Dongjiang Environmental Protection (00895) received the Shenzhen Securities Regulatory Bureau's regulatory discussion measures decision

Zhitong Finance App News, Dongjiang Environmental Protection (00895) issued an announcement. The company recently received the “Decision of the Shenzhen Securities Regulatory Bureau on Adopting Regulatory Dialogue Measures against Dongjiang Environmental Protection Co., Ltd.” (No. 261) issued by the Shenzhen Regulatory Bureau of the China Securities Regulatory Commission. The main contents are as follows:

(1) Irregular financial accounting

“The company's individual project revenue has irregular revenue recognition in the rare precious metal recycling business and landfill gas power generation business with irregular revenue recognition policies; insufficient basis for changes in accounting policies to confirm revenue from the anode sludge sales business and irregular cost accounting; insufficient amortization periods for individual project franchise licenses; and unregulated capitalization of interest on heavy metal sludge workshop loans. In addition, the company also has problems such as inadequate internal controls relating to revenue, and inconsistencies between the certification criteria for asset groups related to goodwill in 2022 and the disclosure of annual reports.

The above situation does not comply with the provisions of Article 4 (1) and Article 34 of “Accounting Standard for Enterprises No. 14 - Revenue”, Article 9 of “Accounting Standard for Enterprises No. 22 - Recognition and Measurement of Financial Instruments”, Article 17 (2) of “Accounting Standard for Enterprises No. 6 - Intangible Assets”, and “Accounting Standard for Enterprises No. 17 - Borrowing Expenses”.”

(2) Irregular corporate governance

“The company's “three meetings” (that is, the shareholders' meeting, board of supervisors) are not regulated, and the registration management of insider information files is not regulated. The above situation does not comply with the “Listed Company Shareholders' Meeting Rules” ([2025] No. 7), Article 39 (1), Article 42 (1) (2) and Article 42 (2), the “Listed Company Governance Guidelines” (Securities Regulatory Commission Notice [2018] No. 29), “Listed Company Supervisory Guidelines No. 5 - Listed Company Insider Information Insider Registration Management System” (CSRC Notice No. 5)〔 [2022] No. 17) The provisions of Article 10 (1).

The above situation indicates that your company has problems with financial accounting, internal control, corporate governance, etc. Related financial accounting issues have led to irregular disclosure of company information. According to the provisions of Article 52 of the “Administrative Measures on Information Disclosure of Listed Companies” (Securities Regulatory Commission Order No. 182), our bureau has decided to adopt supervisory measures for supervisory discussions on your company. The Shenzhen Securities Regulatory Bureau requires the company's chairman, president, financial director, and board secretary to then bring a valid ID to the Shenzhen Securities Regulatory Bureau for regulatory discussions in accordance with the requirements of the Shenzhen Securities Regulatory Bureau.

If dissatisfied with the above regulatory measures, the company can submit an application for administrative review to the China Securities Regulatory Commission within 60 days from the date of receipt of the decision (the application for administrative review can be sent by postal courier to the Rule of Law Department of the China Securities Regulatory Commission), or it can file a lawsuit with the competent people's court within 6 months from the date of receipt of the decision. The implementation of the above supervisory measures will not stop during the review and litigation period.”

After receiving the decision, the company attaches great importance to the relevant matters described in it, and will organize relevant personnel to thoroughly study relevant laws and regulations, effectively improve the level of corporate governance, promote the healthy and stable development of the company, and safeguard the interests of the company and all shareholders. The above administrative supervision measures will not affect the normal production and operation activities of the company. Investors are kindly requested to pay attention to investment risks.