Zjbc Information Technology Co.Ltd(000889) : Reply of Asia Pacific (Group) accounting firm (special general partnership) on the letter of concern for Zjbc Information Technology Co.Ltd(000889)

About Zjbc Information Technology Co.Ltd(000889)

Reply to letter of concern

Asia Pacific (Group) Certified Public Accountants (special general partnership)

Beijing, China

20th floor

Post code: 100073

Tel. + 86 10 88312386

Fax + 86 10 88312386

www.apag-cn. com.

About Zjbc Information Technology Co.Ltd(000889)

Reply to letter of concern

Listed company management Department II of Shenzhen Stock Exchange:

Zjbc Information Technology Co.Ltd(000889) (hereinafter referred to as " Zjbc Information Technology Co.Ltd(000889) " or "the company") received the letter of concern on Zjbc Information Technology Co.Ltd(000889) issued by your ministry on December 21, 2021 (company department concern letter [2021] No. 465), requiring the company to make supplementary disclosure on the matters in the letter of concern, and requiring the annual audit accountant to express opinions on some matters, Our reply to the part of the letter that needs to be explained by the annual audit accountant is as follows: I. please explain the management mode and actual management effect of your company on its business, finance, personnel and major matters since the acquisition of Jiahua information. Your company is requested to supplement whether various situations described in the announcement on loss of control of wholly owned subsidiaries have occurred for the first time since your company acquired Jiahua information, and if so, explain the specific matters leading to such situations; If not, explain the historical situation of relevant situations, whether your company has determined that Jiahua information is out of control in a timely and reasonable manner, and provide sufficient and objective basis, and whether it is appropriate and sufficient for your company to include it in the consolidated financial statements in the early stage. The accountants and independent directors of your company are requested to check and express clear opinions.

[accountant's opinion]

1. Specific basis and rationality of Jiahua information out of control

20th floor

Post code: 100073

Tel. + 86 10 88312386

Fax + 86 10 88312386

www.apag-cn. com.

According to articles 6 and 7 of accounting standards for Business Enterprises No. 33 - consolidated financial statements, the consolidation scope of consolidated financial statements shall be determined on the basis of control. Control means that the investor has the power over the investee, enjoys variable returns by participating in relevant activities of the investee, and is able to use the power over the investee to affect its return amount. The information we have collected so far shows that:

The restructuring counterparty initiated an arbitration application to the Beijing Arbitration Commission in June 2021, requiring Zjbc Information Technology Co.Ltd(000889) to perform the acquisition agreement and pay the remaining equity acquisition consideration and interest. During the period, the restructuring counterparty continued to negotiate a settlement plan with Zjbc Information Technology Co.Ltd(000889) . In August 2021, the restructuring counterparty resisted the company's internal audit requirements by a lawyer's letter on the grounds that the arbitration matter was still in progress. On October 25, 2021, the opposite party of the restructuring transaction issued a statement to all employees of Jiahua information, claiming that Zjbc Information Technology Co.Ltd(000889) is no longer the actual shareholder of Jiahua information and has no right to interfere in the internal management of Jiahua information, and called on Jiahua management team and employees not to accept the management of Zjbc Information Technology Co.Ltd(000889) ; In November 2021, the opposite party of the restructuring transaction submitted the application for change of arbitration request to the Beijing Arbitration Commission, requiring the award to confirm that the agreement related to major asset restructuring has been terminated, and requiring the company to return 100% equity of Jiahua information to it.

In view of the above events, Zjbc Information Technology Co.Ltd(000889) reassessed the control of Jiahua information: (1) on November 16, 2021, five core management team members of Jiahua information were issued with the confirmation of employee performance of duties, and all of them refused to sign and provide relevant materials required by the company list; (2) On November 23, 2021, the company requested the general manager and chief financial officer of Jiahua information to provide Jiahua information and detailed financial information of each company within the consolidation scope, but there was no response; (3) On December 1, 2021, according to the audit plan of the annual audit accountant, the company reported to jiahuaxin

20th floor

Post code: 100073

Tel. + 86 10 88312386

Fax + 86 10 88312386

www.apag-cn. com.

The interest management team issued the annual audit work arrangement and asked the general manager and chief financial officer of Jiahua information to cooperate with the mobilization pre-trial work of the annual audit accountant on December 8. The company and the annual audit accountant failed to communicate with them for many times and have been unable to enter the site for audit so far.

