Notes to financial statements
Year 2021
1、 Basic information of the company
（1） Company profile
Unittec Co.Ltd(000925) (hereinafter referred to as the company or the company) was approved by Zhejiang Provincial People's Government in ZZF [1998] No. 224 and registered with Zhejiang provincial market supervision administration on June 7, 1999. Now it holds a business license with unified social credit code of 91330 Guangdong Golden Dragon Development Inc(000712) 562466b. Registered address: 17 / F, building 4, Shuangcheng international, No. 1785, Jianghan Road, Binjiang District, Hangzhou. Legal representative: Pan Lichun. The company has a registered capital of 558086062 yuan and a total share capital of 558086062 shares with a par value of 1 yuan per share. The company's shares have been listed and traded in Shenzhen Stock Exchange.
The company is engaged in businesses related to rail transit, semiconductor and environmental protection. Its main business activities include rail transit electromechanical engineering, production and marketing of monocrystalline silicon and its products, and operation and maintenance of sewage treatment facilities.
The financial statements and notes to the financial statements were approved by the board of directors of the company on April 20, 2022.
（2） Consolidation scope
The subsidiaries included in the consolidation scope of the company in 2021 include Zhejiang Haina Semiconductor Co., Ltd., Zhejiang Insigma Technology Co.Ltd(600797) Zhonghe Rail Transit Engineering Co., Ltd., Sichuan Zhonghe Intelligent Control Technology Co., Ltd., etc. see note VII "rights and interests in other entities" for details.
2、 Preparation basis of financial statements
（1） Preparation basis
On the basis of continuous operation, according to the actual transactions and events, and in accordance with the accounting standards for business enterprises - Basic Standards and various specific accounting standards, the application guide of accounting standards for business enterprises, the interpretation of accounting standards for business enterprises and other relevant provisions issued by the Ministry of Finance (hereinafter collectively referred to as "accounting standards for business enterprises"), And the disclosure provisions of the rules for the preparation of information disclosure of companies offering securities to the public No. 15 - General Provisions on financial reports (revised in 2014) of the China Securities Regulatory Commission.
（2） Evaluation of going concern ability
The company has no events or circumstances that cause major doubts about the assumption of going concern within 12 months from the end of the reporting period.
3、 Major accounting policies and accounting estimates
（1） Statement of compliance with accounting standards for business enterprises
The financial statements prepared by the company comply with the requirements of the accounting standards for business enterprises and truly and completely reflect the company's financial position, operating results, cash flow and other relevant information.
（2） Accounting period
The fiscal year starts on January 1 and ends on December 31 of the Gregorian calendar.
（3） Business cycle
Normal business cycle refers to the period from the purchase of assets for processing to the realization of cash or cash equivalents. The company takes 12 months as an operating cycle and takes it as the liquidity division standard of assets and liabilities.
（4） Recording currency
The company and its domestic subsidiaries use RMB as the recording currency. The company's overseas subsidiaries take the currency in the main economic environment in which they operate as their bookkeeping base currency and convert it into RMB when preparing financial statements.
The currency used by the company in preparing the financial statements is RMB.
（5） Accounting treatment of business combinations under the same control and not under the same control
Business combination refers to the transaction or event in which two or more separate enterprises are combined to form a reporting entity. Business combinations are divided into business combinations under the same control and business combinations not under the same control.
1. Accounting treatment of business combination under the same control
A business combination under the same control is a business combination in which the enterprises participating in the merger are ultimately controlled by the same party or the same parties before and after the merger, and the control is not temporary.
The assets and liabilities of the combined party obtained by the company in business combination, except for the adjustment due to different accounting policies, shall be measured according to the book value of the combined party in the consolidated financial statements of the final controller on the combination date. The difference between the book value of the owner's equity of the merged party obtained by the company in the consolidated financial statements of the final controller and the book value of the merger consideration paid (or the total face value of the issued shares) shall be adjusted to the capital reserve; If the capital reserve is insufficient to offset, the retained earnings shall be adjusted.
The business combination under the same control is realized step by step through multiple transactions. For the difference between the sum of the book value of the investment held before the combination and the book value of the newly paid consideration on the combination date and the book value of the net assets obtained in the combination, the capital reserve (equity premium) shall be adjusted. If the capital reserve is insufficient to be offset, the retained earnings shall be adjusted. For the long-term equity investment held by the combining party before obtaining the control of the combined party, the changes in relevant profits and losses, other comprehensive income and other owner's rights and interests that have been recognized between the later of the date of obtaining the original equity and the date when the combining party and the combined party are under the final control of the same party and the date of combination shall offset the beginning retained earnings or current profits and losses during the comparative statement period respectively, Except for other comprehensive income arising from the change of net liabilities or net assets of the investee's remeasurement of the defined benefit plan.
