Yunnan Energy New Material subsidiary gets $2m government subsidy

Yunnan Energy New Material Co., Ltd. announced that its subsidiary, Jiangsu Energy New Material Technology Co., Ltd., received a subsidy of $2,000,000 from the Jiangsu Jintan Economic Development Zone Management Committee. This amount represents 3.60% of the company's most recently audited net profit attributable to shareholders. The company clarified that this cash subsidy relates to its ordinary operating activities but is not sustainable.

According to Accounting Standard No. 16 – Government Subsidies, this subsidy is classified as an income-related government subsidy, as it is not for the acquisition or construction of long-term assets. Consequently, the subsidy will be recognized in "other income" in the company's financial statements.

The company anticipates that this $2,000,000 income-related government subsidy will boost its future pre-tax profits by approximately $2,000,000. Investors are advised that the final accounting treatment will be subject to the annual audit results by the accounting firm.