2023Environmental, Social andGovernance (ESG) Report
Web：www.zkteco.comTel：0769-82618868Address: No. 32, Pingshan Industrial Road, Tangxia Town, Dongguan, Guangdo
「Responsibility Integrity Pragmatism Excellence」
ng,China
Stock code: 301330
Green and low-carbonExploring a new era ofenvironmental protection
Introduction to the ReportAbout the ReportGeneral Manager StatementAbout ZKTecoAbout UsAnnual HonorsData of 2023
Sustainable Development Management
Steady for far-reachingOpening up a new development
Responding to Sustainable Development Goals (SDGs)Stakeholder CommunicationImportance Issue Recognition
pattern
Creative and innovativeCultivating new driving forcesfor development
Contributing to the societyCreating a harmonious new future
Governance System StandardizationRisk Control ImprovementInvestor Relationship Management
2024 OutlookIndexFeedback
Adhering to Compliant Operations
Green Production PromotionGreen Technology R&D
People oriented
Technological Innovation PromotionResponsible Supply Chain BuildingProduct Quality ControlCustomer Rights and Interests ProtectionInformation Security Protection
Creating a warm new home
Democratic Communication PromotionEmployee Growth PromotionEmployee Health ProtectionEmployee Care Strengthening
Environmental Management Strengthening
Employee Rights and Interests Safeguarding
Introduction to the Report
AcquisitionThis report can be viewed and downloaded on the official website of the Company (www.zkteco.com), thewebsite of Shenzhen Stock Exchange (www.szse.cn) and CNINFO (www.cninfo.com.cn).
About the Report
IntroductionThis report is the first Environmental, Social and Governance (ESG) Report released by ZKTeco CO., LTD.This report, based on the principles of objectivity, standardization, transparency and comprehensiveness,provides a detailed introduction to the practical measures and achievements of ZKTeco and its branches andsubsidiaries in environmental, social and governance (ESG) in 2023.
ScopeTime frame: This report period is from January 1 to December 31, 2023 (hereinafter referred to as the "reportingperiod"). In order to enhance the comparability of the report, some content may be appropriately traced back tothe reports of previous years or contain forward-looking descriptions.Organizational scope: This report is based on "ZKTECO CO., LTD.", including its branches and subsidiaries.Unless otherwise specified, the scope of this report is consistent with the Company's annual report.
Basis
SourceThe data in this report is sourced from the original internal ledger, company documents, and audited statementsof ZKTeco, and some financial data is sourced from the Company's 2023 annual report. Unless otherwisespecified, the monetary amounts involved in this report are measured in RMB.NamesFor ease of expression and reading, "ZKTeco", "Company", and "We" all refer to ZKTECO CO., LTD.Branches, subsidiaries, and special nouns can be found in the definitions.
TermsDefinitionsXIAMEN ZKTECOGuangdong ZktecoShenzhen ZKTecoBioCV
XIAMEN ZKTECO CO., LTD.ZKTECO(GUANGDONG)CO.,LTD
Shenzhen ZKTeco Biometric Identification Technology Co., Ltd.
Biometrics & Computer Vision
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2023 Environmental, Social and Governance (ESG) ReportIntroduction to the Report
?UN Sustainable Development Goals (SDGs)?"GRI Sustainability Reporting Standards (GRI Standards)" of Global Sustainability Standards Board (GSSB)?"Guidelines for Chinese Corporate Social Responsibility Reporting (CASS-ESG 5.0)" of Chinese Academy of
Social Sciences (CASS)
?"Shenzhen Stock Exchange Guideline No. 2 on Self Regulation of Listed Companies - Normative Operation of
Listed Companies on the Growth Enterprise Board (Revised in December 2023)"
General Manager
Based on higher standardsIn 2023, we strove to create a new sample of ESG practices. ZKTECO has carried out benchmarking against world-classmanagement, with a focus on improving modern management levels through management systems, mechanisms andsupervision mechanisms. The Company has established a corporate governance structure composed of the Board ofShareholders, Board of Directors, Board of Supervisors, and management, established and improved the Rules ofProcedure for the Board of Supervisors, Board of Directors, Board of Supervisors, and independent director worksystem. The Company has solidly promoted the standardized operation, optimized the corporate governance structure,strengthened internal control of the enterprise group, and prevented operational risks. Relying on digital transformation,the Company has upgraded ERP and surrounding information systems, and continuously improved network securitysystems to ensure data and privacy security, and enhance risk control capabilities. The Company adheres to businessethics, improves the supervision system, strengthens the construction of an incorruptible culture, and consolidates thefoundation of integrity and compliance. Meanwhile, the Company has integrated ESG as an important value concept intoits strategy, established an ESG management organization, fully promoted the construction of ESG management system,and continuously improved governance efficiency.Targeted at caring
We deeply understand that social responsibility is a necessary condition for sustainable development of enterprises, andbeing a caring enterprise has always been our goal. We have assisted global employees in realizing their dreams ofsettling, reducing the burden of purchasing a house, and substantially promoting the settlement and happiness ofemployees and their families through our employee interest free housing loan program, achieving a win-win situation forenterprise development and employee well-being; at the same time, in order to enhance the happiness of employeesamong the new industry groups born in the 1990s and 2000s, the Company has provided apartment style dormitories foremployees in Guangdong ZKTECO Park. The dormitories are adjacent to the National Forest Park and have familysuites. In addition, we have daycare centers in ZKTECO Tangxia Park and Guangdong ZKTECO Park, eliminatingworries for employees with young children; the Company has a good execution culture in providing assistance todisadvantaged employees and their families, employee holiday benefits, and daily cultural promotion, so that everyemployee can truly feel the warmth of the Company.Looking ahead to 2024, ZKTECO will continuously improve corporate governance, uphold dreams, and maintaincourage; adhere to honesty and achieve success. The Company will deepen high-quality development, become atrustworthy enterprise, make profound accumulation, and strive to realize the vision of a better life!
Jin Hairong
Focusing on high-quality development as a caring
General Manager Statement
enterprise2023 is a year for ZKTECO to practice excellence and practical development, seeking industrial "innovation" anddevelopment with high "quality".While global AI technology, digitization and intelligent transformation are rapidly developing, countries are also facingthree global crises: climate change, loss of natural diversity and biodiversity, and pollution and waste. We deeplyunderstand that the success of an enterprise lies not only in technological innovation and business growth, but also in itsprofound understanding and proactive actions towards the environment, society and governance.Oriented at high qualityWhile focusing on the three main businesses, ZKTECO actively explores innovative applications of AI and digitaltechnology for high-quality upgrading of the industry, and continues to invest in smart retail business, proposing theenvironmentally friendly concept of "ZKTECO's good screens for beautiful new life". In product innovation, weadvocate for "good products being green", applying green energy technology to various products, and achieving the goalof emission reduction and low-carbon through daily efforts. Realizing green production and low-carbon operation hasalways been our direction. We will introduce advanced environmental protection technologies and equipment in newproduction bases, continuously optimize production processes, reduce pollutant emissions, and improve resourceutilization efficiency. The new bases implement a water recycling system, with an environmental purification systemestablished throughout the entire production process. In addition to actively upgrading environmental protectionmeasures, we also actively promote green lifestyles among our employees and partners, contributing our efforts to theecological civilization.03 04
2023 Environmental, Social and Governance (ESG) Report
Introduction to the Report
About ZKTeco
ZKTECO CO., LTD. was established in 2007 and was listed on the Shenzhen Stock Exchange in 2022 with thestock code "301330". The Company is headquartered in Dongguan City, Guangdong Province. As of December31, 2023, it has 4,106 employees worldwide, including more than 1,200 R&D personnel and more than 1,100foreign employees. The Company has 42 branches/subsidiaries in Chinese Mainland and 47 controllingsubsidiaries overseas, covering more than 100 countries and regions worldwide.
The Company is an international enterprise in the field of multimodal "Computer Vision and Biometrics" (BioCV), andis a national high-tech enterprise specializing in providing smart entrance and exit management, smart identityverification, smart office products, smart retail products and solutions. The Company is mainly committed to integratingcore biometric technologies such as fingerprints, palm veins, palmprints, facial features, finger veins, and iris withcomputer vision, radio frequency, IoT, cloud computing and other technologies. It provides smart terminals, industryapplication software, and platforms with object detection, identity recognition and verification functions to multiplefields such as commerce, transportation, finance, education, healthcare, and government affairs.Relying on the global ecosystem of R&D, manufacturing, and sales services, the Company actively deploys the field ofsmart retail cloud services while deeply cultivating the three major business sectors of smart entrance and exit, smartidentity verification, and smart office, providing digital products and services for users in the public service field,enterprises, and personal users.
About Us
Company Profile
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2023 Environmental, Social and Governance (ESG) ReportAbout ZKTeco
Biometric deviceprovider(From 2007 to 2012)
Provider of biometricsolutions(From 2012 to 2018)
Intelligent identification ecosystem
solution provider(Since 2019)The Company was officiallyestablished (2007)
2019The Company upgradedmultimodal BioCV algorithm;honored as one of the top tenaccess control brands in China'spublic safety product industry.
2021Joining hands with Amazon CloudTechnology to initiate digitaltransformation of enterprises, theCompany has been awarded theA&S 2022 Top 50 Global SecurityCompanies (12th place) and theA&S 2022 AIOT Global Top 50.
2013-2014Multimodal palm recognition algorithm waslaunched.2015Visible light facial recognition algorithms andpalm recognition algorithms were released,and time and safety management platformssuch as Baiaoruida were launched.2016Upgraded versions of visible light facialrecognition algorithms and multimodalrecognition algorithms were released.
2007-2010
In 2007, ZKTeco was officiallyestablished and entered theinternational market.
2011-2012Introduction of finger veinalgorithms and hybrid biometricalgorithms.
2017The intelligent license platerecognition system, intelligentvisual perception system, andfingerprint capture device havepassed international certification.2018
The Company released multimodalrecognition technology for visiblelight facial recognition andfingerprint recognition, a series oftechnologies for human certificateverification, and internationalversions of license platerecognition algorithms in Thailand.
2022On August 17, ZKTeco waslisted on the Shenzhen StockExchange.2023ZKTeco has started the digitaltransformation of enterprises, withcore packages such as SAP andERP systems officially launchedand put into operation. At thesame time, the Company activelybuilds a digital ecosystem thatintegrates upstream anddownstream and cross industryintegration, establishes anecological innovation fund,accelerates product incubation,and assists in the construction ofthe digital industry ecosystem.
Development History
Early stages ofentrepreneurship(1998 to 2006)
1998-2002The founding team has successivelylaunched independently developedfingerprint recognition algorithmsand embedded fingerprintrecognition systems.Simultaneously, the team hasresearched the application of facialrecognition algorithms andfingerprint recognition technologyin identity cards.2003-2006
In 2003, the founding team
launchedalgorithms,successfully facial
and recognitionsubsequently continuouslyupgraded the embedded fingerprintdevelopment platform and facialrecognition algorithms.
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2023 Environmental, Social and Governance (ESG) ReportAbout ZKTeco
Core ValuesResponsibility: Responsibility is an important indicator for ZKTeco to measure the spiritual quality ofevery individual, and it will also run through our mutual commitments to society, customers, partners,employees, shareholders, and other stakeholders in social relationships.Integrity: Integrity and honesty are the most important and common values guiding the self-discipline ofenterprise civilization upheld by ZKTeco, and are the cornerstone of all virtues. Integrity means beingable to adhere to the right path and have the courage to admit mistakes. Integrity also means we mustadhere to our beliefs.Seeking truth: The significance of seeking truth lies in being down-to-earth and pragmatic in one's career.The basic connotation of seeking truth is to respect science and pursue truth. Fundamentally speaking,seeking truth is to start from reality, boldly adhere to truth and science, and fearlessly correct errors.Excellence: ZKTeco thinks excellence as becoming a world-class enterprise, innovating and serving as aworld-class enterprise. Continuously striving to become an outstanding enterprise is our interpretation ofthe process of excellence. Perfection and detail are the best practices of excellence.
Corporate CultureOur MissionChanging the world with technology,making human life and social developmentsafer and smarter.
Our Vision
BioCV makes people more harmoniouswith a smart society
Our PurposeEverything is customer-oriented, withquality as the standard, and strivers as thefoundation, continuously creating value.
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2023 Environmental, Social and Governance (ESG) ReportAbout ZKTeco
Annual HonorsThe Company has been listed as one of the "Top 50 Global Security Companies" by asmag for four consecutiveyears from 2020 to 2023. In 2023, it ranked 14th on the list and was awarded awards such as "Top 50Innovation", "Top 10 Brands in Smart Parks", and "Top 10 Brands in Smart Office" in 2023 Global IndustryDigital Innovation Ranking by asmag; it was selected by the organizing committee and relevant institutions ofthe 19th Security China as the "DC World - Top Enterprise of the DC World Awards", "3rd China SecurityInnovation Enterprise in 2023", and "11th China Intelligent Transportation Construction Recommended Brandin 2023"; it was selected by the organizing committee of the Huicong Brand Festival as the "AIoT InnovationEnterprise" and "Leading Brand in Access Control" of the 20th China IoT Industry Conference and BrandFestival in 2023; it won the second place in the "2023 Top 10 Access Control Brands Award" awarded byQianjia Smart Tech and other entities; it ranked first on the "Top 15 Access Control Brands" list by the LatinAmerican security technology media SecuriTIC in 2023; it received the "Technology Innovation Award" in thefield of physical security at the 2023 Security FESTA in South Korea; it was also selected as one of the "Top100 Global Security Enterprises in 2023" by BOANEWS and Security World magazines. In May 2023, theCompany's trusted digital identity QR code module ZKB10M was successfully shortlisted for the "TrustedDigital Identity Ecological Product Recommendation List" of Beijing Zhongdun Security TechnologyDevelopment Co., Ltd. In June 2023, the Company's ZKTeco perception data gate was awarded the "ExcellentInnovative Product Award" at the 16th China International Public Safety Products Expo. Internationally, theCompany has won 6 industrial design industry awards, including 2 German Red Dot Awards and 4 iF DesignAwards. In addition, since 2016, the Company has been awarded the title of "Top 500 ManufacturingEnterprises in Guangdong Province" by Guangdong Manufacturers Association and other entities for 8consecutive years. In 2023, the Company was rated by the General Administration of Customs of the People'sRepublic of China as a "Sample Enterprise of China Customs Trade Prosperity Survey (Export)". In 2023, theCompany also joined industry organizations such as the Guangdong Chain Operations Association (GDCOA),the E-paper Industry Alliance (EPIA), and the China Chain-Store & Franchise Association (CCFA), becominga new retail technology and service provider in the retail industry. GUANGDONG ZKTECO has beenrated as a "SRDI small and medium-sized enterprise (SME)" by the Department of Industry and InformationTechnology of Guangdong Province.
2023 Environmental, Social and Governance (ESG) ReportAbout ZKTeco
EnvironmentalPerformanceEnvironmental investmentRMB 170,800Illegal and irregular incidents in theenvironmental field0 item
Annual environmental objectiveachievement rate100%Compliance disposal rate of hazardouswaste100%CorporateGovernanceNumber of shareholder meetings held5 timesProportion of independent directors
43%
Proportion of female directors
29%
Investor exchange activities19 times
IndustrialValue
Total R&D investment
RMB 213.6134
millionTotal number of patentsobtained
Product quality training duration244 hours
Total number of R&Dpersonnel1,226 personsTotal number of suppliers
1,660Customer satisfaction surveyscore93 points
Proportion of R&D personnel
29.86%
Number of training sessionson product quality
44 times
Customer complaint handlingand resolution rate100%Number of training sessions on informationsecurity and privacy protection166 times
Number of participants in information securityand privacy protection training1,669 personsEmployee Rightsand Interests
Number of femaleemployees1,514 personsNumber of employeesentitled to maternity leave
70 persons
Proportion of femaleemployees
36.87%
Employee return rate formaternity leave100%
Total number of employees4,106 personsNumber of new employees1,038 personsOccupational healthexamination qualification rate
97.3%
SocialContribution
Donation of Dongguan CharityDayRMB 20,000
Donate of the Lanzhou University EducationDevelopment Foundation (LZUEDF)RMB 1,000,000
Data of 2023
BusinessPerformanceOperating revenueRMB 1.97 billionNet profit attributable to shareholders of listedcompaniesRMB
177.2637 million
Total assetsRMB 3.924 billionDistribution of cash dividends (including tax)RMB 51.9722 million
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2023 Environmental, Social and Governance (ESG) ReportAbout ZKTeco
Responding to Sustainable Development Goals (SDGs)ZKTeco actively responds to the UN Sustainable Development Goals (SDGs), adheres to and strives to achieve themission of "changing the world with technology, making human life and social development safer and smarter", andcreating greater value for customers and society. The Company has always placed green, low-carbon and high-qualitydevelopment in an important position, actively exploring the path of a new green circular economy, continuouslyimproving the level of sustainable development management, continuously enhancing the awareness and ability ofenterprises to fully fulfill their responsibilities, and contributing to the achievement of the UN Sustainable DevelopmentGoals (SDGs).
