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Provision for Credit Impairment and Assets Impairment for the Year Ended 31 December 2020

This announcement is made pursuant to Rule 13.09(2)(a) and Rule 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") and the Inside Information Provisions (as defined under the Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Chapter 571, Laws of Hong Kong).

The board of directors (the "Board") of Xinjiang Goldwind Science & Technology Co., Ltd.* (the "Company", and together with its subsidiaries, the "Group") wishes to refer the shareholders of the Company and potential investors to the provisions for credit impairment and assets impairment of the Group (the "Provisions for Credit Impairment and Assets Impairment") for the year ended 31 December 2020 as detailed below.

I. OVERVIEW OF THE PROVISION FOR CREDIT IMPAIRMENT AND ASSETS IMPAIRMENT

According to the relevant requirements under the China Accounting Standards for Business Enterprises (the "CASBE"), the Guidelines of the Shenzhen Stock Exchange for the Standard Operation of Listed Companies (2020 Revision) and the accounting policies of the Group, in order to reflect the financial positions, value of assets and operating results of the Group as of 31 December 2020, the Company and its subsidiaries conducted a review on all types of assets as of 31 December 2020 under the principle of prudence. It was made a total provision of RMB574.8402 million for credit impairment and asset impairment of certain assets, representing an increase of RMB25.4740 million as compared with the total provision of RMB549.3662 million for credit impairment and asset impairment for the previous three quarters.

A breakdown is set out below:

Unit: RMB ten thousand yuan

Item

Provision for impairment in the first three quarters of 2020

Provision for impairment in 2020

Credit impairment losses:

32,428.73

14,954.75

Including: receivablesTrade

24,522.20

6,207.10

Other receivables

7,379.27

8,398.48

Long-term receivables

600.00

325.47

Othernon-currentassets

5.46

-3.14

Contract assets

-64.27

47.55

Debt investments

-13.93

-20.72

Assets impairment losses:

22,507.89

42,529.27

Including: Inventories

22,507.89

25,565.14

Fixed assets

7,325.87

Construction progress

in

7,827.30

Goodwill

1,810.96

Total

54,936.62

57,484.02

The amount of provision for credit impairment and assets impairment was accounted for the period from 1 January 2020 to 31 December 2020.

II. DETAILS OF THE PROVISION FOR CREDIT IMPAIRMENT AND ASSETS IMPAIRMENT

(I) Credit impairment losses

According to relevant requirements of CASBE No. 22 - Recognition and Measurement of Financial Instruments, expected credit losses are measured on an individual basis or a collective basis based on the credit risk characteristics of trade receivables, other receivables, long-term receivables, other non-current assets, contract assets and debt investments.

Based on historical credit losses, combined with current conditions, forecasts of future economic conditions, the comprehensive consideration of forward-looking factors, and taking into account the credit risk characteristics of different customers, the Group has determined the expected credit loss rate for 12 months and the entire duration , and recognized expected credit losses.

As at 31 December 2020, the Group recognized a credit impairment loss of RMB149.5475 million in total for trade receivables, other receivables, long-term receivables, other non-current assets, debt investments and contract assets.

(II) Asset impairment losses

1. Provision for impairment of inventories

In accordance with relevant requirements of CASBE No. 1 - Inventories, the Group's inventories are measured at the lower of cost and net realizable value. In calculating the provision for impairment of inventories, raw materials and inventories are provided on an individual category basis. Inventories that are related to a product line that are produced and marketed in the same geographical area with the same or similar end use or purpose, which would be difficult to be evaluated separately from other items, are accounted on an aggregate basis for the provision of impairment of inventories.

Subsequent to the provision of impairment of inventories, if the factors that previously caused any write-down of inventories are eliminated and the net realizable value of the inventories is higher than its carrying amount, the excess amount shall be transferred up to the original provision amount for impairment of inventories and the amount transferred is recognized in the profit or loss for the current period.

The Group conducted an impairment test on inventories, and based on the test results, the Group made a provision for impairment of inventories amounting to RMB255.6514 million in 2020.

2. Provision for impairment of long-term assets

According to the relevant requirements of CASBE No. 8 - Impairment of Assets, an enterprise shall determine at the balance sheet date whether there is any indication that the long-term equity investment, investment properties, fixed assets and construction in progress measured by cost method may be impaired. If there is any indication of impairment, the recoverable amount shall be estimated and tested for impairment. Impairment provision shall be made at the lower of the carrying amount and the recoverable amount of the asset. Impairment losses, once confirmed, shall not be reversed in subsequent periods.

