HONG KONG, March 26, 2013 /PRNewswire/ --
Summary
CPP (1094.HK)'s shares will soon resume trading on the HKEx
The board of directors of China Public Procurement Limited (HKEx stock code: 1094, the "Company" or "CPP", together with its subsidiaries, the "Group") is pleased to announce that all the resumption conditions (the "Resumption Conditions") for the trading in the Company's shares (the "Shares") stated by the Stock Exchange have been fully satisfied and fulfilled. On 18 March 2013, the Board received a letter from the Stock Exchange informing the Company that trading in the Shares shall be resumed subject to the announcement of the annual results of the Group for the year ended 31 December 2012. The Company may make an application to the Stock Exchange for the resumption of trading in the Shares with effect from 9:00am on 2 April 2013.
In view of the allegations made against the Company in certain news reports (the "Allegations"), trading in the Shares was suspended on 5 July 2010 at 10:19am at the Company's request. The Stock Exchange stated three Resumption Conditions: (i) address the Allegations and inform the market of all material information that is necessary to appraise the Group's position; (ii) publish the outstanding financial results and address any concerns raised by the auditors through qualifications in their audit report; and (iii) demonstrate that there are adequate financial reporting procedures and internal control systems to meet obligations under the Listing Rules.
(i) Address the Allegations and inform the market of all material information that is necessary to appraise the Group's financial position
On 14 March 2012, the audit committee of the Company (the "Audit Committee") engaged an independent forensic expert (the "Forensic Expert") to conduct an independent forensic review (the "Forensic Review") primarily to address the Allegations. The Forensic Review was completed in July 2012 and the Company published an announcement in relation to the findings of the Forensic Review on 9 November 2012.
Substantial changes have been made to the composition of the board of directors (the "Board") and the senior management of the Company since 2011 to bring in new members with relevant industrial or other expertise and experiences in areas, such as internal control, corporate governance and finance to enhance the corporate governance as well as the management of operations of the Company. Further, the then Board members, senior management or external consultants of the Group directly involved in the Agreements in relation to the Allegations no longer hold any role in the Group. Subsequent to the Allegations, the Board has engaged the Forensic Expert to review the Allegations and to suggest improvements. The Company has engaged an independent internal control expert (the "IC Expert") to review its internal control system. With the assistance of the said expert, an internal control manual has been prepared and implemented by the Company, so as to ensure that the Group operates in accordance with the internal control requirements such as to the authorisation level in the Group, segregation of duties, checks and balances mechanism, internal audit, etc.
In addition, the Company will conduct annual internal control reviews to ensure the effectiveness of the existing controls of the Company. The Company has appointed an internal auditor and set up an internal audit department in 2012 to monitor the effectiveness of the Company's internal control and the management of financial reporting systems. The internal audit function reports to the Honorary Chairman of the Company and the Audit Committee.
Since September 2011, a monthly Board meeting has been held to review the financial performance in the previous month so that the Board can make timely assessment over the financial performance of the Company.
(ii) Address any concerns raised by the auditors through qualifications in their 2011 audit report and publish the relevant financial results
The independent auditor's report on the consolidated financial statements of the Group for the year ended 31 December 2011 (the "2011 Auditor's Report") included ‘‘disclaimer of opinions'' due to the scope limitations on (1) the fair value of goodwill; and (2) the recoverability of trade and other receivables. The qualification in respect of the Group's goodwill will be properly addressed and disclosed in accordance with relevant Hong Kong accounting and financial reporting standards in the annual results announcement to be made by the Company for the year ended 31 December 2012. Regarding the relevant trade and other receivables of the Group, the amount of approximately HK$50.8 million as stated in 2011 Auditor's Report had been fully received by the Group and the Company expects that the audit qualification regarding the trade and other receivables of the Group can be removed for the purpose of the Group's audit for the year ended 31 December 2012.
(iii) Demonstrate that there are adequate financial reporting procedures and internal control systems to meet obligations under the Listing Rules
To enhance the effectiveness of the Company's internal control and financial reporting systems of the Company, the Company engaged the IC Expert in May 2011 to (i) review the internal control systems of the Company; (ii) assist the Company to enhance its internal control system; and (iii) conduct annual reviews on the internal control systems in the Company. The Company has implemented the recommendations made by the IC expert to enhance its internal control systems. The IC Expert has confirmed in a final draft internal control report and a comfort letter that that the Company has adequate financial reporting system and internal control procedures and such documents have been submitted to the Stock Exchange.
The Audit Committee, after assessing the actions taken by the Company since the suspension of trading of the Shares, is of the view that effective internal control system and financial reporting system are in place for the Group to meet its obligations under the Listing Rules. It is approved at the special general meeting of the Company held on 23 March 2013 to appoint SHINEWING (HK) CPA Limited as the auditors of the Company to fill in the casual vacancy following the resignation of Messrs. Morison Heng, Certified Public Accountants.
About China Public Procurement Limited
China Public Procurement Limited is listed on the Main Board of The Stock Exchange of Hong Kong (stock code: 1094). The Group is principally engaged in the development of the public procurement services which involves the provision of procurement services to general public and government in the PRC, and the development of EMC service.