Responsive SDGsOur Actions
Governance SystemStandardizationRisk Control ImprovementInvestor RelationshipManagementAdhering to CompliantOperations
EnvironmentalManagement StrengtheningGreen ProductionPromotionGreen Technology R&D
Responsive SDGsOur Actions
Participate in community activities
Carry out volunteer servicesAssist in rural revitalization
Employee Rights and Interests
SafeguardingPromotionEmployee Growth PromotionEmployee Health ProtectionDemocratic CommunicationEmployee Care Strengthening
Technological Innovation
PromotionResponsible Supply Chain
BuildingProduct Quality ControlCustomer Rights and Interests
ProtectionInformation Security Protection
Sustainable Development
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2023 Environmental, Social and Governance (ESG) Report
Sustainable Development Management
Decent work andeconomic growth
Peace, justice andstrong institutions
Partnership topromote goalachievement
Clean drinking waterand sanitationfacilities
Economical andapplicable cleanenergy
ClimateActions
Industry,innovation andinfrastructure
Partnership topromote goalResponsibleconsumption andproductionachievement
QualityGood healthand well-being
education
Genderequality
Reduceinequality
QualityNo povertyZero hunger
education
Employees
Conduct internal trainingEnsure salary and benefitsOccupational health management
Carry out public welfare andcharity activitiesGive back to communitiesCommunity
Assist in rural revitalization
Employee care measures
Shareholders and investors
Government and regulatory agencies
Customers
StakeholdersExpectations and demandsOur response
Continuous and stable returnsInformation transparency and
Continuous and stable operationStrengthen investorcommunicationTransparent informationdisclosure
disclosureOperate in accordance with
laws and regulationsSupport local developmentProtect the environment
Enhance corporate governanceAccept regulatory reviewPersist in protecting the environment
Product quality and safetyOptimize customer servicePrivacy and information
security
Build a responsible supply chainAdhere to business ethics
Honest cooperation
Adhere to business ethics
Provide high-quality products
Partners
Provide high-quality servicesRespond to customer demands
Stakeholder CommunicationThe Company values the rights and interests of stakeholders such as investors, customers, employees and partners. Inthe process of business development, the Company actively establishes various effective communication channels withstakeholders, understands and timely responds to their expectations and demands.
Energy managementReduce carbon emissionsIntellectual propertyprotectionSustainable supply chainResponsible marketing
Anti-monopoly and fair
competitionBusiness ethics
Water resources protectionGreen technology innovationDemocratic management and
communicationCommunity relationsPublic welfare activities
Pollution and waste
Employee diversity and
inclusivityEmployee compensation and
benefitsOccupational health and safety
Internal integrity
Environmental managementR&D and innovationData security and privacy
protectionCustomer Rights and Interests
Protection
Compliant operationsInvestor communicationsInformation disclosure
Importance to stakeholders
Importance to ZKTecoMedium
We have identified and evaluated the importance of ESG issues, sorted out the important ESG issues, and formed animportance issue matrix from two dimensions: "importance to ZKTeco" and "importance to stakeholders" based on
High
High
the degree of importance of the issues.
Importance Issue RecognitionZKTeco analyzes its own sustainable development challenges based on national policies, industry trends and companystrategies, while paying attention to ESG rating indicators in the capital market. It establishes a mechanism foridentifying important issues and determines annual important issues through analysis of internal and externalstakeholders.
Process for identifying important issues
Company fundamentals
Important issues
Analysis
Industry bestPractice benchmarking
External public opinion
AnalysisPolicies and regulationsBenchmarking research
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2023 Environmental, Social and Governance (ESG) Report
Sustainable Development Management
Training and developmentBasic rights and interests
protectionHealth and safetyHumanistic concern
Public welfare and charityCommunity public welfarePromote regionaldevelopment
Responsive SDGs
Important Achievements in 2023
Steady for far-reachingOpening up a newdevelopmentpatternWe continue to improve the level of corporate governance,striving to achieve comprehensive strengthening ofstandardized governance, risk control, investor relationshipmanagement, and compliant operations, and establish amore sound, transparent and efficient governance systemto ensure the sustainable development of the Company.
Governance System StandardizationRisk Control ImprovementInvestor Relationship ManagementOur Actions
Adhering to Compliant Operations
19 20
Decent work andeconomic growth
Peace, justice andstrong institutions
Partnership topromote goalachievement
Operating revenue: RMB 1.97 billionTotal cash dividends: RMB 51.97 millionNumber of publicly disclosed announcements: 187Punishments for violations of information disclosure: 0 timesNumber of investor exchange activities conducted: 19 times
Governance System Standardization
Office of the Board of Directors
Board of Shareholders
Board of SupervisorsBoard of Directors
General ManagerSecurities Department
Investment and FinancingDepartment
Internal AuditDepartmentGlobal Marketing CenterManufacturing CenterProcurement CenterFinancial CenterGeneral Manager's OfficeHuman Resources Center
R&D Center
Strategy and Development CommitteeSalary and Assessment CommitteeNomination Committee
Audit Committee
The Company has always adhered to compliant operations and strictly followed the requirements of laws andregulations such as the "Company Law of the People's Republic of China", the "Measures for the Administration ofIndependent Directors of Listed Companies", the "Code of Corporate Governance for Listed Companies", and the"Rules Governing the Listing of Shares on the ChiNext Market of Shenzhen Stock Exchange", forming a moderncorporate governance structure where the Board of Shareholders, Board of Directors, Board of Supervisors, andmanagement are separated, supported and balanced. At the same time, the Board of Directors has established a Salaryand Assessment Committee, a Strategy and Development Committee, an Audit Committee, and a NominationCommittee, which have played a good role in further standardizing the operation of the Company. The Company hasdeveloped an effective business model that is adapted to the actual situation, with standardized and orderly managementof all aspects, clear division of labor in the organization, and sound and clear functions.
DiversificationWhen planning the composition of the Board of Directors, the Company will considerthe diverse backgrounds of the board members, including but not limited to gender,age, cultural and educational background, professional experience, skills, etc. TheCompany's Board of Directors consists of 7 directors, including 3 independentdirectors and 2 female directors, with female directors accounting for 29%. Themembers of the Board of Directors have diverse professional backgrounds and utilizetheir professional knowledge to provide support for the Company's decision-making.
Independence
UndergraduateMaster
Board of Shareholders
The Board of Shareholders is the highest authority of the Company. The Company convenes and holds the GeneralMeeting in strict accordance with the provisions and requirements of the "Articles of Association" and the "Rules ofProcedure for Shareholders' Meeting". All shareholders of the Company, especially small and medium-sizedshareholders, are entitled to equal rights and fully exercise their voting rights. During the reporting period, the Companyheld one annual general meeting and four extraordinary general meetings, and a total of 17 proposals were deliberatedand approved.Board of Directors
The Board of Directors is the decision-making body of the Company and is responsible to the Board of Shareholders. TheCompany shall convene and hold board meetings in strict accordance with the provisions of the "Articles of Association"and the "Rules of Procedure of the Board of Directors", exercise its powers in accordance with the law, and fully leveragethe positive role of the Company's directors, especially independent directors, in the standardized operation of theCompany. During the reporting period, the Company held 10 board meetings with a 100% attendance rate of directors,and a total of 47 proposals were deliberated and approved.
In accordance with relevant laws and regulations, normative documents, and the provisions of the Company's "Articles ofAssociation", combined with the actual situation of the Company, we have formulated the "Independent Director System"to clarify the responsibilities of independent directors and fully leverage their role. Independent directors constitute themajority of various professional committees and serve as conveners of the Salary and Assessment Committee, AuditCommittee, and Nomination Committee, providing scientific and professional opinions and references for the decision-making of the Company's Board of Directors.Board of SupervisorsThe Board of Supervisors is the highest supervisory body of the Company, responsible to the Board of Shareholders. TheCompany formulates election procedures for supervisors in accordance with relevant regulations and the Articles ofAssociation. According to the relevant requirements of the "Rules of Procedure for the Board of Supervisors", thesupervisors shall conscientiously fulfill their duties and supervise the production and operation, financial operations, aswell as the directors and other senior management of the Company. During the reporting period, there were 3 members ofthe Board of Supervisors, including 1 employee supervisor. The Company held 9 supervisory board meeting andreviewed 23 proposals.
Operation of the Three BoardsGovernance Structure
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2023 Environmental, Social and Governance (ESG) Report
Steady for far-reaching, opening up a new development pattern
Doctor
Risk Control Improvement
To cope with risks and identify opportunities, we have established a comprehensive Risk and Opportunity ControlProcedure, which clarifies the risks and opportunities that the Company may face in the production and operationprocess, as well as how to carry out risk identification and assessment. It is applicable to the planning andimplementation of risk and opportunity response in activities, products and services within the quality/HSF/environment/occupational health and safety management system. In addition, the risk and opportunity response process clarifies theresponsibilities of each department, promotes collaborative cooperation among departments, further strengthens internalcontrol construction, better prevents and manages risks, and improves operational efficiency.
Risk identification
The Company has established a systematic and effective risk assessment and identification system based on strategicobjectives and development ideas, combined with industry characteristics. According to control objectives, relevantfunctional departments of the Company extensively and continuously collect various external information, includingcollecting historical data, paying attention to changes that have occurred or will occur to macroeconomic environmentand policies, competitors, new technologies and products, internal operations, etc. The collected information ispromptly identified for risks, achieving control over risks.Risk assessmentWe evaluate the severity and frequency of identified risks, and confirm them based on the evaluation criteria of the Riskand Opportunity Control Procedure. The confirmation of risk severity and frequency is used to determine the riskcoefficient, and then the measures to be taken for the risk are determined based on the risk coefficient.We differentiate the severity of risks into five severity levels: very severe, severe, more severe, moderate, and mild.When evaluating the severity of risks, the severity level is divided into five levels based on the violation of laws,regulations, and product standards, the severity of personal injury, the amount of property damage, the time ofshutdown, and the radiation range that affects the Company.In addition, we define the frequency of risk as 5 levels: very rare, rare, occasional, sometimes, frequent. The frequencyof risk occurrence is quantitatively confirmed by evaluating the frequency of uncertain factors, the frequency of riskoccurrence, and the possible frequency of occurrence, as the evaluation criteria for risk frequency.
Internal control system
In 2023, the Company completed the preparation of the "2022 Annual Internal Control Self Evaluation Report" anddisclosed it one time according to the "Basic Norms for the Internal Control of Enterprises" and its supporting guidelines,as well as other internal control regulatory requirements. Within the benchmark date of the internal control evaluation report, there were no significant deficiencies in theCompany's internal control, and effective internal control was maintained in all major aspects. The Company's "Self-evaluation Report on Internal Control in 2023" was prepared and disclosed in 2024. We have established an effectiveinternal control system to achieve full coverage of all aspects and links of the Company's operations, forming astandardized management system that can effectively prevent and timely detect and correct major risks, defects andimportant deficiencies that may arise during the Company's operations.Internal control systemThe Company has established an internal control system based on the Company's "Articles of Association", with corestructures such as the "Rules of Procedure for Shareholders' Meeting", the "Rules of Procedure of the Board of Directors",and the "Rules of Procedure for the Board of Supervisors". It covers procurement management, production management,product sales, external investment, R&D, administrative management, and other aspects, ensuring that all work has rulesto follow, preventing and resolving various risks in the daily operation of the Company, and improving operationalefficiency and profitability.
Internal auditIn order to improve the Company's internal control system and reduce financial and operational risks, the Company hasformulated the "Internal Audit System" based on relevant regulations such as the Code of Corporate Governance forListed Companies" and the "Basic Norms for the Internal Control of Enterprises", combined with the actual situation ofthe Company, to ensure that the internal audit institution plays its due role in internal supervision. The Company has anindependent Internal Audit Department responsible to the Audit Committee. The Internal Audit Department is responsiblefor conducting internal audits of financial and economic activities related to the Company's internal institutions andsubsidiaries, ensuring the effective operation of the Company's internal controls and preventing major risks.
Internal Control
Risk ManagementRisk and Opportunity Control Procedure
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2023 Environmental, Social and Governance (ESG) Report
Steady for far-reaching, opening up a new development pattern
Investor Relationship Management
A series of relatively complete enterprise management systems have been established to ensure thecompetitiveness and reliability of the Company's products and services.Improve the management ability of dealers and maintain good relationships with them.
Keep up with technological trends, increase R&D investment, and focus on customer needs.
Risk countermeasures
Operational risk
Technology andproductinnovation risksInternal controlrisk
Financial risk
Risks relatedto raisingfunds toinvest inprojects
Market competition riskOverseas businessoperational risks
Tax compliance riskLegal risks broughtby information data
Management risks causedby future expansion ofthe Company's scale
Inventorydepreciation risk
Risk of RMB exchangerate fluctuations
The risk of raisingfunds to invest inprojects that do notyield expected returns
Risk of bad debtlosses on accounts
Risk of exchange ratefluctuations in
The risks of cross-borderimplementation ofinvestment projects
mainstream countries
receivable
Innovation risk
www.zkteco.com0769-82618868
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Dealer management risk
The Company closely monitors the global financial markets and relevant exchange rate policies ofmainstream countries, conducts analysis and judgment, fully utilizes hedging and other financial toolsto actively manage exchange rate risks, and reduces exchange rate risks caused by fluctuations.The Company actively strengthens the analysis of market demand and technology, timely grasps thedirection of business development, closely monitors the overall trend of industry, market, policy,competitive environment, etc., strengthens the management and supervision of the progress offundraising investment projects, adjusts project implementation details in a timely manner based oninternal and external influencing factors, improves the efficiency and return rate of fundraising, andensures the smooth implementation of fundraising investment projects.
Gain a deep understanding of local laws, regulations and policy environment, and implementdiversified business strategies. The Company's management personnel and various mechanisms areaccelerating their adaptation to the requirements of global operations, cross regional management and
The Company actively pays attention to local political stability, economic development, industrialpolicy adjustments, exchange rate fluctuations and other situations, and prepares and prevents potentialrisks in advance; the management is responsible for overall investment management of the investmentproject, fully grasping the overall situation of overseas operations, and providing management levelguarantees for controlling overseas risks; establishes a smooth communication and reportingmechanism both domestically and internationally to ensure the smooth operation of the project.
standardized operations.Regularly hire professional consulting agencies to analyze and demonstrate the risks related tosubsidiaries and issue special reports.
Continuously increase R&D investment in recent years, insist on developing and optimizing single andmultimodal hybrid biometric technologies, continuously expand and enriching the types of biometricproducts and services, and pay more attention to the overall linkage design of product software and
Make timely and effective adjustments and responses to relevant policies and regulations, and strictlycomply with relevant laws, regulations and industry norms.
hardware.
Improve the Company's management level, actively expand customers, and increase inventoryturnover rate; at the same time, conduct regular provision for inventory depreciation in strictaccordance with policies to reduce the risk of inventory depreciation.The Company closely monitors exchange rate fluctuations and uses hedging and other exchange ratehedging tools in accordance with relevant company regulations to reduce the adverse effects ofexchange rate fluctuations on the Company's production and operation.
The Company attaches great importance to the return to shareholders and strictly implements the profit distributionpolicy stipulated in the Company's "Articles of Association". The Company has formulated the "Plan for DividendReturns within Three Years after the Initial Public Offering and Listing of ZKTECO CO., LTD." to clarify thereasonable investment return of the Company to new and old shareholders, increase the transparency and operability ofprofit distribution decisions, and enable shareholders to supervise the Company's operations and profit distribution. TheBoard of Directors of the Company has formulated the "Proposal on the 2022 Profit Distribution Plan", which has beendeliberated and approved by the 2022 Annual General Meeting. In 2023, the Company distributed a total cash dividendof RMB 51,972,217.85 (including tax).
Shareholder Returns
In order to better protect the legitimate rights and interests of investors, and improve the transparency and standardizationof information disclosure, the Company has formulated the "Information Disclosure Management System" in accordancewith relevant laws and regulations. This system is the basic standard for the Company's information disclosure . TheCompany truthfully, accurately, completely and timely discloses various information of the Company in strict accordancewith the requirements of the system, ensuring that investors can fully understand the Company's operating conditions,financial position, risk situation, and development prospects.According to the requirements of regulatory agencies, the Company timely disclosed the Company's regular reports,temporary announcements and other information through Shenzhen Stock Exchange, CNINFO, the Company's officialwebsite, etc., and also released the latest company information on the Company's official website, WeChat officialaccount and other windows to facilitate the stakeholders to understand their concerns in a timely and comprehensivemanner. In 2023, the Company disclosed a total of 187 announcements, including 4 regular reports, and was punished 0times for violating information disclosure regulations.
Information Disclosure
ZKTeco focuses on strengthening investor relationship management. In order to further strengthen communication andexchange with investors, the Company held a 2022 annual performance briefing after the disclosure of the 2022 annualreport, timely explaining the Company's 2022 operation to investors and responding to their concerns one by one. InSeptember 2023, the Company participated in the investor briefing on the digital economy held by the Shenzhen StockExchange through on-site and online channels, explaining the Company's participation in the construction of the digitaleconomy to investors and responding to the concerns of on-site and online investors. In September 2023, the Companyparticipated in the "2023 Online Collective Reception Day Event for Guangdong Listed Company Investors" jointlyorganized by the Guangdong Securities Regulatory Bureau and the Listed Companies Association of Guangdong(GDLA). Through online channels, the Company communicated and exchanged information with investors on theCompany's 2023 half year performance, corporate governance, development strategy, operating conditions and otherissues of concern to investors. During the reporting period, the Company organized a total of 19 investor exchangeactivities, strengthened communication and interaction with investors, and deepened their understanding and trust in theCompany.In addition, the Company responded to the concerns of investors through its official website, corporate email, telephoneand other means, focusing on protecting the legitimate rights and interests of investors such as the right to know andvote, and maintaining a good trust relationship between the Company and investors.
