KingNet Network 2023
Sustainability & Environmental, Socialand Governance (ESG) Report
ENVISION THE FUTUREWITH K POWER
ESG Data Performance TableReport Standard IndexAbout the ReportAppendix: Third-Party IndependentAudit Report
Message from the ChairmanSustainability Highlights in 2023About KingNetSustainability Management SystemSupporting Sustainable DevelopmentGoals
Contents
Engaging in Public Welfare to Send KingNet’sLoveParticipating in Volunteer Services to ManifestKingNet's Responsibility TakingContributing to Green Development andImplementing the Concept of EnvironmentalProtection
Part I: Sustainability
Bu?:
Sustainable CareExploring Cultural Depth to Create a"Game+" MatrixContributing to the Development of theDigital Economy by Exploring FrontierTechnologies
Providing Quality Content and ServicesHuman Capital DevelopmentAbiding by Business Ethics
Play:
Sustainable Business
Addressing Climate Change and Respondingto the Goal of "Carbon Peaking and CarbonNeutrality"
With:
Sustainable Temperature0203
Part II: ESG Management and Performance
Employment and Protection of Employees'Rights and Interests
6269
Joining Forces to HelpEmployees Grow
Creating a Clean Network Environment58
Protecting Security to
Optimize User Experience
Consolidating the Foundation of Governance65Strengthening Governanceto Ensure Robust Operation
Message from the ChairmanWith the continuous advancement of the standardization processand a constant increase in the application scenarios, gamecompanies play a signicant role in the iteration and upgrading ofdigital technologies, the advancement of digital-real integration,and the extension of industry value, and have a profound impacton aspects such as technological innovation, business models,and cultural communication, driving the development of the digitaleconomy. Themed "Protecting Minors Together", the 2023 PublicBenet Ceremony of Game explored the multiple values of gamesto promote the healthy, orderly, and sustainable development ofthe Internet industry.KingNet Network, a well-known listed online game company inChina, adheres to the leadership of Party building, upholds thesustainable development concept of "Play With Bu?", and buildsits positive force on sustainable business. In 2023, the Companymaintained two-way communication with stakeholders, managedmaterial topics with an important impact on its development,improved its sustainability governance structure, developedan implementation plan for its KingNet Always Cares Action,and further promoted the implementation of its sustainabledevelopment plan through Four K powers, namely K Cohesion, KStrength, K Protection, and K Gravitation.Improving sustainability governance structure continuously.We continue to improve the top-down sustainability governancestructure to provide the organizational guarantee for the conductand enhancement of ESG work. In 2023, the Company's Boardof Directors fully performed its review, decision-making, andsupervision duties for ESG matters and followed up on theprogress of the Company's sustainable development plan goals.Furthermore, to further promote the effective implementationof ESG work, the Company appointed a Chief ResponsibilityO?cer who is responsible for fully coordinating and advancing theCompany's ESG work and boosting its high-quality sustainabledevelopment.
Implementing sustainable development plan. Withtechnological innovation as our internal driving force, we havecreated a "Game+" matrix and built a digital cultural ecosystem.We actively expand the boundaries of games, explore theconvergence and communication of games and traditionalculture, and contribute to the inheritance and protection ofintangible cultural heritage. We actively respond to the challengespresented by climate change and manage the impact thereofon the Company. In 2023, we participated in green electricityconsumption by purchasing a total of 825 green electricitycerticates to accelerate carbon neutrality in our operations, andwe promoted public welfare for environmental protection, drovethe formation of a green and low-carbon corporate culture, andaroused social environmental awareness with action.We advocate a green and healthy office concept, create acomfortable workplace to boost employees' happiness, havein place an employment system that is in line with laws andregulations, protect employees' legitimate rights and interests,comprehensively care for their physical and mental development,and design sufficient and targeted training for them, to supporttheir continuous growth and development. In 2023, we built the"KingNet's Love Public Welfare" brand, improved the volunteerservice system, threw ourselves into rural revitalization education,and made efforts to organize community assistance. Weresponded to earthquake relief in Gansu upon the occurrence ofthe earthquake by donating materials to help the a?ected peoplecombat cold weather.Advancing sustainability practices comprehensively.We adhere to the leadership of Party building and the Partycommittee, promote the deep integration of the Party's leadershipand corporate governance, and implement ESG topics suchas compliant operation, intellectual property protection, andhuman capital development and conduct targeted management.Furthermore, we prevent the transmission of ESG risks
and support the sustainable operation of the Company withcomprehensive ESG management.In 2023, with ongoing actions in ESG and sustainability work, theCompany was included in the MSCI ESG Ratings for the rst timeand rated as BBB, showing the value of robust operation andstandardized governance and the capital market's a?rmation ofour sustainability capabilities.Looking into the future, guided by the practice of core socialistvalues, we will explore the high-quality development path ofChina's game industry, actively fulll social responsibilities, passon mainstream values, participate in the co-creation of a virtuouscircle of responsibility and value, achieve the Company's high-quality sustainable development, and create more value for thetimes.
Message from the Chairman Sustainability Highlights in 2023 About KingNet Sustainability Management System Part I: Sustainability Part II: ESG Management and Performance AppendixSustainability Highlights in 2023
RevenueRMB
4,295
million
R&D investmentRMB
million
Up
15.30
% year on year
Total protRMB1,697millionUp
22.61
% year on year
Net prot attributable to shareholdersof the listed companyRMB1,462millionUp
42.57
% year on year
Purchase of
green electricity certicates
Volunteer service hours1,286hours
Employee volunteer serviceparticipationmore than
times
Public welfare projects
under implementation
Total GHG emissions (Scope 1 + Scope 2)
828.40
tCO
e, down
32.99
% year on year
GHG emission intensity (Scope1 + Scope 2) per unit revenue
0.19
tCO
e/RMB million
EconomicPerformance
EnvironmentalPerformance
SocialPerformance
Message from the Chairman Sustainability Highlights in 2023 About KingNet Sustainability Management System Part I: Sustainability Part II: ESG Management and Performance AppendixProgress of KingNet Always Cares ActionPillarTarget from 2023 to 2025Performance in 2023ProgressPlay: Sustainablebusiness
1 sustainability-related game developed/improved everyyear
3 gamesWith: Sustainabletemperature
Carbon neutrality in operation by 2025
Total GHG emissions (Scope 1 + Scope 2): 32.99% lower than 2022
Participate in green electricity consumption and procure a total of 825
green electricity certicatesBu?: Sustainable Care
A total investment of RMB 20 million in social welfareundertakings from 2023 to 2025
Community welfare investment: RMB 6,516 thousand
ComprehensiveESG management
Promoting Board DiversityPercentage of female directors 12.5%100% coverage of directors in annual anti-corruption training100%100% coverage of directors in annual ESG training100%100% coverage of employees in annual compliance training100%0 glitch in the anti-addiction system0100% coverage of employees in training100%12 hours of training time per employee18.84 hours
Note: Completed In progress
Awards and Recognition
In 2023, KingNet Network was repeatedly recognized by the industry and the capital market for its excellent performance in ESG system construction and practice of the concept ofsustainable development.
BBBMSCI ESG Rating
2023 Green SustainableDevelopment Contribution Award
A+CCX Green Finance ESG Grade
2023 ESG Practice
Model AwardThe 12
th
China Finance Summit
2023 LoveContribution Award
The MostResponsible Brand
China Association forPublic CompaniesChina SustainableResponsibility Award
The Second International GreenZero-Carbon Festival
Society of Entrepreneurs and
Ecology
2023 ESG Times PioneerListed Company AwardThe Time Weekly
2023 Best ESG PracticeCase of Listed Companies
2023 Best Practice Casein Rural Revitalization ofListed CompaniesChina Association for PublicCompanies
2023 Chief ResponsibilityO?cer (CRO)National Business Daily
2023 Best Board of Directors ofListed Companies of the ChinaListed Companies Word-of-
Mouth List
National Business Daily
2023 Excellent Practice Case ofBest Practice Activities of Boardsof Directors of Listed CompaniesChina Association for PublicCompanies
China Inuential PublicWelfare Enterprise of the Year
in 2023China Times
Four-star Enterprise in
Volunteer Service
Charity Promotion Center ofShare the Care
Sustainable DevelopmentInnovation Pioneer EnterpriseSouthern Metropolis Daily
Top 10 Inuential Public WelfarePrograms of the Year in 2023Social ResponsibilityConference (SRC)
About KingNetCompany ProleKingNet Network Co., Ltd. (stock code:
002517.SZ, hereinafter referred to as"KingNet Network" “the Company”orwe) is a well-known listed online gamecompany in China.The Company persists in focusingon the main business of developinggames as its core strategy forcorporate development. It follows theprinciple of creating quality games thatmeet market demand and operatesthree business systems including R&D,publishing, and investment + IP. Itholds fast to the philosophy of providinghigher quality and better service andcontinuously provides users withquality content and services as well asa fulfilling gaming experience, whichdrives its high-quality development.Furthermore, the Company is activelydeveloping its overseas business inhopes of creating an internationalmarket through its strong R&D capacityand market development capability,thus pushing its performance to thenext level.
General Information on KingNet Network
RevenueRMB4,295
million
Total number of employees1,869Total assetsRMB6,610
million
Shanghai
Principal subsidiaries
Headquarters
? R&D, operation, and publishing of mobile gamesand web games? Operation of web game platforms and mobileapplication distribution platforms (XY GamePlatform and KingNet Cloud Games)
? Shanghai KingNet NetworkTechnology Co., Ltd. ("ShanghaiKingNet")
KINGNET NETWORK CO., LTD.恺英网络股份有限公司Main business
Legend of Blue Moon, Original Legends, War ofAngels, Gundam Battle, Sword Art Online: ACE,Mashin-eiyuuden-wataru, Zero Arms, XuanZhongStory, Dragon God Protector-The Westward, Swordand Fairy: The New Beginning, KR Snake（KR灵蛇）,
War of Angels (South Korea), StoneAge: Awakening,The New Heaven Sword and Dragon Saber, etc.
? Zhejiang Shenghe NetworkTechnology Co., Ltd. ("ShengheGame")
Main products
Message from the Chairman Sustainability Highlights in 2023 About KingNet Sustainability Management System Part I: Sustainability Part II: ESG Management and Performance AppendixThree Business Systems with "Games" at the CoreR&D Strength
Investment LayoutIP Layout
Investment
+ IP
R&D
Publishing
King StudioGundam StudioOther project teams
DominatorStudioArc Light Studio
Genie Studio
Blue Moon Studio
Flying Bird Studio
Dragon Pow
HangzhouFlowEntertainment NetworkTechnology Co., Ltd.
Lexiang Technology Co.,
Ltd. (DPVR)
PCVR headsetsAll-in-one VR headsetsRogue Planet
Code: BH(代号：
BH )
Shanghai Silver KeyNetwork Technology
Co., Ltd.
Hangzhou YujinTechnology Co.,
Ltd.
Evotinction
(演灭)
Hangzhou XingyueInteractive CulturalCreativity Co., Ltd.
Steam FortressNobunaga's Ambition: Tendou
Shanghai OpticalNetwork TechnologyCo., Ltd.
Code: Creation
of the Gods
(代号：封神)
Message from the Chairman Sustainability Highlights in 2023 About KingNet Sustainability Management System Part I: Sustainability Part II: ESG Management and Performance Appendix2023 Sustainability Events
? held the 2023 "TO BE ONE" Annual Event to commend and reward excellentindividuals and groups that created value for the Company
? The CPC Committee of KingNet Network Co., Ltd. was formally established
? Launched the "September 5 Charity Day" marketplace activity andreleased its public welfare image character "KingNeter"? Published the anti-fraud public welfare mini-game, Cleverly catchingscammers? Held the Seasonal Voice Cultural Seminar? Made its rst donation to the "Bright Future Health Initiative" public
welfare fund in Aksu, Xinjiang to help local disabled and sick childrenwith medical surgery and rehabilitation
April
MarchJanuary
July
September
October
December
May
June? Launched the International Volunteer Day publicity activity themed"Gathering Forces to Volunteer Together
? Participated in the "I Have a Tree in Aksu" apple forest planting activity
? Donated RMB 500,000 to Shenzhen One Foundation Charity Fund tosupport the earthquake-a?ected areas in Gansu? Self-developed IP Crafts and Qubits had crossover cooperation with the nationalintangible cultural heritage of fan-making techniques (Wangxingji Fans)? Launched the Crafts and Qubits intangible cultural heritage experience activity? Participated in the "Games for Public Good" public welfare donation activity
organized by the Game Publishing Committee of the China Audio-Video andDigital Publishing Association and donated "KingNet's Love Protective Packages"to Erlang Primary School in Lijiang City, Yunnan Province
? In association with UniLove, the Company released the "SeasonalVoice" 24 solar terms public welfare digital artworks to help moreteenagers with disabilities with their continued rehabilitation andarts learning
? conducted publicity to prevent minors from becoming addicted to online games.
