Net gains and losses, just over billions, and a single-quarter surge was asked if it was the regulator. Performance
On 14 april, the all-china towns investment development corporation, inc. (strategic: all-china development, securities code: 000638. Sz) disclosed the annual report for 2020, in which the company achieved net profits of $111 million and $1. 755. 2 million, respectively, in business income and net profits attributable to shareholders in listed companies, down 4. 05 per cent and 282. 25 per cent, respectively, from the same period of the previous year. The net cash flow from operating activities was $1739. 4 million, a significant decrease of 139. 61 per cent over the same period。
The annual report on development in all its aspects shows that single-business risks were highlighted during the reporting period as a result of increased costs and a slowdown in revenues from corporate internet health services. Companies have re-examined their strategic direction and decided to develop their industries in areas with high technological content and high technical barriers, steadily improving their sustainability. In 2020, it was disclosed that the main development business was the development of medical information software and related operations such as food processing and trade。
In terms of the composition of operating income, the all-china development sub-company, chengdu network for medical technology and development, inc. (hereinafter referred to as information and communication network for medical software and hardware), systems integrated marketing and maintenance, received $9. 114. 46 million, or 82. 12 per cent of total operating income. All-round development generated an operating income of $1. 811 million through food trade, compared to zero in the same period last year, mainly due to the inclusion in the consolidated statement of jilin van fong maije agricultural industries development limited (hereinafter: mangang) in october 2020。
According to the information received, in october 2020, mnd held 60 per cent of its share of rmb 7. 5 million. According to its disclosure, the zhongwon city is a well-known enterprise, with deep-tilled food reserves, farming operations and the processing of agricultural products. The company's shareholding coincided with the marketing of the autumn grains, which had achieved a value of approximately $18 million by 2020。
On the day of the disclosure in the annual development report 2020, an in-depth letter of enquiry was sent to the company as to the reasons for and reasonableness of the significant decline in net profits and net cash flows in a situation where business income was generally equal. The letter of inquiry requested that the cdf indicate whether there were instances of artificial revenue reconciliations of progress or income recognition over time, and whether there were instances where business income that was not related to the main business or did not have commercial substance was not deducted。
It is worth noting that during the fourth quarter alone, rmb 41. 98. 4 million, representing an increase of 88. 40 per cent over the previous year, or 37. 83 per cent of the company's total annual revenue, was just over billion. The fourth quarter of the year saw a significant increase in receipts, and the letters of enquiry required that all parties develop to justify and justify their reasons; and that companies, chinese and signatory accountants, in conjunction with the above-mentioned responses, indicate whether there had been a deliberate attempt to circumvent the risk of being discharged。
It should be mentioned that, under the latest securities law, listed companies would be directly subject to exit risk warning if they satisfied “a net profit audited in the last fiscal year or a net profit of less than $100 million less than the net profit of the business”. In the case of development in all its aspects, companies may be subject to exit warning if the 1,811 million yuan received from the “temporary” acquisitions in the second half of 2020 are eliminated and the “over billions” conditions are not met in 2020。
In this inquiry letter, the exchange directly requested, inter alia, that all parties develop a combination of company-owned operations for software development, indicating the specific reasons for the food trade, whether the new food trade revenue is of an occasional and temporary nature, whether it is business income that is unrelated to the main business or does not have commercial substance, the reasons for, and the reasonableness of, the company's failure to deduct food trade income from its operating income, and whether there are warning signs of a retreat。
Even more surprising is the fact that, according to the annual newspaper, the company disclosed the acquisition on 31 october 2020, but the exchange verified that it had not disclosed the relevant interim announcement on that date。
As a result of this bulletin, the third quarter 2020 report, issued on 31 october 2020, revealed that on 12 october 2020, the corporation and yang kaye and kanwanda food repository company limited (hereinafter: kanwanda, formerly known as mangwanta) signed the replenishment agreement, in which the company replenished kanwanda with £7. 5 million, with 60 per cent of its share. On 14 october 2020, the company completed the registration of changes of interest at the kanan district market supervisory authority。
In this annual letter of enquiry, the exchange also requested that all parties develop additional materials such as internal review procedures, minutes of meetings and business change registration certificates submitted to the above-mentioned investment matters。
