Securities code: 000727 securities abbreviation: Tpv Technology Co.Ltd(000727) Announcement No.: 2022-003
Announcement on change of accounting firm
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.
Special tips:
1. Name of the accounting firm to be employed: PricewaterhouseCoopers Zhongtian Certified Public Accountants (special general partnership) (hereinafter referred to as “PricewaterhouseCoopers Zhongtian”);
2. Name of the originally appointed accounting firm: Lixin Certified Public Accountants (special general partnership) (hereinafter referred to as “Lixin”);
3. Reasons for changing the accounting firm: considering the actual situation of the company’s business development and audit service demand, the company plans to hire PricewaterhouseCoopers Zhongtian as the company’s audit institution in 2021. The company has communicated with the previous and subsequent accounting firms on matters related to the change of accounting firm, and the previous and subsequent accounting firms have clearly known the change and confirmed that they have no objection;
4. The audit committee and the board of directors of the company have no objection to the proposed change of the accounting firm, and the independent directors have expressed their consent and independent opinions in advance;
5. This matter needs to be submitted to the general meeting of shareholders of the company for deliberation.
1、 Basic information of the accounting firm to be changed
(I) institutional information
1. Basic information
PricewaterhouseCoopers Zhongtian, formerly known as PricewaterhouseCoopers Dahua certified public accountants, established on March 28, 1993, was renamed PricewaterhouseCoopers Zhongtian certified public accountants Co., Ltd. in June 2000 with approval; Approved by the Ministry of Finance Cai Kuai Han [2012] No. 52 on December 24, 2012, it was transformed into PricewaterhouseCoopers Zhongtian Certified Public Accountants (special general partnership) on January 18, 2013. The registered address is room 01, unit 507, DBS building, 1318 Shanghai Lujiazui Finance & Trade Zone Development Co.Ltd(600663) Ring Road, China (Shanghai) pilot free trade zone.
PricewaterhouseCoopers Zhongtian is a member of PricewaterhouseCoopers international network. It has the practice certificate of accounting firm and the qualification to engage in the audit business of H-share enterprises. At the same time, it is also an accounting firm with the qualification of securities and futures related business approved by the Ministry of Finance and the CSRC. In addition, PwC Zhongtian is also registered with us PCAOB (American public company accounting oversight committee) and UK FRC (UK financial reporting office) to engage in relevant audit business. PwC Zhongtian has rich experience in securities business and good professional service ability.
The chief partner of PWC Zhongtian is Li Dan. As of December 31, 2020, the number of PWC Zhongtian partners was 229 and the number of certified public accountants was 1359, including 327 certified public accountants who have signed the audit report of securities service business since 2013.
In the latest fiscal year (2020) audited by PwC Zhongtian, the total revenue was RMB 6.115 billion, the audit revenue was RMB 5.692 billion and the securities business revenue was RMB 2.861 billion.
PwC Zhongtian has 103 audit clients for the financial statements of A-share listed companies in 2020, and the total audit fees of A-share listed companies are RMB 584 million. The main industries include manufacturing, finance, transportation, warehousing and postal services, real estate, wholesale and retail sales, etc, There are 48 audit clients of A-share listed companies in the same industry (manufacturing industry) as the company.
2. Investor protection ability
PwC Zhongtian has taken out occupational insurance in accordance with relevant laws and regulations. The sum of the cumulative compensation limit of occupational insurance and occupational risk fund exceeds RMB 200 million. The withdrawal of occupational risk fund or the purchase of occupational insurance comply with relevant regulations. PwC Zhongtian has not undertaken civil liability in relevant civil proceedings due to its practice in recent 3 years.
3. Integrity record
PwC Zhongtian and its employees have not been subject to criminal punishment, administrative punishment, self-discipline supervision measures and disciplinary sanctions of stock exchanges, industry associations and other self-discipline organizations for their practice in recent three years; PwC Zhongtian has not been subject to administrative supervision measures by the CSRC and its dispatched offices due to its practice. Four junior employees of PricewaterhouseCoopers Zhongtian received a warning letter from Shanghai Securities Regulatory Bureau in 2019 because their personal investment behavior violated the relevant provisions on independence. The above personal behavior did not affect the effectiveness of PricewaterhouseCoopers Zhongtian quality control system or the practice quality of audit projects. The four employees subsequently resigned from PricewaterhouseCoopers Zhongtian. According to relevant laws and regulations, the above administrative supervision measures will not affect PwC Zhongtian’s continued undertaking or execution of securities service business and other businesses.