? Participated in the spring planting of the "One Hundred Million Suosuo"program in Alxa League, Inner Mongolia to plant psammophytes
? Launched the "Sports Dream Class (运动梦想课)" o?ine training for18 young teachers from seven schools in Yushu Prefecture, QinghaiProvince? Launched the "Parent-Child Wetland Tour" Dongtan Wetland
Exploration Activity
? donated "KingNet's Love Protective Packages" to schools in Yangyuan County,
Zhangjiakou City, Hebei Province
? The Company donated 140 VR devices to seven schools in Yushu Prefecture,
Qinghai Province for them to build "VR Classrooms"
? Launched the World Earth Day public welfare activity themed "Let theEarth Smile and All Things Breathe"
? held visit and donation activities in Leibo County, Liangshan Prefecture, SichuanProvince
? Established the Chief Responsibility O?cer (CRO) team to further improve thecorporate governance structure? "Launched the "Classic Intangible Cultural Heritage into Communities" activity inwhich a tie-dyeing experience course was o?ered to the summer care class ofHangzhou Qianjiang Century City Local Police Station? Launched the "Rural School Online Classroom | STEAM Online Course" fourth-anniversary visits
Faith
Mission
Values
Vision
K行动·KingNet Always Cares
乐聚可持续游戏力
Play With Bu?
因为在乎，所以行动
Sustainability Management System
Sustainable Development Concept and PlanCorporate Culture
Sustainable Development ConceptAdhering to the concept of "Play With Bu?" and starting with sustainable business, KingNet Network helps protectthe green planet, builds its positive force, promotes its sustainable development through comprehensive ESGmanagement, and strives to create long-term and sustainable shared value for stakeholders including shareholders,customers, and employees.
Love creates valueLeader of the cultural industry
High spirit: Enthusiasm, take challenges, outdo ourselvesOpen & transparent: Open mind, honest, innovativeValue oriented: User oriented, result oriented, see the bigpictureProfessionalism: Stay upright, cooperative, professionaland e?cientJoy everywhere
CorporateCultureCorporate
Culture
KingNet Always Cares Action
Sustainable Development Plan
The Company advances the implementation of its 2023-2025 sustainable development plan , namely KingNet Always CaresAction (K Action). With the continuously improved ESG management as the cornerstone, based on its business advantages,and around products, environment, and culture, it focuses on the three dimensions of Play: Sustainable Business,
With: Sustainable Temperature, and Buff: Sustainable Care. Furthermore, the Company implements its sustainabledevelopment concept around UN Sustainable Development Goals, with a focus on good health and well-being, qualityeducation, gender equality, climate action, community development, etc.
In 2023, the Companydeveloped animplementation plan forits K Action, including theK-Power of K Cohesion,K Strength, K Protection,and K Gravitation, tofurther promote theimplementation of itssustainable developmentplan.
Supervisionlevel
Managementlevel
Execution level
Sustainability ManagementKingNet Network has built a top-down sustainability governance structure to provide the organizational guarantee forthe conduct and enhancement of ESG work and boost its high-quality development. To further promote the e?ectiveimplementation of ESG work, the Company appointed a Chief Responsibility O?cer in 2023 who is responsible for fullycoordinating and advancing the Company's ESG.
In 2023, the Company's Board of Directors fullyperformed its review, decision-making, and supervisionduties for ESG matters and deliberated and approvedESG matters in aspects of corporate governance,information disclosure, and compliant operation.
Revision of the Articles of Association, etc.Deliberation and approval of the 2022 Self-evaluationReport on Internal Control and other proposals toensure the Company's legal and compliant operationDeliberation and approval of the 2022 Sustainability& Environmental, Social and Governance (ESG)Report, the list of material topics in 2023, etc.
In 2023, the Company held one meeting of theStrategy and Sustainability Committee, deliberatedthe 2022 Work Report of the Strategy andSustainability Committee of the Board of Directors,and followed up on the progress of its sustainabledevelopment plan goals.
? Overall supervise the sustainable development
plan and ESG management work and be ultimatelyresponsible for them? Research, analyze, and assess the Company's
sustainable development and ESG-related matters andgive corresponding suggestions? Review the sustainable development plan and goals? Develop the Company's overall sustainable
development plan and goals and assess ESG-relatedrisks and opportunities? Regularly report work progress to the Board of
Directors and the Strategy and SustainabilityCommittee? Be responsible for the specic execution and
implementation of sustainability and ESG-relatedpolicies and goals? Coordinate the preparation of the annual Sustainability& Environmental, Social and Governance (ESG)Reports
Sustainability Governance Structure of KingNet Network
ESG Matters Deliberated by the Board ofDirectors of KingNet Network in 2023
Board of DirectorsStrategy and Sustainability
Committee
Sustainability Work Leading
GroupChief Responsibility Officer
Sustainability Work Executing
Group
ESG information disclosure
Compliant operationCorporate governance
? Corporate governance? Compliant operation? Risk management? Business ethics and anti-
corruption
? Compliant operation? Protection of minors in
cyberspace? Intellectual propertyprotection? Social functions ofgames
? Product R&D and innovation? Customer service andcomplaint handling? Privacy and data security? Protection of minors incyberspace
? Employment and protectionof employees' rights andinterests? Human capital development? Green o?ce
? Supplier
sustainabilitymanagement
? Protection of minors in
cyberspace? Social functions of games? Content quality management
? Community contribution andpublic welfare and charity? Climate change mitigationand adaptation? Energy management andGHG emission reduction? Information disclosure asa listed company? General meeting ofshareholders? Investor exchangemeetings? Complaint and reportingmechanism
? Policy implementation? Information disclosure? Communication andresearch meetings? Copyright applications? Overseas developmentof games
? User questionnaires? KingNet V Channel? User privacy agreements? O?cial management channel
for player groups? 24-hour customer service
hotline? Distribution of brochures on
the prevention of minors from
becoming addicted to online
games
? Labor union and employees'
congress? Club activities? Employee training programs? Green mobility and low-carbon commuting? Electricity saving slogans
? Supplier auditand assessment
? Industry association activities? Participation in standardsetting
? Employee volunteer services? Community public welfareactivities? Energy conservation andemission reduction activities
Key Stakeholders and Communication Methods
Communication with Stakeholders
Communication with stakeholders is an important aspect of KingNet Network's ESG and sustainability management. The Company has identied seven key stakeholders based on itsbusiness and operation and maintains two-way communication with stakeholders through diversied communication channels such as the o?cial website, media, conferences, reports,and activities.
Communication with Stakeholders and Analysis of Material Topics
Keystakeholder
Shareholders andinvestors
Government andregulators
SuppliersUsersIndustry organizationsCommunitiesEmployeesTopic ofconcern
Communicationand response
ldenticationphase
By interpreting macro policies and industry hotspots, the Company claried the policy guidance and development opportunities for sustainable developmentpractices of KingNet Network. The Company considered the actual operation of the Company and established its topic pool by integrating the requirementsof ESG information disclosure from exchanges,international sustainability disclosure standards, and ESG rating requirements in the capital market.
Assessmentphase
ln 2023, the Company continuously communicated with stakeholders and internal and external experts in daily business activities, assessed and updatedtopics based on the Company's ESG practices of the sustainable development plan for this year,and carried out targeted management.Prioritizationphase
Through communication with internal and external experts, the Company took into fulll account the concerns of information users and prioritized topicsbased on their importance to the economy, environment and society, and to the nance of the Company.Reportingphase
The Company developed a material topic matrix based on the topic prioritization results, which was veried and conrmed by the Board of Directors of theCompany, and disclosed topics of high materiality in the Report.
Topic in 2022Topic in 2023ChangeReasons for change
——
Energy management and GHGemission reduction
New topic
The topic was added to respond to the focus of ESGratings.Product R&D and innovationProduct R&D and innovation
Materiality increase
The importance of the topic increases based on thebusiness reality and ESG management practices of theCompany, the sustainability background of domesticnew quality productive force development, and theconcerns of stakeholders.Corporate governanceCorporate governanceSocial functions of gamesSocial functions of gamesIntellectual property protectionIntellectual property protectionData security and privacy protectionPrivacy and data security
Adjustments ofexpressions
The expressions were optimized according to theCompany's actual situation and ESG rating expressions,to make the topic names more in line with the latestcommon expressions.Human capital development
Human capital development (changein the Chinese wording)Supplier managementSupplier sustainability management
KingNet Network Material Topic Analysis Process
Changes in KingNet Network's Material Topics in 2023
Analysis of Material TopicsIn 2023, the Companyidentied material topicsrelated to itself based onits own vision, values andsustainable development plan,and industry characteristics,according to the ESGinformation disclosurerequirements of the exchangeand domestic macro andindustry policies, and byreferring to internationalstandards and capital marketESG rating requirements. Itmaintained communicationwith stakeholders and internaland external expert teams andconducted key management.
Importance to KingNet Network’s Financehighmedium
highImportance to the Economy, Society and Environment
Topic of high materialityTopic of medium-high
materiality
Topic of mediummateriality
No.Material topic
Section1Product R&D and innovation
Contributing to the Development of the Digital Economy byExploring Frontier Technologies2Privacy and data securityCreating a Clean Network Environment3Corporate governanceConsolidating the Foundation of Governance4Compliant operationConsolidating the Foundation of Governance5Protection of minors in cyberspaceCreating a Clean Network Environment6Social functions of gamesExploring Cultural Depth to Create a "Game+" Matrix7Content quality managementProviding Quality Content and Services8Intellectual property protectionAbiding by Business Ethics
Community contribution and publicwelfare and charity
Engaging in Public Welfare to Send KingNet’s LoveParticipating in Volunteer Services to Manifest KingNet'sResponsibility Taking10Business ethics and anti-corruptionAbiding by Business Ethics11Human capital developmentHuman Capital Development12Customer service and complaint handlingProviding Quality Content and Services
Employment and protection of employees'rights and interests
Employment and Protection of Employees' Rights and Interests14Climate change mitigation and adaptation
Responding to the "Carbon Peaking and Carbon Neutrality" Goals
and Addressing Climate Change
Energy management and GHG emissionreduction
Responding to the "Carbon Peaking and Carbon Neutrality" Goals
and Addressing Climate Change
Contributing to Green Development and Implementing the Concept
of Environmental Protection16Risk managementConsolidating the Foundation of Governance17Green o?ce
Contributing to Green Development and Implementing the Concept
of Environmental Protection18Supplier sustainability managementConsolidating the Foundation of GovernanceNote 1: Topics in bold are the Company's topics of high materiality in 2023.
? Climate change mitigation andadaptation? Energy management and GHGemission reduction? Employment and protection of
employees' rights and interests? Customer service and complaint
handling
? Green o?ce? Supplier sustainability management
? Human capital development? Business ethics and anti-corruption? Risk management
? Social functions of games? Protection of minors in cyberspace? Intellectual property protection? Community contribution and publicwelfare and charity
? Product R&D and innovation? Privacy and data security? Compliant operation? Content quality management
Materiality Matrix of KingNet Network in 2023List of Material Topics in 2023
Part I: Sustainability
Play: Sustainable Business
With: Sustainable Temperature
Bu?: Sustainable Care
Play: Sustainable Business
The Company takes sustainable business as the start of its sustainabledevelopment, pays constant attention to innovative R&D, and creates high-qualitygames. It also focuses on the social value of games, explores new possibilities forgames from multiple perspectives, actively promotes traditional Chinese culture,drives the overseas development of culture, and brings into play the positive valueof games.
Metrics and TargetsProgress in 2023
Develop/improveone sustainability-related game
Developed/Improved three sustainability-relatedgames, including:
·Developed the anti-fraud public welfare game,Cleverly catching scammers·Launched the rst intangible culture heritage-relatedpublic welfare project "KingNet's Love Crafts andQubits" which combines with its IP business·Developed a psychological follow-up dialogue largelanguage model in association with Fudan University
Social functions of gamesProduct R&D and innovationTopics responded:
Exploring CulturalDepth to Create a"Game+" Matrix
Promoting TraditionalCulture
Highlights of KingNet Network's Promotion of Chinese Culture in 2023The Company published the anti-fraud mini-game,Cleverly catching scammers, during the ChinaCybersecurity Week, so that more people could learnanti-fraud knowledge and master more anti-fraudtechniques while playing the relaxing casual game,thereby contributing to anti-fraud publicity in China.With its self-developed IP, Crafts and Qubits,the Company popularized and promotedthe knowledge of traditional handicrafts withanimation as the carrier and launched itsrst intangible culture heritage-related publicwelfare project "KingNet's Love Crafts andQubits" which combines with its IP business.The Company launched the "ClassicIntangible Cultural Heritage into Communities"activity in which a tie-dyeing experiencecourse was o?ered to the summer care classof Hangzhou Qianjiang Century City LocalPolice Station.The Company participated in the"Online Game Visual Art Exhibition"to expand the "Game+" newexperience.
The Company participated in the 19
th
ChinaInternational Cartoon & Animation Festival,2023 China Joy, and other activities with adiversied product matrix with Chinese styleand two-dimensional elements, to continue toexpand its cultural inuence.
With its self-developed IP, Seasonal Voice,the Company told China's stories byintegrating traditional publishing and cross-dimensional new animation.
Anti-fraud Public Welfare Mini-game, Cleverlycatching scammers
Games are not only a traditional way for leisure andrecreation but also serve as good platforms for culturalcommunication. KingNet Network insists on developingcontent across the industry chain with traditional cultureas the theme, actively explores the convergence andcommunication of games and traditional culture, andrealizes the value sublimation of the game industry andthe rejuvenation of traditional culture.In 2023, driven and led by technological innovation,the Company continuously released energy, created a"Game+" matrix, deeply explored cultural connotationsaround original cross-dimensional IP projects such asSeasonal Voice and Crafts and Qubits, and launchedcrossover cooperation, to contribute to the inheritanceand protection of intangible cultural heritage, promotetraditional culture, and make games more heartwarming.
KingNet Network adheres to the unity of economic andsocial benets in its development, actively expands theboundaries of games, and deeply explores the socialfunctions of games to create social value.
