The annual performance of the audit institution (s0021, s0021) exploded continuously. Earlier, at the end of December last year, the company announced the termination of the cooperative relationship with notarial Tianye Certified Public Accountants (special general partnership) (hereinafter referred to as notarial Tianye) for more than 10 years, and replaced Lixin Zhonglian Certified Public Accountants (special general partnership) (hereinafter referred to as Lixin Zhonglian) as the annual audit institution in 2021. However, the above proposal to change the annual review organization was rejected by the controlling shareholders of the company at the general meeting of shareholders. As the disclosure date of the annual report is approaching, Shanghai Hongda New Material Co.Ltd(002211) has to continue to seek new cooperation. On February 16, the company announced that it plans to appoint Lianda Certified Public Accountants (special general partnership) (hereinafter referred to as Lianda) as the audit institution of the company in 2021.
The reporter of the daily economic news noted that the price proposed by Shanghai Hongda New Material Co.Ltd(002211) this time is much higher than the annual examination fee paid to notary Tianye in the past, and is also a little higher than the annual examination fee proposed by the company to be paid to Lixin Zhonglian. For Lianda, although it is expected to obtain the “price increase” appointment of Shanghai Hongda New Material Co.Ltd(002211) , under the background of the “thunder explosion” of the private network communication business of the listed company and being filed and investigated by the CSRC, if Lianda is officially employed, the audit risk it faces cannot be underestimated.
it is proposed to appoint Lianda as the annual review organization
According to the Shanghai Hongda New Material Co.Ltd(002211) announcement, the company has received a notice from the controlling shareholder Jiangsu Weilun Investment Management Co., Ltd. (hereinafter referred to as Jiangsu Weilun). Jiangsu Weilun believes that notarial Tianye has a long continuous audit period, and proposes that the company appoint Lianda as the company’s audit institution in 2021 from the perspective of independence.
Lianda was founded in 2013, with 23 audit clients of Listed Companies in 2020; In 2020, the total audited income of Lianda was 401 million yuan, the audit business income was 324 million yuan, and the securities business income was 79.1673 million yuan.
Shanghai Hongda New Material Co.Ltd(002211) said that after receiving the proposal from the controlling shareholder, the company carefully considered that notarial Tianye has provided audit services for the company for more than 10 consecutive years, in order to continuously ensure the independence, objectivity and fairness of the audit work, and comprehensively consider the risks faced by the company in its business in 2021, as well as the company’s development strategy, business layout, audit needs and other factors, The company plans to hire Lianda as the company’s audit institution in 2021, with a term of one year.
“The company plans to pay a total of 1.3 million yuan (including tax) for the audit of 2021, including 900000 yuan (including tax) for the audit of annual financial statements and 400000 yuan (including tax) for the audit of annual internal control.” Shanghai Hongda New Material Co.Ltd(002211) revealed that.
The reporter of the daily economic news noted that the audit fee given by Shanghai Hongda New Material Co.Ltd(002211) this time has increased a lot compared with previous years. According to the Shanghai Hongda New Material Co.Ltd(002211) periodic report, the remuneration paid by the company to notary Tianye in 2019 was 630000 yuan, and the commission fee for issuing the internal control assurance report was 50000 yuan; In 2020, the company paid 750000 yuan to notary Tianye, and there was no internal control audit in that year.
Lianda seems to be an alternative to Shanghai Hongda New Material Co.Ltd(002211) . On December 31 last year, Shanghai Hongda New Material Co.Ltd(002211) announced that Jiangsu Weilun proposed to change the audit institution of the company in 2021 to Lixin Zhonglian. The reason for the change is that notary Tianye has a long continuous audit period for the company. At that time, the listed company said that the audit fee to be paid to Lixin Zhonglian was 1.1 million yuan (including tax), including 850000 yuan (including tax) for annual financial report audit, 200000 yuan (including tax) for annual internal control audit and 50000 yuan (including tax) for other special reports audit.
At first, the board of directors of the listed company considered and approved the proposal of the controlling shareholder by a unanimous vote. However, at the extraordinary general meeting of shareholders held on Shanghai Hongda New Material Co.Ltd(002211) January 17 this year, the proposal on the proposed change of accounting firm was rejected by a high vote. From the voting results, Jiangsu Weilun, the controlling shareholder of the company, is one of the opponents
Image Source: Announcement screenshot
For the reason why Jiangsu Weilun voted against, Shanghai Hongda New Material Co.Ltd(002211) did not publicly explain. Some investors speculate that this may be related to Shanghai Hongda New Material Co.Ltd(002211) being filed for investigation by the CSRC in early January.
the “thunder explosion” of private network communication business caused huge losses
For Lianda, although it is expected to obtain the “price increase” appointment of Shanghai Hongda New Material Co.Ltd(002211) , the audit risk it faces cannot be underestimated.
On January 29, Shanghai Hongda New Material Co.Ltd(002211) disclosed the performance forecast for 2021. The company expects a loss of 470 million yuan to 700 million yuan, a year-on-year decrease of 991.91% ~ 1428.38%.
Shanghai Hongda New Material Co.Ltd(002211) the substantial loss was mainly due to the explosion of its private network communication business. In June last year, the company disclosed that the private network communication business operated by the wholly-owned subsidiary had the risks of abnormal execution of some contracts and overdue and uncertain recovery of some accounts receivable.
In the foregoing performance forecast, Shanghai Hongda New Material Co.Ltd(002211) disclosed that the company has accrued a subtotal of credit impairment loss of 30.6213 million yuan for accounts receivable, prepayments and other receivables, reducing the company’s net profit attributable to the parent company by 23.0987 million yuan; As the production and sales of relevant subsidiaries are basically at a standstill, and the accounts receivable and prepayments related to private network communication continue to have unrecoverable bad debt risks, and the relevant inventories cannot be realized, the company has fully withdrawn the goodwill impairment provision for the goodwill of 166 million yuan formed by the acquisition of corresponding subsidiaries, reducing the net profit attributable to the parent company by 166 million yuan.
In addition, Shanghai Hongda New Material Co.Ltd(002211) said that it planned to fully accrue impairment losses for private network communication accounts receivable, prepayments, inventory, fixed assets, etc., and the above proposed amount was about 580 million yuan, reducing the company’s net profit attributable to the parent by 580 million yuan.
The reporter of the daily economic news noted that the crisis of Shanghai Hongda New Material Co.Ltd(002211) controlling shareholders is not small. Last August, Shanghai Hongda New Material Co.Ltd(002211) said that its actual controller Yang Xin was suspected of losing contact; In late November last year, Jiangsu Weilun, the controlling shareholder of the company, received the notice of filing a case from the supervision committee of Dantu District, Zhenjiang city. Jiangsu Weilun was filed for investigation on suspicion of bribery.