Investor Communications
The Company fully estimates the bad debt risk of accounts receivable, manages customers according tocredit ratings, and improves the standardized and scientific management mechanism of customer creditby taking targeted preventive measures in advance to reduce and control customer credit risk;reasonably formulates a collection plan, increases collection efforts for accounts receivable that exceedthe collection period, and if necessary, takes reasonable adjustments to the accounts receivable period.
Risk CategoriesRisk NameCountermeasures
25 26
2023 Environmental, Social and Governance (ESG) Report
Steady for far-reaching, opening up a new development pattern
Adhering to Compliant Operations
Whistleblower protection
In order to ensure that the Company's related party transactions comply with the principlesof fairness, impartiality and openness, the Company strictly complies with relevant laws,regulations and normative documents such as the "Company Law", the "Securities Law",and the "Rules Governing the Listing of Shares on the ChiNext Market of Shenzhen StockExchange". In addition, the Company has revised the "Related Party TransactionManagement System" based on its actual business operations, and made clear provisionson the review and disclosure procedures, pricing principles, etc. for related partytransactions. The Company strictly implements a related party avoidance mechanism.When related party transactions are reviewed, related directors and shareholders mustavoid voting.
At the same time, the Company has formulated the "Standardized Management System for Related Party FundTransactions", which stipulates the principles of preventing the occupation of related party funds, transaction standards,payment procedures, auditing and filing management. This system aims to ensure that the financial transactionsbetween the Company and its related parties are legal, compliant, transparent and fair, prevent related parties fromabusing company assets, and safeguard the interests of the Company and shareholders.
The Company focuses on protecting whistleblowers. Thecontent of the report is communicated and recorded by full-time personnel to strictly prevent the leakage anddissemination of privacy information such as the identity andreporting materials of the whistleblower. Acts of retaliationagainst the whistleblower are strictly prohibited and punished,and if necessary, judicial authorities will be requested topursue legal responsibility in accordance with the law.
￥
PLAN
Internal integrityTo ensure a clean and honest working environment within the Company, the Company has signed an "IntegrityAgreement" with employees, which stipulates that employees must comply with national laws and regulations, businessethics and company rules and regulations in the process of performing their duties, and shall not participate in or acceptany form of bribery, kickbacks or other improper benefits. The Company has supervised and evaluated the integrity ofemployees in their employment, and for employees who violate the provisions of the Agreement, the Company hashandled them in accordance with the law and regulations. The Company is well aware of the importance of clean workfor the reputation and long-term development of the Company. The Company hopes that every employee canconsciously abide by professional ethics, establish correct values, and jointly maintain the Company's image andinterests.Reporting channelsThe Company has opened reporting channels such as telephone and email, encouraging internal and external personnelto report any improper behavior that violates laws, regulations or business ethics through reporting channels. Thewhistleblower's information is strictly kept confidential and the whistleblower is rewarded.
Duty crime reporting channel of ZKTecoReport phoneReport email
13538555484 (long-term)
zklaw@zkteco.com1371146414@qq.com
Construction of a Culture of Integrity
Related Party Transactions
The Company adheres to the principle of paying taxes in accordance with the law, ensures that the payment of taxescomplies with relevant tax laws and regulations, and formulates tax management systems in combination with relevantlaws and regulations and the actual situation of the Company to strictly regulate and manage taxation.Tax Compliance
The Company always adheres to laws and regulations such as the "Anti Monopoly Law of the People's Republic ofChina" and the "Anti Unfair Competition Law of the People's Republic of China", advocates fair transactions andcompetition, and is committed to maintaining a healthy competitive environment, ensuring a healthy competitionmechanism among competitors, and participating in market competition in accordance with the law and regulations.During the reporting period, the Company did not experience any vicious competition incidents.
Fair Competition
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2023 Environmental, Social and Governance (ESG) Report
Steady for far-reaching, opening up a new development pattern
Responsive SDGs
Important Achievements in 2023
Illegal and irregular incidents in the environmental field:
Annual environmental objective achievement rate: 100%
incidentsCompliance disposal rate of hazardous waste: 100%Environmental investment: RMB 170,800
Green and low-carbonExploring a newera ofenvironmentalprotectionWe always adhere to the ecological andenvironmental protection concept of "Clear watersand lush mountains are invaluable assets", andregard protecting the environment and conservingresources as our own responsibility. We continue toimprove our environmental management level,strengthen energy conservation and emissionreduction, promote water resource protection, andcontribute to reducing pollution and emissions.Our Actions
Environmental Management StrengtheningGreen Production PromotionGreen Technology R&D
29 30
Clean drinkingwater andsanitation facilities
Economical andapplicable cleanenergy
Climate Actions
2023 Environmental Safety Objectives, Indicators and Management PlansEnvironmental Management Strengthening
ZKTeco conscientiously complies with environmental protection laws and regulations such as the "EnvironmentalProtection Law of the People's Republic of China", the "Law of the People's Republic of China on Prevention andControl of Water Pollution", the "Law of the People's Republic of China on the Prevention and Control of AtmosphericPollution", the "Law of the People's Republic of China on Prevention and Control of Environmental Noise Pollution",and the "Law of the People's Republic of China on Prevention and Control of Environmental Pollution by Solid Waste"in their daily production and operation. During the reporting period, production and operating activities of the Companyand its branches and subsidiaries comply with the relevant national environmental protection requirements, and thereare no cases of being punished for violations of laws and regulations.The Company has prepared an "Environmental Management Manual" based on the "Environmental ManagementSystems - Requirements with Guidance for Use", combined with the actual situation of the Company's environmentalmanagement, to determine the Company's environmental policy, and clarify the responsibilities and interrelationshipsof environmental management among various departments.
In order to ensure the systematic and standardized identification and assessment of environmental risks, we havedeveloped and implemented the "Environmental Factor Identification and Evaluation Procedure" to comprehensivelyidentify and evaluate the environmental impacts in the Company's operations. In addition, the Company regularlymonitors key environmental indicators by implementing the "Environmental Monitoring and Control Procedure" toensure the effective implementation of various environmental protection measures. In order to effectively identify andcontrol environmental risks, we specially commissioned a third-party organization to conduct comprehensive testingon pollutants such as wastewater, noise and exhaust gas in the factory during the reporting period, and all test resultsmet the standards.
Risk identification and assessment
Environmental policy
The Company complies with regulatory requirements and implements pollution prevention; reasonably utilizes
resources and continuously improves the environment
The Company establishes a sound environmental governancesystem, with the General Manager responsible for overseeing theCompany's environmental management affairs and making finaldecisions on major environmental issues. The managementrepresentative is responsible for establishing, implementing andmaintaining the Company's environmental management system,approving environmental objectives and indicators, and approvingenvironmental management plans. Each department is responsiblefor implementing environmental management and achieving theCompany's environmental objectives. We actively carry outenvironmental management system certification and havesuccessfully passed the ISO 14001:2015 environmentalmanagement system certification.
ISO14001:2015EnvironmentalManagement SystemCertificate
Wastewater dischargeUp-to-standard dischargeUp-to-standard dischargeUp-to-standard noise emissions(≤ 65 decibels during the day, ≤ 55
decibels at night)100% reasonable classification and
disposal of wasteZero safety accidents
Zero safety accidentsZero safety accidents
Exhaust emissionsNoise emissionsHazardous waste disposalOccurrence of potentialfire, explosion and othersafety accidentsElectric shockCausing occupational healthinjuries (mechanical injuries,object strikes, burns, etc.)
Environmental Factor
ObjectiveAchievement
Environmental Management System
Environmental Risk Control
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2023 Environmental, Social and Governance (ESG) ReportGreen and low-carbon, exploring a new era of environmental protection
Green Production Promotion
The Company strictly implements laws and regulations such as the"Environmental Protection Law of the People's Republic of China" and the"Law of the People's Republic of China on Conserving Energy", andattaches great importance to daily energy conservation management. Inorder to fully and effectively utilize energy and resources, reduce resourceconsumption, and carry out rational utilization, management and control ofenergy and resources, the Company has formulated the "Energy andResource Management System", the "Energy Performance ManagementSystem", the "Main Energy Consumption Equipment Quota ManagementSystem", etc., aiming to improve energy utilization efficiency, reduceenergy consumption and practice the concept of sustainable development.
The Company implements the concept of sustainable development in theproduction and operation process, committed to reducing resource andenergy consumption and environmental costs during production andoperation, and improving resource utilization efficiency. Institutional normshave been formulated, such as the "Energy Conservation Target ManagementSystem", the "Energy Conservation Publicity System", and the "EnergyConservation and Emission Reduction Reward and Punishment System". TheCompany actively responds to various environmental protection instructionsissued by the environmental protection department, cooperates with theenvironmental protection department's instructions, and enhances employees'awareness of environmental protection and energy conservation.
The Company pays close attention to the policy requirements of the nationaland local governments for water use, water reuse and sewage dischargequality, strictly complies with relevant laws and regulations such as the"Water Law of the People's Republic of China" and the "Law of the People'sRepublic of China on Prevention and Control of Water Pollution", andcontinuously optimizes water resource management and utilization,contributing to promoting the sustainable use of water resources and theprotection of the ecological environment.
Emergency plans and drills
The Company investigates environmental risks and hazards in accordance with relevant laws and regulations andinternal management requirements, and improves risk prevention and control measures for sudden environmentalincidents. During the reporting period, we developed the "Chemical Leakage Emergency Plan" and organized chemicalleak prevention drills to enhance the coordination and cooperation ability among departments and improve the overallefficiency of the Company in responding to emergencies.
In order to improve the reaction and rescue capabilitiesof employees in the event of chemical leaks, andenhance their environmental and safety awareness, theCompany conducts chemical leak prevention drills.
Case: Chemical leakprevention drills
ZKTECO always adheres to the concept of green office and is committed to implementing environmental protectionmeasures in daily operations. We strictly adhere to energy-saving standards, and remind employees to pay attention tosaving resources and energy and avoid waste. At the same time, the Company actively promotes paperless office,utilizing digital technology for document management and communication as much as possible to reduce paperconsumption. For inevitable paper usage, we also advocate the use of recycled paper to reduce dependence on forestresources.To ensure the effective implementation of green office measures, the Company has established correspondingmanagement standards. For example, before printing a file, employees must preview the correctness of the format toavoid unnecessary paper waste caused by repeated printing due to formatting errors.In addition, the Company vigorously promotes waterconservation by posting water conservation slogans andother methods to enhance employees' awareness of waterconservation At the same time, the Company activelypromotes the Clean Your Plate Campaign. When dining inrestaurants, we encourage employees to take meals asneeded to avoid food waste and jointly implement theClean Your Plate Campaign.The Company actively fulfills its social responsibility andplays a leading role in environmental protection. In 2023,we were awarded the title of "Dongguan EnvironmentalManagement Demonstration Enterprise".
Green and Low-carbon Operation
Energy Management
Energy Saving
Water Resource Management
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2023 Environmental, Social and Governance (ESG) ReportGreen and low-carbon, exploring a new era
of environmental protection
Wastewater managementZKTeco actively responds to relevant national policies and carries out wastewater discharge management. To ensurecompliant discharge of wastewater, the Company hires a third-party organization to professionally treat the scatteredwastewater produced by Tangxia Industrial Park, ensuring proper wastewater treatment and effectively avoidingwastewater pollution to the surrounding environment.
Hazardous wasteTo ensure the professional and compliant disposal of hazardous waste, the Company has signed a "Hazardous WasteDisposal Service Contract" with a third-party organization with professional qualifications to ensure proper disposal of
Waste gas managementIn order to comprehensively manage the waste gas generated during production and operation, the Companyconsciously complies with the "Integrated Emission Standard of Air Pollutants of the People's Republic of China" andthe "Integrated Emission Standard of Volatile Organic Compounds for Stationary Pollution Source" of GuangdongProvince, ensuring that the emissions of waste gas comply with relevant national and local regulations. Through themaintenance and management of waste gas treatment facilities and continuous technological innovation, the Companystrives to reduce the impact of waste gas on the environment and is committed to achieving the goal of sustainabledevelopment.Waste managementThe Company strictly complies with relevant laws and regulations such as the "Technical Guidelines for Solid WasteTreatment & Disposition Engineering" and the "Law of the People's Republic of China on the Prevention and Controlof Environmental Pollution by Solid Waste", and handles general industrial waste and hazardous waste with caution.The Company has developed the "Waste Management Specification" to further standardize the classification, storageand disposal of waste, reducing the potential harm of waste to the environment.General waste
To ensure the legal, safe and environmentally friendlydisposal of waste, the Company has signed a "GeneralIndustrial (Solid) Waste Treatment Service Agreement"with third-party organizations, and hired organizations toassist it in handling general waste such as waste packaging,tin tin dross, and defective glass prisms.
hazardous waste and provide guarantees for the legal and safe disposal of hazardous waste.In addition, to ensure the safety of hazardous waste transportation and avoid accidents such as leaks, the Company hasdeveloped a detailed inter-provincial transfer plan and filed it for record. To ensure the professional and safetransportation, the Company entrusts a third-party professional waste disposal company to be responsible for the safetransportation of hazardous waste throughout the entire process.Green Technology R&D
ZKTeco has always been committed to integrating green technology into product R&D. According to representativeenvironmental requirements such as RoHS and REACH, it continuously promotes technological innovation to achieveenvironmental protection and energy conservation of products. The Company has enhanced the competitiveness ofproducts by continuously developing energy-saving products, optimizing production processes and reducing energyconsumption, contributing to the sustainable development of society.
The Company integrates green technology into the product R&D process, and the intelligent low-powerattendance machine produced does not work or start at ordinary times, but quickly starts when users usefingerprint clock-in through low-power and fast start technology, achieving precise fingerprint attendancefunction. After clock-in, the system automatically shuts down, effectively saving energy and reducingconsumption.
Case 2: Intelligent low-powerattendance machine
The Company has an ultrasonic cleaning process in the production process of its products, and the water to betreated mainly includes wastewater generated after filtration by a water purifier and wastewater from ultrasonicbackend cleaning. In order to improve and protect the environment, save energy and reduce emissions, theCompany has hired a professional third-party company to treat the above-mentioned wastewater usingreclaimed water reuse filtration facilities for reuse.
Case: Ultrasonic cleaning watertreatment and reuse project
The installation of new energy vehicle charging piles is convenientand suitable for various places. The charging piles developed bythe Company support multiple power outputs to meet differentneeds. On the basis of 7kW AC charging piles, the Company haslaid out DC fast charging piles, focusing on household, communityand other scenarios, supporting multiple charging methods andcloud management functions. Combined with smart parkingservices, the Company has achieved integrated management andservice of charging and parking.
Case 1: New energy charging pile
Emission Management
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2023 Environmental, Social and Governance (ESG) Report
Green and low-carbon, exploring a new era of environmental protection
Responsive SDGs
Important Achievements in 2023
Creative andinnovativeCultivating newdriving forces fordevelopment
We attach great importance to technological innovation,continuously increase investment in R&D, cultivateinnovative talents, improve product quality controlsystem and customer service management systemtaking customer needs as the guide, and provide high-quality products and services, to continuously improvecustomer satisfaction, and create company value.Our Actions
37 38
Industry, innovationand infrastructure
Responsibleconsumption andproduction
Partnership to promotegoal achievement
Number of R&D personnel: 1,226 personsR&D investment: RMB 213.6134 millionNumber of patents and software copyrights obtained: 170Number of training sessions on product quality: 44 timesCustomer complaint resolution rate: 100%
Technological Innovation PromotionResponsible Supply Chain BuildingProduct Quality ControlCustomer Rights and Interests ProtectionInformation Security Protection
R&D talentZKTeco always regards talent strategy as an important strategy of the Company, and strives to promote employees tobecome participants and contributors to innovation by adhering to an innovation system with an engineer culture.Innovation is the first driving force, talent is the first resource, and a high-quality R&D team provides innovationassurance for the Company.
R&D investment
Innovation is an important support for improving product and service quality. In order to consolidate our ability tosustain innovation, we attach great importance to R&D investment and inject strong momentum into independent R&D.
Number of R&DpersonnelProportion of R&D
Person
personnel
%
1,1311,1251,226
29.5
642794
5675
29.729.86
Bachelor's degreeMaster's degreeDoctorMaleFemaleUnder 30 years old30-40 years old
IndicatorsUnit20212022 2023
901884956
270241230Number of R&D personnel by age
673620652
459440380
Number of R&D personnel by educational background
Number of R&D personnel by gender
R&D investment amountRMB '0,000Ratio of R&D investmentto operating revenue
%
19,678.6718,798.38
10.069.80
21,361.34
10.84
IndicatorsUnit2021 2022 2023
Technological Innovation Promotion
Dalian R&D Center
Xiamen R&D Center
Dongguan-Shenzhen R&D
Center
Indian R&D Center
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2023 Environmental, Social and Governance (ESG) Report
Creative and innovative, cultivating new driving forces for development
R&D and Innovation System
Innovative conceptsZKTeco attaches great importance to product R&D and innovation, adheres to technological innovation as the strategicsupport for high-quality development of the enterprise, and formulates regulations such as the "Technical CommitteeManagement Charter", further improving the product R&D system, and driving high-quality development throughinnovation. We are laying out a global R&D system, continuously improving our technological innovation capabilitiesand competitive advantages, and continuously consolidating our core technology and cloud platform technologycapabilities, laying a solid foundation for R&D.The Company takes multimodal BioCV as its core technology, integrates ZKTeco's independent intellectual propertyrights of multimodal computer vision and multimodal biometric technology, and constructs an end, edge and cloudservice technology ecosystem, and the full stack and full-scenario solution, achieving dual wheel drive of market andtechnology, and helping the Company achieve high-quality development.R&D organizationWe always take market demand and technological innovation as the main driving force, and pursue leading coretechnologies as our core product competitiveness. Based on "taking the world's perspective as our own perspective", wecontinuously pursue new technologies and build a global, multi-dimensional, open and integrated R&D platform system.The Company has four R&D Centers, namely Dongguan-Shenzhen R&D Center, Dalian R&D Center, Xiamen R&DCenter, and India R&D Center, responsible for research in hardware, software, platform, products, algorithm technologyand other aspects. Each R&D Center has high professionalism and continuously improves its R&D and innovationcapabilities.