(II) project information
1. Basic information
Project partner and signing certified public accountant: Mr. Chen Wenfeng, a practicing member of the Institute of certified public accountants, has become a certified public accountant since 2008, has been engaged in the audit of listed companies since 2004, has been practicing in PwC Zhongtian since 2002, has provided audit services for the company since 2021, and has signed or reviewed the audit report of one listed company in recent three years.
Quality review partner: Mr. Chen Jianxiao, a practicing member of the Institute of certified public accountants, has become a certified public accountant since 2002. He has been engaged in the audit of listed companies since 2001. He has been practicing in PwC Zhongtian since 2000. He has provided audit services for the company since 2021. He has signed or reviewed the audit reports of five listed companies in the past three years.
Signed certified public accountant: Mr. Mo Chenglin, a practicing member of the Institute of certified public accountants, has become a certified public accountant since 2016, engaged in the audit of listed companies since 2013, practised in PwC Zhongtian since 2013, and provided audit services for the company since 2021.
2. Integrity record
As for PwC Zhongtian’s proposed employment as the company’s audit institution in 2021, Mr. Chen Wenfeng, the project partner and the signing certified public accountant, Mr. Chen Jianxiao, the quality review partner, and Mr. Mo Chenglin, the signing certified public accountant, have not been subject to any criminal and administrative punishment in the past three years, and have not been subject to administrative supervision and management measures by the securities regulatory authority due to their practice, It has not been subject to self regulatory measures and disciplinary sanctions by self regulatory organizations such as stock exchanges and industry associations due to its practice.
3. Independence
With regard to PwC Zhongtian’s proposed appointment as the company’s auditor in 2021, there is no situation that may affect the independence of PWC Zhongtian, Mr. Chen Wenfeng, the project partner and the signing CPA, Mr. Chen Jianxiao, the quality review partner and Mr. Mo Chenglin, the signing CPA.
4. Audit fees
The audit service charge of PWC Zhongtian is determined by both parties through negotiation according to the audit workload and the principle of fairness and reasonableness. The audit fee that the company plans to pay PwC Zhongtian for the audit project of financial statements in 2021 is RMB 6.25 million (including internal control audit fee of RMB 1.95 million), an increase of RMB 4.29 million compared with the audit fee in 2020, a year-on-year increase of 218.88%.
Reasons for large changes in audit fees: at the end of 2020, the company completed the transfer of equity of related subsidiaries such as piezoelectric crystal, touch display and magnetic material industry by agreement, as well as the major asset restructuring of public listing and sale of flat panel display business and cash purchase of 51% shares of Tpv Technology Co.Ltd(000727) Co., Ltd, After the above reorganization, the company transformed from the LCD panel industry to the intelligent display terminal manufacturing industry. Its main business includes the R & D, manufacturing, sales and service of display products, including four categories: display, TV, video and mobile phone. The company’s main business has undergone fundamental changes. In view of the large business volume and global operation attributes of the acquisition target Tpv Technology Co.Ltd(000727) Co., Ltd., the increase of auditors and workload leads to the increase of audit fees. On the other hand, in less than one fiscal year after the completion of the above-mentioned major asset restructuring, according to the provisions of the notice on the implementation of enterprise internal control standard system by main board listed companies in 2012 (CBK [2012] No. 30) issued by the Ministry of Finance and CSRC, the company did not disclose the 2020 internal control audit report, This time, PwC Zhongtian will audit the effectiveness of internal control over the company’s financial report on December 31, 2021 and disclose the 2021 internal control audit report.
2、 Description of the proposed change of accounting firm
(I) previous accounting firms and audit opinions of the previous year
The original audit institution of the company, Lixin, provided audit services for the company from 2016 to 2020. Lixin adhered to the principle of independent audit, diligently and responsibly, fairly and independently issued audit opinions, objectively, fairly and accurately reflected the company’s financial statements and internal control, earnestly fulfilled the responsibilities of the audit institution, and safeguarded the legitimate rights and interests of the company and shareholders from a professional perspective. The board of directors of the company expresses heartfelt thanks to the audit team for their hard work for the company’s audit over the years. The type of audit opinion of Lixin in the previous year is standard unqualified opinion. The company has not been dismissed after entrusting Lixin to carry out some audit work.