2. Accounting treatment of business combination not under the same control
A business combination not under the same control is a business combination in which the enterprises participating in the merger are not ultimately controlled by the same party or the same parties before and after the merger.
On the acquisition date, the company recognizes the difference between the combination cost and the fair value of the identifiable net assets of the acquiree obtained in the combination as goodwill; If the combination cost is less than the fair value of the identifiable net assets of the acquiree obtained in the combination, the fair value of the identifiable assets, liabilities and contingent liabilities of the acquiree obtained and the measurement of the combination cost shall be reviewed first. If the combination cost is still less than the fair value of the identifiable net assets of the acquiree obtained in the combination, the difference shall be included in the current profit and loss.
If, on the acquisition date or at the end of the current period of the merger, the fair value of various assets paid as the merger consideration cannot be reasonably determined due to various factors, or the fair value of various identifiable assets and liabilities of the acquiree obtained in the merger, the company will calculate the business merger based on the temporarily determined value at the end of the current period of the merger. If further information is obtained within 12 months from the date of purchase indicating that the original temporarily determined value needs to be adjusted, it shall be deemed to have occurred on the date of purchase, and retroactive adjustment shall be made. At the same time, relevant adjustments shall be made to the comparative report information provided based on the temporary value; After 12 months from the date of purchase, the adjustment of the cost of business combination or the value of identifiable assets and liabilities obtained in the combination shall be handled in accordance with the principles of accounting standards for Business Enterprises No. 28 - changes in accounting policies, accounting estimates and correction of accounting errors.
If the deductible temporary difference of the acquiree obtained by the company in business combination does not meet the recognition conditions of deferred income tax assets on the acquisition date, it shall not be recognized. Within 12 months after the purchase date, if new or further information is obtained indicating that the relevant situation on the purchase date already exists and the economic benefits brought by the deductible temporary difference of the acquiree on the purchase date are expected to be realized, the relevant deferred income tax assets shall be recognized and the goodwill shall be reduced. If the goodwill is insufficient to be offset, the difference shall be recognized as the current profit and loss; In addition to the above, the deferred income tax assets related to business combination shall be recognized and included in the current profits and losses.
For business combinations not under the same control realized step by step through multiple transactions, judge whether the multiple transactions belong to "package transactions" according to the accounting standards for business enterprises. The terms, conditions and economic impact of multiple transactions meet one or more of the following conditions, which usually indicates that multiple transactions should be accounted for as a package deal: (1) these transactions are concluded at the same time or considering each other's influence; (2) These transactions as a whole can achieve a complete business result; (3) The occurrence of one transaction depends on the occurrence of at least one other transaction; (4) A transaction is uneconomic alone, but it is economical when considered together with other transactions.
If it is a "package deal", each transaction shall be treated as a transaction that obtains control. If it is not a "package deal", in the consolidated financial statements, the equity of the acquiree held before the acquisition date shall be re measured according to the fair value of the equity on the acquisition date, and the difference between the fair value and its book value shall be included in the current investment income; The equity of the acquiree held before the acquisition date involves other comprehensive income and other changes in owner's equity, which are transferred to the current income on the acquisition date, except for other comprehensive income arising from the change in net liabilities or net assets of the investee's remeasurement and setting benefit plan.
3. Treatment of transaction expenses in business combination
The intermediary expenses such as audit, legal services, appraisal and consultation and other relevant management expenses incurred for business combination shall be included in the current profit and loss when incurred. The transaction expenses of equity securities or debt securities issued as merger consideration shall be included in the initial recognition amount of equity securities or debt securities.
（6） Preparation method of consolidated financial statements
1. Consolidation scope
The consolidation scope of the consolidated financial statements is determined on the basis of control. Control means that the company has the power to the investee, enjoys variable returns by participating in relevant activities of the investee, and has the ability to use the power to the investee to affect the amount of return. The scope of consolidation includes the company and all subsidiaries. Subsidiaries refer to the entities controlled by the company (including the separable parts of enterprises and invested units, structured entities, etc.).
2. Preparation method of consolidated statements
The company prepares consolidated statements based on the financial statements of itself and its subsidiaries and other relevant materials. In preparing consolidated financial statements, the company regards the whole enterprise group as an accounting entity, and reflects the overall financial status, operating results and cash flow of the company in accordance with the determination, measurement and presentation requirements of relevant accounting standards for business enterprises and unified accounting policies. The consolidated financial statements offset the impact of internal transactions and transactions between the company and its subsidiaries and between subsidiaries on the consolidated balance sheet, consolidated income statement, consolidated cash flow statement and consolidated statement of changes in owner's equity.