Global R&D employees1,226R&D Centers 4Coverage of research areasComputer vision technology andmultimodal recognition algorithmsSoftware and cloud platform systems andIoT technologyHardware and firmware platform systemand RF technologyApplication technology transformationand innovative technology
PersonPersonPerson
Person
Person
PersonPerson
Collaborative R&D mechanismIn order to strengthen talent cultivation and enhance innovation capabilities, ZKTeco continues to promotecollaborative R&D, and establishes "school-enterprise talent strategic cooperation" with Lanzhou University. We jointlybuilt a "school-enterprise talent strategic training platform"; jointly established the "Dongguan Key Laboratory ofMultimodal Computer Vision and Biometric Recognition" with the Dongguan Institute of Optoelectronics, PekingUniversity.ZKTeco adheres to the mission of "changing the world with technology, making human life and social developmentsafer and smarter", maintains strategic concentration, works together with partners and customers to continuously utilizemultimodal BioCV core technology to deeply integrate with digital technologies such as AI, IoT, big data and cloudcomputing with a focus on the four core tracks of smart access, smart identity verification, smart office and smart retail,meeting the personalized and diversified needs of global customers.Since going public, the Company has expanded its market, globalization, smart retail and innovation ecosystem. R&Dhas entered a new stage of development, expanding from traditional three scenarios to smart retail, transforming fromproduct sales to software and services, and from machine vision to generative AI. A global, multi-dimensional, open andintegrated R&D platform system has been constructed.
In March 2023, ZKTeco's wholly-owned subsidiary in Singapore, ZKTECO SG INVESTMENT PTE. LTD.,and Indonesian listed company Digital Mediatama Maxima Tbk. (DMMX) jointly invested in theestablishment of a smart retail cloud service subsidiary, ZKDIGIMAX PTE. Ltd. (referred to asZKDIGIMAX). ZKDIGIMAX focuses on providing global retail enterprises with "AI+digital signage"services, digital infrastructure (including e-paper digital price tags), and smart business cloud services. It iscommitted to becoming a new boundaryless retail platform service provider with comprehensive, full scenarioand full chain services, accelerating the transformation of traditional retail industry to data-driven smart retail,and helping retail customers create greater commercial value.
Smart retail cooperation
Continuousinnovation guaranteemechanism
Introduction ofexperts and talents
ZK TecoOpen Lab
School-enterprisecooperation
Strategic PartnerJoint Laboratory
CIC
Innovation platform construction
In 2020, the Company was approved to establish Guangdong ProvinceDoctoral Workstation, which is a recognition of the Company'sscientific research ability, comprehensive management level, andservice ability by the Human Resources and Social SecurityDepartment of Guangdong Province. This means that the Companywill have the qualifications and ability to absorb, introduce and gathermore doctoral and postdoctoral talents. It is a leap in the constructionof the Company's talent team, a new milestone in building a high-leveltalent team, and also an important carrier for the Company to carry outscientific research and technical services.
National high-tech enterpriseGuangdong Province Doctoral WorkstationIn 2012, the Company was approvedas a national high-tech enterprise andhas been awarded this title for 12consecutive years. XIAMENZKTECO and Guangdong Zktecohave both received this honor.
Achievement of objectivesduring the reporting period
Master the core algorithms of biometrics, leading the industry inmultimodal biometric technology;Create the unique ultra short delay supercomputing technology;Deep research on multimodal BioCV AI technology;Technological accumulation of AGI technology and smart retail scenarios.Continuously promote the deep integration of various products and software
Next year's objectives andmedium- to long-term planning
platforms, create a scenario data connectivity ecosystem, and enhance thescenario customization and delivery capabilities of software platforms;Increase investment in core technologies of multimodal biometrics and deepenthe integration of computer vision and biometric technology;capabilities and agile production capabilities, and enhance engineeringAccelerate the upgrading of product globalization engineering designintegration capabilities.
Strategic Objectives for R&D
R&D and Innovation Practice
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2023 Environmental, Social and Governance (ESG) Report
Creative and innovative, cultivating new driving forces for development
For 12 consecutive yearsApproved and recognized as anational high-tech enterprise
Core technological advantages
ZKTeco possesses core algorithms in the field of biometrics and has a strongcompetitive advantage. After years of technological accumulation, the Companyhas built a core technology system focusing on single biometric technology andmultimodal biometric technology. In the field of single biometric recognition, theCompany has successfully developed biometric technologies such as fingerprints,facial features, palmprints, veins (including finger veins and palm veins) andirises. In the field of multimodal biometrics, the Company continues to innovateand has launched various multimodal biometric technologies such as "fingerprint+facial recognition", "facial+palm vein recognition", "fingerprint+finger veinrecognition", "facial+iris recognition", and "fingerprint+palmprint+facialrecognition". It has obtained 18 invention and utility model patents in the field ofmultimodal biometrics.
The 2023 IDS was successfully held at China NationalConvention Center, with four special forums set up atthe same time: Security Certificate TechnologyDevelopment Forum, Biometric Technology andSecurity Forum, Network Trusted AuthenticationSecurity Technology Forum, and EmergencyManagement and Identity Integration ApplicationForum. Mr. Chen Shukai, Chief Scientist of ZKTeco,was invited to attend the Biometric Technology andSecurity Forum and shared the R&D and application ofZKTeco's non-contact fingerprint recognition
In addition, the Company has evolved from a single biometric technology to apioneer in computer vision and biometric multimodal BioCV AI technology. Bycombining computer vision with biometrics, the Company has achieved anempathetic experience ecology of multimodal AI attributes and scene interaction.
technology.
Participated in the 2023 IDS
At the DC World, Mr. Chen Shukai, Chief Scientist of ZKTeco, was invited to attend the BiometricTechnology Application Forum as a guest speaker on multimodal biometric technology in the era of AI models.Participated in the Biometric TechnologyApplication Forum
Significant Innovation Achievements
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2023 Environmental, Social and Governance (ESG) Report
Creative and innovative, cultivating new driving forces for development
Engineering Experimental CenterFocusing on advanced R&D, with innovation as the foundation, ZKTeco's R&D Experimental Center is dedicated toadvancing technology R&D. It has more than 20 laboratories, including electronic laboratory, optical laboratory,communication laboratory, wireless laboratory, reliability laboratory, etc. It can conduct basic research from rawmaterials, devices, single boards and complete machines, creating a systematic capability foundation.The Guangdong Biometrics and Security Technology Engineering Technology Research Center is the only provincial-level engineering center in the biometric industry in Guangdong Province. Relying on the talent team and researchequipment of ZKTECO, the center accelerates the transformation of scientific research achievements into realproductivity with the goal of building a provincial-level first-class research platform for deep integration of biometricsby researching and developing key common technologies in the industry, thereby promoting industrial technologicalprogress.
progress. Participation in industry seminars
Encouraging R&D and innovation
The Company continuously improves its technology innovation incentive mechanism, formulates the "ZKTECO PatentApplication and Reward Measures", and further standardizes the management of technology rewards. Through variousincentive measures, the Company encourages employees to actively participate in R&D and innovation, improve theCompany's core competitiveness and market share, and achieve long-term development of the Company.We set up incentive policies such as project sprint incentives, patent bonuses, and project assessment bonuses to rewardand commend innovative projects and talents on a monthly or annual basis, maximizing employees' innovationenthusiasm. In addition, we provide employees with salary standards that match their abilities, organize annual jobqualification evaluations, and determine their positions and salaries based on the results of ability evaluations.
Ecological innovation fundTo build and improve the computer vision field, multi-dimensional perception smart terminals, scene interactive robots,scene cloud service software, AR digital twins, digital identity cards and other track industry chains, and form a digitalecosystem integrating upstream, downstream and cross industries, ZKTeco cooperates with Hefei Xingniu PrivateEquity Fund Management Co., Ltd. to jointly establish an ecological innovation fund.In August 2023, the ecological innovation fund completed its industrial and commercial registration, with a fund size ofRMB 120 million. The investment direction is "in the field of computer vision, multi-dimensional perception smartterminals, scene interactive robots, scene cloud service software, AR digital twins, digital identity cards and upstreamand downstream of the other track industry chains".The establishment of the ecological innovation fund marks an important step for ZKTeco to promote the integrated andcoordinated development of the upstream and downstream of the entire industry chain. With the assistance of capital,ZKTeco will accelerate product incubation and assist in the construction of smart industry ecology.
Main R&D achievementsZKTeco combines basic R&D of biometrics with application R&D. The Company was awarded the titles of "Guangdong Intellectual Property Advantage Enterprise" and "Guangdong Intellectual Property DemonstrationEnterprise" by the Guangdong IP Protection Association (GDIPPA) in 2018 and 2019, respectively. During thereporting period, XIAMEN ZKTECO was awarded the title of "National Intellectual Property Advantage Enterprise".
As of December 31, 2023, the Company has obtained a total of 858patents, including 149inventionpatents and obtained a total of 675computer software copyrights and67work copyrights.In 2023, the Company obtained a total of 124patents, including39invention patents and obtained atotal of 46computer software copyrights and 8work copyrights.
Main R&D projects of ZKTecoBioCV VLM 2.0 Multimodal Computer VisionModel
ZKTeco Interconnection Cloud ScenarioService Platform V2.0.0Research on the Application of Retail ScenarioDetection and RecognitionCloud Attendance Scenario Service PlatformV3.0R&D of Technology and Device forAuthentication Application Based on CTIDDigital Identity CardBioCV LLM 3.0 NLP ModelR&D of Core Technology Platform and Devicefor Access Controller Based on IoT VideoTechnologyR&D of Structured Light Module for Face andPalm Hybrid Recognition Based on HighSecurity and High AccuracyWide Access IoT Perception ApplicationPlatform V1.0 (formerly known as ZKBioCV
Security V1)ZLink (International Version) V2.0 (ZKTeco
Interconnection Cloud Scenario ServicePlatform)
ZKDigimax-L3 V1.0 (Cloud Digital RetailManagement Platform)Continuous Capacity Building of the IoTPlatform (Minerva/Goddess Platform) V3.0R&D of Smart Terminal Based on LLM andLarge Model Technology of MultimodalComputer VisionResearch on Algorithms Related to DigitalHuman GenerationR&D of Device for Collecting and RecognizingMixed Images of Humans, Vehicles and ObjectsBased on Multispectral AnalysisR&D of Smart Office Terminal ManagementPlatform and Device Based on Cloud ServiceMinervaIoT platformR&D of Mobile Access Solution Device Basedon Multimodal BioCV Technology andBluetooth/NFC Near-field CommunicationTechnologyR&D of Electromechanical Product O&MPlatform Based on Bluetooth Near-fieldCommunication Technology and IoT CloudPlatform
Participation in industry standard developmentParticipating in the formulation of industry standards and norms can enable the Company to grasp the forefront ofindustry development direction and carry out technology development and product layout in advance. Since itsestablishment, the Company has been focused on the R&D of biometric technology, and is one of the main participantsin drafting and revising multiple technical standards and specifications in the industry.In the fields of facial feature, palm vein, palmprint, fingerprint and iris biometric technology and its applications,ZKTeco has led and participated in the development and revision of over 27 domestic technical standards, making itan important contributor to the formulation of biometric standards. As of December 31, 2023, ZKTeco and itssubsidiaries Shenzhen ZKTeco and XIAMEN ZKTECO have participated in the development of 14 national standards,3 local standards, 6 industry standards and 2 group standards.During the reporting period, the "Information Technology - Biometrics - Test Methods for Face RecognitionSystem" (GB/T42981-2023) and the "Technical Requirements for Contactless Fusion Recognition Terminal Devices ofPalm Print and Palm Vein" (T/CESA1264-2023), where ZKTeco served as the drafting entity, were officially releasedto promote standardized governance of the industry and promote healthy development. Participating in drafting industrystandards is a full recognition of the important influence, authority and professional strength of ZKTeco in the field ofbiometrics.
GB/TNational standard
29268.7-2023Group standardNational standard
T/CESA1264 —2023
May 23, 2023
ZKTeco is the
June 29, 2023
drafting entityZKTeco andXIAMENZKTeco are thedrafting entitiesZKTeco andXIAMENZKTeco are thedrafting entitiesSeptember 7,2023GB/T42981-2023
CategoryStandard No.Standard NameRelease DateRemarksInformation Technology -
and Biometric Performance TestingReporting - Part 7: Testing of On-cardBiometric Comparison AlgorithmsTechnical Requirements for ContactlessFusion Recognition Terminal Devices ofPalm Print and Palm VeinInformation Technology - Biometrics -Test Methods for Face RecognitionSystem
Summary Table of Standards Formulated with Participation of ZKTeco in 2023
Note: For more information on the main R&D projects of ZKTeco, please refer to the "2023 Report of ZKTECO CO., LTD.".45 46
2023 Environmental, Social and Governance (ESG) Report
Creative and innovative, cultivating new driving forces for development
Participating social organizations
In November 2023, ZKTeco officially joined the E-paper Industry Alliance (EPIA) to promote the deepintegration of e-paper technology and the retailindustry.
Joined the E-paper IndustryAlliance (EPIA)
Responsible Supply Chain Building
ZKTeco conducts intellectualproperty training
ZKTeco strictly complies with laws and regulations such as the "Patent Law of the People's Republic of China", the "Copyright Law of the People's Republic of China", and the "Anti Unfair Competition Law of the People's Republic ofChina". It attaches great importance to its own intellectual property protection, strengthens the utilization of patentinformation, and avoids infringing on the intellectual property rights of others. The Company has formulated systemssuch as the "Intellectual Property Management Measures", the "Patent Management Measures", the "CopyrightManagement Measures", the "Trade Secret Management System", and the "Trademark Management Measures" tostrengthen the management of intellectual property rights.The Company has established an Intellectual Property Department to manage intellectual property related work,responsible for reviewing and supervising various aspects of the Company's intellectual property work, establishing anintellectual property management performance evaluation system, establishing an intellectual property risk warningmechanism, managing company patents, and handling intellectual property disputes. In 2023, XIAMEN ZKTECO haspassed the certification of intellectual property management system.To promote the concept of intellectual property protection, we provide intellectual property training for the Company'sR&D personnel, including patent protection and intellectual property risk prevention. In 2023, the Company conductedmultiple intellectual property training sessions and 2 offline routine training sessions, mainly targeting technicalprofessionals who have been employed for more than one year, with a total of 66 participants; the Company conductedseveral online induction training sessions, mainly targeting new employees, with a total of 79 participants.
In order to standardize supplier management, improve the Company's supplier classification and grading managementmechanism, develop differentiated supplier management strategies, and ensure the achievement of procurementobjectives, the Company has formulated the "Supplier Management Control Procedure", which makes clear provisionsfor supplier access, supplier assessment, supplier classification, etc. At the same time, we have developed a "NewSupplier Selection Certification Procedure" to standardize the selection of new suppliers for the Company, ensure thequality of purchased materials, provide stable sources of goods, and improve the competitiveness of the Company'sproducts.
S/N
Summary of ZKTeco Participation Associations During the Reporting Period
Name
National Security and Alarm System Standardization Technical Committee Human Biometrics ApplicationSub-Technical Committee (SAC/TC100/SC2)National Information Technology Standardization Technical Committee Technical Committee onBiometrics (NITS SC37)Xiamen High-tech Association (member entity)Xiamen Technology Innovation Association (director entity)Xiamen System Integration Association (member entity)Xiamen Software Association (director entity)National Information Technology Standardization Technical Committee (NITS) (member)Information Technology Application Innovation Working Committee (ITAI) (member)IIFAA (member entity)
Supplier management
Intellectual property protection
47 48
2023 Environmental, Social and Governance (ESG) Report
Creative and innovative, cultivating new driving forces for development
Supplier assessment
The Company has established a supplier performance management team, which is organized and led by the QualityDepartment. It mainly includes departments such as the Executive Procurement Department, the Resource DevelopmentDepartment, the Quality Department, the Material Certification Department, and the R&D Department, responsible forconducting monthly performance assessments of suppliers. For suppliers who score last 5 in consecutive assessments,the Company has conducted interviews or on-site coaching, and output the "Minutes of Supplier Quality ProblemCounseling Meeting". For suppliers who score last 5 in consecutive assessments, the Company has considered reducingorders and eliminating them.Supplier classificationSupplier accessThe Company manages the access of suppliers by setting corresponding standards and approval processes in suppliersourcing, supplier certification and supplier selection, ensuring that the selected qualified suppliers meet the Company'sbusiness needs in terms of quality, delivery, price, compliance and trade security. We have set minimum accessstandards for suppliers for both production and non-production procurement, and set minimum requirements for supplierenterprise size, registered capital, industry experience, system certification, product environmental protection, etc. fordifferent materials.Supplier review
ExcellentGoodQualifiedImproved after coachingUnqualified
Level ALevel BLevel CLevel DLevel E
90.1-100 points
80.1-90 points
70.1-80 points
60.1-70 points
Below 60 points (inclusive)
CategoryLevelScore
For new suppliers, the Company conducts on-site reviews at the supplier development site. Before the first trialproduction, suppliers within the province shall organize personnel from R&D/material certification or engineering,procurement and other departments to conduct on-site reviews of their process capabilities, quality status, deliverytime, etc. The review results shall be filled in the "Supplier Site Assessment and Review Form". After approval byrelevant personnel, sustainable procurement may be carried out if the review results are at level C or above (includinglevel C); suppliers from outside the province can conduct self-assessment or video review based on actual needs, andevaluate whether they meet the Company's procurement needs based on written qualification materials and technicalstrength (patents, technical specifications, etc.) provided by the suppliers. For suppliers listed in the "QualifiedSupplier List", the Company will conduct regular or irregular reviews based on their actual situation.
