, and there is uncertainty whether it can submit the relevant plan on time; Nanfang Xiangjiang’s plan to repay the remaining performance compensation by installments needs to be submitted to the board of directors and the general meeting of shareholders for deliberation. There is uncertainty whether it can pass the above decision-making meeting. Please pay attention to the investment risks; As of December 31, 2021, Changsha project phase II has invested 287.48 million yuan, compared with the total committed investment of 132.22 million yuan, and the balance of funds not yet invested is 103472 million yuan. At the end of April 2022, five departments including Changsha housing and Urban Rural Development Bureau, Changsha Development and Reform Commission and Changsha natural resources and Planning Bureau issued several opinions on promoting the destocking of non residential commercial housing. The company will speed up communication with the local competent authorities in Changsha on relevant planning adjustments. The above communication results are uncertain. If the local competent department in Changsha agrees to the company’s adjustment plan, the company will perform the relevant decision-making review
Approval procedures and information disclosure procedures, and reasonably arrange the use of the remaining raised funds; If the local competent department in Changsha disagrees with the company’s adjustment plan, the second phase of Changsha project may be difficult to implement for a period of time, and the raised funds may face the possibility of changing the investment direction. Please pay attention to the investment risk; With the changes of market environment and real estate policies, considering the region where the company’s existing inventory is located, the existing land reserve and the sales of projects under construction, the company has the risk of further decline in gross profit margin.
Shenzhen Heungkong Holding Co.Ltd(600162) (hereinafter referred to as “the company”) received the working letter on the supervision of information disclosure of Shenzhen Heungkong Holding Co.Ltd(600162) 2021 annual report of Shanghai Stock Exchange (shgh [2022] No. 0331) (hereinafter referred to as “the working letter”) on May 6, 2022. According to the requirements of the inquiry letter, the reply to relevant questions is hereby announced as follows:
Question 1. Matters related to the waiver of independent directors. According to the announcement on the resolution of the 30th meeting of the ninth board of directors disclosed by your company on the same day as the annual report, independent director Wang Yongmei abstained from voting on six proposals. Among them, the reason for Waiving the 2021 internal control evaluation report is that “auditors fail to make full use of risk-based audit, and it is recommended that auditors re-examine the internal control evaluation strategy and process”. The reason for Waiving the 2022 project expansion investment plan is that “the industry situation is highly uncertain and investment should not be expanded”, The reason for abstaining from the proposal on the 2022 annual daily related party plan is “it is difficult to determine the fairness of related party transactions”, the reason for abstaining from the proposal on the 2022 annual guarantee plan is “the company’s capital chain is tight and the guarantee should be reduced”, and the reason for abstaining from the proposal on the 2022 annual company’s application for credit line from financial institutions is “the company’s capital chain is tight and the credit should be reduced”, The reason for abstaining from the proposal on the provision for asset impairment is that “the adequacy of the provision for asset impairment is uncertain, and the adequacy of the provision for impairment should be re determined”.
1. Please attach great importance to the relevant opinions put forward by independent directors, fully check in combination with the above reasons for waiver, and explain whether there are the above problems and specific reasons one by one in combination with specific data, industry comparison and the company’s internal control system, and prompt the possible risks.
2. The announcement shows that in the past three years, the company expects to have daily connected transactions with related parties Xiangjiang group, Jinhai and its subsidiaries of no more than 830 million yuan. Among them, in 2020 and 2021, the actual daily related party transactions between the company and the above related parties were 770229 million yuan and 1955844 million yuan respectively. The company is requested to supplement the necessity of related party transactions occurring in the reporting period and expected to occur in 2022 in combination with specific business conditions, and explain whether the relevant pricing is fair and whether there is a situation of transferring benefits to related parties in combination with the price analysis of the same or similar products in the market; And the main reason for the substantial year-on-year increase in the amount of daily related party transactions in 2021, and whether there is dependence on related party business.
