Securities code: 600237 Securities abbreviation: Tongfeng Electronic Announcement Number: Lin 2022-027
Anhui Tongfeng Electronics Co., LTD
Announcement on the provision for asset impairment

The board of directors and all the directors of the Company warrant that there is no false record, misleading statement or material omission in the content of this announcement, and bear individual and joint liability for the authenticity, accuracy and completeness of the content.

1. Provision for asset impairment

In order to objectively and fairly reflect the financial position and operating results of the Company in the half year of 2022, the Company conducted a comprehensive inventory of all assets, conducted an impairment test on the relevant assets that may suffer impairment losses and made corresponding impairment provisions in accordance with the principle of prudence and in accordance with the Accounting Standards for Business Enterprises and the relevant provisions of the Company's accounting policies. In the half year of 2022, the company recorded a total of 15,409,300 yuan of consolidated impairment reserves, carried back to 6,22,500 yuan of impairment reserves, and sold off 7,445,400 yuan of impairment reserves. See the following table for details:

This asset impairment provision has been reviewed and approved by the 12th meeting of the 9th Board of Directors and the 10th meeting of the 9th Board of Supervisors.

Ii. Explanation of reasonableness of the provision for asset impairment

1. Reserve for credit impairment of receivables
On the balance sheet date, the Company classifies the receivables according to their importance and credit risk characteristics. For the receivables with significant single amount and insignificant single amount but for which the provision for bad debts is drawn by single item, the company conducts separate impairment tests and draws credit impairment provisions based on the difference between the present value of their future cash flows and their carrying value. For all receivables of the same age with similar credit risk characteristics, the aging analysis method is adopted to calculate and withdraw the credit impairment reserve. In accordance with the company's policy of reserve for credit impairment, the current period of reserve for credit impairment of 1,763,400 yuan, transferred to the reserve for impairment of 591,900 yuan.
2. Reserve for inventory decline
At the end of the period, the company will conduct a comprehensive inventory, which is measured according to the lower of cost and net realizable value. When the net realizable value of the main raw materials and finished products is lower than the cost, the reserve for inventory decline shall be drawn. The Company determines the net realizable value of the inventory on the basis of obtaining solid evidence, taking into account the purpose of holding the inventory and the impact of events after the balance sheet date. In the normal course of production and operation, the net realizable value of the inventory of finished products and materials directly used for sale shall be determined from the estimated selling price of the inventory less the estimated cost of completion, selling expenses and taxes. At the end of the period, on the basis of making a comprehensive inventory count, reserve shall be drawn for the part of the inventory whose cost is expected to be unrecoverable due to the inventory being damaged, all or part of the inventory being obsolete or the selling price being lower than the cost. When the cost of inventory in the current period is lower than the net realizable value or the inventory for which the reserve for decline in inventory has been drawn is sold, the reserve for decline in inventory shall be reversed or sold off. The reserve for inventory declines amounted to 13,645,900 yuan, the reserve for reverse declines amounted to 30,600 yuan, and the reserve for resale declines amounted to 6,684,800 yuan.
3. Provision for impairment of projects under construction
If the construction of the project under construction has been suspended for a long time and is not expected to be restarted in the next three years, or the project under construction has fallen behind in performance and technology, and the economic benefits brought to the enterprise have great uncertainty, or other circumstances sufficient to prove the impairment of the project under construction, the difference between the recoverable amount and the carrying value shall be used as the impairment reserve of the project under construction; The impairment reserve for projects under construction shall be calculated and withdrawn on a single project basis.
At this period, there is no indication that the Company's construction in progress has occurred impairment, so there is no need to make provision for impairment of construction in progress.
4. Reserve for impairment of fixed assets
For fixed assets, the company shall judge whether there are signs of impairment on the balance sheet date. If there are signs of impairment, impairment test shall be conducted. If the impairment test results show that the recoverable amount of an asset is lower than its carrying value, the impairment reserve shall be drawn and recorded into the impairment loss according to the difference. The recoverable amount is the higher of the net fair value of the asset less disposal costs and the present value of the asset's projected future cash flows. The asset impairment reserve shall be calculated and confirmed on the basis of individual assets. If it is difficult to estimate the recoverable amount of individual assets, the recoverable amount of the asset group shall be determined by the asset group to which the asset belongs. In the current period, 760,600 yuan of impairment reserve is due to the disposal of fixed assets for write-off. In addition, there is no indication that the company's fixed assets have been reduced and need to draw impairment reserve.

Iii. Impact of asset impairment provision on the company's financial position

In the half year of 2022, the Company recorded a total of 15,409,300 yuan of consolidated impairment reserves, 622,500 yuan of converted impairment reserves, and 7,445,400 yuan of transferred impairment reserves. After deducting the impact of minority shareholders' rights and income tax, the impact on the current profit is 12,932,000 yuan (the above amount is unaudited, and ultimately subject to the amount confirmed by the annual audit of the accounting firm).

Iv. Instructions of the Board of Directors on the provision for impairment

The company's impairment reserve is based on the actual situation of the company's assets, in accordance with the "Accounting Standards for Enterprises" and the company's relevant accounting policies, the company's asset impairment reserve, can more fairly reflect the company's assets, can make the company's accounting information about the value of assets more objective and fair, with rationality.

5. Opinions of the Board of Supervisors on the provision for impairment

The company shall, in accordance with the accounting standards for business enterprises and relevant provisions, make provision for asset impairment, which conforms to the actual situation of the company and can more fairly reflect the asset status of the company. The board of directors' decision procedure on this matter is legal and agrees that the company will make provision for impairment of various assets this time.
This is to announce.