Is there another cause for the loss in the financial statements of salt lake shares?

The Shenzhen stock exchange on April 12, an annual report of the inquiry caused small attention. This is to be sent to Salt Lake Industry Co., Ltd. The inquiry revealed a curious fact about salt lake magnesium, an important subsidiary: it had zero operating income in 2016 but 11 cash flows from operations. 0.7 billion yuan. Shenzhen stock exchange wants a company to answer what reason causes.

The main business of salt lake shares listed in 1997 is divided into three parts: the development, production and sales of potassium chloride; Comprehensive development and utilization of salt lake resources; Other businesses include cement production, commercial chain business, and hotel business. Among them, the development, production and sales revenue of potassium chloride is the core part of the company's main business during the reporting period, which accounts for 50 percent of the company's operating income. 57%.

The 2017 annual report shows that the company's 2017 operating income was 116 million yuan. 9.9 billion yuan, a loss of 4.1 billion yuan. 5.9 billion yuan, down from a year earlier - 1,318 billion yuan. 77%. What makes people wonder is, 2017 is the highest operating income in the past four years, how could it lose nearly 4.2 billion yuan? In 2014, the operating income was 10.4 billion yuan, and the net profit reached 1.3 billion yuan. In 2015 and 2016, the operating income was more than 10 billion yuan, but the net profit was less than 50% of that in 2014, which was 5. 5.9 billion yuan, 3. 4.1 billion yuan. In 2017, operating income hit a new high of nearly 4 years, while net profit hit a new high in the opposite direction, with a huge loss of nearly 4.2 billion yuan.

The main reasons for the company's losses are as follows: the high prices of production factors and the decrease of potash sales; Mr. Hainer "2. Chemical engineering 6. 28 "due to the impact of safety accidents, the production equipment was suspended for most of 2017. PVC, caustic soda, cement, and other products with high market prosperity failed to be produced, and relevant rectification investment was made, resulting in an increase in losses. Insufficient supply of coal and natural gas leads to the failure of chemical plants to operate at full capacity; Haina, metal magnesium and other projects large - scale solid lead to increased costs.

The company's 2017 asset impairment losses reached 4.3 billion yuan.

The use inquiry also revealed a curious fact about salt lake magnesium: it had zero operating income in 2016, but 11 cash flows from operations. 0.7 billion yuan. Shenzhen stock exchange wants a company to answer what reason causes.

The huge loss of asset impairment mainly occurred in the three children (grandchildren) of the company. The reason for the impairment is that the resource allocation is not in place, the production facilities are aging, the production process is not mature and so on.

1. Due to the insufficient allocation of coal resources and the high purchase cost of raw coal, the production cost is higher than the sales price of the coal washing unit and coking unit of the subsidiary company yan hu magnesium industry, so the amount is 15 yuan within the reporting period. RMB 1.9 billion in fixed assets impairment provision and provision 7. 6.2 billion yuan of magnesium metal integration project under construction impairment provisions.

2. The subsidiary Haina chemical has been put into operation for many years, and some production facilities are aging, showing signs of impairment. Therefore, during the reporting period, the fixed asset impairment provision of 95.61 million yuan was set aside, and the PVC integrated project of Haina was set aside nearly 3 million yuan. 700 million yuan for impairment provision for projects under construction.

3. Due to the influence of immature production process and the high purchase price of raw materials, the production cost of the ADC foaming agent production device of sun company's haihong chemical industry is on the high side, and there are signs of impairment, and the fixed asset impairment reserve of 69.77 million yuan is calculated.

4. As the subsidiary of salt lake energy has significant uncertainty due to the use of existing mining and stripping projects, the fixed asset impairment provision 2 shall be calculated and withdrawn in full amount for the fixed asset value of mining and stripping projects. 3.7 billion yuan.

It can be seen from the inquiry letter of Shenzhen stock exchange annual report that the major loss source is the important subsidiary salt lake magnesium industry, which lost 31 percent in 2017. 98 yuan, accounting for 77 percent of salt lake's total losses in 2017. The reason for the loss is that the production cost is higher than the sales price. Second, the provision for impairment of fixed assets 15. 1.9 billion yuan, provision for impairment of construction projects under construction 7. 6.2 billion yuan, totaling nearly 2.3 billion yuan.

