Category: Money tips Release Date: 2007-05-26
Examples of analytical balance-sheet financing, or have issues, period items
The current financial reporting method is to use most of the published financial statements of listed companies to analyze the enterprise's financial position and operating conditions, a number of balance-sheet items are often ignored by investors. The balance-sheet items, including balance-sheet financing, or have issues, period and other matters. They tend to bring great risks to businesses, investors need to have attention.
Sino-Singapore Suzhou Industrial Park Ventures Co., Ltd. Meng Aimin
Nanjing University School of Business Accounting Department Wang Fang-ping
Balance-sheet financing is no need to include balance sheet financing. The current international balance-sheet financing methods commonly used, there are four: long-term leasing, joint ventures, securities and innovative financial instruments. At present, China's securities market is not very developed, financial controls are more stringent, so the latter three use less. A large number exist in the enterprise is operating leases, sale and leaseback and other balance-sheet financing.
Liabilities mainly include: discounted commercial acceptance bills of exchange or contingent liabilities; pending litigation and arbitration, the formation of contingent liabilities; for the formation of other units to provide debt guarantees or contingent liabilities. These three or liabilities in the enterprise are very common.
The balance sheet date mainly to explain the balance sheet date occurred in some of the major non-adjusting events, such as stocks and bonds, for a huge investment of enterprises, the loss of assets caused by natural disasters and so on.
Above, we introduced the company's balance-sheet risk of several forms, then we are going to Shanghai Fenghua (Group) Co., Ltd. (abbreviated as ST Fenghua) as an example to conduct a specific analysis.
ST Fenghua-balance-sheet risks are mainly two: First, litigation matters; second is the formation of a security or contingent liabilities.
1, major litigation and arbitration
Fenghua the company disclosed in 2005 annual report significant litigation and arbitration matters of a total of three:
Case 1: "the company's largest shareholder of the original group of related enterprises Qi Han Qi Han Dynasty Real Estate Development Co., Ltd. in 1999 to develop district on behalf of Beijing songjiazhuang 30 million yuan loan to the company, Han Qi, another group associated with Han Qi, Beijing Enterprises Investments Limited (now renamed Jinan Jia-Run Investment Co., Ltd., hereinafter referred to as "Jinan Jia-Run") in 2000, Beijing Red Lion to sell 10% stake in the name of transfer of shares shall be charged to the Company 52.1692 million yuan, After the result of policy constraints, the assignment agreement can not perform to an end. Han Qi Group December 12, 2003 a written commitment to jointly and severally liable for the debts and issued a repayment plan, but so far not materialized.'s law to Shanghai 1 Intermediate People's Court to prosecute the defendant bear the repayment responsibility and joint and several liability repayment, repay the money, 82.1692 million yuan and bear the litigation costs, August 22, 2005, the Shanghai No. 1 Intermediate People's Court ruling: (1) the defendant Han Qi Group shall be the effective date of this verdict within ten days to return the company 30 million yuan Fenghua; (2) the defendant Run Jiaying in Jinan, the effective date of this verdict within ten days to return Fenghua Company 52.1692 million yuan; (3) the defendant Han Qi Group is accused of Jinan Jia-Run settle the debts and liabilities of joint and several liability. in this case acceptance fee 470,856 yuan to the defendant Han Qi Group and Jinan Ka-run common burden, and in the sentence which tender to pay within seven days after the entry into force; who disagrees with this decision, the accused can be ruling within fifteen days from the date of delivery on the Shanghai Higher People's Court of Appeal. because the defendant did not raise objections to the above-mentioned ruling already in force. At present, Fenghua company is through a variety of ways to recover the entry into force of the above-mentioned ruling of debt. "
Analysis?【litigation in this case, the Fenghua is the plaintiff, the former largest shareholder of the Han Qi Group and its affiliates is a defendant.
One defendant, the plaintiffs from this case, it seems that can not be regarded as the company's balance-sheet risk of Fenghua. Because this is not Fenghua the company's debt, on the contrary it is a creditor. The size of the risk to recover the money depend on Fenghua possibilities.
From the "other receivables" and note which we seem to find clues.
Table 1 shows the company's Han Qi Fenghua Group and its affiliates and other receivables are large provision for bad debts, arrears were either insolvent or is the business license has been revoked. In this case, although the court ruled in favor of Fenghua company, but to recover money owed is still very difficult.
