Securities code: Shanghai Industrial Development Co.Ltd(600748) stock abbreviation: Shanghai Industrial Development Co.Ltd(600748) Announcement No.: lin202216 bond Code: 155364 bond abbreviation: 19 Shangshi 01 bond Code: 163480 bond abbreviation: 20 Shangshi 01
Shanghai Industrial Development Co.Ltd(600748)
Announcement on receiving the inquiry letter on the supervision of information disclosure of the company’s 2021 annual report from Shanghai Stock Exchange
The company guarantees that there are no false records, misleading statements or major omissions in the contents of this announcement, and assumes individual and joint liabilities for the authenticity, accuracy and completeness of its contents Shanghai Industrial Development Co.Ltd(600748) (hereinafter referred to as “the company”) received the inquiry letter on the supervision of information disclosure of the company’s annual report in 2021 (szgh [2022] No. 0225) (hereinafter referred to as “the inquiry letter”) from Shanghai Stock Exchange on April 8, 2022. Now the contents of the inquiry letter are disclosed as follows:
In accordance with the requirements of the standards for the content and format of information disclosure by companies offering securities to the public No. 2 – the content and format of annual report (revised in 2021) (hereinafter referred to as the standard for the format No. 2), the guidelines for industrial information disclosure of Shanghai Stock Exchange and other rules, after the post audit of your company’s 2021 annual report, in accordance with the provisions of article 13.1.1 of the stock listing rules of the exchange, Please further supplement and disclose the following information in combination with accounting error correction, non-standard audit opinion, performance commitment and goodwill. 1、 About correction of accounting errors
According to the company’s announcement, after the company and the annual audit accountant jointly carried out internal verification, it was found that some senior executives of Shanghai Shangshi longchuang Intelligent Technology Co., Ltd. (hereinafter referred to as “Shangshi longchuang”) took advantage of their positions to implement the illegal and illegal acts of fictitious trade since 2014, resulting in accounting errors in the company’s 20162020 financial statements and quarterly reports in 2021. In this regard, the company has made error correction and corresponding retroactive adjustment to the above financial statements. Among them, the operating revenue and net profit attributable to the parent company in 20162020 were reduced by 1.704 billion yuan and 1.118 billion yuan.
1. The company is requested to fully disclose the basic information of the fictitious trade business of Shangshi longchuang, including but not limited to the business volume of fictitious trade in each period, the corresponding upstream and downstream, etc., and on this basis, explain the calculation process and recognition basis of the reduction of operating income, net profit, assets and liabilities in each period from 2016 to 2020 and 2021, and invite the annual audit accountant to give opinions;
2. The company is requested to quantitatively evaluate and disclose the impact and proportion of the financial misstatement caused by the above fictitious trade on the assets, liabilities, income and profits of the listed company in 20162020 and 2021 in combination with the financial indicators of Shanghai longchuang and the listed company, and the annual audit accountant is invited to give opinions;
3. The company is requested to supplement and disclose the main financial statements for 20162019.
2、 Opinions on non-standard audit
According to the annual report, the annual audit accountant issued a qualified opinion on the company’s 2021 annual financial report, which is mainly due to the correction of relevant errors caused by the fictitious transaction of Shangshi longchuang, which is based on the statements and materials provided by some senior executives of Shangshi longchuang. The annual audit accountant was unable to obtain sufficient and appropriate audit evidence to determine the possible impact of the above previous accounting errors on the financial statements of Shanghai Industrial Development Co.Ltd(600748) calendar years, And whether the disclosure of fund transactions between related parties in Shanghai Industrial Development Co.Ltd(600748) 2021 is complete. 1. Ask the annual audit accountant to explain the verification of Shangshi longchuang, including working process, time, evidence and other materials;
2. Ask the annual audit accountant to explain the reasons for failing to obtain sufficient and appropriate audit evidence in combination with the above problems;
3. Ask the annual audit accountant to evaluate the universality of the impact of failure to obtain sufficient and appropriate audit evidence on the users of financial statements in combination with the correction of large accounting errors and the impact on the company’s financial statements in each period, and explain the reasons and rationality that the audit opinion is a qualified opinion rather than an inability to express an opinion;
4. From 2016 to 2020, the company has never been issued with non-standard audit opinions, nor has it been pointed out that there are fictitious transactions. The annual audit accountant of the company is requested to self inspect the specific situation of the early-stage audit work, explain whether the audit procedures and audit evidence obtained are sufficient, whether the accountant is diligent and responsible in the audit work, and whether there is any imprudent issuance of relevant early-stage audit opinions. 3、 On occupation of non operating funds
According to the special audit report of the summary of non operating fund occupation and other related fund transactions, the annual audit accountant said that he could not obtain sufficient and appropriate evidence to explain whether Cao Wenlong, general manager of Shangshi longchuang, had non operating fund occupation and other related fund transactions with the company. 1. The company is requested to disclose the details and amount of capital transactions between Cao Wenlong and the enterprises controlled by Cao Wenlong and the listed company and shangshilongchuang in each year, and clarify whether they have commercial essence and constitute non operating capital occupation;
2. Ask the annual audit accountant to explain the audit procedures performed and the audit evidence obtained for the occupation of non operating funds, and the specific reasons why sufficient and appropriate audit evidence cannot be obtained. Compare the audit work of previous years, and explain whether corresponding audit procedures and work have been added to the company’s 2021 annual report and its specific conditions. 4、 Audit opinions on non-standard internal control
The company’s internal control audit opinion highlighted matters. The annual audit accountant said that there were major defects in the company’s internal control over non-financial reporting. It was found that there were defects in the management of customers and suppliers of Shangshi longchuang, the company’s control over Shangshi longchuang was not in place, and Shangshi longchuang had violations of fictitious transactions.