And d a letter of inquiry concerning the annual report to the Salt Lake Industry Co., Ltd

Company annual report inquiry letter [2018] no. 31

This standard will also have a higher standard.

In our post-mortem review of your 2017 annual report (hereinafter referred to as the "annual report"), we are concerned about the following:

1. Qinghai salt lake magnesium industry co., LTD. (hereinafter referred to as "salt lake magnesium industry"), the holding subsidiary of your company, has an operating income of RMB 0 billion in 2016 and RMB 4 billion in 2017. 8.9 billion yuan, operating cash flow of 11. 7 billion yuan, minus 1. 7 billion yuan, with net profit of -9,402. 390,000 yuan, -31 yuan. 9.8 billion yuan. In 2017, due to the inadequate allocation of coal resources and the high purchase cost of raw coal, the production cost of coal washing unit and coking unit of yanhu magnesium industry was higher than the sales price, so 15 items were included in the reporting period. RMB 1.9 billion in fixed assets impairment provision and provision 7. For the impairment provision of the construction of the 6.2 billion yuan magnesium metal integration project under construction, please specify:

(1) the establishment time, investment amount and operation status of salt lake magnesium industry. In 2016, its operating income was 0 but its cash flow from operating activities was 11. 6 billion yuan.

(2) listed in salt lake magnesium industry in detail calculation process of fixed assets and impairment of projects under construction, and compared the 2016 related asset impairment test process, your company 2016 annual asset impairment provision is sufficient, 2017 annual concentrated provision for asset impairment loss is reasonable, whether the relevant accounting treatment complies with the provisions of the accounting standards. Please check and give your opinion.

(3) the original value, depreciation and impairment over the years of the fixed assets required by the owner of salt lake magnesium, the composition and variation of the fixed and variable costs in the production costs, the proportion of raw coal procurement costs in the production costs in the recent two years, and whether the related inventories have been fully prepared for the inventory impairment. Please check and give your opinion.

2. Within the reporting period, the project of Qinghai salt lake haina chemical co., LTD. (hereinafter referred to as "haina chemical"), a subsidiary of your company, has been completed and put into operation for many years, and some production facilities are aging, showing signs of impairment. Therefore, during the reporting period, the fixed asset impairment provision of RMB 95.61 million was set aside, and the PVC integrated project of haina was set aside nearly 3 million yuan. 700 million yuan for impairment provision for projects under construction. Please specify your company:

(1) the establishment time and the main business of haina chemical, the main operating data and financial data of the recent three years, and the amount of fixed asset impairment in previous years.

(2) the calculation process of the impairment of the fixed assets and the projects under construction of haina chemical, and the comparison of the calculation process of the impairment of the relevant assets in 2016 shows whether the asset impairment of your company in 2016 is sufficient, whether the asset impairment loss in 2017 is reasonable, and whether the relevant accounting treatment is in accordance with the provisions of accounting standards. Please check and give your opinion.

3. During the reporting period, the ADC foaming agent production device of your company, sun company, Qinghai yanhu haihong chemical co., LTD. (hereinafter referred to as "haihong chemical"), was affected by immature production process and high purchase price of raw materials, resulting in high production cost and signs of impairment, and the fixed asset impairment provision of 69.77 million yuan was set up. Qinghai salt lake energy co., LTD. (hereinafter referred to as "salt lake energy"), a subsidiary of the company, is subject to significant uncertainty due to the use of existing mining and stripping projects. 3.7 billion yuan. Please specify your company:

(1) the establishment of the Shanghai chemical industry time, main business, the last two years is mainly engaged in data and financial data, before the annual fixed asset impairment provision amount, indicating the Shanghai chemical ADC foaming agent production equipment, construction time and production time, the book value of fixed assets, depreciation and impairment of calendar year, existing stripping engineering using coal production technology and the future coal production process.

(2) the construction time, operation time, investment amount and operation status of salt lake energy's mining and stripping projects are at present at risk.

