Honghua Group Limited announced the planned retirement of its incumbent auditor, Deloitte Touche Tohmatsu, after four consecutive financial-year engagements through FY2025. Deloitte will conclude its mandate at the 30 June 2026 Annual General Meeting (AGM) and has confirmed there are no matters requiring shareholder attention and no disagreements with the Company.
To preserve audit independence and enhance corporate-governance practices, the Board and Audit Committee will recommend appointing BDO Limited as the new external auditor at the upcoming AGM. Subject to shareholder approval and completion of BDO’s client-acceptance procedures, the appointment will cover the audit of the Group’s consolidated financial statements for the year ending 31 December 2026.
Key points from the Audit Committee’s assessment of BDO:
• Governance & Quality Control: BDO is registered with the Accounting and Financial Reporting Council (AFRC) as a Public Interest Entity auditor and maintains a quality-management system compliant with HKSQM 1. No public disciplinary records involving the proposed key audit partner were identified.
• Experience & Competence: BDO audits more than 180 Hong Kong-listed companies and demonstrated detailed knowledge of Honghua’s business scale, complexity and risks.
• Independence: Preliminary independence and conflict checks revealed no relationships with the Company, its directors or substantial shareholders that could impair objectivity. Mandatory partner rotation and internal quality controls are in place.
• Resources & Audit Plan: An experienced engagement partner will lead the assignment, supported by an appropriately resourced team and technical specialists as needed.
• Audit Fee: The proposed fee for the FY2026 audit is RMB2.99 million, determined through arm’s-length negotiations and aligned with the anticipated audit scope and risk profile.
The Board believes the transition will not affect the timely publication of the FY2026 results. A circular detailing the proposed change of auditor and the AGM notice will be dispatched to shareholders in due course.
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