Popularizing Intangible Cultural Heritage with Crafts and Qubits
IP Development Highlights and Achievements of Crafts and Qubits in 2023
Crafts and Qubits Novel
World of Primary School Students
With promoting excellent traditional Chinese culture and protecting intangible cultural heritage as the theme, the Company's self-developed IP, Crafts and Qubits, is committedto the innovative communication of Chinese traditional handicraft culture, active exploration of the social and cultural value of animation and game products in addition toentertainment, and promotion of the leap of the cultural value of animations and games.
The original novel ofCrafts and Qubits waso?cially launched onthe two online literatureplatforms, Migu Readingand iReader. In themeantime, the rstseason (24 episodes)of the animation ofCrafts and Qubits wascompleted, and thesimulated operationmobile game of Craftsand Qubits wasdeveloped. With this, anIP cultural product matrixcomposed of a novel,comics, animation, mobilegame, and cultural andcreative products hasbeen formed for Craftsand Qubits.
The Company opened anew special column forpopularizing traditionalhandicraft culture inthe World of PrimarySchool Students andlaunched a horizontalresearch project withthe China Academy ofArt to visit and researchinheritors of intangiblecultural heritagehandcrafts, interviewthem in documentaries,and conduct industry-university-researchcooperation with them,to actively advancethe public welfarecommunication ofChina's intangible culturalheritage.
Crafts and Qubits X Intangible Cultural Heritage of Fan-making Techniques
KingNet's Love Crafts and Qubits ICH Top Player Plan
The Company launched crossover cooperation with thenational intangible cultural heritage of fan-making techniques(Wangxingji Fans) by presenting comics in the fans, whichcreated a cultural exchange that broke the dimensional walland realized two-way empowerment.
The Company launched the public welfare project, "KingNet's LoveCrafts and Qubits ICH Top Player", which, with the goal of activatingthe infinite possibilities of intangible cultural heritage protectionthrough gamication, explored an innovative mechanism of linking theintangible cultural heritage techniques and the game and reached out toteenagers through gamication, to inject the new culture of the era intointangible cultural heritage.
Popularizing Intangible Cultural Heritage with Crafts and Qubits
Seasonal Voice Telling China's Stories
The IP, "Seasonal Voice", independently developed by theCompany, with the personification of traditional Chinesefestivals and solar terms, focuses on interpreting the origin,customs, legends, and poems related to 17 traditionalChinese festivals and 24 solar terms. Funded by theNational Social Science Fund of China as a major project,adhering to the principle of telling China's stories, the IPinvolves the R&D of picture books, comics, animations,novels, virtual humans, digital artworks, AINPC games, etc.
“Seasonal Voice·24 Solar Terms” Public Welfare Digital Artworks
Seasonal Voice Telling China's Stories? The Company held the Seasonal Voice Cultural Seminar themed "Future
of Seasonal Voice Universe", where academia, the industry, and apublic welfare organization exchanged views, shared brand crossovercooperation cases, explored the mode of metaverse-IP cooperation,strengthened traditional culture-modern industry integration, andpromoted the inheritance, innovative expression, and industrial applicationof Chinese traditional festivals and solar terms;? The Company combined the comic and animation R&D directions
into one, designed the characters of the 24 solar terms, optimized thecharacter settings of the festivals and completed the setting of theanimation worldview, characters, and props;? The Company created calligraphy works of 24 solar terms in associationwith well-known calligrapher Zhang Dalu, released digital artworks, heldo?ine painting exhibitions, and devoted itself to the innovative integrationof traditional culture and AIGC technology;? The Company released public welfare solar term illustrations and relateddigital artworks and developed a 3D model for 24-hour live streaming ofvirtual humans;
? Seasonal Voice was selected as an excellent original cultural work in the"Kirin Cup Animation IP Overseas Promotion Project" in 2023;
? The Company held the Spring Festival Virtual Human Online LiveStreaming", Mid-Autumn Season", and "Blue Moon Warriors, Sorcerers,and Taoists", with a total of 49 AIGC competitions, and participated in 32o?ine activities, such as the China International Cartoon & AnimationFestival and the Shanghai Comicup Convention;? More than 10 companies were authorized by the Company to develop andproduce cooperative products, covering categories such as board games,clothing, and trendy toys;? The Company reached cooperation with UniLove from Jing'an District,
Shanghai to conduct creation with 24 solar terms as the theme, integratethe creations of teenagers with autism into it, release solar terms publicwelfare illustrations and related digital artworks, and provide a diversieddisplay platform for special children.
? The Company developed thegame, Flying with SeasonalVoice, and the demo version ofSeasonal Voice Town;
? The Companycooperated withShanghai LexicographicalPublishing House topublish Seasonal Voiceof Song Dynasty to laythe foundation and builda complete contentstructure for future IPderivatives such asanimations and games;
Seasonal Voice Town is anew community game thatcombines AIGC agentsand simulated operationand integrates the sceneryof the four seasons andthe knowledge of seasonalculture for people to learnthrough play.
The graphicnovel, SeasonalVoice of SongDynasty, combinesChinese styleand technology,personiestraditional festivals,and tells a cross-dimensionaladventure story oftraversing ancientpaintings, whichhappens in thepast, at present,and in the future.
Flying with Seasonal Voice
Participated in the "Online Game Visual Art Exhibition" toexpand the "Game+" new experience
Classic Intangible Cultural Heritage into CommunitiesIn July 2023, KingNet Network participated in the first temporary exhibition"Imagination Leads to Life - The First Online Game Visual Art Exhibition" of theMuseum of China Press and Publication with exquisite original paintings, audioand videos, game props, and related goods, which led visitors to experiencevarious areas of games.
The Company organized a "Classic Intangible Cultural Heritage intoCommunities" public welfare course activity on July 14, 2023, which provided35 children of the summer care class of Qianjiang Century City Local PoliceStation with a wonderful experience of intangible cultural heritage.During the course, the children carefully watched the popular science animationon plant dyeing created by the Company's Mixinxin Studio and an animationclip of Crafts and Qubits to understand the cultural story of the intangiblecultural heritage of "plant dyeing", and they tried to make dyed cloth with richpatterns using the ancient technique of "plant dyeing", in which they felt thecharm of intangible cultural heritage.
Conversing with the past and present and telling China's storieswith game original paintings created by artistsGame+ ArtGame+PopularScienceGame+ PartyBuilding
Letting more young people understand the history of the Partyand inherit the spirit of the Long March using the innovativeform of "digital technology + red culture"
Making popular science more novel and interesting throughgame interaction and interpretation, by linking intangible culturalheritage techniques and using forms such as games, comics, anddocumentaries
Participating "Game+" Matrix (Excerpt)
"Picture Celebrating the Year of theRabbit" and "All Living Things Grow"Picture of Seasonal Voice
Inheritance of intangible heritage:
Dragon City of LEGEND OFBLUEMOON documentary andInheritance of intangible heritage:
Jian wares of LEGEND OFBLUEMOON documentary
Theme Game, The Way Forward
Classic Intangible Cultural Heritage into Communities Public Welfare Course
Note 1: A 100% indirect holding subsidiary by KingNet Network.
Overseas Development of GamesThe Report to the 20
thNational Congress of the Communist Party of China states, "We will extend the reach and appealof Chinese civilization. ... We will deepen exchanges and mutual learning with other civilizations and better presentChinese culture to the world".KingNet Network regards expanding overseas markets as one of its core strategic themes. KingNet Network thoroughlyimplements the strategy of building a culturally strong country, continuously engages in the cultural industry, activelydevelops global publishing, and looks at the global market. The Company has established in-depth cooperative relationswith many overseas channels by integrating overseas teams, to continuously export local culture to the world.
Shortly after launch, The NewHeaven Sword and Dragon Sabertopped the list of free iOS games inHong Kong and Taiwan, China.
The Company won the 2023Chinese Game OverseasDevelopment Awards - Top TenGlobal Game Publishers Award.
War of Angels was awardedthe "2023 Qingshan Award forOutstanding Overseas DevelopmentGame" by the Zhejiang GamesAssociation for its performancein creativity, innovation, andoutstanding inuence.
Shanghai FingerWar Network TechnologyCo., Ltd.
won the "2023-2024 NationalKey Cultural Export Enterprise" Award.
Products and Achievements of KingNet Network in Overseas Development in 2023
Participating in the Licensing ExpoShanghai (LEC) 2023 to ShowcaseTraditional Chinese CultureIP projects, Seasonal Voice, YoKai Master, andLegend of Bluemoon, the digital asset platform,KingNet Chain, of KingNet Network appearedat the LEC. The Company's booth presentedthe classic content of the IP projects as well asthe elements of traditional Chinese culture, toshowcase the comprehensive advantages ofKingNet Network's IP projects to global makers.
YoKai Master 2 Featuring Chinese Demons in the Style of ChineseBrush Painting
The book, Legend of Bluemoon, Inspired by the Ancient ChineseMythology of the Classic of Mountains and Seas
Activeness
Professionalism
Safety
Friendliness
Able to activelyask questions andsummarize conditions
Possessing completepsychiatry medicalknowledge
Avoiding secondaryharm and falsemedical content
Providing professionaldiagnosis while givingpatients psychologicalcomfort andcounseling
Exploring "Game+ Healthcare"
KingNet Network actively expands its layout in the healthcare eld based on its gamedevelopment technology, promotes the real empowerment of healthcare by digital andgamification technologies, and advances theoretical exploration, practice, and serviceproduct innovation in the healthcare eld.
Cooperation with Thoven, a Leading Enterprise in DigitalTherapeutics
Developing a Psychological Follow-up Dialogue Large LanguageModel in Association with Fudan University
Shaoxing Shengwang, a subsidiaryof KingNet Network, reachedcooperation with Thoven in the eldof digital therapeutics, to activelyexplore the "Game+ Healthcare"model, contribute to the R&D ofa digital therapeutic product, andfocus on improving the quality oflife of patients with brain diseases.The digital therapeutic productmainly acts on the cranial nervefeedback loop with sounds, images,and physical activities throughimmersive scenes and AI adaptivealgorithms to a?ect the secretionof neurotransmitters and changethe physical connection of neuralnetworks, thereby achieving thee?ect of treating brain diseases.
In 2023, the Company cooperated with the Fudan University to developa psychological follow-up dialogue large language model based onTsinghua University's chatGLM2 foundation model, in which, they cleaned,enhanced, and optimized training data, conducted ne-tuning based on theRHLF model, improved the dialogue ability of the model, emphasized thecharacteristics of activeness, safety, professionalism and friendliness, andstrove to provide professional diagnosis while giving patients psychologicalcomfort and counseling.
In 2023, the Company was rated as a "Sustainable Development InnovationPioneer Enterprise" for its excellent performance in exploring the "Game+Healthcare" model and contributing to digital therapeutic product R&D.
Characteristics of the Psychological Follow-up DialogueLarge Language Model
Characteristics ofthe PsychologicalFollow-up DialogueLarge LanguageModel
Contributing to the Development of the Digital Economy by ExploringFrontier Technologies
Strengthening R&D Innovation
Industrialized R&D Systemof KingNet Network
PipelineStandardizedModularAutomatic
R&D is one of the core business segments of KingNet Network. Oriented toward user demands, with game R&D and content creation as the core and taking "establishing a sound industrializedR&D system" as its long-term strategy, the Company is committed to creating a multi-dimensional R&D system, strengthening e?ective communication and cooperation among the links of gameR&D, and improving its R&D and operation e?ciency.In 2023, with Zhejiang Shenghe becoming its 100% controlled subsidiary, KingNet Network further connected the R&D systems of Shanghai KingNet and Zhejiang Shenghe, improved the virtualorganizational structure related to technology and planning, achieved the overall planning and sharing of technology, materials, and personnel, and improved its integrated research and operationcapabilities. In terms of IP R&D, the Company expanded commercial channels around IP, shifted from R&D to operation, and connected multiple industrial nodes such as literature, comics, books,dramas, audiobooks, games, and AIGC at home and abroad. In 2023, the Company continued to improve its industrialized R&D system, made its product R&D layout more reasonable, andcontinuously expanded to other game categories.Furthermore, the Company focuses on user communication in the R&D process, reaches out to more users with ne products, polishes game details, and furnishes users with multi-dimensionalquality content services and fun game entertainment experiences. In the works for the new generation of players, the Company reduces the pressure and burden on players, the time that playersmust devote to the games in their daily lives and the commercial elements while increasing the game content and enriching the game play.The Company increases its R&D investment in the reserve of R&D talents, the upgrading of software required for R&D, and the building of a management platform. It achieves talent reuse andR&D technology accumulation and sharing by employing R&D talents and its mature enterprise management mode.
Disassembling, dening,and forming a xed R&Dprocess
Dening the requirementsand delivery standardsfor each link of the R&Dprocess
Modularizing di?erent R&Dlinks to further improveR&D e?ciency and reducecosts
Realizing the automationof the R&D middle o?ce orback o?ce to some extentand matching the bestsolutions based on R&Daccumulation
2021
RMB 527 millionRMB 511 millionRMB 339 million
20232022
Short-, Medium-,and Long-termProduct R&D Layoutof KingNet Network
Short-term productsMedium-term productsLong-term products
Rapid iterative customization projects in cooperation with its own publishingsystem, Tanwan.com, etc.
All-end original IP Unreal Engine development
Customized development cooperation with its own tra?c platforms basedon IP productsSelf-development of top IP licensing products
The Company's self-developed products mainly include legend games represented by Legend of Blue Moon,Legend of Kings, and Original Legends and non-legend games such as Gundam Battle
In 2023, the Company invested RMB
million in R&D,
12.26
% of its operating revenue
R&D Investment of KingNet Network from 2021 to 2023
The Company o?cially launched the turn-based MMO game, Stone Age: Awakening, jointly developedand operated with Tencent, which topped the list of free games and ranked eighth on the bestseller list.