(3) Shanghai fixed assets, salt lake chemical energy stripping engineering calculation process of asset impairment, and compared the 2016 related asset impairment test process, whether the 2016 related assets impairment provision sufficiently, 2017 annual concentrated provision for asset impairment loss is reasonable, whether the relevant accounting treatment comply with the provisions of the accounting standards. Please check and give your opinion.

4. You company annual report, 2017, your company's quarterly financial data there is a big fluctuation, revenue in the fourth quarter is significantly higher than in the first three quarters of this year, in the fourth quarter net profit attributable to shareholders of listed companies at the same time a substantial losses, please company combining with the market environment changes and changes of your company, your company financial data exist significant seasonal fluctuations, quarterly operating income and net profit is inconsistent with the movement of reason and rationality.

5. On page 21 of your company's annual report, the table "whether the company's physical sales revenue is greater than labor income" shows that the potassium chloride manufacturing industry's 2016 inventory +2017 production -2017 sales = 119. 480,000 tons, larger than the 88 million tons of inventory disclosed at the end of 2017. 050000 tons. In response, your company reported that increased internal consumption of potassium chloride during the reporting period led to a decrease in inventory during the reporting period compared with the previous year. Please specify your company:

(1) book value and book value of the inventory commodities in 2016 and 2017 of potassium chloride.

(2) the reason for the differences in the articulation of potassium chloride sales volume, production, and inventory.

(3) causes of internal consumption of potassium chloride and reasons for the increase of internal consumption of potassium chloride during the reporting period.

6. Your company's annual report shows that the company has brine lithium extraction, brine magnesium extraction technology, the future will vigorously develop lithium, magnesium related business. Please add the following questions:

(1) so far, your company's lithium salt lake to ask related developments of the business, 2017 annual production data of related products, 2018 annual production is expected, and analysis of the competitive landscape of the lithium industry, the development of leading enterprises, the existing business then explain lithium expected future impact on your company's business development situation, and please timely reminder risk.

(2) so far, the related development of the magnesium salt lake to ask your company business, the annual production data of related products of 2017 and 2018 annual production is expected, and combined with magnesium industry competition pattern, the business performance of account for your company magnesium business losses, the future is expected to take how to increase the yield of magnesium business, and would you please timely reminder risk.

7. Page 164 of your company's annual report shows that during the reporting period, the amount of your company's transportation equipment, instruments, measuring instruments and weighing instruments transferred from the projects under construction to fixed assets is negative. Please explain the reason why the original value of the assets transferred above is negative, accounting treatment process and accounting treatment compliance.

8. Your company annual report showed that potassium chloride resource tax in July 2016 from production duty to sales revenue by duty, starting in July 2016, potassium chloride transport income separately listed in the other business income, transportation cost from the cost of sales adjustment to other business expenses listed, the revenue cost large changes have taken place in your company, you company detailed the specific changes of the relevant accounting treatment, transport business cost confirm the way of income, the influence of the financial report this matter to your company.

9. According to your company's annual report, fire and explosion accidents occurred in your company's subsidiaries during the reporting period, resulting in 9. For the shutdown loss of 8.2 billion yuan, please specify the composition details of the above shutdown loss, whether the shutdown loss has been completely confirmed, and the progress of the above accident insurance compensation matters.

10. Your company's annual report shows that during the reporting period, your company received 100 million yuan of loan interest subsidy funds, but your company did not recognize non-operating income and other income during the reporting period. Please elaborate on the specific situation of the 100 million yuan loan interest discount, relevant accounting process, and compliance.

In addition, there are a large number of government subsidies related to assets in your company during the reporting period. Please supplement and explain the construction and operation of the assets corresponding to the above subsidies, the accounting treatment process and compliance of the above government subsidies.

11. There is a difference between the related party transaction data disclosed on page 241 and page 52 of your company's annual report. Please explain the specific amount of related party transaction occurred in your company in 2017, whether the relevant transaction has fulfilled the review procedure and information disclosure obligation, and the reason for the difference in the above information disclosure. If there is any wrong disclosure, please timely correct it.

You are requested to make a written statement on the above issues. If disclosure is required, please timely fulfill the disclosure obligation, and submit relevant explanatory materials to our department before April 20, 2018, and send a copy to the agency.

Inform you that we shall send

Shenzhen stock exchange

Company management department

12 April 2018

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