1 stock code: 000652 stock abbreviation: Tianjin Teda Co.Ltd(000652) Announcement No.: 2022-10 Tianjin Teda Co.Ltd(000652) announcement on the reply to the attention letter of Shenzhen Stock Exchange Tianjin Teda Co.Ltd(000652) (hereinafter referred to as ” Tianjin Teda Co.Ltd(000652) ” or “the company”) received the attention letter on Tianjin Teda Co.Ltd(000652) issued by the management department of listed companies of Shenzhen Stock Exchange on February 8, 2022 (attention letter of the company Department [2022] No. 132) 。 According to the requirements of the letter of concern, the company has carefully analyzed and verified the relevant problems one by one, and now the relevant questions are replied as follows: 1. Please specify the reasons for changing the annual audit accountant twice and whether you have done a good job in the communication between the previous and subsequent Accountants. Your company and PricewaterhouseCoopers Zhongtian certified public accountants Daxin certified public accountants has significant differences on matters related to annual report audit. The independent director is requested to check the specific reasons for the change of accounting firm, and explain whether there are other reasons or matters leading to the change of accounting firm and whether the company purchases audit opinions. Reply: (1) specify the reasons for changing the annual audit accountant twice. PwC has provided audit services for our company for many years. According to the requirements of state-owned assets management, the company has hired Daxin Certified Public Accountants (special general partnership) (hereinafter referred to as “Daxin” or “Daxin Certified Public Accountants”) as the company’s 2021 annual audit certified public accountants according to the results of public bidding. Daxin certified public accountants has carried out on-site preliminary examination from November to December 2021. In January 2022, the epidemic broke out in Tianjin. Affected by the epidemic prevention, control and isolation policies, Daxin was unable to enter the site to carry out the on-site audit in Tianjin. Therefore, the annual report audit plan of the company could not be implemented as scheduled in the reporting schedule. In order to ensure the smooth development of the company’s audit work and not affect the requirements of annual report audit and disclosure, the company and Daxin negotiated to terminate the audit business in 2021. (2) Whether the communication between the former and the latter accountants has been done well. The company has communicated with Daxin and China Audit Asia Pacific Certified Public Accountants (special general partnership) (hereinafter referred to as “China Audit Asia Pacific” or “China Audit Asia Pacific Certified Public Accountants”), and all parties know that they have no objection to this matter. The company and all members of the board of directors guarantee that the information disclosed is true, accurate and complete without false records, misleading statements or major omissions. 2 the previous time, the company has also communicated with PricewaterhouseCoopers Zhongtian certified public accountants and Daxin on the matter of changing the accounting firm. All parties know that they have no objection. (3) Whether your company has major differences with PricewaterhouseCoopers Zhongtian certified public accountants and Daxin Certified Public Accountants on matters related to annual report audit. PricewaterhouseCoopers Zhongtian certified public accountants has provided audit services for the company for many years and issued standard unqualified audit reports. Our company and PricewaterhouseCoopers Zhongtian certified public accountants have no significant differences on matters related to annual report audit. Daxin certified public accountants has not completed the audit of the company and has not formed the audit conclusion. In this process, our company and Daxin certified public accountants have no major differences on matters related to annual report audit. In line with the principle of diligence and due diligence provided by the 10th interim Board of directors of the Asia Pacific accounting firm and the relevant materials of the 10th interim Board of directors in 2022, we will pay close attention to the situation after receiving the 652 {letter of diligence from the 10th interim Board of directors of the Asia Pacific accounting firm, Careful verification was carried out. After verification, this change of accounting firm is indeed Daxin accounting firm, which is unable to enter the site to carry out audit work in Tianjin due to the impact of Tianjin epidemic prevention and isolation policies; In addition, due to the tight personnel arrangement of Daxin accounting firm, it is unable to coordinate sufficient internal audit resources, meet its requirements for undertaking the on-site workload of listed companies for the first time, and complete the company’s audit work in 2021 on schedule. There are no other reasons or matters leading to the replacement of accounting firms, and there is no case that the company purchases audit opinions. 