In March 2023, the Companywas selected as one of the Top20 Chinese Game Companiesfor R&D Competitiveness in2022.
The Company won two awards inthe 15
thCGDA Game DevelopersAward Ceremony.
The Company won two awards of the rst China Game "Gold Plaque", which fullyproved the Company's professionalism and prestigious qualication in the eld of
China's game research and development.
Shanghai Doushi was titled ShanghaiService Trade Innovation Enabling
Enterprise.
Jimutang (Shanghai) InformationTechnology Co., Ltd. was honored High-
tech Enterprise.
AIGC
Metaverse
DeepeningDigitalIntelligenceTransformationNew technologies are usheringin a new era of game. Thecore advantage of automationtools and AI is to breakthrough capacity constraintsand generate content at anexponential growth rate.KingNet Network pays highattention to the latest cutting-edge technologies, and fullysupports the overall strategy ofnational digital transformation.With a focus on the businessportfolio planning andopportunities in the eld ofmetaverse and AIGC in thelong term, the Company iscommitted to cultivating newdriving forces and buildingdigital cultural ecology withdigital industrialization.
The Company continuously explores AIGC technology, and carries out targeted segmentation training and application on the basic bigmodel. It expands the application of AI tools to the whole system to expand the usage scenarios and improve e?ciency.The Company is one of the rst batches selected in the list of technological innovation center constructors of the Ministry of Culture andTourism. It builds the technological innovation center of digital generation and application service for calligraphy and painting with FudanUniversity, Shanghai Art Museum (China Art Museum) and Shanghai Bawu Information Technology Co., Ltd. The Company concentratese?orts on exploring the development of new modes, new industries and new applications of digital generation and tourism industry.The Company developed the AINPC game Seasonal Voice Town, exploring the innovative fusion of traditional culture and AIGCtechnology.
The Company invested in VR hardware maker DPVR and established Chenni Network, a platform for metaverse and virtual realitycontent production.The platforms of "KingNet Chain" and "KingNet Alliance Chain (恺英联盟链)" under the holding subsidiary Jimutang have completedthe blockchain information service ling of the Cyberspace Administration of China, bolstering the standardized application of blockchaintechnology and data security protection.As a director unit of China Cultural Industry Association, it was listed as a member of the Specialized Committee on Cultural Metaverseof China Cultural Industry Association, and participated in the compilation of Chinese Cultural Metaverse White Paper - Game MetaverseSub-volume.The Company reached a cooperation intention with Qingdao Virtual Reality Industrial Park. Both parties plan to carry out relevantcooperation in terms of metaverse and promote the implementation of the program.
Measures and Results of the Company's Digital Intelligence Transformation in 2023
Huanyao Network TechnologyCo., Ltd. researches its ownAIGC tool under the UnrealEngine and trains AI with itsinternal database to form a setof proprietary models, reducingart costs.
In 2023, thanks to the long-term portfolio planning inthe eld of metaverse andinnovative exploration in AIGC,the Company was successfullyselected as one of the TOP200 of Hurun China MetaverseCompanies with the GreatestPotential 2023. The Company'sR&D case in the eld ofmetaverse was specied in theChina Cultural Metaverse AIGCDevelopment Research Report.
KingNet Chain wonthe annual DigitalAsset ExcellenceAward issued by theShanghai Urban DigitalTransformation LeadingGroup O?ce, theShanghai Data ServiceProvider Associationand the National DataTransaction Alliance.
Optical Network's self-developed "Sjoy WonderfulMagic House" system shortensthe scenario drawing time fromnearly two weeks to one day,improving production e?ciency.
Silver Key utilizes StableDi?usion + Web UI as a tool tobuild its own AI capabilities byconstantly adjusting keywords,feeding self-developed productmaterial, and working withproduction personnel to meetthe various settings of thegame style.
In 2023, the Company released its digital asset platform,KingNet Chain. Since the release of its 1.0 beta version inJanuary, it has tested and released 82 original IP and brand-linked digital artifacts, and carried out a wealth of online ando?ine activities. It aims to promote the in-depth integrationof the digital economy and the real economy, and realizethe rapid development of the digital economy by combiningthe sale of digital assets and the real economy. In 2023,KingNet Chain was granted the IT Times' "Shanghai Top 10Digital Performers of the Year" award.KingNet Chain strives to develop based on "Gleaning","Multivariant", "Extraordinary", and "Equal" concepts.Through blockchain technology and Web3.0, metaverse andarticial intelligence, it brings together multiple creators andgame brands, builds a digital artwork marketing system, andestablishes a digital brand image. It intends to create a richand diversied metaverse content ecosystem, and breathefresh relevance into the development of digital economy.
Launch of Digital Asset Platform - KingNetChain
KingNet Chain Digital Asset PlatformImpress players in multiple tiers with contentoriented.Attract a wealth of authors and brands to settle forcommon prosperity.IP + game + N multiple linkage rights for exibilityand innovation.Follow the principle of symbiosis and co-constructionon the chain to construct a harmony world.
GleaningMultivariantExtraordinaryEqual
Launch of the Digital Collection"Childlike Dreamer"
Cooperation with Fudan University to Promote the Application of New TechnologyResearch and Development
Strategic Cooperation with Unilever Digital Rights Trading Platform
On August 28, 2023, KingNet Network officiallylaunched the theme series of "Childlike Dreamer",
atrendy digital collection modeled on the Company'smascot "King K".The Company cooperated with China Post to launchthe "Childlike Dreamer" customized limited physicalstamp collection, echoing the online digital collection.The proceeds from the physical stamps will beincorporated into the KingNet's Love Public WelfareFund, which will be channeled to support publicwelfare programs and help realize the dream.
On April 23, 2023, Shanghai KingNet Software Technology Co., Ltd., a subsidiary of KingNet Network, signed a SoftwareCustomization and Development Agreement with Fudan University. Both parties intend to jointly work on the combinationof AIGC and AINPC, and to promote the research, development and application of new technologies in the fields ofarticial intelligence, virtual reality and augmented reality.The Company explores the application of AIGC technology to the AINPC research and development of game products. Itendeavors to create a more accurate and realistic articial intelligence for Internet game products, thereby improving thegame product experience and allowing players a realistic game environment. In 2023, the Company created the rst SoulLand IP mobile game with AIGC and AINPC technology through this cooperation.
In April 2023, the Company's KingNet Chain digital asset platform signed a strategic cooperation agreement with theUnilever Digital Rights Trading Platform (hereinafter referred to as "UDRTP") and accessed UDRTP. KingNet Chain'srelevant digital assets were streamed in its special section. Both parties devote to passing on the excellent traditionalChinese culture through the innovation of digital works.In this cooperation, both parties will give full play to the resourceadvantages in their respective elds. They start from the IP of works,technology, user interaction, activity rights and other businesses, andlaunch a multi-level and multi-dimension in-depth cooperation. In thefuture, both parties will continue to innovate and develop a viable pathfor digital assets, drive the real economy through the combination ofonline and offline ways. They will make great efforts to allow usersa one-stop experience, and create an era of digital art featuringglobalization, diversication and liberalization.
Variety of King K Digital Collections
Signing Ceremony of KingNet Chain Digital AssetPlatform and Unilever Digital Rights Trading Platform
"Childlike Dreamer" Customized Limited PhysicalStamp Collection
Climate change mitigation and adaptationEnergy management and GHG emission reductionGreen o?ceTopics responded:
With: Sustainable TemperatureThe Company values its own green and low-carbon transformation, actively takesactions to respond to climate change, and contributes to the national goal of carbonpeaking and carbon neutrality. The Company focuses on green and healthy offices,explores green electricity certicate trading, participates in green electricity consumption,and advocates work-life balance. The purpose is to create comfortable and healthyworkplace environments for its employees to enhance their sense of well-being andbelonging.
Metrics and TargetsProgress in 2023Carbon neutrality inoperation by 2025
·Total GHG emissions (Scope 1 + Scope 2) 828.40 tCO
e,
32.99% lower than 2022
·Participation in green electricity consumption, with a totalof 825 green electricity certicates procured
? Identify climate change risks and opportunities relevant tothe Company based on IFRS S2 guidelines? The Board of Directors is responsible for overseeing ESG-
related matters, including climate change mitigation andadaptation topics? The Strategy and Sustainability Committee under the Boardof Directors is responsible for identifying and assessingESG-related risks and opportunities, including climate risk,setting carbon neutrality goals and monitoring the results ofemission reduction e?orts? Analyze and assess the potential impact of climate risksand opportunities on the Company, and reduce risks andseize opportunities through green o?ce and environmentalpublic welfare;? Specify how to respond to climate change as a key topicin sustainable development planning, set climate-relatedgoals and disclose progress regularly
TargetProgress in 2023
To achieve carbonneutrality in operationby 2025
? Participate in green electricityconsumption and procure a totalof 825 green electricity certicatesto accelerate the carbon neutralityprocess of the Company'soperationsTo achieve fullvalue chain carbonneutrality by 2035
? Advocate green mobility and lowcarbon commuting for employees? Promote the construction of green
data centers
This Redemption Statement has been produced for
KINGNET NETWORK CO., LTD.byJILIN PROVINCE JIDIAN ELECTRICITY DISTRIBUTION AND TRADING CO.,LTD
con?rming the Redemption of
825.000000
I-REC Certi?cates, representing 825.000000 MWh ofelectricity generated from renewable sourcesThis Statement relates to electricity consumption located at or inBuilding 3, Pujiang High-tech Plaza, No. 2388, Chenhang Highway, Minhang District,
Shanghai.Chinain respect of the reporting period2023-01-01to 2023-12-31The stated Redemption Purpose isUsed to o?set 40% of all electricity consumption of KINGNET NETWORK CO., LTD. from January 1 to
December 31, 2023.QR Code Veri?cation
Verify the status of this Redemption Statement by scanning the QR code on the left and en
tering in the Veri?cation Key belowVeri?cation Key40222541
https://api-internal.evident.app/public/certi?cates/en/iAHAh6X3WhpJgPjJyMQRFyUDf0nHY7EilzEv7F
mee5CYuJ8avpssEs%2BakHZmuAma
Addressing Climate Change and Responding to the Goal of "CarbonPeaking and Carbon Neutrality"
Management System for Climate Change
Climate-related Targets and Progress in 2023Governance
Riskmanagement
Metrics and TargetsStrategy
Against the backdrop of increasingly severe global climate change, all sectors are actively taking action to reduce carbon emissions and achieve sustainable development. As an important part ofthe global digital economy, the game industry, while creating huge economic value, is facing the challenges of energy conservation, consumption reduction and green development.KingNet Network is fully aware of the importance and urgency of addressing the impacts of climate change, and actively responds to the challenges posed by climate change. The Companyidenties the risks and opportunities that climate change poses to the Company's operations based on the framework of the International Sustainability Standards Board's (ISSB) InternationalFinancial Reporting Sustainability Disclosure Standard 2 - Climate-Related Disclosures (IFRS S2). It adopts countermeasures based on the results of the identication to manage the impacts ofclimate change on the Company.
Green Electricity Trading Certicate
? Dramatic climate changes suchas typhoons and oods willbring extreme weather or naturaldisasters that may a?ect thenormal operation of the Companyand the Company's data center,which may even a?ect theCompany's business
? Put emergency management measuresin place, implement a 24-hour dutysystem for security personnel andreporting of incident information,and prepare emergency equipmentto e?ectively minimize the impact ofextreme weather on the Company'soperations? Pay close attention to the possible
adverse impacts on the Company'sbusiness during the implementationof the carbon peaking and carbonneutrality policies and take timelycountermeasures.? Formulate and publish sustainabledevelopment plans, carry outenvironmental public welfare activities,and enhance social image and brandvalue.? Actively promote the portfolio planningof the metaverse sector, support theapplication of new technologies andmaterials, and lead the transformationof lifestyles to a smarter and greenermodel with digital economy productsand digital content.
? Long-term shifts in naturalenvironment, such as sealevel rise and persistent hightemperatures, could have animpact on the Company's normaloperations? The state is vigorously carryingout the deployment of carbonpeaking and carbon neutralitystrategy, and raises higherexpectations for companies toaccelerate low-carbon greentransformation and strengthenenvironmental informationdisclosure? The public is increasinglyconcerned about green operationsand environmental protection,and if the Company fails to meetstakeholders' expectations, itmay pose a reputation risk to theCompany's operations
Climate-relatedrisk
Acutephysical riskChronicphysical risk
Chronicphysical riskPolicy andregulationrisk
Policy andregulationriskReputationrisk
Risk descriptionCountermeasure
Climate-related
opportunity
Marketopportunity
E?ciency inresources use
Energytransition
Opportunity descriptionCountermeasure
Climate-related Risk Analysis and CountermeasuresClimate Change Opportunity Identication and Countermeasure
Understand themarket demand anddevelop games orother digital productswith low-carbon andenvironmental themes
By creating game content themedon environmental protection andclimate change for combinationof fun and education, allowplayers to learn about theimportance of climate change andcountermeasures in the game,and raise public awareness ofenvironmental protection
Improve the e?ciencyof the use of energy,water, raw materialsand other resourcesin the Company'soperations, helpingreduce the Company'sproduction costs
Promote the constructionof green data centers andadopt public cloud services,the elasticity and scalabilityof which can allow dynamicalexpansion or shrinkage ofcomputing resources accordingto demand, minimizing idleresources and unnecessaryenergy consumptionUse green energyand advance wellin energy transition,enhancing theCompany's brandimage
Actively participate in the greenelectricity trading market andprocure 825 green electricitycerticates
Contributing to Green Development and Implementing the Concept ofEnvironmental Protection
KingNet Network advocates the concept of green and healthy o?ce, creating a comfortable workplace and enhancing the happiness of employees. In 2023, the Company issued an energy-conservation green o?ce initiative, and took a number of energy-conservation and emission reduction measures to reduce energy consumption and carbon emissions in the Company's operationprocess. It actively facilitated the trading of green electricity certificates to participate in green electricity consumption, procuring a total of 825 green electricity certificates to accelerate theCompany's operation of the carbon neutrality.
