Core Viewpoint - The company, Oriental Materials, is facing regulatory scrutiny due to non-compliance in accounting practices and internal controls, leading to a need for corrective measures [1][2]. Group 1: Regulatory Issues - The Anhui Securities Regulatory Commission has issued a decision requiring the company to rectify issues related to accounting and internal controls [1]. - Specific problems identified include non-standard accounting practices, such as missing original vouchers for salary accruals and a lack of segregation of duties in accounting tasks [2]. - Internal control deficiencies were noted in areas like procurement management, expense management, and approval processes, including the absence of written records for large equipment purchases and inconsistent criteria for employee bonuses [2]. Group 2: Management Changes - The company experienced a leadership change when Xu Guangbin resigned as chairman on July 29, and Zhuang Shengxin was appointed as the new chairman and legal representative on August 5 [1]. - A special rectification task force has been established, led by the new chairman, to address the issues highlighted in the regulatory decision [1]. Group 3: Financial Performance - For the first half of the year, the company reported revenue of approximately 174 million yuan, a year-on-year decrease of 5.06%, and a net profit of about 650,000 yuan, down 88.48% [3]. - The decline in revenue is attributed to falling sales prices of ink products, while sales expenses increased by 13.05% to 16 million yuan [3]. - Projections indicate a significant drop in net profit for 2024, estimated at 13.96 million yuan, a year-on-year decrease of 73.17%, despite high executive compensation totaling 5.64 million yuan [3].

Core Viewpoint - The company has completed the rectification work in response to the Anhui Securities Regulatory Commission's order regarding accounting irregularities and inadequate internal controls, with a series of targeted measures implemented to enhance governance standards [1][4]. Summary by Sections Rectification Measures for Accounting Irregularities - The company has implemented three main corrective actions: 1. Re-evaluating the roles and permissions within the existing ERP system to ensure incompatible duties are separated and a mutual restriction mechanism is established [2]. 2. Reviewing and supplementing any missing or non-compliant original attachments for accounting vouchers from 2022 onwards, as per the Accounting Basic Work Standards [2]. 3. The internal audit department will conduct regular reviews of accounting vouchers and organize semi-annual special inspections to ensure compliance and monitor the implementation of corrective measures [2]. Rectification Measures for Inadequate Internal Controls - The company has undertaken systematic reforms focusing on institutional development, process optimization, and supervision mechanisms: 1. Adjusting the organizational structure and clarifying responsibilities, with new management measures for subsidiaries approved by the board [3]. 2. Enhancing compensation and approval management by requiring subsidiaries to refine their compensation management systems within 15 days after board approval [3]. 3. Improving procurement management by mandating competitive bidding for suppliers, with a review of large equipment purchases over the past three years [3]. 4. Revising the expense reimbursement policy to standardize business entertainment and travel expenses, with a self-review of large entertainment expense vouchers from 2022 onwards [3]. Measures to Consolidate Rectification Outcomes - The company emphasizes several multi-dimensional measures to solidify the rectification results: 1. The internal audit department will conduct annual evaluations of internal controls and report findings to the board's audit committee [4]. 2. Training sessions will be organized for staff across various departments to reinforce accountability [4]. 3. Subsidiaries are required to refine their internal management systems based on the new organizational structure within 15 days of board approval [4]. - The company believes these rectification efforts will significantly enhance internal controls and operational standards, ensuring sustainable and healthy development while protecting shareholder interests [4].