Zhejiang Fu Run (600070): Restructured Target Receivable Balance Far Exceeds The Number Of Commitments Received At The Shanghai Stock Exchange Inquiry Letter

Zhejiang Fu run (600070) announced in the evening of May 31st, the company received the annual report issued by the Shanghai Stock Exchange after the audit inquiry letter, the Shanghai Stock Exchange asked the company to restructure the target 2018 accounts receivable balance far exceeding the number of commitments.

According to the performance compensation agreement signed by the former shareholder of Zhejiang's "Fu run" and "reorganization", the former shareholder promised that the balance of accounts receivable should not exceed 450 million yuan at the end of 2018.

At the end of 2018, Thailand pointed out that the actual accounts receivable balance was 842 million yuan, far exceeding the commitment number.

The Shanghai stock exchange requires Zhejiang Fu run to disclose further: Thailand refers to the amount of accounts receivable, the age distribution and the provision of bad debts; Thailand refers to the names, amounts, accounts receivable impairment and cancellation of the top 10 accounts receivable before the accounts receivable, and whether it is related party.

In December 2016, Zhejiang's acquisition of Tai Yi was 100% equity, resulting in goodwill of 794 million yuan.

In 2018, the company did not prepare for the impairment of goodwill.

The Shanghai stock exchange requires Zhejiang Fu run to make a supplementary disclosure: since the acquisition of goodwill by the subsidiary company, the method of goodwill impairment test at the end of the reporting period, the detailed steps and detailed calculation process of the goodwill impairment test, the adequacy and accuracy of the report on the impairment of goodwill during the reporting period, and whether it meets the relevant provisions of the enterprise accounting standards, and provides relevant evidence and description.

Zhejiang Fu run company has poor cash flow in recent two years. The net cash flow of operating activities in 2017 and 2018 was -460 yuan and -5140 million respectively, which did not match the profit growth reflected in the profit statement: net profit in 2017 and 2018 was 166 million yuan and 217 million yuan respectively.

The Shanghai stock exchange requires Zhejiang Fu run to disclose further: the specific reasons for the negative net operating cash flow in the reporting period are: the specific reasons and reasonableness of the discrepancy between the net operating cash flow and the net profit during the reporting period are in line with the actual operation and practice of the company.