Green O?ce Measures of KingNet Network in 2023
Green and Healthy O?ce
Green o?ce
measure
Implementation of apaperless o?ce
Rational use of electricityRecycling of o?ce suppliesWaste disposalGreen mobility
Action
Utilize the web-based o?ce systemto reduce theissuance of paper-based informationby transmittinginformation via theweb, while ensuringsecurity
? Replace o?ce lights with LED energy-saving lights? Require that the air conditioning
temperature should not be lower than26°C in summer and not higher than20°C in winter? Require employees to turn o? lightswhen leaving the o?ce? Advise employees to avoid using thescreen saver function of LCD monitors,and preferably set the screen saverfunction to "Null" or "Black Screen"? Arrange security guards to turno? lights, air-conditioners, waterdispensers, puriers and other power-consuming equipment
? Adopt "reusable packaging" of the induction gift for new
employees? Recycle single-sided used paper when printing and copying? Advocate the use of recycled paper, rellable pens, tonercartridges and rechargeable batteries, and other recyclableitems? Actively use second-hand o?ce furniture in the o?ce, practicingthe concept of environmental protection? Issue tableware sets to employees and prohibit the use ofdisposable chopsticks
? Set up di?erenttypes of garbagebins on each oor torealize the separatecollection of fourtypes of garbage: Drygarbage, wet garbage,hazardous garbageand recyclablegarbage? Hand over non-hazardous wastesuch as cardboardboxes, waste paper,waste dry batteriesand hazardouswaste such as wasteelectronic products toproperty managementcompany forcompliance treatment
? Advocate drivingless private cars,taking more publictransportation ordriving new energyvehicles? Actively practicethe "1-3-5" mobilitymode: Insist on low-carbon mobilitymodes of walkingwithin 1 km, cyclingwithin 3 km andtaking publictransportation within5 km
Packaging of the Induction Gift for New Employees
Issuance ofTableware Sets
The Company always puts employees in the first place ofenterprise management strategy, pays high attention toemployees' physical and mental health, emphasizes work-life balance, and provides employees with a variety ofrecreational facilities, like ping-pong room, billiard room,gymnasium, lounge, etc. The Company makes great effortsto maintain employees' physical and mental health afterwork. The Company actively organizes rich cultural, sportsand recreational activities and holiday care activities, such asLantern Festival activities, Women's Day activities, Children'sDay activities, annual meeting activities, etc. It intends toenhance the sense of happiness and belonging of employees.
On October 27, 2023, theCompany held club orientationevent, including ra?e, playingfootball, pitching, throwingsandbag, lucky draw, etc.The event was attended by200+ people in total, and 62employees joined various clubs,which brought new vitality tothe team.
In the middle of November 2023, to enrich the work andlife of the Company's employees, and to create a goodatmosphere of cooperation and convey the spirit ofstriving and enterprising, the Company held the secondbadminton match of 2023. More than 50 colleaguesparticipated in the match, competing in men's singles,women's singles and mixed doubles respectively.Through this competition, the staff not only exercisedtheir body, but also adjusted their condition to work hardin the fourth quarter with better spirit.
Gymnasium
Women's Day Activities
Billiard RoomDragon Boat Festival Gifts
Playing Football
Lucky Draw
Throwing Sandbag
Pitching
Group Photo of Participants
Organizing Club Orientation Events
Organizing the Second Badminton Match in 2023
On September 22, 2023 and September 27,2023, the Company invited teachers fromthe First Response Agency to bring the FirstAid Popularization Training to the Company'semployees in Guangzhou and Shanghai,respectively. The training was intended to allowemployees to understand the concept of firstaid, and to master the rst aid knowledge, tools,and skills for incidents such as cardiac arrest,sudden trauma, and medical emergencies.Representatives from various departmentswere invited to attend this training, totaling62 employees. The Company equipped theoffice space with AED first aid equipment foremergencies.
The Company designed and produced 23public welfare posters themed on the WorldWetlands Day, Arbor Day, World Earth Day,International Day for Biological Diversity andother environmental protection festivals.It strives to actively spread the concept ofenvironmental public welfare, set a new greenand low-carbon trend, and guide the staffto implement the concept of environmentalprotection.
In April 2023, KingNet's Love Public Welfarelaunched the public welfare walking activitythemed on "Let the Earth Smile and All ThingsBreathe" on the World Earth Day. The activityattracted nearly 100 cadres and employeesfrom the Company to participate. HangzhouBranch, Shenghe Network and GuangzhouBranch carried out related thematic activitiesin their respective locations. A total of morethan 150 people from the three placesparticipated in the activity.
Inviting External Organizations to Provide theFirst Aid Popularization Training for Employees
The Company actively promotes environmental public welfare activities, builds a quality environmental protectionvolunteer service platform, and attracts more employees to participate through public welfare publicity and activity.It spares no e?orts to form a positive atmosphere of everyone's concern, support and participation in environmentalprotection, and realize the important change from "employees being required to protect the environment" to"employees spontaneously contributing to environmental protection". It hopes to promote the formation of a greenand low-carbon corporate culture, raise social awareness of environmental protection through action, and bolsterthe healthy and orderly development of the environmental public welfare.
Promoting Environmental Public Welfare
First Aid Teaching
Public Welfare Poster of KingNet Network
Scene of the Public Welfare Walking Activity
Continuous Enhancement ofEnvironmental Public Welfare Publicity
Carrying out Public Welfare Activities onthe Theme of World Earth Day
The Company organized volunteers toparticipate in the spring planting activities "OneHundred Million Suosuo" for public welfare 2023carried out by the Foundation of the Society ofEntrepreneurs and Ecology (hereinafter referredto as "SEE Foundation"). These volunteerstraveled to Alxa League of the Inner MongoliaAutonomous Region to experience the plantingand watering of psammophytes, and to promotethe sustainable development of the "KingNetPublic Welfare Forest" environmental publicwelfare program. Volunteers who participatedin this spring planting activity, as participantsof the "KingNet Public Welfare Forest"activity, worked in concert with environmentalprotection volunteers from all over China tobuild sand barriers, dig deep pits, water twice,lift seedlings after planting, and mulch twicein desert marginal areas., etc. They plantedpsammophytes to help protect the ecologicalenvironment of the Yellow River Basin.
The Company has launched a "PlasticRecycling" program, setting up recycling pointsto collect discarded plastic bottles used byemployees. The Company used these bottles asraw materials to make environmentally friendlyschool uniforms and donate them to ruralschools in need.In 2023, the Company donated
sets of environmentally friendlyuniforms to rural schools.
In May and November 2023, the Companyorganized two "Parent-Child Wetland Tour"Dongtan Wetlands exploration activities,which attracted the participation of morethan 60 volunteers and children. Wetlandspopularization, bird observation, andintangible cultural heritage experienceprovided participants with opportunities tounderstand the significance of wetlands to theecological environment, know the ecologicalrestoration achievements of wetlands, and getenlightenment on environmental protection.
Participating in the Spring PlantingActivities "One Hundred Million Suosuo"
Launching a Plastic Bottle RecyclingProgram
Organizing the Dongtan WetlandsExploration Activities
Group Photo of Volunteers for the Spring Planting ActivitiesPoster for Public Welfare Program of Plastic RecyclingGroup Photo of Volunteers and Children
In February 2023, theCompany joined handswith SEE Foundationand Alxa SEE DonghaiProgram Center to donateRMB 200,000 to SEEFoundation's "ProtectingDongtan for Birds" publicwelfare program. The fundwas channeled to helpShanghai ChongmingDongtan to declare as theWorld Natural Heritage,to protect the wetlandenvironment, and to protectbiodiversity. The Companycarried out o?ine publicityactivities with the theme of"Endowing Poetic Wetlandswith Pictorial Splendor". Itintroduced the protectionof Dongtan Wetlands andperformed bird knowledgequiz to the employees of theCompany in combinationwith the "ProtectingDongtan for Birds" publicwelfare program, attractingmore than 140 employeesto participate for learningand interaction.
In October 2023, KingNet Network visited the apple demonstration garden inShahe Town, the Fifth Regiment, Xinjiang, to gain a deeper understanding of theXPCC-Xinjiang integrative development and the development of the regional appleindustry. The Company formally participated in the "I Have a Tree in Aksu" appleforest planting.The "I Have a Tree in Aksu" large-scale Xinjiang aid operation was led by the Tra?cRadio of Zhejiang Media Group, and co-sponsored by the Xinjiang Aid Command ofZhejiang Province, the Zhejiang Provincial Department of Culture and Tourism, theForestry Bureau of Zhejiang Province, and the Zhejiang Media Group. The programwas guided by the principle of "Practicing the Double-Eight Strategy, Taking upthe Mission of Xinjiang Aid, Promoting Rural Revitalization, and Protecting theEcological Environment". It was intended to actively promote extensive exchanges,and in-depth integration between Zhejiang and Aksu. In July 2023, the publicwelfare program was launched in the Shahe Town of the Fifth Regiment, aiming tofurther the XPCC-Xinjiang integrative development, consolidate the revitalizationof the countryside, maintain the ecology, and help the farmers. The program wasdesigned to open up the circulation channels of quality agricultural and sidelineproducts, and contribute more to the construction of the magnicent Xinjiang.Dongtan Wetlands Protection Base
Scene of the Company's Wetland Protection Publicity Activities
Exclusive Use of the Apple Forest Planting Certicate
Carrying out Activities on the Theme of "InternationalWetlands Day"
Participating in the Aksu Apple Forest Planting
Bu?: Sustainable Care
KingNet Network integrates multiple resources, deepens the content of activities,carries out public welfare programs and employee volunteer activities in terms ofrural education, emergency relief, intangible cultural heritage, etc. The Companymakes continuous e?orts to explore new forms of game-based public welfare, toconvey warmth and hope, and to boost the development of society.
MetricTargetProgress in 2023Amount invested insocial public welfare
Total investment of RMB 20million from 2023 to 2025
RMB 6,516,000
Community contribution and public welfare and charityTopics responded:
Engaging in Public Welfare to Send KingNet’s Love
KingNet Network continues to pool various resources to build the "KingNet's Love Public Welfare" brand, and continuesto expand the Company's positive inuence through systematized and standardized operations. The Company endeavorsto realize the conformance of the Company's economic value and social value.
Support for RuralEducationThe Company has been actively engagedin education for rural revitalization,focusing on literacy education ofminors, especially children in remoteareas. It intends to provide moreeducational opportunities for childrenin underdeveloped areas, to give ruralchildren more opportunities, and tocontribute to the high-quality developmentof rural literacy education.By virtue of its own technology andindustry advantages, the Companyprovides rural children with multifacetedsupport covering course resources, VRequipment and teachers in respect ofeducation, facility donations, growthsubsidies and living assistance. It aims tostimulate the children's creative thinkingand innovation, comprehensively improvetheir cultural, artistic and physical literacy,and continue to guard the healthy growthof minors.
? Areas of focus: Child literacy education, ecological environmental protection and emergency relief inremote ethnic minority areas;? Coverage: Covering 24 cities and 26 counties in 14 provinces, including Qinghai, Sichuan, Yunnanand Xinjiang, aiming to create a platform for rural children to communicate with the outside world in amulti-channel and diversied way.Education of children in remote areasEcological environmental protectionEmergency relief"KingNet's Love Rural Cloud StudentAid""Girls' Escort of KingNet's Love" GirlProtection Action"Bright Future Health Initiative"Rehabilitation Assistance for DisabledChildren"Colored Plateau" Rural Art Education
"Sports Dream Class (运动梦想课)"
and so forth
"One Hundred Million Suosuo""Plastic Recycling" program"Protecting Dongtan for Birds" ,etc.Aksu Apple Forest Planting in XinjiangSee the "Promoting Environmental PublicWelfare" section in the Report.
Establish a special fund foremergency relief
Achievements of the "KingNet's Love Public Welfare" Branding
Message from the Chairman Sustainability Highlights in 2023 About KingNet Sustainability Management System Part I: Sustainability Part II: ESG Management and Performance Appendix
Public Welfare Programs of KingNet Network in Support of Rural Education in 2023
Donated 140 VR glasses and 288 VR courses to seven rural schools in Yushu,Qinghai to establish "VR technology classrooms" and help technologicalinnovation of rural education.Visited Leibo County, Liangshan Yi Autonomous Prefecture, Sichuan Province,and donated 6,167 sets of public welfare materials to four local rural schools,including Xinhua dictionaries and school supplies.In cooperation with the 25th batch of youth education support teams fromthe central and state organs, donated 500 sets of "KingNet's Love ProtectivePackage" to the Xiaoshizhuang Central School in Yangyuan County, HebeiProvince.
Launched the "Colored Plateau"Rural Art Education Program inassociation with China Academyof Art, and provided courses witha total of 22 class hours and880 minutes as of December,distributing picture books ando?ering calligraphy, art and othercourses to 319 children in sevenschools.