Supplier Review Rating Table at Development Site
Total number of suppliers
IndicatorsUnitQuantity in 2023
Nos.1,660
Bottleneck suppliers
Procurementamount
Supply riskLow
The Company divides suppliers into four categories based on supply risk and procurement amount: core suppliers,leverage suppliers, bottleneck suppliers, and general suppliers. Different management strategies are adopted for differentcategories of suppliers to improve the efficiency and level of supplier management.
High
High
Procurement amount
Leveraging
Core suppliers
Establish partnershipDevelop competitiveadvantagesReduce procurement costs
General suppliers
Streamline internalprocessesReduce management
Reduce procurement
risksEnsure effective supplycosts
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2023 Environmental, Social and Governance (ESG) Report
Creative and innovative, cultivating new driving forces for developmentQuantity Table of Suppliers of ZKTeco in 2023
Sustainable procurementZKTeco always adheres to the concept of sustainable development throughout the procurement management process.Before establishing a cooperative relationship with suppliers, both parties need to sign agreements such as the"Environmental Protection Agreement", the "Commitment Letter for Non Infringement of Intellectual Property Rights",and the "Commitment Letter for Non Use of Hazardous Substances". In addition, before adding suppliers to theCompany's "Qualified Supplier List", suppliers are required to provide the Environmental Compliance Declaration, theMaterial Composition Declaration, and the Third-party Environmental Testing Report completed by laboratories withISO/IEC 17025 certification qualifications.
Emergency response team
Team membersResourceDevelopmentManager
Team membersExecutiveProcurementManager
Team membersManager of MaterialCertificationDepartment
Team membersQuality Manager
Team membersPMC Manager
The Company attaches great importance to solving the uncertainty of the supply chain and ensuring supply safety. Inorder to ensure effective production, ensure the supply of purchased materials, and prevent unexpected losses caused byshortages or poor quality of purchased materials, the Company has formulated the "Supplier Emergency ControlProcedure". Through process planning, arrangements are made in advance to quickly respond to problems and ensuretimely delivery of products to customers.We have established an emergency response team, with the General Manager of the Supply Chain Committee serving asthe team leader, and the Resource Development Manager, Executive Procurement Manager, Material CertificationDepartment Manager, Quality Manager, and PMC Manager as team members to coordinate and handle supply chainsecurity management related work. For different emergency events, we have developed emergency plans and clearlydefined various emergency measures. In the event of an emergency, the emergency response team decides whether toimplement the emergency plan based on the current procurement situation of the Company's production plan and unifiesthe command of emergency response.
Supply Chain Security Management
Responsible Supply Chain
Providing high-quality products is the Company's unremitting pursuit. In order to establish and improve the qualitymanagement system of ZKTeco, improve product quality, enhance the competitiveness of the enterprise in theinternational market, and elevate the Company's management level to a new level, we have prepared the "QualityManagement Manual" as a guiding document for the Company to implement quality management, and carry out qualityplanning, quality control and quality improvement activities following the principle of customer satisfaction, inaccordance the "IS09001:2015 Quality Management System Requirements" and the "QC080000:2017 HazardousSubstance Process Management (HSPM) System Requirements" standards, and combined with the actual situation of theCompany.
1371146414@qq.com
13518555484zklaw@zkteco.com
We establish a quality policy based on thebasic principles of quality and HSFmanagement, which is the overall qualitypurpose and direction of the Company.
Quality policy
Continuously innovate technology; continuously improve productquality; always pursue customer satisfaction.Use environmentally friendly materials, prevent pollution, makecontinuous improvements, and meet regulations and customerrequirements!
Quality policy
Clean procurementWe continue to enhance the business ethics awareness of our suppliers and are committed to establishing honest, fair andtrustworthy business cooperation relationships with them. To ensure the transparency of the procurement process, theCompany and its suppliers jointly signed the "Integrity Agreement" and the "Procurement Framework Agreement",advocating mutual supervision and creating a fair competition, honest and trustworthy, and sunny and healthy businessenvironment. At the same time, we have set up a dedicated complaint channel for accepting reports of illegal anddisciplinary behaviors, encouraging the reporting and exposure of behaviors thatviolate work integrity, such as acceptingcommercial bribes and transmitting improper benefits, and protecting whistleblowers.Reporting acceptance channels
Optimizing Quality System
The cooperation between the Company and suppliers is based on the principles of fairness, justice, mutual benefit, andwin-win cooperation. The mutual trust, conventions, and contracts established by both parties in the cooperation are thefoundation of business cooperation, and improving efficiency and common development are the common goals of bothparties. The supply chain has always adhered to the principles of "sunshine purchase, honesty and trustworthiness,integrity and self-discipline", requiring suppliers to also bear relevant responsibilities for social responsibility andenvironmental impact. By formulating complete procurement management agreements, and continuously improving theprocurement process, the Company ensures that the source of materials is legal and compliant. In order to promote andregulate the active fulfillment of corporate social responsibility by partners in the supply chain, we have signed a "CSRAgreement"with suppliers to regulate the requirements of both parties, including labor rights, environmental protection,occupational health and safety, business ethics and other aspects.51 52
2023 Environmental, Social and Governance (ESG) Report
Creative and innovative, cultivating new driving forces for development
Team leaderGeneral Manager of the SupplyChain CommitteeConflict mineral controlZKTeco has always practiced and actively assumed social responsibility, adhered to ethical procurement, promotedsustainable development of the industry chain, and strictly controlled conflict minerals. We require suppliers to sign a"Letter of Commitment for Not Using Conflict Minerals" in the new supplier identification and selection proceduredocument, strictly control the Company's raw material sources, and make every effort to ensure the procurement and useof non-conflict minerals in the supply chain within a commercially reasonable range.
Product Quality Control
The Company has developed the "Risk and Opportunity Control Procedure" to identify and evaluate various risks andopportunities in the quality management system, establish countermeasures for risks and opportunities, clarifyoperational requirements including risk avoidance, risk reduction and acceptable risks, establish a comprehensive riskand opportunity management system, enhance the Company's risk resistance, and provide operational guidance forincorporating and applying risk and opportunity identification and evaluation measures in the quality managementsystem.
Quality risk managementQuality objectives
Incoming inspection batch
qualification rateDelivery inspection batchqualification rateRepair rate
99.00%
99.60%
2.00%
98.98%
99.66%
1.77%
99.10%
99.70%
1.70%
Assessment Content2023 ObjectiveAchievement of 2023 Objective2024 Objective
Ensuring Product Quality
During the reporting period, ZKTeco,ZKTeco Dongguan Branch, and GuangdongZKTeco all passed the GBT9001-2016 and
Product Quality System Certificate
ISO9001:2015-CNASCN certifications.
Quality certifications
R&Ddesignquality
Material
qualitycontrol
Customersatisfactionimprovement
Assemblyqualitycontrol
Continuousquality
Finished
improvement
productqualitycontrol
Orderqualitycontrol
Control productquality throughoutthe entire stages ofR&D, testing andproduct handover
Conduct qualityinspection on productionequipment and conductprocess inspections
Inspect andrecheck materials,and hold materialreview meetings
Analyzeimprove
andtheproductbasedoncustomer feedback
Conduct orderreview and PMCreview0102
ZKTeco's productsQuality controlprocess
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2023 Environmental, Social and Governance (ESG) Report
Creative and innovative, cultivating new driving forces for development
The Company sets annual quality objectives, which are signed off by the General Managers of business groups andsummarized in the "List of Company Quality Objectives". Each department formulates and decomposes objectivesbased on the overall objectives, and conscientiously implements and monitors them to ensure the achievement of theoverall objectives. In addition, we assess the implementation of quality objectives and record the implementationprocess and assessment results.To achieve our policies and objectives, we require all employees to establish the guiding ideology of "quality first" andthe service awareness of "customer first", establish and maintain a strict and effective management system within theCompany, operate in strict accordance with prescribed procedures and documents, and provide users with the mostsatisfactory and compliant products at the best cost and with the best production and service.
ZKTeco's Quality Objectives
Inspectpackagingperform
productandfactoryquality control
and repair Analyzedefectiveevaluate
products,
and verifybefore consideringcontinuing production,rework or discontinuation
The Company has developed the "Equipment and Instrument Management Control Procedure" to ensure the normal operation ofproduction equipment, testing instruments and metallurgical tools through service, renovation, calibration, maintenance andmanagement, and to reasonably and effectively meet production and testing needs. The Production Department and the QualityDepartment are responsible for the procurement, management, daily maintenance and level I service of equipment, instruments andmetallurgical tools used in their respective departments; the Engineering Department is responsible for evaluating the feasibility andconfiguration of the Company's equipment, designing, manufacturing, repairing and renovating it, and organizing acceptance by userdepartments and conducting level II and level III services; the Procurement Department is responsible for contacting equipmentsuppliers to cooperate with the Engineering Department in formulating equipment plans and negotiating purchase quotations; theManagement Department is responsible for evaluating the purchase cost and reviewing and approving equipment purchases.We regularly perform calibration on the Company's equipment, either internally or externally, with an internal calibration cycle of sixmonths and an external calibration cycle of one year. The Engineering Department or those with an instrument calibration certificateshall submit an "Annual Calibration Plan" at the beginning of each year and schedule the calibration according to the annual plan.During the reporting period, we conducted internal caliper calibration on some equipment using secondary gauge blocks in accordancewith the "JJG30-2012 Verification Regulation of Current Calipers". At the same time, we commissioned a third-party testing agency toperform external calibration on some equipment and issued calibration certificates. In addition, we have developed an "AnnualMaintenance Plan" for production equipment and carry out daily maintenance and upkeep of the equipment.
Improving service system
As an innovative international technology company, since its establishment in 2007, ZKTeco has always adhered to aglobal market network layout based on the concept of localized services. ZKTeco has now established a relativelycomplete global marketing service network system. As of December 31, 2023, the Company has established 28 branches,14 subsidiaries, and 193 service outlets in 31 provinces, cities, and autonomous regions across China, with a sales andservice system covering the whole country. The Company has established a total of 47 controlling subsidiaries overseas,located in 31 countries and regions worldwide, with product sales covering over 100 countries and regions.During the reporting period, the Company established 7 overseas controlling subsidiaries and 1 domestic controllingsubsidiary, continuously accelerating its global layout and promoting the construction of the Company's regional gridmarketing system. At the same time, the Company has actively participated in large-scale overseas exhibitions, receivingincreasing attention in overseas markets such as South Africa, Brazil and Singapore.
Production Equipment Management
Product Quality Training
Customer Service Management
Domestic marketWe are committed to safeguarding customer rights and interests and continuously improving customer service levels. Fordomestic customers, the Company has established systems such as the "After-sales Service Management Specification forChina Business Group", the "After-sales Service Process for China Business Group", the "After-sales Quality ExceptionHandling Specification" and the "Product Warranty Policy of ZKTeco" to standardize product after-sales servicemanagement and after-sales exception handling process, and improve customer satisfaction. Overseas marketThe Company's overseas business revenue accounts for a relatively large proportion due to a large number of overseascustomers. Therefore, we have developed a customer service management system that is different from the domesticmarket. We have considered the characteristics of multilingualism, multiculturalism, and multi-time zones to fullyimprove customer satisfaction. Different overseas subsidiaries have developed customer service systems that are adaptedto local policies. For example, the Mexican subsidiary has developed systems such as "Politica-de-Garantias-2023" (after-sales maintenance policy) to better protect customer rights and interests.
Overseas market customerservice concept
Localized services:With the local team at the core, understand and respect the local culture, customsand language.
Localized services:With customers as the center, provide accessible and efficient communication
channels, ensuring that language and time zones do not become communication barriers.
Localized services:Gain a deep understanding of customer needs and provide personalized and
thoughtful service experiences.
Overseas market customerservice system
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2023 Environmental, Social and Governance (ESG) Report
Creative and innovative, cultivating new driving forces for development
To enhance employee quality awareness, the Company actively carries out product quality training by a combinationof external and internal, online and offline methods. The Quality Management Department is responsible forproviding internal training to employees, and providing targeted training of different categories and contents for allemployees, quality inspectors, etc. External training is conducted online, covering multiple aspects such as productionline design, factory planning, QCDSM indicators, etc. During the reporting period, the Company conducted a total of
42 internal training sessions and 2external training sessions, with a total training duration of244hours and
covering 373people.
The headquarters team provides services to global branches and customers;
Customer Rights and Interests Protection
Local teams of branches provide localized pre-sales, in-sales, and after-sales services to local distributioncustomers and their customers;
Local teams of branches and various distribution agent teams jointly provide various services to localcustomers, including but not limited to online and offline training, experiential interaction, and after-salesservice, ensuring comprehensive coverage and timely response to customer needs.
Intelligent service managementFull process management of customerservice in overseas markets
Pre-
sales
After-sales service system foroverseas markets
National technical serviceAfter-sales service management system:
https://cn.zkteco.com/cn/producthotline: 4006900999
WeChat official account: ZKTecoCustomer Service Center
We have opened a national technicalservice hotline through cloud services,and the service center has set up 80agents to intelligently record inboundcalls, outbound calls, and businesstransactions.
We have uses an online customer servicesystem to categorize and edit answers tocommon questions,covering multiple topics such asattendance, access control, videosurveillance,
We have established an after-salesservice management system website,where customers can operate productafter-sales management, effectivelyreducing communication processes andimproving work efficiency.
security inspections, etc. By identifying
We have created a WeChat officialaccount of "ZKTeco CustomerService Center", where customerscan consult online, communicateand operate after-sales maintenance,equipment password reset and other
keywords, we can automatically reply.
work online.
Online customer service system:
https://www.sobot.com/console/login
Customer satisfaction improvement
Customer complaint response
We have actively responded to customer complaints. During the reporting period, the Company had 63 customer
complaints and resolved 63 of them. The customer complaint resolution rate was 100%.
Domestic market
In order to improve service quality, standardize the complaint handling process system, put customers at the center, and
improve customer satisfaction, we have formulated the "Customer Complaint Acceptance System for China Business
Group", which clarifies the customer complaint acceptance regulations related to product or service quality in the China
Business Group
We adhere to the principle of "customer first, quality first, high-quality service, and timely response" in our after-sales
service and technical support. When receiving customer complaint calls, we calm their emotions, communicate
complaint content with them, and keep records. We promptly handle them within the Company and provide feedback on
the results to the complaining customers. We have set requirements for the deadline for handling customer complaints to
ensure that their demands can be met in a timely manner. After the complaint handling is completed, we fill out the
"Customer Complaint Handling Record Form" and the "Technical Service Report Form (After-sales Service Form)", and
archive and save the documents generated during the complaint process.
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2023 Environmental, Social and Governance (ESG) Report
Creative and innovative, cultivating new driving forces for development
24/7 support: Provide 24/7 customer support services in different time zones.Multilingual support team:Build a multilingual team to cover the diverse language needs of
customers.Knowledge base and training::Through internal team training, transmit relevant
knowledge to the customer's team, and continuously learn and respond to differentsituations through training.
Market research and analysis: Gain a deep understanding of the characteristics andneeds of markets in various countries/regionssales
Customer consultation and answers: Provide consulting services tailored to different
services
cultures and languages to answer customer inquiries.Product introduction and customized solutions: Provide customized productsolutions based on customer needs.In-sales
Order processing and follow-up: Ensure smooth order process, track order status,services
and respond to customer needs in a timely manner.
Cultural sensitivity training: Provide team training for customers with different
cultural backgrounds to enhance cultural sensitivity.
a
:eAfter-
lParno
gb
ulemges
so
tolv
einngsu
arnedti
tmecehlynirceaslosluu
ptipoonrt
ofPcruo
svtiodmetechssnuicas.riel support for differentservices
Customer satisfaction survey and feedback: Conduct regular surveys to understandcustomer satisfaction and continuously optimize services based on feedback.
Number of customers participating in
the surveyProportion of customers participating
in the surveyNumber of valid customersatisfaction questionnaires distributedOverall customer satisfaction score
3,240
3,812
3,497
3,947
3,511
3,817
Indicators2021Nos.%CopiesPoints
Unit2022 2023
Overseas marketOffline complaints: Customers can directly complain to the legal representative of each subsidiary or directly complainto the legal representative of the business unit during regular visits. The legal representative of the subsidiary andbusiness unit will analyze and provide feedback based on specific circumstances.Online complaints: Customers can provide feedback on relevant complaint suggestions to the Company through thereserved email on the official website, and the Company will respond to customers based on specific circumstances.