In order to further carefully evaluate whether the core management team of Jiahua information can cooperate with the annual audit, on the morning of January 10, 2022, Zjbc Information Technology Co.Ltd(000889) asked the head of Jiahua information finance department to provide necessary audit materials to the annual audit accountant at the specified time, but the other party did not cooperate.

To sum up, the company has a number of matters affecting its daily management. It is necessary to judge whether the decision-making power over relevant activities can be exercised. The accountant needs to make a judgment according to the investigation after further investigation in the later audit.

2. Is it reasonable for the company to include Jiahua information in the consolidated financial statements in the early stage

In 2018, Zjbc Information Technology Co.Ltd(000889) purchased 100% equity of Jiahua information from the original shareholders of Jiahua information by issuing shares and paying cash. After completing the acquisition of Jiahua information, the company amended the articles of association of Jiahua information in accordance with the acquisition agreement. As the controlling shareholder of Jiahua information, he exercised shareholder rights in accordance with the company law and the articles of association of Jiahua information, appointed directors to Jiahua information and maintained majority control over the board of directors of Jiahua information. The core management team of Jiahua information accepted the business and financial management of Zjbc Information Technology Co.Ltd(000889) . During the audit of annual reports from 2018 to 2020, The core management team of Jiahua information can also cooperate with the audit work of the firm. During the annual audit, we found no sign of losing control.

In conclusion, we believe that Zjbc Information Technology Co.Ltd(000889) company can actually control Jiahua information before 2020, and it is reasonable to include Jiahua information in the scope of consolidated financial statements.

20th floor

Post code: 100073

Tel. + 86 10 88312386

Fax + 86 10 88312386

www.apag-cn. com.

Matters of concern letter II. On November 11, 2021, your company disclosed the announcement on reply to the letter of concern of Shenzhen Stock Exchange, which said that since June 1, 2021, your company has uniformly changed the bank account, bank U shield and financial seal of Jiahua information and put them under the management of the company. By 2021, the company has released the third quarterly report, Your company has not touched the standards related to the loss of control of subsidiaries. Please describe in detail the specific changes in the company's control over Jiahua information before and after the third quarterly report of 2021, the specific basis for your company to determine that Jiahua information is out of control, and whether the relevant basis is sufficient, in accordance with the situation specified in article 2.5.18 of the guidelines for the standardized operation of listed companies of Shenzhen Stock Exchange. The annual audit accountant and independent directors are requested to check and express clear opinions.

[accountant's opinion]

Through communication with the management of Zjbc Information Technology Co.Ltd(000889) and the evidence provided by Zjbc Information Technology Co.Ltd(000889) currently collected through our verification, it shows that since August 2021, the core management team of Jiahua information has resisted the internal audit requirements of Zjbc Information Technology Co.Ltd(000889) , refused to sign the confirmation of employee performance of duties, failed to provide Jiahua information and its subordinate enterprises' financial data, and failed to arrange the annual audit firm to enter the site for audit as required, In addition, the restructuring counterparty has submitted the application for change of arbitration request to Beijing Arbitration Commission in November, requiring the award to confirm that the agreements related to major asset restructuring have been terminated.

There are many matters affecting the daily management of the company. It is necessary to judge whether the decision-making power over relevant activities can be exercised. The accountant needs to make a judgment according to the investigation after further investigation in the later audit.

20th floor

Post code: 100073

Tel. + 86 10 88312386

Fax + 86 10 88312386

www.apag-cn. com.

Matters of concern 3. It is announced that your company is unable to obtain the complete financial data of Jiahua information and perform on-site audit on it. At the same time, your company is unable to grasp the actual operation, asset status and potential risks of Jiahua information. Please add that your company can not grasp the actual operation of Jiahua information and other information, withdraw the asset impairment provision of RMB 1.480 billion for its long-term equity investment balance, confirm the basis and rationality of the investment loss of RMB 287 million, the accuracy of the impairment and investment loss, and whether there is a financial "big bath". Accountants and independent directors are invited to check and express clear opinions.

[accountant's opinion]

Because Zjbc Information Technology Co.Ltd(000889) cannot provide the financial data of Jiahua information, we cannot grasp the actual operation, asset status, potential risks and other information of Jiahua information, and Zjbc Information Technology Co.Ltd(000889) is currently in arbitration with the original shareholders of Jiahua information, so we cannot judge whether the provision for impairment of long-term equity investment and the amount of recognized investment loss are appropriate.

Matters of concern IV. please compare and analyze 2020

- Advertisment -