Zhongzhuang Construction(SZ:002822) Zheng Quan Zhi Xing·2025-07-02 16:36Core Viewpoint - Shenzhen Zhongzhuang Construction Group Co., Ltd. has corrected its financial statements for the years 2017-2021 due to accounting errors that resulted in inflated profits, as identified by the regulatory authority [1][8][10]. Summary by Sections Nature and Reasons for Corrections - The company and its subsidiary were found to have misclassified internal contracting projects as self-operated projects, leading to understated costs and inflated profits. The inflated profit amounts for the years 2017 to 2021 were RMB 18.33 million, RMB 12.92 million, RMB 43.99 million, RMB 13.02 million, and RMB 16.10 million, respectively, which accounted for 9.06%, 5.26%, 14.74%, 3.91%, and 8.88% of the total disclosed profits for those years [1][8]. Financial Impact of Corrections - 2017 Financial Statement Adjustments: - Other payables increased from RMB 17.52 million to RMB 39.47 million, a change of RMB 21.95 million - Net profit decreased from RMB 160.22 million to RMB 138.27 million, a reduction of RMB 21.95 million [1][3]. - 2018 Financial Statement Adjustments: - Other payables increased from RMB 27.08 million to RMB 57.18 million, a change of RMB 30.10 million - Net profit decreased from RMB 160.32 million to RMB 152.17 million, a reduction of RMB 8.15 million [3][5]. - 2019 Financial Statement Adjustments: - Other payables increased from RMB 65.23 million to RMB 132.81 million, a change of RMB 67.59 million - Net profit decreased from RMB 236.62 million to RMB 199.14 million, a reduction of RMB 37.48 million [5][6]. - 2020 Financial Statement Adjustments: - Other payables increased from RMB 137.13 million to RMB 210.75 million, a change of RMB 73.62 million - Net profit decreased from RMB 251.90 million to RMB 245.87 million, a reduction of RMB 6.03 million [6][7]. - 2021 Financial Statement Adjustments: - Other payables increased from RMB 172.93 million to RMB 257.65 million, a change of RMB 84.72 million - Net profit decreased from RMB 118.96 million to RMB 107.86 million, a reduction of RMB 11.10 million [7][8]. Approval and Opinions - The corrections were approved by the company's board and supervisory committee, confirming compliance with relevant accounting standards and regulations, ensuring a more accurate reflection of the company's financial status and operational results [8][9][10]. Impact on Company - The corrections will not significantly affect the company's operational results or financial condition, nor will they harm the interests of shareholders, particularly minority shareholders. The company aims to enhance its financial management and governance practices moving forward [10][11].