Customer satisfaction surveyCustomer feedback is an important source of informationfor ZKTeco to continuously optimize its services, andthe Company attaches great importance to and continuesto carry out customer satisfaction management. Weconduct customer satisfaction surveys on an annual,quarterly, or monthly basis through telephone, WeChat,QQ, questionnaire, and other survey methods. Thesurvey targets core agents in China, large end customers,overseas subsidiaries, and customers related to qualityticket customer complaints. We also follow up oncustomer feedback or suggestions and generate a"Customer Satisfaction Survey Follow-up Form".Our customer satisfaction survey target is 90 points, andin the past three years, our monthly customer satisfactionsurvey scores have been higher than the target value. Inthe 2023 annual customer satisfaction survey, wecollected a total of 3,817 valid questionnaires, with asatisfaction score of 93 out of 100. More than half of therespondents had a very good overall impression of the"ZKTeco" brand.
Poor: 2.3%
Relatively good: 41.8%
Very good: 43.6%
2023 Customer Satisfaction Survey Results of ZKTeco
Customer service training and assessmentTo better serve customers, the Company conducts customer servicetraining for relevant employees, special training for new employees,and assessment of trainees, including theoretical and practicalassessments. In 2023, we conducted two batches of customerservice training and customer technical training, with a total of 48participants and a pass rate of 95.8% in the assessment. In addition,we provided specialized training on customer complaints, includingetiquette standards for customer service personnel and how toenhance customer experience, in order to better respond tocustomer complaints.
FebruJanuaryaryMarchAprilMayJuneJuly
SepteAugust
mber
NovemOctober
berDecemberCustomer satisfaction in 2022 (%)
98.999.5
99.1
99.299.3
99.3
99.0
99.1
99.399
98.9
.1
99.4
99.299
99.6
.499
99.6
.499
99.5
.1
99.599.0
99.2
99.8
99.6
99.4
99.2
98.8
99.1
98.6
Customer satisfaction in 2023 (%)
99.3
Trend Chart of Customer Satisfaction via ZKTeco's 400 Hotline
59 60
2023 Environmental, Social and Governance (ESG) Report
Creative and innovative, cultivating new driving forces for development
General: 12.3%
Responsible marketing
The Company regulates its information management and publicity work in strict accordance with the "Advertising Lawof the People's Republic of China", adheres to responsible marketing, and strictly prohibits all forms of false advertising.We are committed to showcasing the service capabilities and competitive advantages of ZKTeco to the market, whilemaintaining absolute authenticity and objectivity, and strictly prohibiting false advertising. To enhance our employees'awareness of responsible marketing, we provide annual training on responsible marketing to them.
Customer service training andcustomer technical training
Statistics on Customer Service Training and Assessment
Person-time of special training on customer
complaint responseTotal duration of special training on
customer complaint responseNumber of special training sessions oncustomer complaint responseNumber of assessments on customer
complaint responsePass rate of assessments on customer
complaint response
Person-timeHourTimesTimes%
Indicators202120222023Unit
Person-time of responsible marketing
trainingTotal duration of responsible marketing
trainingNumber of responsible marketing training
sessions
Person-timeHourTimes
Indicators20212022 2023Unit
ZKTeco respects and protects the privacy of customers, and will sign a "Confidentiality Agreement" beforeconducting business cooperation with customers, requiring the confidentiality of information between both parties. Wehave made provisions in the "After-sales Quality Exception Handling Specification" to protect customer privacy: do notcall and view user information without user authorization; do not modify, delete, copy or transmit user data to theoutside world without user authorization; do not exchange customer accessories without user authorization; do notchange customer machine hardware and software settings without user authorization. In addition, we require relevantpersonnel to notify customers to clear device data before handling after-sales product returns and exchanges.Each overseas subsidiary has established relevant policies and systems to protect customer information. For example,the Mexican subsidiary has formulated the "Aviso-de-Privaci-dad-Integral (Comprehensive Privacy Statement)", the"Politica -de-Privacidad -ZKTeco-LATAM (Privacy Policy)", etc., to standardize customer privacy protection.
Do not call and view userinformation without userauthorization
Do notcustomer
exchangeaccessorieswithout user authorization
Do not modify, delete, copy ortransmit user data to the outside
Do not change customermachine hardware andsoftware workpiece settingswithout user authorization
world without user authorization
Regulations for protecting customer
privacy
Customer Privacy Protection
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2023 Environmental, Social and Governance (ESG) ReportCreative and innovative, cultivating new driving forces for development
Information Security Protection
Information security and privacy securitypolicyInformation security is everyone's responsibility, andrisk control is continuously improved.
Quick response, professional focus, first-class service,and continuous improvement.Information technology service policy
Managing organizationsThe Company has established an Information Security and Privacy Management Committee and an Information SecurityManagement Working Group. With the vision of protecting the Company's core assets and preventing informationleakage, the Company has established and implemented a series of strategies, systems, measures and methods throughasset collection, risk analysis, and plan formulation, and established an information security management system, whichhas been comprehensively promoted and implemented within the Company. The Information and Product SecurityCommittee is a Promotion Group under the highest organization of the Company's information security, responsible forthe overall information security management of the Company and for promoting the implementation of informationsecurity, and other departments cooperate to complete information security related work.
Management objectives
We have set information security, information technology service, and privacy security management objectives, and all objectiveswere achieved during the reporting period.
Number of information leaks:
Zero incidents of information leakage at or above the confidential level.
Ensure the security of the Company's core information assets and prevent information leakage.Number of security incidents:
Target value of major safety incidents: 0 times per year;(Including but not limited to core code damage and loss, leakage of trade secrets to competingcompanies in the industry, financial statement leakage, etc.) Target value of major securityincidents: no more than 3 times per year;(Including but not limited to network interruption exceeding one working day, power outageexceeding one working day, etc.)Target value of general safety incidents: no more than 8 times per year.(Including but not limited to network interruption exceeding half a working day, power outageexceeding half a working day, etc.)
Information securityobjectives
Information Security Management System
Institutional policy
With the development of information technology revolution and economic globalization, competition betweenenterprises has shifted to competition in technology and information. Protecting the Company's core technology secretsand other information assets, and preventing information leakage, have become the basic guarantee for the Company'ssustainable development.ZKTeco has established multiple information security and privacy protection related systems and regulations in strictaccordance with laws and regulations such as the "Cybersecurity Law of the People's Republic of China" and the "DataSecurity Law of the People's Republic of China", including the "Cybersecurity Management Regulations", the"Information Security and Privacy Incident Management Regulations", the "Software Development SecurityManagement Regulations", etc., covering personnel security management, access control management, network andcommunication security, operational security, information security continuity management, information assetprotection, privacy related management, etc.In order to define the process and requirements for establishing, implementing, maintaining and continuously improvinginformation security, information technology services and privacy security management systems in the Company,clarify the responsibilities of all related parties, establish management policies and basic strategies, and guide allbusiness units and employees to carry out their work comprehensively within the Company, ZKTeco has developedthe "Information Security and Privacy Management Manual" in accordance with international standards such as the"Information Security Management Requirements" (ISO/IEC27001:2013) and the "Information Technology - SecurityTechniques - Code of Practice for Information Security Controls Based on ISO/IEC27002 for Cloud Services" (ISO/IEC27017:2015). XIAMEN ZKTECO has developed the "Management Manual" for information security management,information technology service management, and cloud security management system documents for privacy security.
Information Security, Information Technology Service and Privacy Security Management System Diagram forXIAMEN ZKTECO
Execution layer
Information Promotion Group/Information Technology Service Group
Business Unit Manager
Managementrepresentative
Group members
Members of each
department
Company managementTop management of the
CompanyInformation Management
Committee
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2023 Environmental, Social and Governance (ESG) ReportCreative and innovative, cultivating new driving forces for development
Protecting supplierinformationThe Company keeps confidential paper versions of supplier information, while electronic versions arestored in the NAS and access permissions are set. XIAMEN ZKTECO classifies suppliers, sets differentinformation security requirements for the confidential information involved by different suppliers, andtakes targeted measures.
Protecting customer dataFor customer data related to R&D technical support, the Company has formulated the "Technical SupportService Customer Data Privacy Management Rules" to clarify the work requirements of technical supportpersonnel. In addition, we require customers to sign a "Privacy Protection Statement for TechnicalSupport Services", reminding them to backup and clear device data before sending the product for repair;for special circumstances where it cannot be cleared, customers need to sign relevant statements, and theCompany's technical support personnel will clear the data and keep records after processing.Protecting employee dataThe Company stores paper versions of employee data in the Printing Room, sets access control andpermissions, and clears them upon expiration; electronic files are stored in the NAS and only supportinternal network access. Access permissions are set and relevant data is backed up weekly.
Company Printing Room
In addition, the Company requires all relevant personnel to sign the "Confidentiality Agreement" and install ESMC portmanagement software and antivirus software to prevent virus and Trojan attacks. We provide information security relatedtraining to new employees upon their onboarding, and also provide periodic information security awareness training tocurrent employees. In the past three years, the Company has not experienced any violations of information security andprivacy protection. We attach great importance to data security protection and continue to increase investment in datasecurity.Data security protectionThe Company conducts risk identification and analysis on supplier information, customer data, employee data, etc., andtakes targeted measures to protect their data security and privacy.
Normalized Security Governance
Information security risk managementZKTeco has formulated the "Information Security Risk Assessment Guidelines" and the "Personal Privacy RiskAssessment Guidelines" to assess and manage information security risks and personal privacy risks. Both the Companyand XIAMEN ZKTECO have formulated the "Information Confidentiality Classification Guidelines" to identify anddetermine the confidentiality levels of various information in the Company's business activities. The confidentialitylevels from level I to level V are classified as top secret, confidential, internal restriction, internal disclosure, and externaldisclosure.
System certificationsThe Company actively carries out information security and privacy protection related managementsystem certifications. ZKTeco has passed ISO27001:2013 information security management systemcertification and ISO27701:2019 privacy information management system certification. XIAMEN ZKTECO haspassed ISO27001:2013 information security management system certification, ISO27701:2019 privacyinformation management system certification, and ISO27017:2015 cloud service information security managementsystem certification, all of which are valid during the reporting period.
Privacy securitymanagement objectivesTarget assessment qualification rate agreed uponin the service level agreement ≥ 99%; Softwaredesign implementation rate ≥ 97%; Customer
Cloud service availability ≥ 99.9%; Timelyresponse rate to privacy incidents ≥ 95%.satisfaction ≥ 85%.
Information technologyservice objectives
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2023 Environmental, Social and Governance (ESG) ReportCreative and innovative, cultivating new driving forces for development
We summarize information assets of various departments and compile the "List of Information Assets", and classify andrate them based on their characteristics (confidentiality, integrity and availability). For information assets at level III orabove, we assess potential risks, including risk likelihood, consequences and asset level, form preliminary risk levels,determine final risk levels after taking measures, and record them in the "Risk Assessment Form"; develop a riskmanagement plan for level 3 and above risk assets and risk items, and prepare a "Risk Assessment Report &Management Plan".Data security protection
To address information security risks, ZKTeco has developed alternative measures and emergency plans to ensure theCompany's level of information security management. The Company has established systems such as the "BusinessImpact Analysis (Information Security)", the "Information Security Continuity Management Regulations", and the"Information Security Continuity Management Plan" to provide stable and reliable guidance for ensuring informationsecurity. Moreover, in order to respond to possible emergencies, achieve scientific, procedural and standardizedemergency response to network and information security emergencies, and build an information and network securityguarantee system, the Company has developed multiple emergency plans to take timely measures in the event of
ZKTeco actively expands cooperation in security ecosystem technology, conducts in-depth communication with datasecurity technology companies, and invites external organizations to provide training and guidance to employees,comprehensively strengthening the Company's capabilities in threat intelligence collection, vulnerability scanning, riskassessment, and other aspects. During the reporting period, the R&D Department was responsible for timely handlingand responding to product related vulnerabilities periodically released by CNVD (China National VulnerabilityDatabase). At the same time, the Company invited external certification training institutions (DNV, SGS, etc.) andexternal product security experts to provide coaching and customized product security training, and purchasedinformation security protection system coaching and related technical consulting services from Dalian Hi-Think.
information security emergencies.
Currently, network security has become a national strategy. Duringthe reporting period, ZKTeco released the "Cloud Security &Compliance White Paper", which for the first time disclosed thecloud service security operation system and elaborated on the cloudplatform security standards and compliance system. Based on yearsof deep cultivation in professional fields and continuous innovationinvestment in basic research, ZKTeco provides multi-dimensionaltechnical support capabilities in the field of cloud platform servicesecurity, fully providing network security services and safeguardingcloud network security for customers.
Information security technology guarantee
Data security technology cooperation
ZKTeco's information security technologyguarantee measures
ZKTeco"Emergency Response Plan for Storage ServerFailures""Emergency Plan for Handling Failures inAccess Aggregation Switches""ZKTeco's Fire Emergency Mechanism""ZKTeco's Power Outage EmergencyMechanism""Emergency Plan for Failure Handling inInternet Behavior Management (AC)"……
XIAMEN ZKTECO"Emergency Plan for Failure Handling inInternet Behavior Management (AC)""Emergency Plan for Handling Core SwitchFaults""Emergency Plan for Power Outage""Fire Emergency Mechanism"……
Feedback on CNVDvulnerability platform issues
Dalian Hi-Think assisting inbuilding a security system
Inviting DNV experts fortrainingCustomized training on"Software Security"Training on Information Security and Privacy Protection Conducted by the Company
Number of relevanttraining sessions conducted
Number of participants in
practice and trainingEmployee coverage of
practice and training
1,290
1,005
Indicators
2021 2Dongguan
XiamenDongguanXiamen
Dongguan
Xiamen
UnitTimesPerson-time%
Emergency Event Management
Network Security Escort
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2023 Environmental, Social and Governance (ESG) ReportCreative and innovative, cultivating new driving forces for development
Set up a firewall at the entrance of the externalnetwork to resist external virus and TrojanintrusionInstall AsiaInfo antivirus software on the serverUse internal network system. External network
Computer port management (using ESMC for
needs to be accessed through VPNProduct data/sensitive information encryption
terminal control)Restrict some personnel's internet access and usethe SangFor AntiBot System to control theirInternet behaviorAnonymization of product user dataAccess control (develop the "Access ControlManagement Regulations")
Responsive SDGs
We adhere to the talent concept of "people-oriented,collaborative and win-win", create a diverse and inclusiveworkplace environment, provide employees withcompetitive salary and benefits, establish a comprehensivetraining system, and strive to ensure the physical andmental health and safety of employees. Let employees workhand in hand with the Company for constantly creating newvalue and a good life.
Our Actions
Employee Rights and Interests SafeguardingDemocratic Communication PromotionEmployee Growth PromotionEmployee Health ProtectionEmployee Care Strengthening
69 70
GoodHealth andwell-being
Quality educationGender equality
Reduceinequality
Important Achievements in 2023Labor contract signing rate: 100%
Number of employees entitled to maternity leave: 70Employee return rate for maternity leave: 100%
Number of new employees: 1,038
People orientedCreating a warm newhome
Employee Rights and Interests Safeguarding
Labor contract signing rateNumber of new employees
Employee turnover rate
%PersonPersonPerson%
1,038
21.35
IndicatorsUnit2023
Campus recruitmentSocial recruitment
Employee structure
Total number of employeesPerson
PersonPersonPersonPersonPersonPersonPersonPersonPersonPersonPersonPersonPersonPerson
Divided by gender
Divided byeducationalbackground
Divided by age
Divided byspecialty
3,8342,4311,4031,8781,864
1,5402,1751,0501,2141,117
3,7882,3941,3941,8111,890
1,6482,007
1,3051,125
4,1062,5921,5141,9312,078
1,9022,067
1,5681,226
Employee CompositionUnit202120222023
MaleFemaleUnder 30 years
old31-50 years oldOver 50 yearsoldDoctorMaster's degreeBachelor'sdegree
OtherProductionpersonnelSalespersonnelTechnicalpersonnelFinancialpersonnelAdministrativepersonnel
Labor Relationship ManagementEmployee recruitmentThe Company has formulated multiple management systems including the "ZKTeco's Recruitment andConfiguration Management Regulations" and the "ZKTeco's Recruitment Behavior Operation Standards" in strictaccordance with relevant laws and regulations such as the "Labor Law of the People's Republic of China" (hereinafterreferred to as the "Labor Law") and the "Labor Contract Law of the People's Republic of China" (hereinafter referred toas the "Labor Contract Law"). Adhering to the principles of "respect, fairness, and impartiality" and "efficientidentification, scientific evaluation, personnel position matching, and selective recruitment", the Company standardizesthe recruitment and entry process of employees, eliminates all forms of discrimination and prejudice, and ensures thatrecruitment work is fair, just and orderly. We adhere to the talent concept of "those who are capable come first, andtalents emerge in large numbers", evaluate talents based on their abilities, qualities and values, and build ZKTeco'stalent supply chain.Diversified recruitment channelsThe Company has established diversified recruitment channels, including online recruitment platforms, on-site job fairs,and third-party human resources services through social recruitment channels. Campus recruitment channels includeonline and offline campus lectures, mutual selections, school-enterprise cooperation, and third-party campusrecruitment company cooperation. In addition, based on the source of candidates for positions, the Company alsoopens up the internal talent market to employees through internal recruitment in addition to campus recruitment andsocial recruitment, providing more opportunities for employees to expand their career development areas andhelping them explore broader growth paths. Internal recruitment includes internal transfers, post promotions, etc. TheCompany will also open recruitment channels for suitable veterans and people with disabilities.Given the high level of understanding and loyalty among internal employees towards the Company, the Company adheresto the principle of "internal first, external later" in recruitment, prioritizing internal recruitment to promote internaltalent flow and optimize allocation, and enhance employee motivation. When internal recruitment cannot meetthe Company's employment needs, the Company considers external recruitment to attract outstanding talents andrevitalize the enterprise's talent pool. The Company conducts an annual effectiveness evaluation of recruitmentchannels, retains efficient recruitment channels, and eliminates inefficient ones.