1. Ask the company and the annual audit accountant to supplement and disclose the specific defects in the management of shangshilong’s customers and suppliers, as well as the impact on the financial report;
2. Ask the annual audit accountant to specify the basis for distinguishing the internal control of financial report from the internal control of non-financial report, and explain the reason and rationality of identifying the relevant defects as the internal control of non-financial report in combination with the impact of this large financial correction on the company’s financial report;
3. From 2016 to 2020, the company has never been issued with non-standard internal control audit opinions, nor has it been pointed out that there is any occupation of non operating funds. The annual audit accountant of the company is requested to self inspect the specific situation of the internal control audit in the early stage, explain whether the audit procedures and audit evidence obtained are sufficient, and whether there is any imprudent issuance of relevant internal control audit opinions in the early stage;
4. Please disclose the specific reasons for the company’s inadequate control over Shangshi longchuang, the relevant responsible persons and the relevant accountability of the company up to now. Independent directors are invited to express their opinions. 5、 About performance commitments and related goodwill
According to the annual report and accounting error correction announcement, after retroactive adjustment, the net profit of Shangshi longchuang in 20152017 was 11.57 million yuan, and the non net profit deducted was about 6.51 million yuan, which was far lower than the performance commitment target of 202.7 million yuan.
At the same time, the company acquired Shangshi longchuang in the early stage and formed a goodwill of 220 million yuan. Before the correction of accounting errors, the impairment of the above-mentioned goodwill was withdrawn until the end of the third quarter of 2021. This correction is to withdraw the impairment provision in full and make retroactive adjustment.
1. The company is requested to conduct further self-examination and make supplementary disclosure of the decision-making process of the early acquisition of shangshilongchuang, and explain what due diligence procedures have been implemented, and whether there is an association relationship or potential interest arrangement between the company’s directors, supervisors and counterparties;
2. Ask the company to supplement the specific impairment signs of the above goodwill, the time when the impairment signs appear, and whether there is any untimely impairment provision in the early stage. Combined with the test method and calculation process of this goodwill impairment, it explains the rationality of full withdrawal and whether the specific accounting treatment of relevant retroactive adjustment complies with the relevant provisions of the accounting standards for business enterprises. Ask the annual audit accountant to give opinions; 3. The company is requested to disclose what measures it plans to take to safeguard its own interests in respect of the actual failure of the counterparty to fulfill its performance commitments. Independent directors and the board of supervisors are invited to express their opinions. 6、 Other
1. According to the annual report, the company recognized the income from land collection and storage of 1.091 billion yuan in 2021, accounting for about 205.08% of the net profit attributable to the parent company in the current period, and the net profit deducted from non attributable to the parent company in the current period is -422 million yuan. Land collection and storage is one of the main reasons for the company’s profitability. The company is requested to make supplementary disclosure: (1) the time, background, income calculation method and process of land collection and storage business, and evaluate whether the relevant income recognition time point is reasonable, whether the amount is accurate, and whether it complies with the relevant provisions of the accounting standards for business enterprises; (2) The amount of income from land collection and storage accounts for about 133.37% of the net profit attributable to the parent company in 2020 (before adjustment), which is an event that has a significant impact on the company. Whether the company disclosed the event in time in the early stage. If not, please explain the reasons and rationality. Please comment on the above issues.
2. In the early stage, our department issued an inquiry letter on the trading business of the company and Shangshi longchuang (szgh [2022] No. 0109), and the company has not replied as of today. The company is requested to disclose the reasons for its failure to reply in time, verify relevant matters as soon as possible in combination with the annual report, correction of accounting errors and other matters, and timely respond to inquiries and disclose to the public.
In view of the above problems, if the company believes that it is not applicable or inconvenient to disclose due to special reasons in accordance with the requirements of standard format No. 2 and the guidelines for industry information disclosure of Shanghai Stock Exchange, the company shall explain the reasons why it cannot disclose.
Your company is requested to disclose this inquiry letter on April 9, 2022, disclose the reply to this inquiry letter before April 16, 2022, and revise and disclose the periodic report accordingly as required.
In accordance with the requirements of Shanghai Stock Exchange, the company will actively check and reply to the inquiry letter of the annual report together with the annual audit accountant, and fulfill the relevant information disclosure obligations.
The information disclosure media designated by the company is the website of Shanghai Stock Exchange（ http://www.sse.com.cn. ）, Shanghai Securities News and China Securities News. All information of the company shall be subject to the information published in the above designated media. Please pay attention to relevant announcements, make prudent decisions and pay attention to investment risks.
It is hereby announced.
Shanghai Industrial Development Co.Ltd(600748) April 9, 2002