During the reporting period, the subsidiaries and businesses increased due to business combination under the same control shall be deemed to be included in the consolidation scope of the company from the date when they are controlled by the final controller, and their operating results and cash flows from the date when they are controlled by the final controller shall be included in the consolidated income statement and consolidated cash flow statement respectively. During the reporting period, the opening balance of the consolidated balance sheet is adjusted at the same time, and the relevant items of the comparative report are adjusted. It is deemed that the consolidated report entity has existed since the time when the final controller began to control.
If subsidiaries are added due to business combination not under the same control in the current period, the opening balance of the consolidated balance sheet will not be adjusted; The financial statements are adjusted based on the fair value of identifiable net assets on the acquisition date. Incorporate the income, expenses and profits of subsidiaries from the purchase date to the end of the period into the consolidated income statement; The cash flow of the subsidiary from the date of purchase to the end of the period is included in the cash flow statement. The equity, profit and loss and current comprehensive income attributable to minority shareholders of subsidiaries are separately listed under the owner's equity item in the consolidated balance sheet, the net profit item and total comprehensive income item in the consolidated income statement. If the current loss shared by the minority shareholders of a subsidiary exceeds the share of the minority shareholders in the owner's equity of the subsidiary at the beginning of the period, the balance shall be offset against the minority shareholders' equity.
3. Purchase of minority shareholders' equity and partial disposal of subsidiaries' equity without losing control
The difference between the cost of long-term equity investment newly obtained by the company due to the purchase of minority shares and the share of net assets of subsidiaries continuously calculated from the purchase date or merger date according to the newly increased shareholding ratio, As well as the difference between the disposal price obtained from the partial disposal of equity investment in subsidiaries and the share of net assets of subsidiaries continuously calculated from the purchase date or merger date corresponding to the disposal of long-term equity investment without losing control, the equity premium in the capital reserve in the consolidated balance sheet shall be adjusted. If the equity premium in the capital reserve is insufficient to be offset, the retained earnings shall be adjusted.
4. Disposal of equity of subsidiaries losing control
If the company disposes of a subsidiary in the current period, the income, expenses and profits of the subsidiary from the beginning of the period to the disposal date shall be included in the consolidated income statement; The cash flow of the subsidiary from the beginning of the period to the disposal date is included in the consolidated cash flow statement. When the control over the original subsidiary is lost due to the disposal of part of the equity investment or other reasons, the company remeasures the remaining equity investment after disposal according to its fair value on the date of loss of control. The difference between the sum of the consideration obtained from the disposal of equity and the fair value of the remaining equity minus the sum of the share of the net assets of the original subsidiary continuously calculated from the purchase date and the goodwill calculated according to the original shareholding ratio shall be included in the investment income of the current period when the control right is lost. Other comprehensive income related to the equity investment of the original subsidiary shall be accounted for on the same basis as the direct disposal of relevant assets and liabilities by the acquiree when the control right is lost (that is, except for the changes caused by the re measurement of net liabilities or net assets outside the benefit plan in the original subsidiary, the rest shall be transferred to the current investment income). Subsequently, the remaining equity of this part shall be subsequently measured in accordance with the relevant provisions of the accounting standards for Business Enterprises No. 2 - long term equity investment or the accounting standards for Business Enterprises No. 22 - recognition and measurement of financial instruments. See note III (XIX) "long term equity investment" or note III (x) "financial instruments" for details.
5. Step by step disposal of equity investment in subsidiaries to loss of control
If the company disposes the equity investment in subsidiaries step by step through multiple transactions until it loses control, it is necessary to distinguish whether the transactions of disposing the equity investment in subsidiaries until it loses control belong to a package deal.
If all transactions from the disposal of equity investment in subsidiaries to the loss of control are package transactions, all transactions shall be treated as a transaction for the disposal of subsidiaries and the loss of control; However, before the loss of control, the difference between each disposal price and the share of the subsidiary's net assets corresponding to the disposal of investment shall be recognized as other comprehensive income in the consolidated financial statements, and shall be transferred to the profit and loss of the current period when the control is lost.
If it is not a package deal, each transaction shall be accounted for according to the applicable principles of "partial disposal of long-term equity investment in subsidiaries without losing control" and "loss of control over original subsidiaries due to disposal of partial equity investment or other reasons" (see the preceding paragraph for details). That is, the difference between each disposal price and the share of the book value of the net assets of the subsidiary continuously calculated from the purchase date corresponding to the disposal of the investment before the loss of control is included in the capital reserve (equity premium) as an equity transaction. When the control right is lost, it shall not be transferred into the profits and losses of the current period when the control right is lost. （7） Classification of joint venture arrangement and accounting treatment method of joint operation
Joint venture arrangement refers to a