2. Daxin certified public accountants is requested to verify and disclose the reasons why the relevant audit work and progress carried out since the appointment of the company’s annual audit accountant cannot be completed on schedule in 2021, and whether there is any active resignation due to the limited audit scope, differences on accounting treatment and other controversial matters, Communicate with your company on the process and content of appointment and resignation, and explain the specific reasons for accepting and resigning the company’s annual audit accountant in a short time, and whether the appointment in the early stage is prudent. Notes of Daxin certified public accountants: (1) the relevant audit work and progress since the appointment of the company’s annual audit accountant have been reviewed and approved by the sixth extraordinary general meeting of shareholders in 2021, and the firm has been appointed as the company’s audit institution in 2021. During the audit business, the Institute mainly implemented the procedures of understanding the auditee and its environment, preliminary analysis of the unaudited statements, paying attention to and evaluating the opening balance, reviewing the preparation 3 process of the consolidated financial statements of the previous year, communicating with the former accountant, preparing the audit plan, internal control test, year-end supervision, analytical review, etc. (2) The reason why your company was unable to complete the audit work in 2021 on schedule was that it was unable to enter the site to carry out the audit work in Tianjin due to the impact of Tianjin epidemic prevention and isolation policies. The correspondence and transaction letters, customer and supplier interviews and other work were greatly affected, and the work progress was far behind the original plan. (3) Whether there is active resignation due to the limited scope of audit, differences in accounting treatment and other controversial matters. Since the relevant audit procedures have not been completed, the audit work has not reached a conclusion, and the stage of communicating audit opinions with the management and governance has not been reached, the exchange and the company do not have any problems due to the limited scope of audit There are differences in accounting treatment and other controversial matters, which lead to active resignation. (4) Communicate with your company on the process and content of appointment and resignation, and explain the specific reasons for accepting and resigning the company’s annual audit accountant in a short time, and whether the appointment in the early stage is prudent. In October 2021, the exchange won the bid for the auditor of the company in 2021 through public bidding. According to the auditing standards for Chinese certified public accountants No. 1151 – communication with the management, since November 2021, the exchange has made many matters on the responsibility, independence statement, audit scope and time arrangement of certified public accountants, epidemic impact in Dalian, Tianjin and other regions, Has communicated with the company’s management for many times. Since the outbreak of the epidemic in Tianjin in early January 2022, the two sides have maintained close contact to assess the impact of the lag of the audit plan. On January 26, 2022, the two sides held a video conference to communicate that the on-site audit procedures caused by the covid-19 pneumonia epidemic were not implemented as planned, and the overall audit progress was slow, Unable to meet the on-site audit workload requirements of the exchange for the first time undertaking listed companies (class a business); In addition, due to the large number of audit projects and tight personnel arrangement of the Institute, the Institute is unable to coordinate sufficient audit resources to complete the follow-up audit work on schedule. Both parties preliminarily reached the intention to terminate the audit business and decided that both parties should perform the approval process of terminating the business respectively. On February 3, 2022, the exchange issued the letter on agreeing to terminate the engagement letter of audit business in 2021 to the company and agreed to sign the agreement on terminating the engagement letter of audit business.
The firm was employed in the form of public bidding and fully communicated and evaluated the whole process of the audit plan seriously lagging behind due to the epidemic, as well as the audit resources and business arrangements of the firm. In order to ensure the normal progress of the company’s annual audit work, it is prudent to accept and resign as the company’s annual audit accountant in a short time. It is prudent to be employed in the early stage. 