On-site recruitment
School-enterprise cooperation signing
meeting
Offline lecture
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2023 Environmental, Social and Governance (ESG) ReportPeople oriented, creating a warm new home
To protect the rights and interests of employees, enhance the cohesion of the Company, and attract and retainoutstanding talents, the Company provides employees with generous benefits.Staff welfare
ZKTeco's Welfare System
Diversification, equality and inclusiveness
ZKTeco adheres to the principles of legality, compliance, fairness, and respect, and is committed to establishing aninclusive and equal opportunity work environment. The Company's employees are distributed in various regionsof China and overseas countries. The Company clearly stipulates in the "Recruitment Behavior Operation Standards"that it is prohibited to pass on discriminatory ideas such as region, race and gender. During recruitment and employment,the Company abides by the relevant provisions of ZKTeco's Business Values Guide, cares for employees, and does nottake the hepatitis B test and pregnancy test as employment conditions, does not take social class, nationality,religion, etc. as the criteria for judging employees, and respects and guarantees the rights and interests of employees inall aspects. During the reporting period, the Company did not experience any incidents of labor discrimination.
Opposing the employment of child laborThe Company prohibits the employment of child labor and firmly opposes any disguised use of child labor. Inthe "ZKTeco'sRecruitment Behavior Operation Standards", there are clear regulations on the age of applicants and itis not allowed to hire minors. The Company has formulated the "Recruitment Background Check OperationStandards" to conduct background checks on every newly hired employee. The content of the background checkincludes comparing the ID card and the person, confirming the age of the new employee, and avoiding the recruitmentof child labor by mistake. During the reporting period, the Company did not experience any incidents of child labor.Opposing forced laborThe Company has formulated working hour and vacation policies in strict accordance with the relevant provisions oflaws and regulationssuch as the "Labor Law" and the "Labor Contract Law", ensuring the legitimate right to rest ofemployees. The Company provides employees with various paid leave options such as annual leave, marriage leave, andcompensatory leave, and implements a 5-day 8-hour work system. In addition, the Company prohibits the use of forcedor compulsory forms of labor such as prisoner laborer and bonded laborer. During the reporting period, the Company didnot experience incidents of forced labor.Protection of female employees' rights and interestsWe pay attention to the rights and interests of female employees, strengthen the protection of female employeesduring pregnancy, childbirth, lactation, and other stages in strict accordance with the requirements of laws andregulations such as the "Law of the People's Republic of China on the Guarantee of the Rights and Interests of Women",and actively implement the systemsof maternity leave, prenatal rest leave, maternity leave, lactation leave, etc. TheCompany pays salaries to pregnant female employees according to normal attendance. We respect and care for femaleemployees, strive to combat discrimination against special groups such as pregnant women, and implement human rightsprotection effectively.
Number of employees entitled to maternity leave
Maternity leave return rateNumber of employees entitled to accompanying
paternity leaveAccompanying maternity leave return rate
Person%Person%
IndicatorsUnit2023
Compensation and Benefit System
Fixed salary (basicsalary)
Floated salary(position salary)
Subsidies andallowances
WelfarePerformance bonus,special bonus, year-end bonus, year-endperformance bonus,annual evaluationbonus, and mediumand long-term bonus
Basic salary andposition salary
Age allowance,attendance bonus,and others
Insurance andhousing fund andothers
Insurance andhousing fund
Pay social insurance and housing provident fund inVacation
accordance with the law
National statutory
Statutory leaves such as annual leave, sick leave,
maternity leave, etc.
welfare
BonusCateringAccommodationEntertainmentHealthOthers
Special or temporary bonuses and year-end bonusesIndependent
Hold annual meetings, gatherings, performance events, and
lucky draws every year
company welfare
Compensation structureThe Company has formulated the "Employee Handbook", the "Compensation Management System", and the"Organizational Performance Management System" in strict accordance with relevant laws and regulations such as the"Company Law", the "Labor Law", and the "Labor Contract Law", to enhance the incentive, balance, and fairness ofsalary, and ensure that salary distribution is scientific and reasonable. The Company determines salary standards basedon the principles of remuneration for work, fairness and justice, and mutual benefit between labor and capital, accordingto the corresponding job level of the position.
Company Compensation Structure
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2023 Environmental, Social and Governance (ESG) ReportPeople oriented, creating a warm new home
Provide cafeteriaProvide dormitoriesAnnual physical examination of employeesNurseries, gyms, employee interest free housing loans,
etc.
Performance assessment
In order to make employees truly feel the care of theCompany, further strengthen the centripetal forceand cohesion of employees, and deepen theconstruction of the Company's "home" culture, theCompany has sent blessings and carefully preparedbirthday gifts to employees every month since itsestablishment, so that employees all over thecountry and even globally can feel the care of theCompany.
Case 1: Holding an employeebirthday party
In orderto express gratitude toexpatriate employeesfor theirloyalty, dedication, responsibility, and mission tothe Company, aswell as to everyfamily for understanding and contribution to ZKTeco, the Company has launched activities such as familyvisits overseas, regular invitations to family members to participate ininternal company activities,gifts for major holidays, andirregular visits to the familiesofexpatriate colleagues.
Case 2: Employee family dayactivities
Equity incentivesTo fully stimulate and mobilize the work enthusiasm and motivation of the core team, effectively combine the interestsof the Company, shareholders, and employees, and maximize the symbiosis and growth of multiple values, ZKTecoCO., LTD. officially released the 2022 Restricted Stock Incentive Plan in September 2022, implementing the secondtype of restricted stock incentive plan. The grant of reserved shares was completed in June 2023, and the first phase ofthe grant of restricted shares was completed in November 2023.ZKTeco continues to improve its long-term incentive mechanism. In order to promote the healthy and stabledevelopment of the Company, the actual controller and Chairman of the Company have fully considered the Company'sfinancial position, operation, and development strategy, and propose that the Company use its own funds to repurchasesome of the Company's shares for the implementation of employee stock ownership plans or equity incentives. OnNovember 10, 2023, the Company held the 7th Session of the Third Board Meeting and deliberated and approved the"Proposal on Repurchasing Company Shares through Centralized Bidding Trading". As of February 1, 2024, the above-mentioned share repurchase plan of the Company has been completed, with a total of 2,230,000 shares repurchased. Therepurchased shares will be used for equity incentives or employee stock ownership plans in the future.Democratic Communication Promotion
The Company establishes the trade union in accordance withrelevant laws and regulations, regularly holds employeecongresses, facilitates communication channels, and safeguardsthe legitimate rights and interests of employees, such as the rightto know and participate. Employees of the Company join thetrade union organization on a voluntary basis. The managementstructure of the trade union organization includes members suchas the Chairman, finance and economics, cultural and sports,labor and welfare, and women's protection. Generally, employeerepresentatives account for about 10% of the total number ofmembers. During the reporting period, the Company held the firstemployee congress of 2023. The main agenda of the employeecongress was to review the "2023 Employee Handbook", and thenumber and qualifications of employee representatives at theemployee congress met the statutory requirements.
Smooth communication channels help employees fully express their opinions and create a working environment fordemocratic communication in the enterprise. The Company has established equal and democratic diversifiedcommunication methods, ensuring that employees can obtain timely and clear information in different scenariosthrough face-to-face meetings, emails, internal social networks (such as Colleague Bar and ZKTeco World), etc. Inaddition, the Company has established an employee suggestion box, allowing employees to raise questions and providefeedback in a timely manner, in order to better understand their needs and ideas. To ensure the transparency andaccuracy of information, and to clearly convey information, the Company has set up a company affair disclosurecolumn, issuing announcements, internal communications, etc., to help employees better understand the developmentand objectives of the enterprise.
The First Employee Congress of2023
Convening employee congresses
Establishing diversified communication channels
The Company has established a Compensation Management Committee, which includes the Human Resources Center, the headsof level I organizations, the Internal Audit Department, and the Finance Department, to form a performance managementorganization. The Human Resources Center plays the role of a consultant in performance management, and each department isresponsible for performance management. To achieve the annual performance objectives of the Company and departments,we jointly establish the "Performance Objective Responsibility Letter" through the participation of superiors andsubordinates, as a formal performance agreement, to standardize and guide the work behaviors and efforts of all related parties.According to the "Organizational Performance Management System", the Company conducts regular performance assessmentsevery year. We adhere to the principles of "fairness, impartiality, and openness", and clearly define the specific requirementsfor four key links: performance objective setting, performance implementation and coaching, performance evaluation andfeedback, and performance result application.We value two-way communication between performance evaluators and assessees, providing feedback on assessment results,strengths and weaknesses, and providing improvement suggestions. If the assessed organizations have objections to the results, theycan fill out the "Performance Appraisal Appeal Form" within the prescribed time to appeal to the Compensation ManagementCommittee. The Human Resources Center will lead the investigation, propose preliminary handling opinions, and submit them tothe Compensation Management Committee for ruling before implementation. If the declarant does not accept the conclusion, he/shemay retain his/her opinion, but the ruling result must be applied.75 76
2023 Environmental, Social and Governance (ESG) ReportPeople oriented, creating a warm new home
Employee Growth Promotion
In order to standardize the training management of ZKTeco, improve the comprehensive quality of employees,and achieve common development between employees and the enterprise, the Company has formulated the"Training Management System". We always adhere to the concept of "developing the enterprise with technologicalinnovation and talents", providing employees with multi-channel and diversified promotion channels anddevelopment platforms, and inspiring their innovation awareness and work passion. We adhere to the valuesof "responsibility, integrity, pragmatism, and excellence", focusing on the intrinsic qualities of integrity, pragmatism,enterprising spirit, and sense of responsibility. In terms of employment, we focus on practical abilities, and are guidedby work results and performance to achieve self-value while realizing the Company's value.
The employee career development system, as an important component of the human resource managementsystem, plays a crucial role in establishing and strengthening organizational capabilities, shaping coreadvantages, and promoting the effective achievement of organizational strategic objectives. The Company hasformulated employee career development paths and promotion channels based on actual situations, providingemployees with diversified career development directions and opportunities, and maximizing employee vitality andpotential.The Company divides employees into five categories, namely management, marketing, technical, professional, andoperational categories. Except for the management category, employees in other categories are evenly divided into sixlevels, and are promoted step by step based on work experience and performance. The career development path is clear.
Career development path
Marketing category (S)Technical category (T)Professional category (P)Operational category (O)
S1T1P1O1
S2T2P2O2
S3T3P3O3
S4T4P4O4
S5T5P5O5
S6T6P6O6
Management category (M)
Rank
Executive management
(M3)
Operational management
(M4)
Management decision-makers (M5)Newentrants
AssistantsJuniorIntermediateHighSeniorExpertsS0T0P0O0
ZKTeco's Position PatternEmployee suggestion box posterCompany affair disclosure column
Job transfers within the Company are mainly divided into two types: internal transfers within business groups andtransfers across business groups. Internal job transfers require the Company's talent demand department to initiateinternal recruitment requests, and the Human Resources Center recommends resumes and interviews toselect transferred employees based on the needs. Employees complete internal job transfers after passing the trial periodand assessment.
Internal job transfer mechanism
In terms of talent cultivation, we create a rich and diverse online and offline learning environment and trainingopportunities for the growth and progress of employees. We strive to create a corporate culture atmosphere of mutualtrust, respect and help, providing sustainable development space and opportunities for each employee, and encouragingemployees to work together and grow together in the Company.Construction of teaching teamZKTeco implements "mentor system" and "internal lecturer system" management methods. In order to promote theextraction and inheritance of knowledge and experience within the Company, select and cultivate high-quality mentorsand internal lecturer teams, we have formulated the "ZKTeco's Mentor System Management Measures" and the "Lecturer Management Regulations", which cover the selection, welfare, and teaching management of mentors andinternal lecturers. In 2023, the Company certified 125 lecturers, including 5 senior lecturers, 35 intermediate lecturers,and 85 junior lecturers.Construction of training platformWe provide employees with a rich and diverse online learning environment. Through online management of courseresources, real-time teaching, online exams, and result analysis, we help establish an enterprise knowledge base andpromote the standardization and professionalization of the Company's training management. The Company hasintroduced an online learning platform called Yunxuetang, which includes five application sections: training center,online classroom, testing center, research center, and teacher management. The platform contains rich course resources,covering multiple sections such as human resources management, sales management, financial management, basic middleand senior management, and workplace literacy, with a total of 955 learning courses.
During the reporting period, the Company experienced a total of 639 transfer incidents, including 597 transfers within
the business group and 42 transfers across business groups.
Talent Development Concept
Career Development Channel
Employee Training Measures
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2023 Environmental, Social and Governance (ESG) ReportPeople oriented, creating a warm new home
Diversified training methodsThe Company and its subsidiaries have established multiple exhibition halls for corporate development and culture,strengthening employees' organizational responsibility through training and education, and enhancing their sense ofhonor and pride. We pay attention to employee skill training, focus on promoting employee education and training,establish talent training mechanisms such as on-the-job training and professional technical training, accelerate employeecareer growth, and broaden employee development channels.
In 2023, the Company conducted three offline trainingsessions for new employees, with a total of 136 participants(new employees from various business groups), and a totalof 15 class hours; the Company provided 10 coursesonline, with a total of 10 class hours and 54 participants(new employees of the Group).
Case 1: New employeetraining
The Company conducts EDP training (Agile Change SpecialTraining for Middle and Senior Managers) activities, whichpromote the mastery of core knowledge, construction ofmanagement thinking, improvement of comprehensiveabilities, optimization of business philosophy, clear strategicdirection, and support for future development throughsystematic management courses and innovative practicalactivities by the middle and senior managers. The traineesare 80 middle and senior managers of the Company, with atotal of 7 training courses and 72 class hours.
Case 3: Management posttraining
The Company carries out SAP system skills trainingactivities to promote key personnel in relevant departmentsto have a deeper understanding of SAP system and betteruse it, in order to improve employees' SAP system operationlevel and practical operation ability. There are about 700trainees, covering various job levels.
Case 2: Technical posttraining
The Company uses the Kirkpatrick model to comprehensively evaluate training results and provides feedback to thesupervisory department as a basis for developing and revising training plans. Response evaluation provides feedback onthe training results of trainees through survey questionnaires or interviews. Learning evaluation involves the knowledgeand skills mastery of trainees through exams, speeches, and other methods. Behavioral and result level evaluationinvolves the achievement of training objectives through tracking surveys and face-to-face interviews between trainingleaders and trainees. After the training is completed, an assessment will be conducted to ensure fairness, impartiality, andopenness. If trainees have any doubts about the assessment process, they can report it to the Human Resources Center,which is responsible for investigating and informing them of the results within a week.
In order to implement the recognition of occupational skilllevels in human resources and social security, accelerate theimprovement of the Company's skilled talent evaluationsystem, further stimulate and mobilize the enthusiasm ofemployees, and explore and cultivate a group of excellentskilled talents, the Company has been carrying out skill levelrecognition for three consecutive years since 2021. As ofDecember 31, 2023, 1,542 people have obtained certificates.
PersonPersonPersonPersonPersonPersonPerson
1,067
Category
LevelUnitNumber of PeopleLevel 5Level 4Grade IIIGrade IILevel 4Grade IIIGrade II
Number of recognized workers forelectronic assembly and connectionof broadcasting and communication
equipment
Number of computer programming
staff
Employee Level 2 Vocational SkillsCertification and Evaluation Site
Training Evaluation and Assessment
Skill Level Recognition
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2023 Environmental, Social and Governance (ESG) ReportPeople oriented, creating a warm new home
Emergency plans and drills
To ensure the safety of employees, production equipment, and property, and to prevent accidents and disasters, we haveformulated the "Emergency Rescue Plan for Work Safety Accidents" in accordance with laws and regulations such as the"Work Safety Law of the People's Republic of China" and the "Fire Prevention Law of the People's Republic of China".In the event of a disaster, we aim to minimize potential losses.The Company formulates a fire drill plan at the beginning of each year to implement the policy of "prevention first,combining prevention and elimination", and enhance employee safety awareness and self-protection ability. To cope withsudden fires and ensure the safety of employees and company property, the Company organized a fire drill for allemployees on the day of the National Firefighting Day in 2023.
Safety hazard investigation
2023 work safety fire drill
Employee Health Protection
The Company adheres to the concept of "safety first, prevention first"and pays attention to the occupational health of employees. In accordancewith relevant laws and regulations such as the "Occupational DiseasePrevention and Control Law of the People's Republic of China", the "WorkSafety Law of the People's Republic of China", and the "WorkplaceOccupational Health Management Regulations", the Companyhas formulated occupational health management systems such as the"Occupational Health and Safety Management Manual" and the"Occupational Disease Management System". The Company adheres tothe occupational health and safety policy of "preventing, controlling, andeliminating occupational hazards, preventing and controlling occupationaldiseases, and protecting the health of workers", establishes and improvesan occupational health and safety management system, andconscientiously implements various occupational health measures, tocomprehensively guarantee the health and safety of employees. Duringthe reporting period, ZKTeco and Guangdong ZKTeco passed theISO45001:2018 occupational health and safety management systemcertification.
