By Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.
CHINA PUBLIC PROCUREMENT LIMITED(incorporated in Bermuda with limited liability)
(Stock Code: 1094) FURTHER UPDATE ON COMPANY'S STATUS
Reference is made to (i) the announcement of the Company dated 5 July 2010 in respect of the Suspension; (ii) the Update Announcement; (iii) the Resumption Conditions Announcement; (iv) the Further Update Announcement; (v) the Engagement Announcement; and (vi) the announcement of the Company ("Forensic Review Completion Announcement") dated 9 November 2012 in relation to, among others, the findings of the Forensic Review. Unless otherwise defined, capitalised terms used in this announcement shall have the same meanings as those defined in the Forensic Review Completion Announcement.
As mentioned in the Resumption Conditions Announcement, the Board received a letter from the Stock Exchange on 26 April 2011, in which the Stock Exchange stated the resumption conditions for the Company ("Resumption Conditions"). This announcement serves as an update on the progress on the fulfillment of the Resumption Conditions and on the status of the Group's operation.
The Forensic Review was completed in July 2012 and the Forensic Review Completion
Announcement was published on 9 November 2012 to inform the Shareholders and potential investors of the Company the findings of the Forensic Review in relation to, among others, the genuineness of the Agreements and the accuracy of the Subject Announcements.
The independent auditor's report ("2011 Auditor's Report") on the consolidated financial statements of the Group for the year ended 31 December 2011 included a "disclaimer of opinion" due to the scope limitations on (1) the recoverability of goodwill; and (2) the recoverability of trade and other receivables.
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(1) Recoverability of goodwill of HK$5.3 billion
The Board has appointed an independent professional valuer to perform a valuation calculation on the relevant goodwill and thereafter issue a valuation report to the Board. After the issue of the independent professional valuation report, the Directors will discuss with the Group's auditors to determine how the prior year's qualification in respect of the carrying value of the Group's goodwill will be dealt with.
(2) Recoverability of trade and other receivables
The relevant trade and other receivables of the Group amounted to HK$50.8 million as stated in 2011 Auditor's Report had been fully received by the Group as at the date of this announcement, as disclosed in the announcement of the Company dated 25 October 2012. Accordingly, the Directors will discuss with the Group's auditors to determine whether such qualification can be removed for the purpose of the Group's audit for the year ended 31
December 2012.
The Company is in discussion with certain certified public accountants firms in Hong Kong in relation to the appointment of the Group's auditors to fill the casual vacancy following the resignation of Messrs. Morison Heng, Certified Public Accountants. The auditors of the Group will be appointed in due course and thereafter the Company will seek the shareholders' approval on such appointment at a special general meeting of the Company.
To enhance the internal control of the Company, the Company engaged Crowe Horwath (HK) CPA Limited ("CHHK") in May 2011 to, among others, (i) identify the internal control deficiencies in the Company; (ii) assist the Company to improve and strengthen its internal control system; and (iii) conduct annual reviews on the internal control system in the Company. Since August 2011, the Company has been implementing the recommendations made by CHHK and a series of measures to strengthen its internal control system by stages. A final draft internal control report and confirmation from CHHK that the Company has adequate financial reporting system and internal control procedures has been submitted to the Stock Exchange.
Further, in respect of the Forensic Review Report as disclosed in the Forensic Review Completion Announcement, the Stock Exchange has given their comments on the findings of the Forensic Review Report including but not limited to matters in relation to the internal control procedures of the Company. The Company is taking steps to address the comments and concerns of the Stock Exchange in relation to the findings and recommendations of the Forensic Review as a part of the Company's application for resumption of trading in the Shares.
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The Board announces that on 21 November 2012, a conditional sale and purchase agreement ("Acquisition Agreement") was entered into between a wholly owned subsidiary of the Company ("Purchaser") as purchaser, ACME Insight Limited as vendor and an individual (being the beneficial owner of 91.4% interest of the Target (as defined below)) as guarantor in relation to the proposed acquisition ("Acquisition") by the Purchaser of 70% of the equity interest in a company ("Target"). The Target will hold interests in certain subsidiaries which were principally engaged in the procurement, manufacturing and developing of water pumps and providing pump station solutions in the PRC and the Middle East. The proposed Acquisition will constitute a very substantial acquisition and connected transaction for the Company under the Listing Rules. An announcement in relation to the proposed Acquisition in compliance with the Listing Rules will be published by the Company as soon as practicable.
SUSPENSION OF TRADING
At the Company's request, trading in the Shares was suspended from 10:19 a.m. on 5 July 2010.
By order of the Board
Joint Chairman
Hong Kong, 7 December 2012
At the date of this announcement, the Board comprises seven executive Directors, Mr. Cheng Yuanzhong (Joint Chairman), Mr. Chen Shulin (Joint Chairman), Mr. Ho Wai Kong (Honorary Chairman), Mr. Wang Dingbo (Chief Executive), Mr. Li Kening, Mr. Peng Zhiyong and Mr. Peng Ru Chuan; two non-executive Directors, Mr. Wang Ning and Ms. Liu Jie; and four independent non-executive Directors, Mr. Wu Fred Fong, Mr. Chan Tze See, Kevin, Mr. Chen Bojie and Mr. Xu Haigen.
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