3. Your company’s 2021 annual report is scheduled to be disclosed on April 13, 2022. The change of audit institution needs to be reviewed and approved by the general meeting of shareholders. Please add the specific time and personnel arrangement, audit plan, understanding of key audit risk areas and audit procedures to be implemented by China Audit Asia Pacific accounting firm for the audit of your company’s 42021 annual report, whether there is sufficient time to ensure the smooth implementation of annual audit projects and the full implementation of key audit procedures, relevant audit Whether the review plan complies with the relevant provisions of the auditing standards for Chinese certified public accountants. (1) The scheduled disclosure time of the company’s 2021 annual report still needs to be reviewed and approved by the company’s general meeting of shareholders due to the change of audit institution. In order to ensure the full implementation of audit procedures, the company adjusted the scheduled disclosure time of the annual report to April 26, 2022. (2) The specific time, personnel arrangement and audit plan for the audit of the company’s annual report in 2021 by China Audit Asia Pacific. The company and China Audit Asia Pacific communicated the “audit of financial statements in 2021” on January 29, 2022. During this period, China Audit Asia Pacific, through interviews with the chairman and chief financial officer of the company, consulted public information, analyzed and sorted out the company’s business data and on-site investigation in recent five years, and understood the basic situation, historical evolution, integrity, main business and operation, financial situation of previous years and current year, industry background, development status of the company, major events and risks in recent years, We had full communication with the company on February 3 and February 6 respectively. On this basis, we conducted a preliminary business risk assessment and determined that we can undertake the audit projects of the company. China Audit Asia Pacific has formulated the overall arrangement and reasonable plan of the project, and arranged a total of 48 auditors to form a project team to carry out project audit. The specific arrangements are as follows: ① from February 8 to April 10, 2022, according to the overall arrangement of the project, the overall audit strategy and the specific audit plan, it is divided into three project teams to implement the on-site field audit at the same time, and complete the preparation of the first draft of the report and the review of the first and second quality. ② From April 11 to April 19, 2022, complete the review of the quality control department and the review of independent partners (three-level review). ③ From April 20 to April 23, 2022, finalize the audit report and issue the audit report. (3) Based on the understanding of the company and the audit reports of previous years, China Audit Asia Pacific plans to take the evaluation of the expected credit loss of accounts receivable and the evaluation of the net realizable value of inventory as the key audit areas. ① The audit procedures to be implemented for the evaluation of the provision of expected credit loss of accounts receivable are as follows: · understand and evaluate the company’s internal control procedures for the measurement of expected credit loss of accounts receivable· Test the key control of expected credit loss of accounts receivable· According to the actual situation of the company’s accounts receivable, determine the expected credit loss accrual for different accounts receivable 5 such as single item and risk combination, including sample review, prediction in combination with current and future conditions, inspection of payment records, subsequent collection, subsequent repayment plan, etc. ② The audit procedures to be implemented for the evaluation of the net realizable value of inventories are as follows: · understand the company’s accounting policies on the provision for falling prices of real estate inventories and trade commodity inventories, test relevant internal controls and evaluate the risk of material misstatement· On the basis of sampling, make a physical inventory of the inventory and observe its storage status and development progress. Analyze and use the third-party valuation report and adopt a reasonable valuation method to recheck and calculate the closing realizable value of inventory assets· The net realizable value of inventory is evaluated by viewing the public data, realizing the selling price after the inspection period and combining the industry experience. (4) Whether there is sufficient time to ensure the smooth implementation of the annual audit project and the full implementation of key audit procedures, and whether the relevant audit and review plans comply with the relevant provisions of the auditing standards for Chinese certified public accountants. In conclusion, China Audit Asia Pacific has formulated a reasonable and feasible audit plan and review plan with sufficient time Personnel and professional ability ensure the smooth completion of annual audit projects and the full implementation of key audit procedures. It is expected to disclose the annual report as scheduled. The relevant audit and review plans comply with the relevant provisions of the auditing standards for Chinese certified public accountants. It is hereby announced. Tianjin Teda Co.Ltd(000652) board of directors February 11, 2022