Case 2: "Fenghua Company, a subsidiary of Beijing Red Lion litigation had Han Qi Group (first defendant), Fenghua, Inc. (second defendant), Jinan Jia Run (third defendant) merger contract dispute case, after Beijing's Red withdraw the appeal and the end of the lion. August 31, 2005, the case law agent Taihe Thailand (Beijing) Law Firm (hereinafter referred to as Taihe Thailand) to have been signed with Fenghua the "civil principal-agent contract" on grounds of Company Su Zhi, Beijing Second Intermediate People's Court, counsel fees required to pay 7.7 million yuan, November 30, 2005, Beijing Second Intermediate People's Court in (2005), the first two characters in the early Republican No. 12609, ruled that company Taihe Thailand paid 7.7 million yuan and the appeal case acceptance fee 48.5 thousand yuan. Fenghua dissatisfied with the company has filed an appeal court, the current Court has yet to sit. "
Analysis?【litigation in this case, the Fenghua company is the defendant, which is typical of the formation of pending litigation or contingent liabilities. Although we do not know Fenghua in this case the possibility of winning big or losing big possibility, but as a prudent investor, it formed a contingent liability risks are forced to consider.
Case 3: "the end of 2001 Fenghua companies to obtain bank loans 111.5 million yuan, from Guan Sheng Yuan for Surety Bond. Fenghua the same time, the largest shareholder of Guan Sheng Yuan and Han Qi Group, signed a" counter-guarantee contract "agreed by the Han Qi Group, for these banks to provide a counter-guarantee loans. Fenghua the company due to financial difficulties, did not reimburse the maturity of bank borrowings, while the Han Qi Group, refused to honor the bond obligations, can only be undertaken by the Guanshengyuan guarantee repayment responsibilities. guanshengyuan subsequently was indicted in May 2002 Han Qi Group. in April 2003, Guan Sheng Yuan Fenghua company for reimbursement in the first 20 million yuan in bank borrowings due after the prosecution of Fenghua, which seeks repayment of 20 million yuan. Shanghai 1 Intermediate People's Court ruled that Guanshengyuan Fenghua to pay 20.36 million yuan, and a freeze on the company, No. 3601 Dongfang Road, all the real estate, a branch of the entire equity and the company held by the Beijing Red Lion Coatings Co., Ltd. 10% stake. 2003 August Shanghai Second Intermediate People's Court ruled that the freezing of the company held by the Beijing Red Lion Coatings Co., Ltd. all share. in October 2003, the Shanghai Second Intermediate People's Court ruled that the auction held by the Beijing Red Lion Coatings Co., Ltd. 70% of the shares.
In view of the late Fenghua company has already fulfilled as the principal debtor shall bear the repayment obligation, Fenghua Company in July 2005 to the Shanghai Intermediate People's Court made a retrial request to the implementation of the Court of Shanghai Second Intermediate People's Court for termination of the Executive and the lifting of asset seizure requests. However, Fenghua company in December 2005 received Shanghai Second Intermediate People's Court on the transfer of the case placed on file notice. "
?【Analysis from Fenghua companies to disclose these are matters of view, its real estate has been seized, frozen, as well as full ownership of a subsidiary held by the Beijing Red Lion 80% of the shares in the near future may not be unsealed, thawed . ST Fenghua This would produce a certain day to day operational problems. Because ST Fenghua mainly on the income derived from the two regions ------ paint production in Beijing and Shanghai property leasing. The Beijing Red Lion Coatings industry is Fenghua's core business, once Guanshengyuan enforcement, the company's main business will have a significant impact. Dongfang Road in Shanghai, the land use rights and houses have been closed down after the Shanghai area will greatly affect the property rental income. For this pending litigation the company has identified 7.7 million of the projected liabilities. Investors should be vigilant.
Second, debt guarantees
From the report we can see that two notes to the financial situation of the majority of the security objects are relatively poor, the borrower had largely been overdue, ST joint and several liability as a guarantor of Fenghua face greater risk. And the total amount of security has been accounted for 8.7% of net assets. The joint and several responsibility to bring a lot to the company's contingent liabilities, and some can even be recognized as projected liabilities. Note from the report can be found in companies, we guarantee to confirm the estimated liabilities of 4.38 million yuan.
In recent years, the listed company guarantees, entrusted financial management, litigation and other balance-sheet risk of crashing the collapse of a minority. These statements do not see the risks are so many investors are paying for. Balance-sheet risk analysis has become an indispensable analysis of listed companies, a