Donated RMB 150,000 to the"Sports Dream Class (运动梦想课)"
public welfareprogram, and organizedtraining for physical educationteachers. 18 young physicaleducation teachers fromYushu completed online ando?ine training to improve theirteaching level and methods.
In cooperation with "YunnanTrust - Baichuan ChaohaiCharitable Trust for PovertyRelief", donated 51 sets of"KingNet's Love ProtectivePackage" to the children ofYunli Factory Primary School inPupeng Town, Xiangyun County,Dali Prefecture.
Visited the Erlang Primary School in Chenghai Town,Yongsheng County, Lijiang City, Yunnan Province,donating 120 sets of "KingNet's Love ProtectivePackage" to local school children.Donated RMB 300,000 to the Special Fund of "BrightFuture Health Initiative" to assist children in medicalsurgeries and rehabilitation assistance in AksuPrefecture of Xinjiang.
Carried out the "Rural SchoolOnline Classroom | STEAM OnlineCourse" fourth anniversary visitto Yushu in Qinghai, providedintangible cultural heritage andaesthetic education experiencecourses, and donated sportswearand materials valued at a total ofRMB 5 million to seven schools incooperation with the Anta Group.
Visited Longling County,Baoshan City, YunnanProvince, donating 390sets of "KingNet's LoveProtective Package" and6 sets of o?ce computersto children in three localschools.
MarchAprilMay
JuneJulySeptemberOctober
Message from the Chairman Sustainability Highlights in 2023 About KingNet Sustainability Management System Part I: Sustainability Part II: ESG Management and Performance Appendix
Group Photo of Public Welfare Donations to Longling County,Baoshan, Yunnan
One of the First Partners of "Bright Future HealthInitiative"Donation to the Special Fund of "Bright FutureHealth Initiative"
In 2023:
The Company visited and conducted research in 15 cities (counties) in eight provinces,including Yushu Prefecture in Qinghai, Liangshan Prefecture in Sichuan, Xinmi City inHenan, and Baoshan City in Yunnan.
The Company o?ered for the "Rural School OnlineClassroom | STEAM Online Course" program
classes
teaching time accumulatingover4,300
minutessurpassing the annual teachingtarget of 88 classes in 2023 by
122.7
%
The Company visited
rural schools
donated in funds andmaterials over
million
and beneted over12,000children
RMB 300,000 Donated to the Special Fund of "BrightFuture Health Initiative"
In October 2023, KingNet Network donated the initial amount of RMB 300,000to the Special Fund of "Bright Future Health Initiative" for the RehabilitationAssistance of Disabled Children in Zhejiang's Aid to Xinjiang. The donation willbe used to provide medical surgeries and rehabilitation assistance to eligiblechildren under 18 years old with visual, hearing, or speech disabilities, as well aschildren with congenital heart disease in Aksu Prefecture and the First Divisionof the Xinjiang Production and Construction Corps.
Tips: The "Bright Future Health Initiative" for the Rehabilitation Assistanceof Disabled Children in Zhejiang's Aid to Xinjiang is one of the practicallivelihood programs jointly implemented by Xinjiang and Zhejiang. Sinceits launch in August 2021, five phases of assistance projects have beencompleted in the "Bright Future Health Initiative", benefiting 348 childrenwith visual or hearing disabilities. In 2023, the partnership program wasofficially launched for the "Bright Future Health Initiative".
"Sports Dream Class (运动梦想课)" Assisting theDevelopment of Young Teachers in Tibetan Regions
Carried out Public Welfare Activities in Leibo, Sichuan
In 2023, KingNet Network joined forces with the Shanghai Adream CharitableFoundation to launch the "Sports Dream Class (运动梦想课)" program, whichserved as a lever for schools to enhance physical education literacy. Theprogram focuses on training frontline physical education teachers, increasingthe frequency and quality of physical education classes in schools, helping ruralstudents meet physical fitness standards, and comprehensively improving thelevel of physical health testing in schools and students' physical literacy.In May 2023, the Company donated RMB 150,000 to the "Sports Dream Class(运动梦想课)" Public Welfare Program. Eighteen young physical educationteachers from seven schools in Nangqen County, Chindu County, and QumarlebCounty in Yushu Prefecture, Qinghai Province, which are the target areas fortargeted assistance, participated in the "2023 Anta One-Star Physical EducationTeacher Training" at Heyin Primary School in Guide County, Hainan TibetanAutonomous Prefecture, Qinghai Province. This training aims to enhance theteaching skills and methods of these teachers.
In March 2023, the Company visited Leibo County, Liangshan Yi AutonomousPrefecture, Sichuan Province, and donated 6,167 sets of public welfare materials tofour local rural schools, including Xinhua dictionaries and school supplies.A group of volunteers from the Company visited the Shanlenggang Township CentralPrimary School, Lami Township Central Primary School, Qingkou Township CentralPrimary School, and Zhongtian Primary School in Huanglang Town in Leibo County.Their main focus was to gain a better understanding of the actual needs of eachschool and its students and provide targeted assistance. They planned to integrateavailable public welfare resources and bring the "Yushu experience" to Leibo. Theyaimed to pilot a cloud education support program in the area, delivering warmth andknowledge to rural children.
Group Photo of "Sports Dream Class (运动梦想课)" TrainingGroup Photo of Public Welfare Donations to Leibo, Sichuan
"Rural School Online Classroom | STEAM Online Course" Fourth-anniversary Visit
In July 2023, the Company joined forces with the School of Social Aesthetic Education at China Academy ofArt to visit rural schools in Yushu Prefecture, Qinghai Province. This marked the fourth consecutive year thatthe Company has visited Qumarleb County, Chindu County, and Nangqen County in Yushu Prefecture, QinghaiProvince, to exchange with locally partnered schools.During the visit, the Company's Mixinxin Studio introduced to the children the use and presentation of thethousand-year-old tie-dyeing craft in the present day. Through the explanation of volunteer teachers and theanimated video content of the Crafts and Qubits", the children were led to create "plant dyeing" hands-on.Teachers Lin Jie and Chen Jinglei from the School of Social Aesthetic Education at China Academy of Artpresented exciting courses on calligraphy and picture books to the children.
Picture Book Class in the "Rural School Online Classroom | STEAM Online Course"Fourth-anniversary Visit
Plant Dyeing Class in the "Rural School Online Classroom | STEAM Online Course"Fourth-anniversary VisitDonations to three counties and seven schools in Yushu Prefecture:
sets of learning and livingmaterials over31,000
medical kits3,595
extracurricular books
4,410
worth RMB
450,000sets of VR head-mounted displays
including
categories and
VR classes
Sports clothing andsupplies worthRMB
million
Sports Dream Class (运动梦想课) program worthRMB150,000
Aided Gansu with One Fountain
On December 18, 2023, a 6.2-magnitude earthquakeoccurred in Jishishan County, Linxia Prefecture,Gansu Province. In response, the Company donatedRMB 500,000 to the Shenzhen One Foundation,provided urgently needed supplies and materials tothe a?ected population, and rushed to the earthquake-hit areas of Gansu to overcome the di?cult time.
Responding toEmergenciesThe Company has established an emergencyresponse and disaster relief fund and adisaster trigger mechanism, allocating acertain amount of funds for public welfarepurposes each year specically foremergency response and disaster relief. Thisensures a timely, scientic, and e?ectiveresponse to sudden disasters, reducingdecision-making costs and maximizingpositive social impact.In 2023, the Companyinvested a total ofRMB500,000in emergency response anddisaster relief.
Rushed to the Disaster Relief Site in Gansu
Message from the Chairman Sustainability Highlights in 2023 About KingNet Sustainability Management System Part I: Sustainability Part II: ESG Management and Performance Appendix
Participating in VolunteerServices to Manifest KingNet'sResponsibility Taking
The Company has established the KingNet Network Volunteer Association. Strictly adhering tothe Charity Law of the People's Republic of China and the Regulations of Shanghai Municipalityon Volunteer Services, the Company has also formulated the Articles of Association of KingNetNetwork Volunteer Association and developed the Volunteer Management System of KingNetNetwork in 2023, continuously improving the volunteer service management system.The Company has established a volunteer service team, encouraging and advocatingemployees to actively participate in public welfare undertakings. By organizing volunteeractivities, the Company aims to fully leverage the strengths of employees and contribute tosociety through practical actions.
Organized and participated in the "3·5" Learn-from-Lei FengMemorial Day activities;Produced and distributed anti-addiction protection brochures forminors and promoted the Company's public welfare philosophyto hundreds of community residents.
Organized the "Classic Intangible Cultural Heritage intoCommunities" public welfare course activity, which provided35 children of the summer care class of Qianjiang CenturyCity Local Police Station with an intangible cultural heritagetie-dyeing class package and a wonderful experience ofintangible cultural heritage.Launched a "9?5 Charity Day" public welfare market activity,featuring the second phase of the Wish Tree Program (with 355projects released), a plastic bottle recycling program, a Tibetanchildren's art exhibition, and an agricultural assistance market.The charity sale activity generated a total of RMB 10,371.60 infunds to support agricultural development.
Launched the International Volunteer Day publicity activitythemed "Gathering Forces to Volunteer Together", distributingvolunteer activity-related items to 135 registered volunteers.
March
July
September
December
Registeredvolunteers
Volunteer activities
Provinces/cities/autonomousregions covered with volunteerservices projects
Employee volunteer serviceparticipation more than
person-times
Volunteer services1,286hours
Awarded
Volunteer Service Performance of KingNet Network in 2023
Key Volunteer Service Projects of KingNet Network in 2023
the title ofAdvanced Volunteer Service
Collective in Shanghai
Supporting Sustainable Development Goals
As a leading Internet-based listed company in China, the Company comprehensively examines the relevance between the United Nations Sustainable Development Goals (SDGs)and its sustainability practices, integrating the SDGs into its long-term development strategies and business operations. The Company ensures that its business decisions, productdevelopment, and services all have a positive impact on the realization of these goals. It continuously discloses the progress of its actions, demonstrating its active contribution to global SDGs.Specic Actions of KingNet Network for Supporting SDGs in 2023
Actions in 2023Actions in 2023SDGs SupportedSDGs Supported
Donated materials to rural schoolsEncouraged to obtain work-life balance and carried out diverse culturaland sports activitiesSet up a gym, billiards room, and table tennis room
Established diverse interest clubs; carried out holiday activities; andsupported department team buildingProvided targeted training programs for employees from newcomers tomanagement advancement, including "Newcomer Village Challenge","X Plan", "New Manager Training Camp", and "M Plan", and designedvarious learning activities such as "Learning Month"
Participated in green electricity consumption, with a total of 825 greenelectricity certicates procuredCarried out environmental public welfare activitiesAdvocate green mobility and low carbon commuting for employees
Developed the anti-fraud public welfare game, Cleverly catchingscammers
Launched the intangible culture heritage-related public welfare project"KingNet's Love Crafts and Qubits"Carried out the "KingNet's Love Rural School Online Classroom | STEAMOnline Course" ProgramContinuously promoted the "Colored Plateau" Rural Art Education ProgramDonated to "Sports Dream Class (运动梦想课)" Public Welfare Programand the Special Fund of "Bright Future Health Initiative"Participated in the "3·5" Lei Feng Memorial Day series activitiesOrganized the "Classic Intangible Cultural Heritage into Communities"public welfare course activity
Part II:
ESG Managementand Performance
Joining Forces to HelpEmployees GrowProtecting Security toOptimize User ExperienceStrengthening Governanceto Ensure Robust Operation
Joining Forces to HelpEmployees Grow
MetricTargetProgress in 2023
Employee training coverage100% 100%Training time per employee12 hours18.84 hours
Employment and protection of employees' rights and interestsHuman capital developmentTopics responded:
Employment and Protection of Employees'Rights and Interests
Talent Attraction and Retention
Employee Recruitment and EmploymentAbiding by applicable laws and regulations such as the Labor Law of the People's Republic of China and the LaborContract Law of the People's Republic of China, the Company has established rules and regulations including theRemuneration Management Measures and the Outsourced Personnel Management Measures. Adhering to the talentphilosophy of "people-centered", the Company emphasizes employee quality, regarding ethical integrity and professionalcapability as crucial criteria for selecting and hiring employees. It stipulates that no discriminatory conditions based onrace, religion, ethnicity, gender, household registration, or other factors should be set for any recruitment activities.
The Company has never employed a minor. In 2023,the Company did not experience any incidents ofemployee discrimination or the employment of child labor.Furthermore, there were no violations of employment orlabor standards, nor were there any legal proceedingsrelated to these matters.
Employee Recruitment of KingNet Network in 2023
Employee Diversity Performance of KingNetNetwork in 2023Genders of Emplaoyees in KingNet Network
Ages of Employees in KingNet Network
The Company formulated the annual demand plan of human resources and standardized the work processaccording to the overall planning of human resources in combination with the actual demand of productionand operation, and organized the recruitment of human resources according to the plan, system, andproceduresIn 2023, the Company had a planned recruitment demand of 755 positions and successfully issued 730 offerletters, achieving a recruitment plan delivery rate of 96.69%.Campus recruitment: The Company held campus promotions, published campus recruitment posters on theWeChat official account (KingNet Recruitment), and published campus recruitment positions on the officialwebsiteSocial recruitment: The Company published social recruitment positions on the official website and socialrecruitment posters on the WeChat official account (KingNet Recruitment)Internal recommendation: The Company instituted an internal recommendation and reward mechanism,established bonuses to incentivize referrals, and implemented various internal recommendation initiativesaimed at identifying and attracting "new" talent
Formulated atalent demandplan
Enrichedrecruitmentpaths
1,366
73.09%
50.29%
0.11%
26.91%
49.60%
Male
<30
Female
30-50>50
Message from the Chairman Sustainability Highlights in 2023 About KingNet Sustainability Management System Part I: Sustainability Part II: ESG Management and Performance AppendixImproving Employee Remuneration and Benet System
Remuneration and Benet System of KingNet Network
The Company duly and fully contributes to employees' social insurance and housing provident fund. In addition to providing statutory welfare benets to all employees, it also o?ers adiverse range of exible benets, including meal allowances, transportation allowances, annual health check-ups, supplementary commercial insurance, and festive gifts.
