crashbandicootnintendoswitch| ST Huijin's inquiry letter on receiving annual report: explaining the latest progress of the detentions by former executives and the impact on the company's daily production, operations and financial statements

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On May 22, Shenzhen Stock Exchange issued a letter of inquiry about the annual report of Hebei Huijin Group Co., Ltd. The inquiry letter asked ST Huijin (rights protection) to explain the latest progress of the former executive retention and its impact on the company's daily production, operation and financial statements.CrashbandicootnintendoswitchExplain the business logic of transferring 51% equity of subsidiary Yunxing Wangsheng, whether the transfer is true, whether the transaction price is fair, whether there are other interest arrangements between the company and its related parties and transferee Xiao Yang (49% of the shareholders and general manager of Yunxing Wangsheng), etc.

In its post-mortem review of the ST Huijin 2023 annual report, the Shenzhen Stock Exchange paid attention to the following situation:

oneCrashbandicootnintendoswitch. The audit report of the annual auditor issued a qualified opinion on the 2023 financial statements of ST Huijin, which was based on the former executive lien, the business logic of transferring the controlling stake in Yunxing Wangsheng subsidiary and the recoverability of subsequent payments. Please ST Huijin:

(1) explain the latest progress of the former executive retention and its impact on the daily production, operation and financial statements of the company.

(2) explain the business logic of transferring 51% of the shares of subsidiary Yunxing Netsheng, whether the transfer is true, whether the transaction price is fair, whether there are other interest arrangements between the company and its related parties and transferee Xiao Yang (49% of the shareholders and general manager of Yunxing Wangsheng).

(3) explain whether the amount, specific content, formation process and recyclability of the accounts receivable of Yunxing and Xiao Yang, and whether the relevant provision for bad debts is sufficient.

(IV) further explain the specific measures taken by the company to eliminate the impact of matters related to the reservation, as well as the feasibility and latest progress.

Ask the annual auditor to give an explanation.

two。 According to the annual report, the operating income of ST Huijin continued to decline sharply from 2021 to 2023, and the net profit belonging to shareholders of listed companies after deducting non-recurring gains and losses was negative. Please ST Huijin:

(1) distinguish different industries and different products to analyze the reasons for the continuous decline of operating income in the past three years, whether it is consistent with the changing trend of the industry, and analyze the reasons for the large losses in 2022 and 2023 combined with the changes of costs, expenses and other items.

(2) in the light of the development of the company's industry, the threshold of entry and the degree of competition, as well as the company's technological level, new business development, in-hand orders, etc., further analyze whether there is a major uncertainty in the company's sustainable business capacity, as well as the measures to be taken by the company and its effectiveness.

The main business of 3.ST Huijin is mainly divided into intelligent manufacturing business, information integrated solution business and supply chain business, among which the supply chain business includes urban intelligent innovation business, steel trading business and coal trading business, accounting for 35.61% and 17.21% of income in 2022 and 2023, respectively. Please ST Huijin:

(1) explain whether the procurement, production and sales models of different businesses, whether the business model is stable and sustainable, whether the relevant business income is related to the main business, whether it has commercial essence, and whether the calculation of operating income deductions is complete and accurate.

(2) in combination with the development process of each business, explain the composition of the income in accordance with the specific methods of income recognition disclosed in the 2023 annual report, and whether the recognition of the relevant income conforms to the provisions of the Accounting Standards for Enterprises, whether there is a situation in which the total amount method is used instead of the net amount method.

Ask the annual auditor to give an explanation.

4. According to the annual report, the book value of goodwill of ST Huijin at the end of 2023 was 106.8953 million yuan, which was significantly lower than that of 434.8492 million yuan at the beginning of the period, mainly due to the disposal of the equity interest of Yunxing Wangsheng, a subsidiary, and the provision for goodwill impairment to the subsidiary Zhongke Tuoda. At the end of the period, ST Huijin goodwill impairment reserve balance of 245.0767 million yuan. Please ST Huijin:

The main contents are as follows: (1) explain the specific process of testing the impairment of goodwill of the relevant targets, as well as the basis and rationality of determining the key hypotheses, main parameters and forecasting indicators.

