CHINA HARZONE(SZ:300527) Zheng Quan Zhi Xing·2025-07-30 16:45Core Viewpoint - China Shipbuilding Industry Corporation Emergency Warning and Rescue Equipment Co., Ltd. (hereinafter referred to as "the Company") is facing administrative penalties from the China Securities Regulatory Commission (CSRC) due to violations related to information disclosure and accounting errors in its 2022 annual report [1][2][3] Summary by Sections Administrative Penalty Notification - The Company received a "Notice of Administrative Penalty" from the CSRC on October 18, 2024, indicating that it is under investigation for suspected violations of information disclosure laws [1] - The CSRC has proposed penalties against the Company and its executives for failing to ensure accurate and complete information disclosure [3] Violations Identified - The Company was found to have prematurely recognized revenue, resulting in an overstatement of operating income by 31.3724 million yuan, and an overstatement of total profit by 12.9815 million yuan [2] - Additionally, there were errors in the classification and provision for bad debts, leading to an over-provision of 5.8412 million yuan, which affected the reported profit by 1.86% [2] Proposed Penalties - The CSRC intends to impose a warning and a fine of 4 million yuan on the Company, along with fines on key executives: 700,000 yuan for the former chairman, 600,000 yuan for the former general manager, and 600,000 yuan for the former chief accountant [3] Company Response and Future Actions - The Company has acknowledged the violations and has taken corrective actions, including a public announcement on January 16, 2024, regarding the accounting errors [5] - The Company plans to apply for the removal of risk warnings on its stock after 12 months from the CSRC's final decision, provided it has made the necessary adjustments to its financial reports [5]