(II) reasons for proposed change of accounting firm
Lixin has provided audit services for the company for many consecutive years. In order to ensure the independence and objectivity of the company’s audit work, at the same time, the company completed major asset restructuring in 2020, the main business changed and the business scope expanded to a global scope. The company comprehensively considered the business development and the demand for future audit services, It is proposed to appoint PwC Zhongtian as the company’s audit institution in 2021.
(III) communication between the listed company and previous accounting firms
The company has fully communicated with the previous and subsequent accounting firms on this matter, and all parties have clearly known this matter and have not expressed any objection. As the selection and employment of the company’s accounting firm in 2021 still needs to be submitted to the general meeting of shareholders for deliberation, the previous and subsequent accounting firms will actively communicate and cooperate in a timely manner in accordance with the relevant provisions of the auditing standards for Chinese certified public accountants No. 1153 – communication between former certified public accountants and subsequent certified public accountants.
3、 Procedures to be performed by the accounting firm to be changed
(I) performance of the audit committee
The audit committee of the board of directors of the company has fully understood PwC Zhongtian’s practice, professional qualification and integrity, reviewed PwC Zhongtian’s independence, professional competence, investor protection ability and the appropriateness of the company’s reasons for changing the accounting firm, and believes that PwC Zhongtian has rich audit experience in listed companies, The company has the professional ability and qualification to provide audit services for the company and can meet the audit needs of the company in 2021. The change of accounting firm is that the company has comprehensively considered the independence and objectivity of the audit business and the needs of future business development, agreed to hire PwC Zhongtian as the audit institution of the company in 2021, and agreed to submit the proposal to the board of directors for deliberation.
(II) prior approval and independent opinions of independent directors
The independent directors have carefully reviewed the company’s change of accounting firm in advance and believe that PwC Zhongtian has the qualification and ability to engage in financial audit and internal control audit, has rich securities experience, has good professional ethics and practice level, meets the independence requirements of relevant independence policies and professional codes, and is in good faith, Have the ability to protect investors and meet the audit requirements of the company; The company changed the accounting firm based on comprehensive consideration of business development and the demand for audit services, which is justified and sufficient; The company has fully communicated with the original audit institution Lixin Certified Public Accountants (special general partnership) on matters related to the change of accounting firm in advance, and it has confirmed the matter without objection. We agree to submit the matter to the board of directors of the company for deliberation. And expressed the following independent opinions:
The board of directors of the company deliberated and approved the proposal to hire PricewaterhouseCoopers Zhongtian Certified Public Accountants (special general partnership) as the financial audit unit and internal control audit unit of the company in 2021. We believe that the decision-making procedure is in line with the company law, the Listing Rules of Shenzhen Stock Exchange and other laws and regulations as well as the relevant provisions of the articles of association, It does not harm the interests of the company and other shareholders, especially minority shareholders.
(III) deliberation and voting of proposals by the board of directors
On January 18, 2022, the company held the fourth extraordinary meeting of the 10th board of directors and deliberated and adopted the proposal on proposed change of accounting firm. The company plans to hire PricewaterhouseCoopers Zhongtian Certified Public Accountants (special general partnership) to provide the company with the audit of financial report and internal control in 2021, The audit fee is RMB 6.25 million (including internal control audit fee of RMB 1.95 million). The proposal has been unanimously voted by all directors, and this matter must be submitted to the general meeting of shareholders of the company for deliberation.
(IV) effective date
This change of accounting firm needs to be submitted to the general meeting of shareholders of the company for deliberation, and will take effect from the date of deliberation and approval by the general meeting of shareholders of the company.
4、 Documents for future reference
1. Resolutions of the fourth extraordinary meeting of the 10th board of directors;
2. Resolutions of the audit committee of the board of directors;
3. Prior approval opinions and independent opinions of independent directors;
4. PwC Zhongtian’s explanation on its basic situation.
It is hereby announced
Tpv Technology Co.Ltd(000727) board of directors
January 19, 2022