In 2023, the Company revised its Department Team Building Management Measures and adjusted the utilization period of team building funds to guarantee the availability of employeebenefits. The Company values the work-life balance for our employees, provides various recreational facilities to employees, and establishes clubs organized spontaneously byemployees with funds from the Company. The Company regularly organizes diverse cultural and recreational activities to enrich employees' leisure time.Regarding talent retention, the Company pays closer attention to high-performance employees, follows changes in their work and life, enhances communication, and listens to theirvoices on needs. It provides timely intervention and coaching assistance to minimize the loss of high-performance employees.
Remuneration
Guaranteedbenets
Healthbenets
Routinebenets
CaringbenetsBasic salary, project bonus,performance bonus andother cash incentives andsubsidies
Social insurance andhousing provident fund paidin full
Supplementary commercialinsurance (including insurancefor including serious diseases,accidental injuries, andoutpatient and emergencyhospitalization), annual healthcheck-ups, and cultural andsports activities
Anniversary gifts foremployeesMeal and transportationallowancesDepartment team building andannual development-orientedtourismInterest clubs
Birthday gifts, festive gifts,paid annual leave exceedingthat stipulated by the state,annual ceremony benets,and New Year's red envelopes
Message from the Chairman Sustainability Highlights in 2023 About KingNet Sustainability Management System Part I: Sustainability Part II: ESG Management and Performance AppendixDemocratic Communication among EmployeesThe Company follows the principle of "transparency and openness" and values democratic management. Apart from theo?cial system announcement, open solicitation of employees' opinions, and open acceptance of employees' appeals, theCompany has established an open and transparent internal online democratic communication platform named "KingNetMoments". The Company has smoothed Internal communication channels through methods such as the employees'congress to learn about employees' needs and protect employees' rights and interests.
Screenshot of "KingNet Moments"
In March 2023
the Company conducted the reelection ofemployee representatives and selected
representativesincluding frontlineemployees
femaleemployees
managers at andabove the middle level
In 2023, the Company's headquartersconvened an employees' congress to electthe employee representative supervisors ofthe fth Board of Supervisors.
Human Capital DevelopmentEmployee TrainingThe Company's training e?orts are focused on meeting the learning needs of employees at di?erent career developmentstages. To achieve this, the Company has established an internal online learning platform called "Sky City", anddeveloped a multi-level curriculum system with targeted training programs. Based on the Company's business strategicdirection, annual key training projects such as new employee training and leadership training are being promoted.
In 2023, the Company carried out Phase II of theLeadership Enhancement Project - M Plan andlaunched the Phase 1 course of A + Manager. Thistraining focuses on role recognition, managementof others, and management collaboration. 26middle management employees of the Companyparticipated in this training.
KingNet Network's Multi-level Employee Training System
Phase II of Leadership EnhancementProject - M Plan
Management
promotion
M Plan
On-jobtraining
Hot games seminarLecturer managementKnowledge Inheritance O?cer, Teacher's Day activities,Lecturer Training Camp, and external Training
Culturaldivision
Anniversary ceremony activities
Club operation
Events, competitions, funding support, problem
settlement, etc.
Onlinetraining
Sky City Learning Platform
New course e?orts, information security examdevelopment, and data organization
Basicwork
Training operation
Training assistance, lecturer operation, course
development, learning analysis, etc.
Newcomer
training
Training for newcomers from social recruitment and X Plan for
newcomers from campus recruitment
Scene of Lecturer's Teaching
Photo with Trainees
On March 16 and 17, 2023, the Company invited professional lecturers from an external organization toshare the course Discerning Talents - Becoming an Excellent Interviewer with the management. The aimwas to help managers understand e?cient interview processes, master interview techniques, and facilitatejob recruitment. A total of 53 managers participated in the two-day training, which amounted to 212 hours ofcumulative training time.
The Company supports employees inenhancing the professional skills requiredfor their positions and obtaining relevantvocational qualications such as ComputerProgrammer. The Company reimbursesemployees who take the relevant examinationsfor their examination or registration fees andprovides additional subsidies. In 2023, theCompany provided subsidies totaling RMB8,000 to eight employees who passed theComputer Programmer certication.
Employee Training Programs in Association with an External Organization
Performance Assessment Process of KingNet Network
Performance Appeal Process ofKingNet Network
The Company has established a performance assessment appeal mechanism with a clear appeal process. If anyemployee has any objection to the assessment results, he/she may submit a written appeal via email within the speciedtime frame. The relevant department will investigate and handle the appeal within one week of receiving it. After theinvestigation and handling, the department shall generate an appeal report and submit the same to the correspondingsenior leadership and the head of the Human Resources Center for approval. Upon approval, the feedback will beprovided to the employee and his/her direct supervisor.The Company stipulates that appeal investigators must keep the details of the appeal and the personnel involvedcondential. Employees who violate condentiality requirements will be subject to disciplinary action, and it is strictlyprohibited to conduct any retaliation or discrimination against appealing employees.
In 2022, the Company launched a stock optionincentive plan and granted 19.71 millionshares to 21 individuals, including professionalmanagers and core team members. In 2023,the exercise conditions of shares in therst phase of the plan became mature andthe corresponding shares were exercisedaccordingly.
Employee Assessment and IncentivesThe Company manages performance based on the principles of openness, fairness, impartiality, objectivity, and healthycompetition. In 2023, the Company revised the Performance Management Measures and included the assessment ofwork attitude and daily behavior.In 2023, the Company conducted quarterly assessments based on job responsibilities and key work tasks. The resultsof performance assessments were applied to performance communication and improvement, performance bonuscalculation, performance assistance, salary adjustment, promotion, and equity incentives.
Proposing an objection byan employeeCommunicating with thesuperior
Giving feedback on appealhandling opinions
Submitting a written appealInvestigating the appeal
Performance plandevelopment
Performancecommunication
Performance
appealPerformanceplan review
Performanceself-assessment
Performanceassessment
Performanceapproval
Message from the Chairman Sustainability Highlights in 2023 About KingNet Sustainability Management System Part I: Sustainability Part II: ESG Management and Performance Appendix
EmployeePromotion
Merit-basedNomination
Review andInspection
PromotionDecisionValuing the personal development ofits employees, the Company adheresto the principle of "openly andtransparently gradual promotion". Ithas established systems such as thePromotion Management Measuresto provide employees with fair andequitable promotion opportunitiesand diverse career developmentpaths. Employees can choose tovertically advance and becomeexperts in their professional elds,or horizontally develop and becometeam managers, based on theiraspirations and characteristics.The Company has established asound career development systemand formulated promotion programplans based on managementdecisions. Through mechanismssuch as merit-based nominations,review and inspection, andpromotion decisions, it providesemployees with fair and equitablepromotion opportunities and vastcareer development prospects.
Department heads checkteam members and selectemployees who meet thepromotion nominationcriteria and are suitable forthe corresponding job level.The Human ResourcesCenter reviews andapproves the nominationsuggestions from eachdepartment based onunified standards anddetermines the promotioncandidates.
The HumanResources Centersummarizesthe review andassessment opinionsand submits them tothe management fordecision-making.
The Human Resources Center leadsdepartment heads and internal experts invarious professional fields to establish apromotion review team.The promotion review team uniformly reviewsand inspects the promotion candidates basedon the Job Qualification Standards, andthe review opinions serve as an importantreference for promotion decisions.Each promotion candidate presents his/herachievements over the past year through awork report, demonstrates his/her professionalabilities and professional competence, andresponds to questions from the judges duringthe defense session.
Promotion Mechanism of KingNet Network
2x2
Message from the Chairman Sustainability Highlights in 2023 About KingNet Sustainability Management System Part I: Sustainability Part II: ESG Management and Performance Appendix
Metrics TargetsProgress in 2023
Number of glitches in the anti-addiction system00
Note: The statistical scope for the number of glitches in the anti-addiction system involves theglitches that can be inquired in the Real-name Verication System for Anti-addiction in InternetGame Playing.
Protecting Security toOptimize User Experience
Privacy and data securityProtection of minors in cyberspaceContent quality managementCustomer service and complaint handlingTopics responded:
Creating a Clean Network EnvironmentPrivacy and Data SecurityAccording to applicable laws and regulations such as the Cybersecurity Law of the People's Republic of China, the DataSecurity Law of the People's Republic of China, and the Personal Information Protection Law of the People's Republicof China, KingNet Network has formulated the Basic System for Data Management and the Management System forInformation Security Incidents and Emergency Response to conrm the legality and compliance of data collection andstorage.The Company has established a data security management framework with clear responsibilities and comprehensivefunctions to ensure the e?cient execution of data security management work. In 2023, the Company did not experienceany data security or leakage incidents, achieving the goal of "zero data security incidents" and e?ectively protecting datasecurity and user privacy.
The development team adheres to best practices insecure development, conducts regular code reviews,and utilizes the latest security tools for vulnerabilitydetection. It continuously learns about the latestsecurity standards and threats in the industry, whiletimely updating and improving security measures.
To ensure data security in product development, theCompany follows the principles of secure development,assesses privacy design, and enhances data securitythroughout the product development process.
The CEO of the Company makes important decisions related to privacy and data security incidents.The Vice President of Public Security is mainly responsible for the overall privacy and data security strategy,ensuring that the Company complies with relevant laws, regulations, and mandatory standards.
Privacy and Data Security Management Framework of KingNet Network
Secure DevelopmentPractices
Data Security Protection Measures in theProduct Development Process of KingNetNetwork
Supervision
level
The Senior Director of the Operation & Maintenance Security Center formulates privacy policies and relatedprocedures, ensuring the e?ective operation of data security and network security mechanisms.Management
level
The Information Security Department ensures that the Company's data processing mechanisms are compliantand promptly identies and blocks any possible privacy and data security issues.Execution
level
The Company assesses privacy design in the earlystages of product design, assesses potential privacyrisks in the data processing process, and implementscorresponding measures to mitigate these risks.
Privacy Design
Assessment
Measures for User Data Management of KingNet Network
The Company has established an informationsecurity incident and emergency responsesystem, encompassing incident discovery andreporting, incident disposal, evidence preservation,incident summary, audit, reward, and punishmentmechanisms, to minimize and mitigate potentiallosses arising from incidents and reduce the impact ofdata security risks.In terms of internal capacity building, the Companyconducted a survey on information securityawareness among all employees in 2023, coveringtopics such as personal information protection,social engineering, and laws and regulations, toenhance employees' awareness of data security andprivacy data protection. The survey covered 100% ofemployees.In 2023, the Company conducted four externalaudits, including classied protection evaluations,telecommunications protection evaluations, datasecurity risk evaluations, and annual audits forlisted companies. The Company conducted saidevaluations for the Company's main businesses,with the certication scope covering all data of theCompany.
The Company employs encryption, de-identification, and other techniques to implement strict access controls andprotection measures for user data during storage, transmission, analysis, and processing stages, guarding against therisk of user privacy/sensitive data leaks. The Company informs users of its measures to handle and protect personaldata through user education and publication of its Privacy Policy. Users have the right to access, correct, and delete theirrelated personal data and can seek assistance from the Company through customer service, email, phone, and postalmail if required.
Unless explicitly required by laws and regulations, the Company will not collect personal datafrom third parties without the consent of the users, or unless we have obtained explicit consentfrom the users.Clearly dening the purpose of data collection, the Company meets the minimum requirements ofnational regulations to support service operations.
Employing the de-identication technique, the Company removes individual identity informationduring data analysis and processing to ensure that data cannot be restored to specic individualsduring use.The Company implements access control policies, with only authorized personnel having accessto sensitive data, and regularly reviews and updates employee access permissions to maintainthe principle of minimum authorization.The Company commits to retaining personal data only for the specified use period and willpromptly delete unnecessary personal data once the purpose of data use is achieved, ensuringthat the retention period does not exceed a reasonable duration.
The Company employs https encryption to prevent user data from being stolen duringtransmission and storage.
Data Collection
Data Transmissionand Storage
Data Use andRetention
In 2023, the Company's "KingNet Chain" and"KingNet Alliance Chain (恺英联盟链)" platformscompleted the blockchain information serviceling of the Cyberspace Administration of China,bolstering the standardized application ofblockchain technology and data security protection.Note: https refers to the hypertext transfer protocol secure, which helps establish a secure link between clients and servers to ensure information security.
Protection of Minors in CyberspaceKingNet Network has consistently adhered to o?ering healthy and green network cultural products as well as informationcontent services. The Company has continually reinforced its protection system for minors, enhancing and rening itsanti-addiction system. It has actively participated in the development of relevant standards and industry collaborations,creating a clean network environment for minors and safeguarding their healthy development. The Company's gameproducts mainly target adult users and the Company closed the registration function for minors in September 2021.KingNet Network's Anti-addiction Action for Minors
Game Player Age Prompt
XY Game Platform Reporting Center
All games of the Company have been included in the Real-name Verification Systemfor Anti-addiction in Internet Game Playing. The "Age Prompt" label for game worksis placed in conspicuous positions such as game icons, official websites, and maininterfaces of games.
