LIS Submits Audit Report... Audit Opinion 'Unqualified'

Designated as Investment Warning Item Due to Inadequate Internal Controls
Internal Controls and Processes to Be Improved

[Asia Economy Reporter Hyungsoo Park] LIS announced on the 3rd, after the market closed, that it received an "unqualified" audit opinion on its financial statements for the fiscal year 2019 from its designated auditor, Samjong Accounting Corporation.

Last year, the company recorded sales of 145.1 billion KRW, operating profit of 8.5 billion KRW, and a net loss of 2 billion KRW. A company official explained, "We were unable to recognize the gain on disposal of intangible assets sold to the Chinese joint venture as net profit last year," adding, "We changed the accounting recognition related to loans and deferred tax assets concerning the sale of subsidiaries."

He continued, "As a result of accounting adjustments, a net loss occurred," and "Although last year's performance ended disappointingly, we expect to increase operating profit and show positive results in net profit starting from the first quarter of this year by deferring the recognition."

LIS received a "non-conforming" opinion on its internal accounting control system operation report. According to detailed regulations of the Korea Exchange, it was designated as a stock subject to investment caution. Although designated as an investment caution stock, no special sanctions are imposed on trading the shares.

An official stated, "This was not a financial variable issue but pointed out as a problem in internal control and procedural processes," and explained, "At this point, the subsidiaries with insufficient recognition have already been sold."

Furthermore, the official emphasized, "We will raise awareness regarding other subsidiaries and related parties to prevent the recurrence of the same issue," and "We will improve internal controls and processes."

This content was produced with the assistance of AI translation services.