Securities code: Zhejiang Reclaim Construction Group Co.Ltd(002586) securities abbreviation: ST sea reclamation Announcement No.: 2022091 Zhejiang Reclaim Construction Group Co.Ltd(002586)
Announcement on correction and retroactive adjustment of accounting errors in the previous period
The company and all members of the board of directors guarantee that the contents of the announcement are true, accurate and complete without false records, misleading statements or major omissions.
The 50th meeting of the 6th board of directors and the 22nd Meeting of the 6th board of supervisors of the company deliberated and adopted the proposal on correction and retroactive adjustment of accounting errors in the early stage of the company. According to the Accounting Standards No. 28 – changes in accounting policies and accounting estimates and error correction, and accounting Standards No. 29 – events after the balance sheet date According to the requirements of the rules for the preparation and reporting of information disclosure of companies offering securities to the public No. 19 – correction and related disclosure of financial information and the decision on administrative supervision measures ([2021] No. 25) (hereinafter referred to as the “decision”) of Ningbo regulatory bureau of China Securities Regulatory Commission, the accounting errors in the financial statements of relevant periods shall be corrected and retroactively adjusted, The situation of this retrospective adjustment is described as follows:
1、 Summary of correction of accounting errors in the previous period:
Recently, the company found that there were errors in some accounting treatment and financial statement disclosure in the 2020 financial statements prepared by the company. In order to more accurately reflect the operating results of each accounting period, truthfully reflect the presentation of relevant accounting subjects and accurately reflect the costs and expenses of each period, the proposal on correction and retroactive adjustment of previous accounting errors was reviewed and approved by the company at the 50th meeting of the sixth board of directors and the 22nd meeting of the sixth board of supervisors on April 28, 2022.
2、 The impact of retroactive adjustment on financial status and operating results and the retroactively adjusted financial indicators 1. The main items corrected in 2020 are as follows:
(1) On August 21, 2020, the company announced that it had lost control of Shanghai Millennium Urban Planning Engineering Design Co., Ltd. (hereinafter referred to as Shanghai Millennium Design Co., Ltd.), which was not included in the scope of consolidated statements in the current year and would not be managed as a holding subsidiary of the company in the future. In January 2022, the company fully demonstrated the out of control time point of Shanghai Millennium design company, and confirmed that the actual out of control time point of Shanghai Millennium design company is May 15, 2020.
The accounting standards for Business Enterprises No. 33 – consolidated financial statements stipulates that the consolidation scope of consolidated financial statements shall be determined on the basis of control. The investor shall judge whether to control the investee on the basis of comprehensive consideration of all relevant facts and circumstances. Once the change of relevant facts and circumstances leads to the change of relevant elements involved in the definition of control, the investor shall reassess it.
When preparing the 2020 financial statements, the company did not include the financial data before the loss of control of Shanghai Millennium design company into the scope of the consolidated financial statements, which did not comply with the provisions of the accounting standards for business enterprises. After regaining control over Shanghai Millennium design company, the company decided to correct the accounting error, make retroactive adjustment, and incorporate the profit statement of Shanghai Millennium design company from January to April 2020 into the company’s 2020 financial statements.
According to the approval of zhongxinghua certified public accountants, the financial data of Shanghai Millennium design company from January to April 2020 are incorporated into the company’s 2020 financial statements, and the company’s 2020 net profit is increased by -380414590 yuan at the consolidation level, including 17556120176 yuan of main business income, 15046179772 yuan of main business cost, 114890564 yuan of taxes and surcharges, 408142428 yuan of sales expenses, 1254426688 yuan of management expenses R & D expense is 1035438713 yuan, financial expense is -12423293 yuan, other income is 1135695380 yuan, investment income is 336.98 yuan, credit impairment loss is -334836538 yuan, asset impairment loss is -124401030 yuan, non operating income is 23748251 yuan, non operating expenditure is 890072048 yuan, and income tax is -99952393 yuan.
(2) The company did not conduct goodwill impairment test in accordance with the provisions of accounting standards for Business Enterprises No. 8 – asset impairment, and made full provision for impairment of goodwill acquired by Shanghai Millennium design company in 2019. After the company resumed control over Shanghai Millennium design company, it decided to correct the error and make retroactive adjustment.
According to the retrospective asset evaluation report of Shanghai Millennium urban planning and Engineering Design Co., Ltd. including the recoverable amount of the goodwill asset group involved in the Zhejiang Reclaim Construction Group Co.Ltd(002586) proposed goodwill impairment test (glhpbz (2022) No. 038) issued by Gelu (Shanghai) asset evaluation Co., Ltd., the recoverable amount of the asset group including goodwill of Shanghai Millennium Design Co., Ltd. on December 31, 2019 was 154800000000 yuan, As of December 31, 2019, the book value of the company’s asset group including goodwill was 177887561486 yuan. Therefore, the impairment of asset group including goodwill is 23087561486 yuan, and the impairment of goodwill attributable to the company is 20654074786 yuan.