(2) combined with the specific time of the corresponding signs of impairment of goodwill, explain whether the provision for impairment of the current and previous years is prudent and adequate, whether it conforms to the Accounting Standards for Enterprises and relevant regulations, whether there is a situation in which profits are adjusted through a large amount of impairment at the end of the period.

(3) explain the relevant system and decision-making process of ST Huijin investment business, and whether the internal control related to investment activities is sound and effective.

Ask the annual auditor to give an explanation.

5. According to the annual report, the balance of accounts receivable of ST Huijin at the beginning of 2023 and the end of the year is relatively large, accounting for 78.93% of the accounts receivable with an age of more than one year at the end of the year. Please your company:

(1) explain the business composition of accounts receivable at the beginning of the year and the end of the year, the basic information, amount and proportion, age and sales content of the top five customers, as well as the composition of the main customers of accounts receivable with long account age.

(2) explain the company's credit policy and the overdue amount of accounts receivable, analyze the recyclability of accounts receivable in combination with the historical and post-term payback of major customers, and the collection measures taken by the company and its effectiveness.

(3) whether the proportion of accounts receivable to income and the age distribution characteristics of accounts receivable are consistent with the industry practice, whether there is a significant difference between the policy of provision for bad debts and comparable companies, and whether the provision for bad debts is sufficient.

Ask the annual auditor to give an explanation.

6. According to the annual report, ST Huijin inventory includes raw materials, products in process, goods in stock, contract performance costs, and issued goods, with a final book value of 144.1392 million yuan. Please ST Huijin:

(1) explain the specific content of each inventory item, the age of the warehouse and the support of the order, the carry-over after the period, the performance cost of the contract, the customers and projects corresponding to the goods issued, and whether the current inventory level matches the volume of business.

(2) to explain the basis and calculation process of inventory price reduction provision according to specific items, and whether the provision is sufficient.

Ask the annual auditor to give an explanation.

The summary table of the occupation of non-operating funds and other related capital transactions in 7.2023 shows that at the end of 2023, ST Huijin had non-operating receivables from other subsidiary enterprises directly controlled by controlling shareholders, minority shareholders of former holding subsidiaries and their affiliated companies, with a total balance of 143.8101 million yuan, and the cumulative amount of non-operating funds occupied during the reporting period was 278.9735 million yuan. Please ST Huijin:

(1) explain the nature, cause and process of the relevant funds, and summarize whether the information on the occupation of non-operating funds is true, accurate and complete.

(2) to explain whether ST Huijin has established and improved the internal control of fund management, whether the risk prevention measures are reasonable and effective, whether the fund flow behavior complies with the appropriate review procedures and disclosure obligations, and whether it harms the interests of listed companies.

(3)Explain the specific collection arrangements for relevant receivables, and whether the counterparty has serious deterioration in operating conditions, insolvency, difficulty in cash flow or other circumstances that seriously affect the ability to repay.

Ask the annual auditor to provide an explanation.

8.2023 Since the beginning of 2024, ST Huijin's former chairman Yang Zhenxian, director and general manager Ma Zhenhua, independent directors Shi Yuqiang and Wei Huisheng, deputy general manager Peng Chong, secretary of the board of directors Liu Feihu, supervisor Wang Shiguang, employee supervisor Liang Xiaoqi have left their posts, and the chief financial officer Sun Zhiheng has been dismissed. In 2024, newly appointed independent director Li Zongfang expressed his views on the "Proposal on the Full Text and Summary of the Company's 2023 Annual Report", the "Proposal on the Company's 2023 Annual Audit Report", Proposals such as the "Proposal on the Company's 2023 Internal Control Self-Evaluation Report" abstained from voting. Please ST Huijin:

(1)Explain whether the reasons for the resignation or changes of the original directors, supervisors, and senior executives are related to objections to the company's financial information and information disclosure matters, and whether they have had a significant adverse impact on production and operations.

(2)Combined with the actual operation of the "three meetings and one level", explain whether your company's current governance structure is complete and whether it can ensure legal operation and scientific decision-making.

(Article source: Duchuang)

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