"Xujio Machinery: A Misleading Account of Related-party Transactions" analyzed the suspicious points of Xugong Machinery's flickering related debts and the financial performance of cash dividends from joint ventures. Originally believed that Xugong Machinery was a well-known company in the construction machinery industry with an annual revenue of more than RMB 30 billion, its responsibility for treating shareholders was as good as that of products. However, the actual results were actually disappointing.

In the past, when the journal questioned Zoomlion, the company's attitude towards investors was the first time to explain the issues raised by the journal, and it hired an accounting firm to conduct special audits. On the Other hand, Xugong Machinery, in the face of irrefutable questions raised by the publication, took a passive and evasive “ostrich” policy. It is easy to see that Xugong Machinery's management team is not only indifferent to the quality of information disclosed in the annual report, but also to investors. There is no responsibility for any interest. In comparison with Zoomlion, it is not difficult to find the differences between the two companies, and the lack of sense of responsibility is probably the fundamental reason why the company has never been able to compete with Zoomlion in terms of business development and corporate market image. .

At the same time, the financial problems existing in XCMG are not limited to those previously analyzed. This article will continue to expose major errors in the company's financial information.

100 billion yuan purchase flow puzzle

In the report of the board of directors on page 34 of the XCMG 2011 Annual Report, the information for the major suppliers in the year was disclosed as: “The company’s top five suppliers purchased 25,416,110,000 yuan, accounting for 20.40% of the total annual procurement,” which is not difficult to Calculating that the company's total purchases for the year 2011 was 124.593 billion yuan (25.417 billion yuan / 20.4%), this is obviously a very abnormal set of financial data that goes far beyond common sense.

First of all, for Xugong Machinery, the total sales in 2011 were only 32.971 billion yuan, and at the same time the total assets at the end of the year were only 34.714 billion yuan, which was roughly equivalent to only a quarter of the total amount of the above-mentioned deductions. So what is the need? At the same time, how can financial strength support the purchase of more than one hundred billion yuan?

Next, look at the company’s financial data. The cash flow statement “Cash for Purchase of Goods and Acceptance of Labor Services” accounted for RMB 31.298 billion in the whole year of 2011, which was paid for by purchases and construction of fixed assets, intangible assets and other long-term assets. The cash account amounted to RMB 2.822 billion, which represented the main purchase cash flow of a company under normal circumstances. The total amount of the two companies was only RMB 34.12 billion, which was only 27.38 percent of the “staggering” purchase amount estimated above. %.

At the same time, balances of accounts payables and prepayments at the end of 2011 on the balance sheet were only 637 million yuan and 5.438 billion yuan in the year-on-year balance of the same period of last year, which was not an order of magnitude higher than the purchase amount of 100 billion yuan. This further confirms that the 100 billion purchase amount is a "jokes."

Therefore, the Journal believes that there is reason to believe that Xugong Machinery has falsely disclosed information on major suppliers and purchases for the year 2011 in the report of the board of directors of its 2011 report, and I am afraid that this is not a simple "typo." Because even assuming that XCMG’s "proper amount of purchases for the top 5 suppliers" was due to a "typo", it was erroneously disclosed as 10 times the correct amount, that is, the actual purchase amount of the top 5 suppliers was 2.542 billion yuan. The purchase amount for the whole year was only 12.459 billion yuan, which in turn was not commensurate with the amount of the “Cash for Purchase of Goods and Acceptance of Labor Services” amounting to 31.698 billion yuan for the whole year.

In short, Xugong Machinery's main supplier information in 2011 constituted a mystery involving hundreds of billions of dollars.

Joint venture company's revenue accounting "disorderly account"

According to Xugong Machinery's annual report, the company's joint venture (Note: usually 20% to 50% of the invested companies) is only one of Xuzhou Charter Machinery Co., Ltd., Xugong Machinery holds shares in the company. The proportion is 50% and the investment income is calculated according to the equity method.

At the same time, "Xuzhou Chartered Machinery Co., Ltd." is not an associate company newly added this year. It should calculate its investment income by multiplying its annual net profit by the shareholding ratio. According to Xugong Machinery's annual report data disclosure, Xuzhou Chartered Machinery Co., Ltd. achieved a net profit of 2,706,700 yuan in 2011. With Xugong Machinery's shareholding ratio, it should use the equity method to accrue investment income of 1,353,400 yuan.

In fact, according to the information disclosed in the investment earnings section of the Xugong Machinery Annual Report financial report, the amount of investment income accrued for this year's investment was only 999,200 yuan, which was 354,200 yuan less than the aforementioned theoretical amount. At the same time, the amount of the investment income of the joint venture disclosed in the notes to the financial report is consistent with the amount of the “wherein: investment income from associates and joint ventures” listed in the income statement. The strange part is that where the difference in the amount of 354,200 yuan goes?

Looking at the two articles in this publication, the financial data disclosed by Xugong Machinery can be described as doubtful. It is difficult to believe the quality of its financial internal control. How can we support credit financing services worth tens of billions of yuan? At the same time, the business dilemma hidden behind these tens of billions of funding gaps is also worth paying attention to.