Securities code: 000731 securities abbreviation: Sichuan Meifeng Chemical Industry Co.Ltd(000731) Announcement No.: 2022-04 Sichuan Meifeng Chemical Industry Co.Ltd(000731)
Announcement on provision for impairment, asset retirement and cancellation of equity and creditor’s rights of participating companies
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.
1、 In order to truly and accurately reflect the financial status, asset value and operating results of Sichuan Meifeng Chemical Industry Co.Ltd(000731) (hereinafter referred to as “the company”) as of December 31, 2021, in accordance with the relevant provisions of the accounting standards for business enterprises and the company’s accounting policies, The company and its branches (subsidiaries) checked various assets at the end of 2021. Based on the principle of prudence, the company carefully analyzed, tested and evaluated the net realizable value of various inventories, the recovery possibility of receivables, the net realizable value and use value of fixed assets, and planned to withdraw impairment reserves for assets with signs of impairment, And scrap some fixed assets that have no use value. Meanwhile, according to the civil ruling issued by the court on the bankruptcy reorganization of the joint-stock company Xinjiang Meifeng Chemical Co., Ltd. (hereinafter referred to as “Xinjiang Meifeng”), the company plans to write off the equity and creditor’s rights of Xinjiang Meifeng. The total amount of accounting profit in 2021 was affected by relevant accrual, scrapping and write off events, with a decrease of RMB 60.379 million (Unaudited). The reduced amount has been predicted in the 2021 annual performance forecast (Announcement No.: 2022-03) on January 19, 2022, and will not affect the relevant financial indicators in the disclosed 2021 annual performance forecast.
2、 Basis and method for withdrawing impairment provision and asset retirement
(I) basis and method of provision for impairment
1. At the end of the reporting period, the company made provision for credit impairment of accounts receivable and other receivables according to the methods of single test and aging combination test.
2. The ending inventory shall be valued according to the principle of the lower of cost and net realizable value. For the part of the inventory whose cost is expected to be unrecoverable due to damage, all or part of obsolescence or the sales price is lower than the cost, the inventory falling price reserve shall be withdrawn. The inventory falling price reserves of inventory commodities and bulk raw materials shall be withdrawn according to the difference between the cost of a single inventory item and its net realizable value; For other raw and auxiliary materials with large quantities and low unit price, inventory falling price reserves shall be withdrawn by category. 3. During the reporting period, the company checked the fixed assets. If there is any indication that an asset or asset group may be impaired, its recoverable amount shall be estimated on the basis of single asset or asset group. The recoverable amount is 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.
Judge whether there are various signs of possible impairment of fixed assets. If there are signs of impairment, carry out impairment test. The amount of impairment provision shall be recognized according to the difference between the net book value of each asset and the expected recoverable amount. Once the impairment provision of fixed assets is recognized, it shall not be reversed in subsequent accounting periods.
(II) basis and method of asset retirement
When the fixed assets are disposed of or are not expected to produce economic benefits through use, they shall be scrapped after approval according to the appraisal opinions of relevant professional departments of the company.
3、 Provision for impairment and asset retirement in the current period
(I) provision for impairment
At the end of the year, the company made a comprehensive inventory of various assets, made a full analysis and evaluation, and considered that some of them had certain signs of impairment. Based on the principle of prudence, the company plans to withdraw 54.5489 million yuan of value reduction reserves for assets that may have impairment losses in accordance with the requirements of the accounting standards for business enterprises. Among them, the provision for inventory falling price is 6.1474 million yuan; The provision for impairment of fixed assets is 34.5924 million yuan; The provision for credit impairment is 13.8091 million yuan. Of which:
1. Provision for inventory impairment
In 2021, the company plans to withdraw 6.1474 million yuan of inventory falling price reserves. It is mainly due to the discovery of some dull, aging spare parts and raw materials eliminated due to technical renewal during asset inventory.
2. Provision for impairment of fixed assets
In 2021, the company plans to withdraw 34.5924 million yuan of provision for impairment of fixed assets. The main reason is that the yield of nitro compound fertilizer production line has been at a low level due to factors such as fierce market competition, small product audience and strong substitutability in recent years. According to the appraisal of a third-party professional appraisal institution (Tianyuan Asset Appraisal Co., Ltd.) with securities and futures related business evaluation qualification, the provision for impairment of buildings, machinery and equipment related to nitro compound fertilizer production line is 31.1231 million yuan.
