WEIFANG,
Yuhe International's Audit Committee engaged Ernst & Young (
Based on the discussion with the Company's management team and the review
of the report delivered by Ernst & Young, the Board of Directors and Audit
Committee concluded that (1) Yuhe International has cleared all the
inter-company balances with related party companies; (2) There was no payment
between Yuhe International and its related party companies in the period of
Although according to the discussion with the Company's management and the review performed by Ernst & Young, all balances with related party companies were settled and no other material control exception in the payment procedures was noted, the Board of Directors has elected to implement the following measures to ensure adequate internal controls are in place in the payment procedures and operated effectively, thus unauthorized or improper related party payment would not occur and exceptional related party transactions would be detected in time.
A: Update and Revision of Relevant Policies and Procedures
The Company will update its existing code of business ethics and other relevant policies and procedures to clearly stipulate the following two points.
(1) Related party loan is a violation of the Company's code of business ethics and is strictly prohibited. (2) All related party transactions have to be reported to and approved by the Board of Directors in advance.
B: Execution of the relevant policies and procedures
The revised policies will be thoroughly communicated within the Company. All department heads would be required to sign to confirm their acknowledgement of the revised policies. The Finance Department will play a major role in the execution of the revised policies and will strictly follow the revised policy and report any transactions that violate or seemingly violate the policies.
C: Monitoring of the Operation of Internal Controls
The Company will fill a new position of Internal Auditor, who directly reports to the Chairman of the Audit Committee functionally, and to the Chief Financial Officer from the administrative perspective.
-- Quarterly, the Internal Auditor will conduct an independent audit to review the Company's payment procedures and test the controls as stated in the revised policies. Then the Internal Auditor will report the results to the Board of Directors. -- Quarterly, the Internal Auditor will conduct specific audit to review all related party transactions to examine if the revised policies are properly executed, then the Internal Auditor will report the results to the Board of Directors. -- The Internal Auditor will be on board on June 1, 2010. The Board of Directors is in the process of reviewing the background and experience of a number of candidates at the same time defining the job description of the Internal Auditor.
"We appreciate the efforts of all our board members who have helped us
improve our financial controls and reduce our operational risk," commented Mr.
About Yuhe International, Inc.
Founded in 1996, Yuhe is the second largest day-old broiler breeder in
Cautionary Statement
This press release contains forward-looking statements concerning the Company's business, products and financial results. The Company's actual results may differ materially from those anticipated in the forward-looking statements depending on a number of risk factors including, but not limited to, the following: general economic and business conditions, development, shipment, market acceptance, additional competition from existing and new competitors, changes in technology, and various other factors beyond the Company's control. All forward-looking statements are expressly qualified in their entirety by this Cautionary Statement and the risk factors detailed in the Company's reports filed with the Securities and Exchange Commission. The Company undertakes no duty to revise or update any forward-looking statements to reflect events or circumstances after the date of this release.
For more information, please contact: Yuhe International, Inc. Mr. Vincent Hu, CFO Phone: +86-536-7300-667 Email: vincent.hu@yuhepoultry.com Mr. Jason Wang, Director of IR Phone: +1-765-409-1844 Email: jason.wang@yuhepoultry.com Web: http://www.yuhepoultry.com CCG Investor Relations Inc. Mr. Athan Dounis, Account Manager Phone: +1-646-213-1916 Email: athan.dounis@ccgir.com Shaun Smolarz, Financial Writer Phone: +1-646-101-7444 Email: Shaun.Smolarz@ccgir.com Web: http://www.ccgirasia.com
SOURCE Yuhe International, Inc.