Easy Visible Supply Chain Management Co.Ltd(600093) board of directors
Special note on negative opinion internal control audit report
Easy Visible Supply Chain Management Co.Ltd(600093) (hereinafter referred to as “the company” or “easy to see shares”) hired Dahua Certified Public Accountants (special general partnership) (hereinafter referred to as “Dahua certified public accountants”) to audit the effectiveness of the company’s internal control in 2021 and issued an audit report with negative opinions. According to the relevant requirements of the Listing Rules of Shanghai Stock Exchange, the board of directors of the company explains the matters involved in the internal control audit report as follows:
1、 Matters leading to negative opinions in the internal control audit report
A material defect is a control defect or a combination of multiple control defects existing in internal control that may lead to the failure to prevent, detect and correct the material misstatement of the financial statements in a timely manner.
In this internal control audit, we noticed the following major defects in the internal control over financial reporting of easy to see shares:
There are significant defects in internal control related to financial reporting. It is easy to see that the company received the notice of administrative punishment and market entry Prohibition (No. [2022] 25) (hereinafter referred to as the notice) from China Securities Regulatory Commission on April 19, 2022, and was found to have false records and major omissions in the periodic reports for six consecutive years from 2015 to 2020, accounting for 84.26%, 73.68%, 75.20%, 72.18%, 71.59% and 66.16% of the falsely increased income Inflated profits accounted for 9.49%, 69.33%, 96.46%, 110.06%, 142.94% and 33.07%. Easy to see shares retroactively adjusted the previous financial statements according to the inspection and identification and extended self-examination results of the CSRC.
Effective internal control can provide reasonable guarantee for the authenticity and integrity of financial reports and relevant information, and the above major defects make the internal control of easy to see shares lose this function.
The management of easy to see shares has identified the above major defects and included them in the enterprise’s internal control evaluation report. These deficiencies are fairly reflected in all material aspects. In the audit of the financial statements of easy to see shares in 2021, we have considered the impact of the above major defects on the nature, timing and scope of the audit procedures. This report has no impact on our audit report on the 2021 financial statements of easy to see shares issued on April 26, 2022.
2、 Explanation of the board of directors on internal control audit opinions
The board of directors of the company respects the independent judgment of accountants. The internal control audit report with negative opinions issued by Dahua certified public accountants is objective and true, and the matters involved are in line with the actual situation of the company.
In 2020, the company’s internal control defects have been rectified. In 2021, the company made overall management, improved the risk control system, improved the communication mechanism, strengthened audit supervision, continued to improve the level of corporate governance, carried out in-depth self-examination and rectification from the aspects of internal control system construction, personnel management and internal control implementation, and launched the trial operation of the improved internal control system in the fourth quarter of 2021, The company’s internal control construction has been significantly improved and improved. According to the notice received on April 19, 2022, the company was found to have false records and major omissions in the regular reports for six consecutive years from 2015 to 2020. Effective internal control can provide reasonable assurance for the authenticity and integrity of financial reports and relevant information, and the above major defects make the company’s internal control lose this function. In view of the above problems, the board of directors of the company learned from previous experience and lessons, comprehensively sorted out and investigated relevant matters, and earnestly fulfilled the obligation of information disclosure. For details, see the announcement on correction of accounting errors in the early stage of the company announced on the same day.
At present, the company has not obtained the special assurance report issued by the accounting firm for this correction. According to the provisions of the rules for the preparation of information disclosure of companies offering securities to the public No. 19 – correction and related disclosure of financial information, the company will complete the corrected financial statements within two months from the date of disclosure of the announcement on the correction of accounting errors in the early stage of the company Relevant notes and the disclosure of the special assurance report issued by the accounting firm on this correction. The board of directors of the company will actively implement the relevant requirements of the regulatory authorities and complete the rectification as soon as possible. 3、 Work carried out by the board of directors to improve internal control
In terms of rectification of internal control defects, the company has formulated rectification objectives and tasks, and hired Yunnan Caizhi Certified Public Accountants (general partnership) to guide the construction of the company’s internal control system by means of public bidding. The board of directors of the company attaches great importance to the problems reflected in the internal control report, and has actively urged the management to comprehensively Carry out in-depth self inspection and rectification, promote the construction and improvement of the internal control system through the rectification of internal control defects, eliminate the adverse effects as soon as possible, and safeguard the interests of listed companies and the legitimate rights and interests of all shareholders. In view of the problems existing in the company’s internal control, the company has taken the following measures to improve:
1. Yunnan Jiutian Investment Holding Group Co., Ltd. and its controller instructed and directed the development of false businesses, falsely increasing the company’s performance, and there were false records in the regular reports from 2015 to 2020 disclosed by the company. According to the matters in the notice, the company adopts the retrospective restatement method to correct the important early errors involved. The company timely communicates with the annual audit accounting firm and timely makes retrospective adjustment to the financial statements from 2015 to 2020 to truly and accurately reflect the company’s financial status and operating results.
2. The company will coordinate operation and management, improve corporate governance, continue to strengthen the construction of internal control management system and improve the level of internal control management. Continue to strengthen the implementation of the strategy, improve the organizational structure, strengthen the construction of corporate culture, and create a good internal control environment. Based on the actual situation of the enterprise, establish the corresponding management mechanism, improve the internal control workflow and comprehensively improve the internal control management level.
3. According to the information disclosure requirements of listed companies, strengthen information disclosure management and improve the quality of information disclosure. We will continue to improve the comprehensive risk management system and establish and improve the normalized control mechanism for all kinds of risks.
4. Strengthen the function of audit and supervision, organize the company and its affiliated enterprises to implement self-evaluation of internal control and deepen problem rectification. Integrate the company’s internal and external resources, fully perform the supervision function of internal audit, effectively ensure the safety of the company’s assets, safeguard shareholders’ rights and interests, and prevent such situations from happening again.
4、 Special instructions of the board of directors of the company
Since 2021, the company has faced a difficult situation. The board of directors of the company has led the management to actively respond, united the cadres and workers to rally and overcome various difficulties. Under the guidance of the audit committee of the board of directors, through the above work, the company has met the internal control requirements in terms of corporate governance structure, business development, risk control, information disclosure and so on at the end of the reporting period.
In accordance with the requirements of the company’s internal development strategy and the guidance of the company’s internal control department in 2022, we will continue to improve the company’s internal risk prevention and control system, and strive to improve the company’s internal control system in accordance with the company’s internal development strategy and the company’s actual needs. In daily management, the company will continue to strengthen the awareness of internal control, strengthen the learning of all employees, standardize the implementation of internal control system, strengthen the supervision and inspection of internal control, timely find the weak links of internal control, improve the management level of internal control and promote the steady and healthy development of the company.
It is hereby explained.
Easy Visible Supply Chain Management Co.Ltd(600093) board of directors
April 26, 2002
