Securities code: 000032 securities abbreviation: Shenzhen Sed Industry Co.Ltd(000032) Announcement No.: 2022-010 Shenzhen Sed Industry Co.Ltd(000032)
Announcement on the reply to the letter of concern of Shenzhen Stock Exchange
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.
Company management department of Shenzhen Stock Exchange:
Shenzhen Sed Industry Co.Ltd(000032) (hereinafter referred to as “the company”) received the letter of concern on Shenzhen Sed Industry Co.Ltd(000032) issued by your ministry on February 21, 2022 (company department concern letter [2022] No. 150) (hereinafter referred to as “the concern letter”). The company attaches great importance to the matters in the letter and carefully checks the questions raised in the letter of concern. The reply is as follows:
Your company has not hired the 2021 annual audit accounting firm. Our department is concerned about this. Please verify and explain the following problems.
1. According to the stock listing rules of the exchange, if the company fails to disclose the annual report within the statutory time limit, the company’s shares may be subject to the risk of delisting. A listed company shall reasonably arrange the time for new or renewed employment of an accounting firm, and shall not affect the regular disclosure of periodic reports due to failure to hire an accounting firm in time. Your company’s 2021 annual report is scheduled to be disclosed on April 22, 2022. Your company should attach great importance to the preparation and disclosure of the company’s 2021 annual report, hire an annual audit accountant as soon as possible and actively cooperate, disclose the annual report on schedule, and ensure that the information disclosure is true, accurate and complete. Please explain the reasons why your company has not hired the annual audit accounting firm at present, as well as the relevant arrangements and specific dates for hiring the annual audit accounting firm. On this basis, please explain whether your company has the risk of failing to disclose the annual report on schedule. If so, please explain your company’s response measures (if any) and timely and fully disclose the risk tips.
reply:
Lixin Certified Public Accountants (special general partnership) (hereinafter referred to as “Lixin”) has undertaken the audit of the company’s financial reports and internal control in 2018, 2019 and 2020, as well as the audit of the target company issuing shares to purchase 96.7186% equity of China system and the profit and loss audit during the transition period of delivery. It has a better understanding of the company’s business and is diligent and responsible in the audit process, It has better fulfilled the responsibilities and obligations agreed by both parties. In view of the above reasons, the company focused on communication with Lixin as the intended appointment institution when selecting the 2021 financial report and internal control audit firm. The company completed the work related to the restructuring of China’s system in 2021, with a significant increase in the company’s asset scale and business volume, and a significant change in the audit scope compared with the previous year. Therefore, when communicating with Lixin on the implementation of the audit engagement letter and renewal details, the two sides had a lot of communication on the audit schedule, audit service quality assurance and so on.
In order not to delay the audit progress and on the basis of bilateral trust, the company and Lixin reached a preliminary agreement on audit fees and overall schedule in late November 2021; At the beginning of December 2021, Lixin entered the site to carry out the audit work and completed the pre-trial work at the beginning of January 2022; In mid January 2022, the general manager’s office meeting of the company deliberated and approved the proposal to renew the appointment of Lixin as the audit institution of 2021. The independent directors of the company and the audit committee of the board of directors then held an annual audit communication meeting with Lixin, including the employment of accounting firms, division of work and audit schedule Key matters of pre-trial work and the implementation of audit procedures for important subjects. On January 19, 2022, the notice of the second meeting of the ninth board of directors was issued to all directors to consider the proposal on renewing the appointment of the audit institution in 2021; Affected by the Spring Festival holiday and epidemic prevention situation, the board of directors held a meeting on February 22, 2022, considered and approved the proposal. For details, see the company’s announcement on the resolution of the second meeting of the ninth board of directors (Announcement No.: 2022-005) and other relevant announcements. The proposal needs to be submitted to the first extraordinary general meeting of shareholders in 2022 to be held on March 15, 2022 for deliberation. The company plans to sign the audit engagement letter with Lixin after the proposal is passed by the general meeting of shareholders.
Since Lixin entered the site to carry out the audit work, the company has always maintained close communication with it and steadily promoted the work related to the annual report audit as planned. The company has no risk of failing to disclose the annual report on schedule and will disclose the annual report on April 22 as scheduled. The company will further improve the internal processes related to the appointment of accounting firms to eliminate the same problems in the future.
2. On January 29, 2022, your company disclosed the 2021 annual performance forecast, which shows that the net profit attributable to the shareholders of the listed company in 2021 is expected to be 330 million yuan to 390 million yuan, and the net profit after deducting non recurring profits and losses is expected to be 305 million yuan to 365 million yuan. Moreover, your company has pre communicated with the annual report audit accounting firm on matters related to the employment performance forecast, There is no significant difference between your company and the accounting firm in the performance forecast of this reporting period. Please check and explain whether the above information disclosure is accurate.
reply:
The company prepares the financial statements of 2021 in strict accordance with the accounting standards for business enterprises, relevant policies and relevant financial systems of the company. As mentioned in the above title, Lixin actually entered the site to carry out the pre-trial work in early December 2021, completed the pre-trial work in early January 2022, and communicated and reported with the independent directors and the audit committee of the board of directors in mid January 2022. The 2021 annual performance forecast disclosed by the company on January 29, 2022 was disclosed after pre communication with Lixin. There is no significant difference between the company and the accounting firm in the performance forecast of the reporting period. Through self-examination, the relevant information disclosed in the 2021 annual performance forecast is accurate, and the specific data shall be subject to the final audit results.
The company and all directors, supervisors and senior managers will strictly abide by the securities law, the company law and other laws and regulations, as well as the stock listing rules of Shenzhen Stock Exchange, and perform the obligation of information disclosure truthfully, accurately, completely, timely and fairly.
It is hereby announced.
Shenzhen Sed Industry Co.Ltd(000032) board of directors
February 24, 2022