3. Provision for credit impairment
At the end of 2021, the company’s receivables were recognized according to the end of the period aging combination or single item, and it is proposed to withdraw 13.8091 million yuan of credit impairment provision. In some businesses, the collection cycle of customers is slow, and the company has adopted judicial collection. After comprehensively considering the recoverability of receivables and other factors, based on the principle of prudence, the company plans to withdraw 13.8357 million yuan of credit impairment loss in 2021. (II) asset retirement
The assets to be scrapped in 2021 are 6.7464 million yuan. It is mainly because some production equipment cannot meet the current production needs and has no transfer value due to backward production capacity and high failure rate. It is proposed to scrap this part of assets.
4、 Cancellation of equity and creditor’s rights of Xinjiang Meifeng
The people’s Court of Alar Reclamation Area of Xinjiang production and Construction Corps issued the civil ruling ([2021] Bing 0103 No. 5 BIS) in December 2021, ruling to approve the reorganization plan of Xinjiang Meifeng and terminate the reorganization procedure. See the progress announcement on bankruptcy reorganization of joint stock companies (Announcement No.: 2022-01) issued by the company on January 1, 2022 for details of the matter.
(I) write off of equity
According to the ruling result of “because Xinjiang Meifeng is seriously insolvent, the owner’s equity of the investor is negative” in the civil ruling, the equity of the original investor is adjusted to zero, and all the equity of Xinjiang Meifeng held by the original shareholders of Xinjiang Meifeng is transferred to the reorganization investor. The initial investment cost of the company to Xinjiang Meifeng was 62.4 million yuan, and the book value of the long-term equity investment in Xinjiang Meifeng was written down to 0 yuan in 2017, that is, the profit and loss adjustment recognized by the equity method was – 62.4 million yuan, and the book value was 0 yuan before equity write off remained unchanged. This time, the company carried out accounting write off for the cost and profit and loss adjustment of long-term equity investment of Xinjiang Meifeng, which had no impact on the profits of the current statement.
(II) cancellation of creditor’s rights
The company and its branches (subsidiaries) hold Xinjiang Meifeng creditor’s rights totaling RMB 1.8132 million (excluding interest).
Including: 299500 yuan of employee creditor’s rights and 1513700 yuan of ordinary creditor’s rights. According to the execution results of the civil ruling, the employee’s creditor’s rights have been fully recovered, and the ordinary creditor’s rights have actually recovered 616800 yuan. As the company has made full provision for credit impairment of Xinjiang Meifeng’s creditor’s rights, 896900 yuan of uncollected creditor’s rights are written off in this period, and 916300 yuan of actually recovered creditor’s rights are reversed. The above treatment will increase the total profit of this period by 916300 yuan.
5、 Impact on the current financial situation of the company
In the current period, it is proposed to withdraw inventory depreciation reserves of 6.1474 million yuan, asset impairment reserves of 34.5924 million yuan, credit impairment reserves of 13.8091 million yuan and scrapped assets of 6.7464 million yuan. After deducting and writing off Xinjiang Meifeng’s equity and creditor’s rights and reversing credit impairment reserves of 916300 yuan, the total accounting profit of the company in 2021 will be reduced by 60.379 million yuan. The reduced amount has been predicted in the 2021 annual performance forecast (Announcement No.: 2022-03) on January 19, 2022, and will not affect the relevant financial indicators in the disclosed 2021 annual performance forecast.
6、 Relevant description
1. The items and amounts of the company’s proposed provision for impairment, asset retirement and the write off of Xinjiang Meifeng’s equity and creditor’s rights have not been audited by an accounting firm, and the details shall be subject to the 2021 annual report officially disclosed by the company. The company has communicated with the annual report audit accounting firm on the above matters, and there is no difference between the company and the accounting firm; 2. The matter has been reviewed and approved by the audit committee of the board of directors of the company, and the statement on the rationality of withdrawing asset impairment provision and writing off assets in 2021 has been issued, which has been disclosed online at the same time as this announcement.
It is hereby announced
Sichuan Meifeng Chemical Industry Co.Ltd(000731) board of directors
January 20, 2002
