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The AIM-quoted company, based in Shandong Province, put out a statement in July saying it had delivered unaudited revenue of CNY 526.9m and net profit of CNY 11.4m for the six months ended 30 June 2016. However it has now published a correction which states: ‘Due to an administrative oversight, this unaudited revenue figure did not incorporate a net-off of transactions between Haike and two companies, Shandong Hi-Tech Chemical Group Ltd and Haiyuan Trading Ltd., which had been disposed as part of the company''s restructuring to divest its non-core and loss-making refining business in June 2014. ‘Consequently, under the company''s agreed accounting policies, transactions with these two companies are recognized on a net method.’ Having discovered the error, Haike says its audited revenue, for the period ended 30 June 2016 is now expected to be CNY 350.7m, a decrease on the CNY 385.4m reported for the same half-year period in 2015. The company says it does not expect the correction to affect its underlying profitability, and says it still expects to deliver a net profit of CNY 11.4m for the six months ended 30 June 2016, as previously announced. However, it was also forced to admit that, in a further mistake, the comparative results provided in its July 2016 announcement were figures for the 12 months ended 31 December 2015. HaiKe now expects to announce its interim results for the period ending 30 June 2016 by the end of September. According to its annual report and accounts for the year ended 31 December 2015, HaiKe’s auditor is BDO China Shu Lun Pan Certified Public Accountants, a local firm which joined the BDO International network in 2009. In an announcement two days prior to its revelation of the accounting issues, the company said its chief financial officer, George Zeng, had decided to step down from the board ‘for personal reasons’ and, on 18 July 2016, resigned with immediate effect. Haike is currently searching for a new CFO with an announcement to be made ‘in due course’. The annual report also lists Julie Wilson, an audit partner with UHY Hacker Young who runs the firm’s China desk in the UK, as a non-executive director and chair of its audit committee. |