Occupational Health and SafetyManagement System Certificate
The Company always regards work safety as the top priority and attaches great importance to the construction of worksafety culture. The Company has established the "Work Safety Responsibility System", and signed a safety productiontarget management responsibility letter based on the policy of "safety first, prevention first, andcomprehensive management" in accordance with the principle of "whoever is in charge is responsible", to clarifythe work safety responsibilities of entities, management personnel at all levels, and employees in each position,strengthen the safety awareness of all employees, and prevent the occurrence of accident hazards. During the reportingperiod, the Company did not experience incidents of employee deaths due to work.Safety hazard investigation
An inspection team is established within the enterprise, the safety inspection system is strictly implemented, and acombination of safety self-inspection and special inspection, routine inspection and surprise inspection, and inspectionand rectification is adopted, to continuously eliminate unsafe factors in production such as human, machineand environmental factors. Each Production Department of the Company shall inspect at least once a daywhether the electrical equipment is normal, the mechanical equipment is safe, the fire-fighting facilities are normal, andinspect the implementation of protective measures by each department, and the preparation of labor protection andprevention materials.
Occupational Health and Safety Management System
Work Safety Risk Management
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2023 Environmental, Social and Governance (ESG) ReportPeople oriented, creating a warm new home
Notification of occupational hazardsEmployees may encounter hazards such as dust and noise during production. The Company has established and postedhazard notification cards on site to remind workers to protect their own health and safety and reduce the risk ofoccupational diseases. The Company posts signs such as "Note Dust Prevention" and "Wear Protective Masks" in placesprone to dust generation, and signs such as "Noise Harmful" and "Wear Ear Protectors" in places prone tonoise generation.
The Company conducts annual occupational hazard factor testing in the workplace, and conductsprofessional occupational health examinations for personnel in positions with hazardous factors through testing,paying attention to employee health and reducing the risk of occupational diseases. During the reporting period, theCompany did not have new occupational cases.
Occupational health examinationsThe Company implements a rotation and job transfer mechanism for personnel at occupational disease risks,and regularly conducts occupational health examinations. In 2023, the number of people participating in occupationalhealth examinations was 113, and the qualified number was 110, with a qualification rate of 97.3%. The physicalexamination items include occupational internal medicine examination, routine blood test, ALT, routine urine test,electrocardiogram, chest X-ray, lung function, ophthalmic examination, fasting blood glucose and ear examinations, etc.
The Company conducts occupational healtheducation and training every quarter tostrengthen employees' awareness of occupationalhealth and safety, and continuously improve theirawareness of work safety.
Health education and trainingZKTeco Holds 2023 Occupational DiseaseKnowledge Lecture
Number of safety education and training sessionsDuration of safety education and training
TimesHour
IndicatorsUnit20232023 work safety fire drill
When each department of the Company needs a first-aid kit, it shall submit an application.After approval, the relevant department provides it according to the "List of FirstAid Medicine" and checks it weekly to see if there is a need to supplement the typesand quantities of drugs. At the same time, it is recorded in the "First-aid Kit InspectionForm".The Company regularly updates the escape route maps of each manufacturer, which areattached to the entrances or exits or gates of each department. The supervisors ofeach Production Department are responsible for supervising employees to understand theescape route maps.Electrical workers are responsible for inspecting and repairing emergency exit lights andrelated lighting equipment in various departments, actively carrying out circuitacceptance, preparing for various disasters and accidents, and reducing theoccurrence of safety accidents.The Company conducts a quarterly inspection of occupational hazard protection facilitiesand fills out the "Occupational Hazard Protection Facility Inspection Form". The Companymaintains warning signs, alarm facilities, eye washers, and first-aid kits every quarter,and fill out the "Maintenance Record Form".
Management of
The Company strictly manages hazardous chemicals according to national regulations,to ensure the safety of the entire process. Dangerous goods containers must be sturdy, tight,and labeled with special signs. The instruction manual shall indicate the nature of thedangerous goods and safety precautions. In addition, the Company assigns professionalpersonnel to manage dangerous goods.
first-aid kit
Posting escaperoute maps
Management ofemergency exit lightsand related lighting
Inspection ofprotection facilities
Hazardous chemicalmanagement
Safety Management Measures
Occupational Disease PreventionOccupational hazard testing
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2023 Environmental, Social and Governance (ESG) ReportPeople oriented, creating a warm new home
Employee Care Strengthening
ZKTeco organizes a variety of cultural and entertainment activities for employees following the people-orientedmanagement philosophy, relieving work pressure, caring for their physical and mental health, revitalizing their vitality,and stimulating their self motivation. We create a warm and loving corporate atmosphere, allowing the enterprise andemployees to grow together.
In order to enrich the leisure life of employees, improvetheir physical fitness, enhance the close connectionbetween employees in various business groups anddepartments of the Company, and promote aharmonious corporate culture, the Company hasorganized basketball competition activities.
Case 1: Basketballcompetition activities
In order to create a healthy and positive corporateculture, enhance communication and exchange amongcolleagues and partners, the Company has organizedhiking and mountain climbing activities to improveeveryone's physical fitness and enhance team cohesion.
Case 2: Hiking andmountain climbing activities
In order to enrich the leisure life of employees, create a confident, sunny, and vibrant corporate atmosphere,and call on everyone to strengthen their physical fitness and devote themselves to work with a more fullspirit, the International Business Group has organized the "Badminton Cup" men's and women's singles
Consoling the sick
The Company provides care and assistance to sick employees and their families, visits sick employees with gifts andmoney, and reimburses the travel expenses for cross city visits. Moreover, in order to help employees with majorillnesses solve practical difficulties and reduce the burden of medical expenses on employees, the Business GroupManagement Department provides assistance and consolation money based on the actual situation of employees.
competitions.
Case 3: Badmintoncompetitions
In order to motivate female employees to reshapethemselves, enhance their work enthusiasm andcreativity, and enhance the corporate cultureatmosphere, the Company has launched a "New EraWomen" salon.
Case 4: Women's Salon Club
Carrying out employee activities
Emphasizing Humanistic Concern
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2023 Environmental, Social and Governance (ESG) ReportPeople oriented, creating a warm new home
Responsive SDGs
Important Achievements in 2023
Donation of Dongguan Charity Day: RMB 20,000Donate of the Lanzhou University Education DevelopmentFoundation (LZUEDF): RMB 1 million
We actively fulfill our corporate social responsibility, fullyleverage our own advantages, and focus on creatingvalue for society. As a responsible enterprise, ZKTecofocuses on community development and activelycarries out diversified public welfare and charity projects,giving back to society with practical actions and conveyingwarmth and love to society.Our ActionsParticipate in community activitiesCarry out volunteer servicesAssist in rural revitalization
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Contributing to the societyCreating a harmoniousnew future
Zero hungerQuality educationNo poverty
ZKTeco actively participates in community development support work, carries out knowledge exchange activities, andactively participates in local social and cultural activities to establish harmonious and friendly community relationshipswith community residents. The Company adheres to the spirit of voluntary service of "dedication, friendship, mutualassistance, and progress", encourages employees from all over the country to participate in volunteer activities andcontribute love and warmth to society. For many years, the Company has actively practiced social responsibility andcarried out volunteer activities, such as voluntary blood donation, charitable donations, caring for children, etc., toconvey corporate care to every corner of the world.
ZKTeco held a public welfare teaching activity inNigeria. On August 26, 2023, computer science studentsfrom Federal University of Agriculture, Abeokuta in OgunState visited and studied at ZKTeco in West Africa.
Case 1: Public welfareteaching activities
In order to promote innovation and encourage young people to accept new technologies, ZKTeco and itspartners jointly organized a high school community activity in Nigeria in the second half of 2023. Through amonth of professional training, local students can quickly learn and understand new knowledge andtechnologies.
Case 2: Community activities formiddle school students
On Nelson Mandela Day, we encourage employees toactively participate in various activities that promotechange, integrate into the local community, and benefitsociety. Every year on Nelson Mandela Day, subsidiaryemployees spend at least 67 minutes serving the localcommunity, symbolizing Nelson Mandela's 67 years ofdedication to social justice. We assist the local vulturerescue center by cleaning cages and feeding vultures, andlook forward to helping more other charitableorganizations on Nelson Mandela Day.
Case 3: Community activities on SouthAfrican Presidential Day
We donate daily necessities such as rice, flour, grain, oil,and hygiene products to Nigeria's schools for blindchildren to help solve some of their living problems.
Case 4: Donation to Nigeria's schoolsfor blind children
ZKTeco encourages employees to participate in charitable blood donation activities. In 2023, the Nigeriancompany organized a collective blood donation activity for employees.Case 5: Blood donation by Nigerian ZKemployees
The Company officially established the ZKTeco Volunteer Team in 2013. The ZKTeco Volunteer Teamadheres to the principle of "serving society, conveying love, harmony, and friendliness", providing services topeople in special difficulties and need of help. ZKTeco volunteers bring the idea and action of giving back tosociety to more than 30 countries and regions around the world, as well as more than 80 branches andsubsidiaries.
Case 6: Nigerian ZK volunteer cleaning
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2023 Environmental, Social and Governance (ESG) ReportContributing to the society, creating a harmonious new future
We care for children's growth, organize andparticipate in Filipino children's hope publicwelfare activities, give gifts to local children, carryout fun activities, and accompany children to playtogether.
Case 7: Filipino children's hope publicwelfare activities
On December 2, 2023, ZKTeco made a material donation tothe local forest association Adopta Bosque in Panama andreceived a thank-you letter. This association is a non-governmental organization dedicated to protecting theecological diversity of Panama, primarily relying ondonations to maintain operations. ZKTeco donated plantingequipment and horticultural supplies to the association andparticipated in the tree planting activity on that day.
Case 11: Donation to Panama ZKForest Association
In February 2023, the Company donated RMB 100,000 to the Listed Companies Association of Dongguan forthe decoration and renovation of the association's member activity center, procurement of operatingequipment, property maintenance and repair, etc., to support the development of the association.
Case 12: Donation to the ListedCompanies Association of Dongguan
The Company participated in the 2023 "June 30" Assistance to Rural Revitalization and Dongguan CharityDay Event held in Zhangmutou Town, Dongguan City, consolidating and expanding the achievements ofpoverty alleviation, and helping to achieve rural revitalization. The Company and its subsidiary GuangdongZKTeco donated RMB 10,000 each, totaling RMB 20,000.
Case 1: Donation of Dongguan CharityDay
In 2023, the Company donated RMB 1 million to the Lanzhou University Education DevelopmentFoundation (LZUEDF) for quality education of college students and subsidies for impoverished students,fully supporting the education cause.
Case 2: Donation to education
ZKTeco not only supports the development of education,but also actively pays attention to student sports activities,providing sponsorship for the Hockey 1st Team at a SouthAfrican university to support team development.
Case 8: Sponsorship of South Africanuniversities
ZKTeco participates in the establishment of a caringhome for children in South Africa, striving to make theworld a better place.
Case 9: South Africa ZK Children'sCare Home
On November 20, 2023, ZKTeco made a material donationto Adavion Cancer Hospital, the only hospital in Panamathat treats cancer, and received a thank-you letter. Due to itssmall scale and government budget cuts, the hospital'sinfrastructure is very dilapidated, and daily necessities arealso in short supply. After communicating with the hospitalto understand the needs, ZKTeco donated chairs, tissues,garbage bags, alcohol, towels and other daily necessities.
Case 10: Donation to Panama ZKcancer hospital
Assist in rural revitalizationImplementing the strategy of rural revitalization is a major historical task for achieving the goal of building a moderatelyprosperous society in all respects and building a socialist modernized country in all respects. As a socially responsibleenterprise, we firmly believe that rural revitalization is not only an important national strategy, but also a socialresponsibility that our enterprises shall actively participate in. Therefore, we have been committed to makingcontributions to rural revitalization and supporting the development of local communities through various means.We focus on supporting national education and cultural undertakings, donating books, equipment and other materials toschools, supporting the education of impoverished students, and helping them realize their self-value. We provideemployment opportunities for local residents, as well as training and skill enhancement opportunities, to help themachieve self-value and livelihood stability.
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2023 Environmental, Social and Governance (ESG) ReportContributing to the society, creating a harmonious new future
New opportunities are coming globally in the new era of hard technology. ZKTeco provides insightsinto transformation trends and looks forward to the future. ZKTeco will continue to deeply cultivatecore technologies of multimodal BioCV, adapt to technological and industry evolution trends, andconsolidate the foundation of healthy development and technological leadership for the enterprise.Adhering to a corporate culture of responsibility, integrity, pragmatism, and excellence, we continuouslydeepen the ESG concept, committed to achieving higher levels of development in the ESG field.In 2024, we will further strengthen the reform of our corporate governance structure, strengthen riskmanagement and compliance awareness by improving our internal control system, safeguard thelegitimate rights and interests of shareholders and other stakeholders, and establish a good corporatereputation and brand image. Moreover, we will increase investment in green and low-carbon technologiesto contribute to the green transformation of the industry.In 2024, we will continuously promote the deep integration of various products and software platforms,create a scenario data connectivity ecosystem, and enhance the scenario customization and deliverycapabilities of software platforms. We will increase investment in multimodal biometric core technology,and deepen the integration of computer vision and biometric technology.In 2024, we will continue to adhere to our mission of "changing the world with technology, makinghuman life and social development safer and smarter", actively fulfill our commitments to society,continue to be customer-centric, pay attention to user needs, and provide safe and intelligent products andservices. Moreover, we will actively participate in social public welfare undertakings, and fulfill socialresponsibilities, to make positive contributions to social harmony and stability.The journey is long and hard, but with determined steps, we will reach our destination. ZKTeco willcontinue to promote ESG work with higher standards and stricter requirements, making greater
024 Outlook
contributions to the sustainable development of the Company and the prosperity of society.
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2023 Environmental, Social and Governance (ESG) Report2024 Outlook
Index
2-2/2-3/2-1/2-6/201-1/2-22/2-292-26/3-1/3-22-1/2-9/2-10/3-3/405-12-25/2-27/3-32-26/2-29/3-32-27/3-3/201-12-25/2-27/3-33-3/303-2/306-3/306-4/306-53-33-32-8/3-3/204-1/308-2/414-1/414-23-3/416-22-25/3-3/416-1/417-3/418-12-27/3-3/418-12-7/2-27/3-3/401-1/401-2/401-33-33-3/404-1/404-2/404-33-3/403-1/403-2/403-3403-4/403-6/403-7/403-8/403-9/403-
2-7/3-3/401-2203-1/3-3/415-1///
P1.1/P1.2/P1.3P2.2P4.1/P4.2/P4.3//G3.2G3.6G3.5G1.1/G1.2/G1.10/G1.11G1.5/G1.6E1.1/E1.2/E1.3/E1.4/E1.6/E1.7/E1.9/E2.14E2.1/E3.5/E3.6E1.8V2.1/V2.2/V2.3/V2.4/V2.7/V2.8S5.1/S5.2S4.1/S4.2S4.3/S4.5/S4.6/S4.7/S4.8S4.6S1.1/S1.2/S1.3/S1.4/S1.5/S1.7/S1.10/V3.2S1.6S2.1/S2.2/S2.4S3.1/S3.2/S3.4/S3.5/S3.6/S3.7/S3.11S1.10V1.1/V1.2/V1.3/V1.4/V3.1/V3.4A1A4A5
About the Report
General Manager StatementAbout UsAnnual HonorsData of 2023
Responding to SustainableDevelopment Goals (SDGs)
Stakeholder CommunicationImportance IssueRecognitionGovernance SystemStandardizationRisk Control ImprovementInvestor RelationshipManagementAdhering to CompliantOperations
Environmental ManagementStrengthening
Green Production PromotionGreen Technology R&DTechnological InnovationPromotionResponsible Supply ChainBuildingProduct Quality ControlCustomer Rights andInterests ProtectionInformation SecurityProtectionEmployee Rights andInterests SafeguardingDemocratic CommunicationPromotionEmployee Growth PromotionEmployee Health Protection
Introduction
Employee Care Strengthening
to the ReportAbout ZKTeco
Sustainable
Development
Management
Steady for
far-reaching,
opening up a
new
development
patternGreen and
low-carbon,exploring anew era ofenvironmental protectionCreative andinnovative,cultivatingnew driving
forces fordevelopment
People
oriented,
creating a
warm new
homeContributing to the society, creating aharmonious new future
2024 Outlook
Index
Feedback
ContentsGRI StandardsCASS-ESG5.0
For ZKTeco, your identity is:
□Shareholders and investors □ Employees □ Government and regulatory agencies □ Customer partners
□Employee industry associations and organizations □ Community, public, and media
6.What topics in this year's ESG report have attracted your most attention?
7.What other information would you like to obtain from the report?
8.What is your opinion on our ESG report or ESG work and sustainable development management?
Feedback
Thank you for taking the time to read the "2023 Environmental, Social and Governance (ESG) Report of ZKTecoCO., LTD.". We attach great importance to and look forward to hearing your valuable opinions and suggestions on theCompany's ESG work and sustainable development management. Your opinions and suggestions are an important basisfor us to continue improving ESG work and enhancing sustainable development management. We sincerely invite youto assist us in completing the relevant issues in the reader's feedback and provide feedback to us through the followingmethods. Thank you again for your strong support of our ESG work!
Email: ir@zkteco.comAddress: No. 32, Pingshan Industrial Road, Tangxia Town, Dongguan,Phone: 0769-82618868Fax: 0769-82618848
Guangdong, China
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2023 Environmental, Social and Governance (ESG) ReportAppendix
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