To sum up, at the consolidation level, the goodwill impairment provision of 70080503109 yuan withdrawn from the book in 2019 is reversed and included in the undistributed profit at the beginning of the year; The supplementary provision for goodwill impairment in 2019 is 20654074786 yuan, which is included in the undistributed profit at the beginning of the year. At the parent company level, the long-term equity investment impairment provision of 70080503109 yuan withdrawn in 2019 is reversed and included in the undistributed profit at the beginning of the year.
(3) On December 31, 2020, the company transferred the book value of long-term equity investment in Shanghai Millennium design company (full provision for goodwill impairment) to other non current assets for accounting, and transferred the net profit from the acquisition date to the date of loss of control to other non current assets in the consolidated financial statements according to the share of the company. In view of the company’s loss of control over Shanghai Millennium design company in 2020, the company cannot determine the value of the equity investment of Shanghai Millennium design company included in other non current assets as of December 31, 2020.
According to the retrospective appraisal report on the recoverable amount of 8945975% equity of Shanghai Millennium urban planning and Engineering Design Co., Ltd. involved in the impairment test of Zhejiang Reclaim Construction Group Co.Ltd(002586) proposed long-term equity investment issued by North Northking Information Technology Co.Ltd(002987) ASI Asset Appraisal Office (special general partnership), the recoverable amount of 8945975% equity held by the company in 2020 was 131382000000 yuan, The book value of the company’s equity investment in Shanghai Millennium design company on December 31, 2020 was 144924795000 yuan (the book value of equity investment after retroactive adjustment in (2)), and the equity impairment was 13542795000 yuan.
To sum up, at the consolidation level, the impairment loss of other non current assets – equity investment of Shanghai Millennium design company of 13542795000 yuan is accrued and included in the asset impairment loss; The profit of 24611396601 yuan transferred into other non current assets from the acquisition date to the date of loss of control shall be reversed and included in other profit distribution; The supplementary provision for goodwill impairment of 20654074786 yuan will be offset against other non current assets.
At the level of parent company, the impairment loss of equity investment of other non current assets – Shanghai Millennium design company of 13542795000 yuan is accrued and included in the asset impairment loss.
(4) According to the relevant provisions of accounting standards for Business Enterprises No. 14 – revenue and accounting standards for Business Enterprises No. 22 – recognition and measurement of financial instruments, the impairment of contract assets shall be included in the “asset impairment loss”. When preparing the 2020 financial statements, the company mistakenly included the impairment of contract assets in the credit impairment loss. At the consolidation level, reclassify and adjust the credit impairment loss of 1554180342 yuan to the asset impairment loss; At the parent company level, the credit impairment loss of 1554180342 yuan was reclassified and adjusted to the asset impairment loss. 2. Comparison of affected statement items in 2020
(1) Consolidated balance sheet
December 31, 2020
project
Amount before correction amount after correction
Other non current assets 9950948159711272236722110781718319 undistributed profit -13717886588511272236722 -125906629163
(2) Consolidated income statement
Year 2020
project
Amount before correction amount after correction amount operating income 19750830774017556120176215064427916 operating costs 18386351294315046179772198909692715 taxes and surcharges 771158564114890564886049128 sales expenses 27362087408142428435504515 management expenses 90042857671254426688 102, 58712455 R & D expenses 222709592410354387133262534637 financial expenses 11636122872 -1242329311623699579 other income 133429769311356953802469993073 investment income -672232334 336.98 -672198636 credit impairment loss -31124166691219343804 -1893072865 asset impairment loss -426970272- 15221376372 -15648346644 non operating income 229001342374825146648385 non operating expenditure 1375185703889007204814641929086 income tax expense 2059395279 -999523931959442886
Year 2020
project
Amount before correction amount after correction amount minority shareholder profit and loss -1475436648 -62033633 -1537470281
(3) Consolidated cash flow
Year 2020
project
Amount before correction amount after correction amount cash received from selling goods and providing labor services 20376147330714355984814218117458121
Cash received from other operating activities 43565429475413851342847703942903 cash paid for purchasing goods and receiving services 18113415489015239104137196373259027
Cash paid to employees and for 97793 Shanghai Guangdian Electric Group Co.Ltd(601616) 24719936216026559523 employees
Taxes paid 8841258141241690926111258167402 payment of other cash related to operating activities 37304654408412273115141427385559 received from investment income
9,234214.34 336.98 9,23