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It is important to mention that the so-called “ploys” of these enhanced performances have also been developed or applied in the company's 2021 season。
On 15 april, the company disclosed a performance forecast for the first quarter of the year that it expected to achieve a net profit return to the mother in the first quarter of the year of approximately $14 million to $18 million, an increase of approximately 323. 31 per cent to 387. 11 per cent over the previous year's loss of $6,269. 3 million。
In march 2021, the company completed the acquisition and control of 40 per cent of the company's shares in the military engineering asset harbin founder's large new materials technology co. Ltd. (hereinafter: founder's large) in march 2021. During the reporting period, a significant gain of approximately 3. 5 million yuan was realized for the casting industry. In addition, in the first quarter of 2020, the impact of the non-recurring gains and losses on net profits from development in all directions is expected to be approximately $18 million, mainly to generate investment returns for 40 per cent of the shares of chengdu medical technology ltd., the equity-involving subsidiary。
In fact, the performance of development in all its dimensions in recent years can hardly be described as optimistic. In 2018 and 2019, companies realized operating income of $119 million and $116 million, respectively, and the deduction of non-net profits attributable to shareholders in listed companies amounted to $148 million and $111. 39 million, respectively。
Industry sources have indicated that the addition of financial indicators such as net net profit deductions and the deduction of income not related to the main business would be a “fatal” blow to companies that have long-term dominant industries that are unable to do so and that continue to rely on government subsidies or the sale of asset housing。
“temporary” high-priced reassignment audit questioned whether to purchase audit opinions, and the letter was exaggerated
In addition to the above-mentioned performance issues, the development of “temporary” high-cost reassignments to audit institutions has also been of interest to the exchange. According to the bulletin, the financial audit and internal control audit institution, which evolved from 23 february 2021 to 2020, is the china-china accounting corporation (the special general partnership) (hereinafter referred to as the “china-china institute”)。
It is important to mention that the cost of auditing services for the years 2014 to 2019 was $0. 8 million per year for the firm of leading accounting firms (hereinafter referred to as “the institute”) and $1. 2 million per year for the newly recruited firm, an increase of 50 per cent. On the other hand, zo stated that the increase in the cost of services was a combination of the overall industry of audit institutions in recent years and the cost and working hours of additional inputs needed to change accounting firms。
During this period, the exchange raised concerns about high-priced job placements for companies, and on 6 march 2021, in response to the exchange-related concerns, chase stated that the specific reasons for the withdrawal of its position as an annual accountant for companies were that the 2020 annual audit project was time-consuming and task-intensive and did not fully meet the working arrangements for the 2020 annual audit for all。
In this annual letter of enquiry for the exchange, the company was also asked to indicate the specific content of the annual review work carried out by the letter, the progress of the work, whether there were significant differences between the company and the letter office regarding the deduction of operating income, and whether the audit process was subject to audit restrictions or other irregularities。
Demand that the reasons for the increase in audit costs be explained and justified by, for example, the size of the company, and ask directly whether the company has purchased audit opinions from its annual accountants。
In addition, in the chapter of the “overview of business” of the annual development report 2020, “through years of development and competition, the company has developed into one of the larger and more technically powerful software development and production enterprises in the sichuan region and even in the south-west of the country,” and the holding subsidiary's icn service has covered nearly 30 per cent of the sichuan province's level ii and above hospitals, including: the sichuan university's wahshi hospital, wahxi hospital ii, the ibei city's second people's hospital and the southwest medical university's hospital. The coverage of 90 per cent of level ii and above hospitals in qinghai province is the expression that the south-west medical information corporation, with a high level of accreditation, is leading in the south-west in the field of technology for the development of medical software products. On this occasion, the exchange also requested that all parties develop a combination of company income, income generation per capita, etc., to indicate whether these statements are accurate and whether they are exaggerated。
An annual newspaper, drawing so much of the problem of “hand-on the soul”, deserves vigilance. Further attention will be given to follow-up company responses。
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