UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________
FORM 20-F/A
(AMENDMENT NO. 1)
________________________
(Mark One)
¨ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
OR
x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2013.
OR
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
OR
¨ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Date of event requiring this shell company report
Commission file number: 001-33433
____________________
CHINA SUNERGY CO., LTD.
(Exact name of Registrant as specified in its charter)
____________________
N/A
(Translation of Registrant’s name into English)
Cayman Islands
(Jurisdiction of incorporation or organization)
Tingxiu Lu, (86 25) 5276 6666,
tingxiu.lu@chinasunergy.com,
No. 123 Focheng West Road
Jiangning Economic & Technical Development Zone
Nanjing, Jiangsu 211100, People’s Republic of China
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
Title of each class | Name of each exchange on which registered | |
American Depositary Shares, each representing 18 ordinary shares, par value $0.0001 per share |
Nasdaq Global Select Market |
Securities registered or to be registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None
(Title of Class)
267,287,253 ordinary shares, par value $0.0001 per share, as of December 31, 2013.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ¨ No x
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ¨ No x
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ¨ | Accelerated filer ¨ | Non-accelerated filer x |
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP x |
International Financial Reporting Standards as issued by the International Accounting Standards Board ¨ |
Other ¨ |
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.
Item 17 ¨ Item 18 ¨
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ¨ No ¨
table of contents
Page | |
EXPLANATORY NOTE | 1 |
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS | 2 |
ITEM 15. CONTROLS AND PROCEDURES | 2 |
ITEM 19. EXHIBITS | 4 |
SIGNATURES | 6 |
This Amendment No. 1 (“Amendment No. 1”) to our Annual Report on Form 20-F for the year ended December 31, 2013, originally filed with the Securities and Exchange Commission on April 29, 2014 (the “2013 Form 20-F”), is being filed for the purpose of correcting the relevant disclosure in “Item 5. Operating and Financial Review and Prospects” and “Item 15. Controls and Procedures” of the 2013 Form 20-F. As required by Rule 12b-15 of the Securities and Exchange Act of 1934, as amended, the Company is also filing as exhibits to Amendment No. 1 the certifications required under Section 302 of the Sarbanes-Oxley Act of 2002.
Other than as required to reflect the amendment discussed above, this Amendment No. 1 does not, and does not purport to, amend, update or restate any other information in the 2013 Form 20-F, or reflect any events that have occurred after the filing of the 2013 Form 20-F. Our 2013 Form 20-F, as amended by this Amendment No. 1, continues to speak as of the initial filing date of the 2013 Form 20-F.
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Item 5. Operating and Financial Review and Prospects.
F. Contractual Obligations and Commercial Commitments
The following table sets forth our contractual obligations and commercial commitments as of December 31, 2013:
Payment Due by Period | ||||||||||||||||||||
Total |
Less than |
1-3 Years |
3-5 Years |
More than |
||||||||||||||||
(in thousands) | ||||||||||||||||||||
Operating lease obligations | 3,777 | 1,838 | 1,790 | 88 | 61 | |||||||||||||||
Purchase obligations(1) | 858,488 | 294,383 | 564,105 | - | - | |||||||||||||||
Long-term borrowings(2) | 341,674 | 35,518 | 218,570 | 63,759 | 23,827 | |||||||||||||||
Total | 1,203,939 | 331,739 | 784,465 | 63,847 | 23,888 |
_____________________________
(1) | Includes commitments to purchase property, plant and equipment in the amount of $13.4 million, and commitments to purchase silicon raw materials in the amount of $845.1 million. |
(2) | Long-term borrowings have an annual interest rate of 4.74%. This figure includes the interest payable amount in connection with such long-term borrowings. |
Item 15. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this report, our chief executive officer and chief financial officer have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act of 1934, as amended. Based on this evaluation, our chief executive officer and chief financial officer concluded the Company’s disclosure controls and procedures were not effective because of the material weaknesses in our internal control over financial reporting described below under “Management’s Report on Internal Control over Financial Reporting”.
Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, the Company’s chief executive officer and chief financial officer and effected by the Company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
• Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;
• Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
• Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2013. In making this assessment, the Company’s management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework (1992 version). The COSO framework is based upon five integrated components of control: control environment, risk assessment, control activities, information and communications and ongoing monitoring.