3. According to the annual report, the company accrued 832473 million yuan of asset impairment reserves in 2021, including 3.1973 million yuan of bad debt loss of accounts receivable and 864446 million yuan of impairment of inventory depreciation reserves in the current period, mainly due to the impairment of developed products, but no specific items were specified. The company is requested to: (1) supplement and list the specific conditions of the provision for inventory falling price, including the corresponding specific items and their completion time, price change, de conversion, etc; (2) Analyze whether the company’s accrued depreciation reserves and the specific changes of the accrued depreciation points of the surrounding projects in combination with the specific situation of the company’s accrued depreciation reserves in the early stage, and whether there are prudent changes in the price of the surrounding projects. Ask the annual audit accountant to give opinions; (3) Wang Yongmei, an independent director, is requested to supplement the main basis for abstaining from voting on the proposal on the provision for asset impairment, and on this basis, explain the main considerations and reasons for abstaining from voting on the above proposal but voting in favour of the full text and summary of the company’s annual report.
Question 1 answer 1: 1. Please attach great importance to the relevant opinions put forward by independent directors, fully check in combination with the above reasons for waiver, and explain whether there are the above problems and specific reasons one by one in combination with specific data, industry comparison and the company’s internal control system, and prompt the possible risks
A: 1. With regard to internal control, [company description] the company has established relatively perfect internal control related systems. For the problems raised by independent directors on internal control, investment expansion, related party transactions, guaranteed credit and other aspects, the relevant systems clarify the detailed rules for division of labor, authorization and Implementation.
The company sets up a full-time department, the internal control department, which is responsible for internal control related work such as self-evaluation and internal audit of the company’s internal control. The internal control department is responsible for the operation audit or special audit of each business segment of the company. The board of directors of the company authorizes the internal control department to be responsible for the organization and implementation of the annual internal control self-evaluation, and evaluate the high-risk fields and important subsidiaries included in the evaluation scope. The internal control department shall regularly report the work plan and work results to the audit committee.
According to the industry experience and relevant risk identification, the company has disclosed the announcement draft of the 2021 internal control evaluation report through self inspection. The company’s total assets of the units included in the evaluation scope of internal control account for 88.78% of the total assets of the company’s consolidated financial statements, and the total operating revenue of the units included in the evaluation scope account for 91.89% of the total operating revenue of the company’s consolidated financial statements. The company’s sales management, procurement, bidding management High risk areas such as project change and settlement management, project payment management, development cost and marketing expense management should be checked. There are no major and important defects in the company’s internal control. The non-standard behaviors in the daily business operation and management of the company, such as the untimely updating of the management account and the delayed initiation of the process, have been rectified before the publication of the annual report, and there are no other circumstances affecting the effectiveness of the control operation of the internal control department of the company. During the reporting period, the company’s internal control work was carried out normally and the overall internal control operated effectively.
In the future, the company will deepen the construction of internal control system, continuously improve the supervision of various processes, and comprehensively improve the effectiveness and execution of various systems.
[accountant’s opinion] according to the internal control audit test results and other relevant work, we believe that Shenzhen Heungkong Holding Co.Ltd(600162) has maintained effective internal control over financial reporting in all major aspects in accordance with the basic norms of enterprise internal control and relevant regulations on December 31, 2021, and we have not found that Shenzhen Heungkong Holding Co.Ltd(600162) has significant defects in internal control related to the preparation of financial statements on December 31, 2021.
2. In terms of expanding investment in the company’s projects, in the short term, the credit system of the real estate industry is in the reconstruction period, the process of restoring the confidence of buyers is still uncertain, the recovery of market vitality needs a certain time, and the situation of the real estate industry is uncertain. In the long run, the construction of new urbanization continues to be promoted. In the future, the regulation attitude of “housing without speculation” will remain firm, and the guiding ideology of stabilizing land prices, house prices and expectations will not change. The company adheres to a steady and safe investment strategy and will continue to pay attention to investment and development opportunities in key areas, make scientific decisions and develop steadily. Similar to most real estate enterprises, the company has set up investment decision-making meetings, managers’ office meetings and other institutions to make prudent decisions on the company’s investment and expansion projects. In 2021, the company plans to use no more than 7 billion yuan for project expansion investment, and the actual project expansion investment is only 570 million yuan. Compared with the project expansion investment plan in 2021, the company has reduced the total authorized amount of the project expansion investment plan in 2022 to 5 billion yuan, which is the quantitative amount of 5 billion yuan, It is mainly considered that the company will continue to cultivate the Great Bay area of Guangdong, Hong Kong and Macao and pay attention to the investment opportunities in the first tier cities of Guangzhou and Shenzhen. As the asset investment level of these cities is higher than that of the second and third tier cities, combined with the company’s own financial situation, the company sets the upper limit of the total investment authorization at 5 billion yuan. In the specific project decision-making, the company will also demonstrate at all levels and make prudent decisions on the expansion investment of the project within the scope of authorization.