The recoverable amount shall be the higher of the net amount after deducting the cost of disposal from the fair value of an asset and the present value of the future cash flow of the asset. The Group estimated the recoverable amount on the basis of individual assets. If the recoverable amount of an individual asset is hard to be estimated, the recoverable amount of an asset group shall be determined based on the asset group where the asset belongs.

The Group conducted an impairment test on fixed assets. Due to the increase in market risk caused by various factors such as the country level risk of the Republic of Argentina, assets related to PARQUES EOLICOS MIRAMAR S.A., which is a wholly owned subsidiary of the Company, showed signs of impairment. Based on the test results, the Group made a provision for impairment of fixed assets of RMB73.2587 million in 2020.

The Group conducted an impairment test on the construction in progress. Due to various factors such as the future tariff and new energy construction plan that resulted in impairment indications of relevant assets of certain wind farm projects includingDachaidan Phase II, the Group made a provision for impairment of construction in progress of RMB78.2730 million based on the test results.

3. Provision for impairment of goodwill

In accordance with the relevant requirements of CASBE No. 8 - Impairment of Assets, the Group conducts an impairment test on the goodwill generated on consolidation at the end of each year. The Group adopts the recoverable value test on the goodwill on consolidation, that is to make valuation estimates at an appropriate discount rate based on the future recoverable amount, or to make valuation estimates based on the net amount after deducting disposal cost from recoverable amount.

The Group conducted an impairment test on goodwill. Due to the impact of various factors such as the pandemic, the increased market risk, resulting in impairment indicators of the relevant assets of Vensys Energy AG, which is a subsidiary of the Company. Based on the test results, the Group made an impairment provision of RMB18.1096 million for goodwill in 2020.

III. IMPACT OF THE PROVISION FOR CREDIT IMPAIRMENT AND ASSET IMPAIRMENT ON THE GROUP

As of 31 December 2020, after considering the impact of income tax (calculated based on the 2020 consolidated tax rate) and the profit or loss of minority shareholders, the Group made a provision for credit impairment losses and asset impairment losses totaling RMB574.8402 million, reducing the net profit attributable to shareholders of the Company for 2020 by RMB520.7436 million and correspondingly reducing the owners' equity attributable to the shareholders of the Company by RMB520.7436 million for the current reporting period.

The provision for credit impairment and asset impairment is in compliance with CASBE and the relevant accounting policies of the Group, which reflected the prudent principle of accounting and fully and fairly reflected the Group's asset position, without prejudice to the interests of the Company and its shareholders.

IV. THE OPINION OF THE BOARD ON THE PROVISIONS FOR CREDIT IMPAIRMENT AND ASSETS IMPAIRMENT

The Board is of the view that the Provisions for Credit Impairment and Assets Impairment are in compliance with the relevant requirements of CASBE and the accounting policies of the Group, are well substantiated and reflect the accounting principle of prudence. The Board is of the view that the Provisions for Credit Impairment and Assets Impairment give a fairer view of the financial conditions and operation results of the Group for the year ended 31 December 2020 and the accounting information of the Group will be more reasonable. Therefore, the Board approved the Provisions for Credit Impairment and Assets Impairment.

V. THE OPINION OF THE SUPERVISORY COMMITTEE ON THE PROVISIONS FOR CREDIT IMPAIRMENT AND ASSETS IMPAIRMENT

The Supervisory Committee is of the view that the Provisions for Credit Impairment and Assets Impairment are in compliance with the relevant requirements of CASBE and the accounting policies of the Group, in accordance with the Group's assets and actual status of operations, and the Provisions for Credit Impairment and Assets Impairment give a fairer view of the Group's financial conditions and operation results. The decision-making process and the procedures of making the Provisions for Credit Impairment and Assets Impairment are lawful and in compliance with relevant laws and regulations. The Supervisory Committee approved the Provisions for Credit Impairment and Assets Impairment.

Investors and shareholders are advised by the Board to exercise caution when dealing in the securities of the Company.

By order of the Board

Xinjiang Goldwind Science & Technology Co., Ltd.

Ma Jinru

Company Secretary

Beijing, 26 March 2021

As of the date of this announcement, the executive directors of the Company are Mr. Wu Gang, Mr. Cao Zhigang, and Mr. Wang Haibo; the non-executive directors are Mr. Gao Jianjun, Mr. Lu Hailin and Ms. Dong Zhenyu; and the independent non-executive directors are Dr. Tin Yau Kelvin Wong, Mr. Wei Wei and Ms. Yang Jianping.

* For identification purpose only

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Xinjiang Goldwind Science & Technology Co. Ltd. published this content on 26 March 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 March 2021 14:58:04 UTC.