Based on the evaluation, our chief executive officer and chief financial officer have identified what they believe to be material weaknesses, which are discussed below. Therefore, our management concluded that our internal control over financial reporting was not effective as of December 31, 2013.
During the year ended December 31, 2013, our management identified the following two material weaknesses in our internal control over financial reporting.
1. Due to a high turnover in our financial reporting staff in 2013, including the departure of our financial controller and general accountant, we did not have sufficient qualified financial reporting and accounting personnel equipped with appropriate U.S. GAAP and SEC reporting and disclosure knowledge or experience.
2. During 2013, a number of non-trade interest-free advances were made to a related party, CEEG (Nanjing) Semiconductor Co., Ltd., an entity controlled by our chairman, without receipt of proper approvals from our chief executive officer and audit committee. For additional information concerning the advances, including their repayment, please see “Item 7.B.-Major Shareholders and Related Party Transactions-Related Party Transactions-Transactions with Certain Directors, Shareholders and Affiliates” in this annual report. A special committee of our board of directors consisting only of independent directors was established to conduct an independent investigation of this material weakness with the assistance of external counsel. The special committee concluded that the advances were provided during a period of pressure on us and CEEG concerning bank financing and maintenance of credit and liquidity with a view to addressing liquidity and credit conditions of CEEG and, in turn, to preserve our credit and liquidity, because CEEG provided various guarantees in favor of us.
We are now in the process of addressing the material weaknesses by taking the following remedial actions:
1. Our management is continuously interviewing senior financial personnel candidates with relevant U.S. GAAP accounting and reporting experience, to lead our accounting and financial reporting matters and improve our financial reporting capability.
2. Key staff members of our financial accounting and reporting team have attended and will continue to attend periodic training on relevant U.S. GAAP and SEC reporting requirements update provided by our auditor.
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3. We established in our office an automation system with the function requiring our management’s prior approval and for our audit committee’s review of any transfer to related parties to prevent unauthorized cash disbursements.
4. We updated and published our related party transaction policies and procedures to include the requirement that, among other things, the legal department’s or the audit committee’s prior approval will be required, depending on the threshold amount, for cash transfers to related parties.
We believe that the foregoing steps, if effectively implemented and maintained, will remediate the material weakness identified above, and we will continue to monitor the effectiveness of these steps and make any changes that our management deems appropriate.
Attestation Report of the Independent Registered Public Accounting Firm
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting, as we are a non-accelerated filer exempted from section 404(b) of the Sarbanes-Oxley Act.
Changes in Internal Control over Financial Reporting
In 2013, our financial controller and general accountant left the Company, and the departure of such personnel with appropriate U.S. GAAP and SEC reporting and disclosure knowledge and experience caused the changes in our internal control over financial reporting, as well as the material weaknesses as disclosed in the above Management’s Report on Internal Control over Financial Reporting.
4 |
Exhibit Number |
Description of Document | |
12.1 | Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
12.2 | Certification by the Acting Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
5 |
The registrant hereby certifies that it meets all of the requirements for filing its annual report on Form 20-F and that it has duly caused and authorized the undersigned to sign this Amendment No. 1 on Form 20-F/A on its behalf.
By: | /s/ Tingxiu Lu | |||
Name: | Tingxiu Lu | |||
Title: | Chairman and Chief Executive Officer |
Date: March 23, 2015
6 |
Exhibit 12.1
Certification by the Chief Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Tingxiu Lu, certify that:
1. I have reviewed this annual report on Form 20-F/A of China Sunergy Co., Ltd. (the “Company”);
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. [intentionally omitted];
4. The Company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by this annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and
5. The Company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.
Date: March 23, 2015
By: |
/s/ Tingxiu Lu | |
Name: | Tingxiu Lu | |
Title: | Chairman and Chief Executive Officer |
Exhibit 12.2
Certification by the Acting Chief Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Shiliang Guo, certify that:
1. I have reviewed this annual report on Form 20-F/A of China Sunergy Co., Ltd. (the “Company”);
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. [intentionally omitted];
4. The Company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by this annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and
5. The Company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.
Date: March 23, 2015
By: |
/s/ Shiliang Guo | |
Name: | Shiliang Guo | |
Title: | Acting Chief Financial Officer |