3. In terms of daily related party transactions, the company has a complete account of related parties, and has formulated the management measures for preventing the occupation of funds by controlling shareholders and related parties, the decision-making and implementation system of related party transactions and the management system of related party capital transactions, which has a relatively perfect system guarantee for the judgment, decision-making and implementation of related party transactions. For the fairness of the price of related party transactions, the contract pricing of related party procurement transactions shall be implemented in accordance with the management system for bidding and procurement of industry city development of Shenzhen Heungkong Holding Co.Ltd(600162) group, in which:
Chapter IV bidding process management
Article 12 the principle of bidding is to win the bid at a reasonable low price
Article 13 the bidding team shall be composed of personnel specified by the company. The Shenzhen Heungkong Holding Co.Ltd(600162) president’s office shall issue the list of members of the bidding team every year, which is divided into engineering, material and design;
Chapter V Management of bid negotiation process
Article 19 in principle, bid negotiation requires price comparison among three parties. Under special circumstances, it can be less than the price negotiation of three parties or the examination and approval within the authority in the authorized examination and approval matters of direct entrustment).
Article 20 bid negotiation process: project initiation application → list approval (adjustable) → prequalification → bidding documents (adjustable) → bid issuance → bid return (adjustable) → bid opening (adjustable) → bid evaluation (adjustable) → business negotiation (adjustable) → bid determination → contract signing → data archiving.
The transactions between the company and related parties and non related parties are carried out in accordance with the above system requirements, and there is no problem that the fairness of related party transactions is difficult to determine. The company’s daily related party transaction plan for 2022 is formulated according to the company’s daily business needs, which is the same as the daily related party transaction plan for 2021, and there is no significant growth. The company purchases from related parties rather than from third parties, mainly to reduce the procurement cost of intermediate links and improve the procurement efficiency.
4. As for the guarantee plan, as of March 31, 2022, the cumulative external guarantee balance of listed companies and subsidiaries of listed companies was RMB 2807290800, of which the guarantee balance for holding subsidiaries or wholly-owned subsidiaries was RMB 2735548700, accounting for 37.54% of the company’s audited net assets in 2021; The guarantee balance for the joint venture company is RMB 717421 million, accounting for 0.98% of the audited net assets of the company in 2021. The company’s external guarantee balance accounts for a low proportion of the audited net assets of the listed company. At the same time, most of the subjects guaranteed by the company are the holding subsidiaries of the listed company. For the wholly-owned subsidiaries, holding subsidiaries and subsidiaries within the consolidated statement scope, the company has control over their daily operations, has good solvency and low risk; For associated companies and joint ventures, the company provides equal guarantees according to the proportion of equity, and the risk is controllable. The company strictly controls the external guarantee in accordance with the relevant provisions of the CSRC. The decision-making procedure of the company’s external guarantee is legal and operates according to law. The external guarantee does not harm the interests of the company and minority shareholders. As of December 31, 2021, the asset liability ratio of listed companies after deducting advance receipts is 68.52%, and the net liability ratio is 36.14%; The overall financial situation is relatively stable and the guarantee risk is controllable.
5. In terms of applying for credit, the real estate industry is a capital intensive industry, and development and operation need a lot of capital support. As an effective financing means, bank credit meets the needs of industry development. The total amount of annual credit line established by the company in 2021 shall not exceed 10.9 billion yuan. The total amount of bank credit line applied by the company in 2021 is 4884.2 million yuan, which does not exceed the plan of bank credit line applied by the company in 2021. In 2022, the company plans to apply to the bank for a credit line of no more than 6.97 billion yuan. After comparison, the total amount of the 2022 plan is significantly reduced compared with the 2021 credit plan, which is in line with the actual business needs of the company. Meanwhile, as of December 31, 2021, the asset liability ratio of listed companies after deducting advance receipts is 68.52%, and the net debt ratio is 36.14%; The overall financial situation is relatively stable and the risk is controllable. The company’s plan to apply for credit from financial institutions in 2022 is an annual authorization plan. The company will apply for credit from financial institutions within the scope of authorization