The Company sets up "Online Harmful Information Reporting Area" and "ShanghaiInternet Illegal Information Reporting Center" on the XY Game Platform and the homepage of its official website.
In 2023, the Company conducted 12 spot checks on the implementation of anti-addictionmeasures for self-operated products and provided feedback on the implementation toregulators.
The Company participated in the discussion ofthe group standard, Management System onMinors Online Protection for Internet Companies.The Internet Society of China officially releasedthis standard on March 2, 2023, and it becamee?ective on June 1.
As part of the "Pujiang Town 3·5" Learn-from-Lei Feng Day activities, the Company distributedand publicized brochures on the prevention ofminors from becoming addicted to online gamesto community residents.
The "Parental Guardianship Program for Minors inOnline Games" is initiated by the XY Game Platformaccording to relevant national regulations, guided bythe Ministry of Culture and Tourism of the People'sRepublic of China. It aims to strengthen parentalguardianship of minors in online games and guidethem to participate in healthy and green onlinegames as a social public welfare action.The Parental Guardianship Program features afull consideration of the practical needs of parents.When parents discover that their children are overlyaddicted to playing games, they can provide legalguardianship qualication certicates, game names,and accounts, as well as their wishes regarding theintensity of restrictions. Based on this information,the Company can take restrictive measures againstthe accounts of children who are addicted togames, addressing the unhealthy phenomenon ofminors' excessive engagement in online games.These measures may include limiting the periodand duration of daily gameplay, restricting play toweekends only, or imposing a complete ban.
XY Game Platform "Parental GuardianshipProgram for Minors in Online Games"
Conducting publicity on anti-addictionprotection for minors
Participation in the formulation of group standards forthe online protection of minors in Internet enterprises
Excerpt from Brochures on the Prevention of Minors fromBecoming Addicted to Online Games
Providing Quality Content and ServicesContent Quality ManagementStrengthening content management and output, the Company considers product content from ve aspects: "concept orientation", "original design", "production quality", "culturalconnotation", and "development level", and takes multiple measures to improve content quality.
In 2023, the Company conducted weekly content supervision and reviews of all game products and issued monthly supervision reports to promptly communicate and modify anyissues discovered with the business departments. It organized monthly training for content quality reviewers to keep them updated on the latest review requirements and encouragedemployees to actively participate in content quality management training organized by authorities and industry associations.
The Company conducts a survey before introducingIPs, excludes IPs with obvious negative values suchas bloody violence and pornography, and does notintroduce themDuring game development, the Companyappropriately modifies the IP contents, game themes,characters, and gameplay to ensure that the gamecontents conform to socialist values.
The Company considerswhether there isreasonable innovationin gameplay, art, artisticstyle, and game world.
The Company ensuresthat the production ofgame scenes, charactersettings, and storylinesis meticulously craftedand of high quality.
The Company considerswhether the gamescan disseminate andpromote the essence ofChinese culture as wellas accurate scientificand cultural knowledge.
The development levelis crucial in determiningwhether a game iscomplete and theCompany takes intoaccount factors such asthe comprehensivenessof character settings,storyline, and gameplay,as well as the soundnessof the game's operation.
Considerations of Product Contents of KingNet Network
Concept OrientationOriginal DesignProduction QualityCultural ConnotationDevelopment Level
Message from the Chairman Sustainability Highlights in 2023 About KingNet Sustainability Management System Part I: Sustainability Part II: ESG Management and Performance AppendixCustomer Service and Complaint HandlingKingNet Network always adheres to the concept of"providing higher quality and better service", with user valueas the core, continuously creating a customer-centeredhigh-quality experience. By formulating the ManagementMeasures for Complaints from Game Users, the Companyclaries complaint channels and the complaint handlingprocess, properly resolves user complaints, and maximizesthe satisfaction of legitimate and reasonable user demands,reducing the risks of user disputes.In 2023, the Company conducted questionnaire surveysamong its game and platform customers to gain insightsinto their issues and suggestions regarding the games.It conducted customer satisfaction surveys throughchannels such as its o?cial public account and website.
The Company has established a customer complaintsystem encompassing four dimensions: timeliness,empathy, coordination, and proactivity. This ensures thatcustomers receive prompt responses and solutions totheir issues, achieving the shortest possible service path.In 2023, the complaint handling rate of the Company was100%.
Customer Complaint Handling Process of KingNet Network
Upon receiving a customer complaint, the Customer Service Department will investigate thedetails within two hours.Communicating with the customer over the phone as soon as possible to understand its finaldemands.Communicating with the Game Operation and Distribution Department and the Legal Departmentbased on the specic condition of the query and the customer's demands to negotiate the handlingmethod.Proactively communicating and negotiating the nal solution with the customer.Feeding back the nal handling results to relevant departments.
Timeliness
EmpathyCoordinationProactivity
WeChat public
account
Channels for Customer Communication
of KingNet Network
Officialwebsite
Online instantcommunication software
Exclusive WeChatservice channel
24-hour customer
service hotlineService channel for managing anchors
of TikTok fan groupsOfficial managementchannel for player groups
MetricsTargetProgress in 2023
Percentage of female directorsTo promote Board diversication12.5%Coverage of directors in annualanti-corruption training
100%100%Coverage of directors in annualESG training
100%100%Coverage of employees in annualcompliance training
100%100%
Strengthening Governance toEnsure Robust Operation
Corporate governance Compliant operation Risk managementBusiness ethics and anti-corruptionIntellectual property protection Supplier sustainability managementTopics responded:
Consolidatingthe Foundation ofGovernanceLeadership by PartyBuilding
KingNet Network adheres to the leadership of Partybuilding, incorporating it into its Articles of Association.The Company's directors, deputy chairman, andgeneral manager serve as the secretaries of the CPCcommittees, fully leveraging the leadership role ofthe CPC committees to strengthen the unity of Partyleadership and corporate governance.Since its establishment, the Company's Partyorganization has prioritized promoting the Party'sorganization coverage and Party work, integrating theminto its culture and operations. Rooted in red genes,it strives to create a unique brand of Party buildingfor Internet game companies - an "Orange" Hearttowards the Party (be loyal to the Party). In 2023,the General Party Branch was upgraded to a CPCcommittee, overseeing four Party branches, with 103Party members. Among them, over 90% hold bachelor'sdegrees or above, and 90% are post-85s graduates,reecting high education and youth features.
O?cial Establishment of the CPC Committee of KingNet Network Co., Ltd.
Special Party Building Activities of KingNet Network in 2023
Thematic Training of "Reviving Red Memory and Inheriting the Yan'anSpirit"
Joint Learning and Construction Activitywith Party Organizations of Peers
"Military-Civilian Mutual Support"Thematic Party and Youth LeagueActivities
In July 2023, the General Party Branch Committeeof KingNet Network Co., Ltd. was o?ciallyupgraded to the CPC Committee of KingNetNetwork Co., Ltd., becoming the rst "two new"Party organization among Internet game companiesin Pujiang Town with a CPC committee setup.
The CPC Committee of the Company studies and follows the theme education of Xi Jinping Thought on Socialismwith Chinese Characteristics for a New Era. It has formulated detailed implementation plans with Party branchesas the units. It carries out theme education relying on "Three Meetings and One Class" and thematic Party Dayactivities.
For detailed information on corporate governance, please refer to the chapter "Corporate Governance" in the 2023 AnnualReport of KingNet Network Co., Ltd..
2523
Enhancing Corporate Governance
Composition of Board of Directors and Board of Supervisors andThree Meetings of KingNet Network in 2023
Corporate Governance
KingNet Network strictly abides by applicable laws and regulations such as theCompany Law of the People's Republic of China and the Code of Governance forListed Companies. Combining the latest regulatory requirements with operationalpractices, the Company revises the Articles of Association, the Rules of Procedureof the Board of Directors, and the rules of procedure of other special committees,continuously improving its corporate governance system.The Company continuously optimizes the governance structure of its Board ofDirectors, considering factors such as gender, industry experience, and professionalexperience. On July 26, 2023, the Board of Directors completed its term renewal. In2023, the Board of Directors consisted of eight directors, with independent directorsaccounting for 50% of the total. All independent directors possessed legal or nancialprofessional experience. One female director served as an independent director, andthe non-independent directors all showed extensive industry experience.The Company has established the Chief Responsibility O?cer (CRO) team to furtherimprove the corporate governance structure, establish a sound core managementsystem, and highlight primary responsibilities. This team fully integrates themanagement "strategy" and multiple dimensions of "ESG", enhancing the Company'soperational advantages and management status.Corporate Governance Structure of KingNet Network
General Meeting of
ShareholdersBoard of Directors
Board of SupervisorsNominationCommittee
Audit Committee
Remuneration andAppraisal Committee
Strategy and Sustainability Committee
on the Board of Directors
in the Board ofSupervisorsgeneral meetings of shareholders
meetings of special committees ofthe Board of Directors
meetings of the Boardof Supervisors
meetings of the Boardof Directorsproposals deliberatedproposals deliberated
proposals deliberatedproposals deliberated
independent directors
female supervisor
One female director
employee supervisor
directors
supervisors
In 2023, the Company successfullybecame a constituent stock of renownedindices such as the MSCI China, SZSEComponent Index, CSI 1000, Animationand Gaming, CNI 2000, SHS Internet,and CSI Media.The Company was awarded the BestInvestor Relations Team Award in the 4
th
Elite Board Secretaries Selection by theCLS.
Investor Relations Management
The Company complies with applicable laws, regulations, and provisions, including the Company Law of the People'sRepublic of China, the Securities Law of the People's Republic of China, and the Guidelines for Investor RelationsManagement of Listed Companies. It discloses information truthfully, accurately, completely, and timely and e?ectivelyprotects the legitimate rights and interests of the Company, shareholders, and other stakeholders.The Company conducts internal audits and supervision of the information disclosure process to reduce errors andimproper conduct, thereby enhancing the quality and reliability of information disclosure. In addition to regular nancialreports, the Company promptly and comprehensively discloses its development through various channels such as itswebsite, investor relations WeChat public platform, performance briengs, and investor surveys, ensuring the timelinessand transparency of information disclosure. In 2023, the Company issued a total of 159 announcements on theShenzhen Stock Exchange.
On May 15, 2023, the Company participated inthe Online Collective Reception Day for Investorsorganized by the CSRC Fujian Bureau with thetheme of "Concerning Investors, Acting Together -Embracing the Comprehensive Registration-BasedIPO Reform and Protecting the Legitimate Rights andInterests of Investors".The Company conducted online communicationwith investors on matters encompassing the mainreasons for the Company's annual performancegrowth in 2022, the reserve of products under R&D,IP licensing, innovative development of games, andshareholder returns.2023 Investor Exchange Event
Participation in the Online CollectiveReception Day for Investors of ListedCompanies in Fujian
On November 23, 2023, the Company held the 2023 Investor ExchangeEvent of KingNet Network was held in Shanghai. Representatives fromKingNet Network's Board of Directors, Board of Supervisors, seniormanagement team, CRO team, and strategic investment enterprisesattended the event. The exchange event attracted more than a hundredparticipants from various investment institutions and mainstreamnancial media, including China Merchants Securities, CITIC Securities,and Haitong Securities.The Company reviewed its performance in 2023 and the development ofits three core business segments including R&D, publishing, investment+ IP with the participants. This was not only a comprehensive reportfor investors, industry partners, and media who care about and supportthe Company's development, but also a concentrated display of theCompany's e?orts in communication with investors.
Scene of 2023 Investor Exchange Event of KingNet Network
The Company compiled and published 12 volumes of the internalpublication Entertainment Laws and Game Principles, which mainlytargets middle and senior management.
The Company invited external lawyers to conductcompliance-themed lectures and training for allemployees.
Guided by the management philosophy of "Creating Value from Compliance", the Company has established a comprehensive internal management system following laws andregulations such as the Company Law of the People's Republic of China and the Basic Standard for Enterprise Internal Control. The system covers various aspects including nance,human resources, asset management, and capital activities. The Company has established a comprehensive compliance team with dedicated compliance o?cers responsible formanaging compliance matters, forming a tight compliance management system.In 2023, the Company added and revised a total of 17 internal compliance management systems, including the Working Rules of Budget Committee, the System for Managing LegalDispute Cases of the Company, and the IT Asset Management System. These systems cover corporate governance, labor and employment, operation management, risk control, andnancial management. The Company improved its compliance management processes, actively implemented compliance management actions, and ensured the legality and complianceof its operations.
Compliant Operation
The Company complies with relevant laws andregulations such as the Company Law of thePeople's Republic of China, the Basic Standardfor Enterprise Internal Control, and the EvaluationGuideline for Enterprise Internal Control. It hasestablished a comprehensive risk managementsystem, strictly implemented internal controlsystems for listed companies, accelerated theimplementation of internal control standards, andimproved its operational management and riskprevention capabilities to promote sustainablebusiness operations.The Company has established an RCM riskcontrol matrix to continuously improve its major riskprevention and control mechanisms. It identifiesrisks and sets corresponding control objectives andmeasures to ensure e?ective control over the risksrelated to nancial statements.
Risk ManagementHighlights of Compliance Management of KingNet Network in 2023
Entertainment Laws and Game PrinciplesCompliance Training on "Content Evaluation and Analysis of Revised
Draft of Company Law"
Compliance Training on "Disputes and Solutions in Game Companies"
KingNet Network practices corporate credit, operateswith integrity, adheres to the principle of "zero tolerance"towards corruption, and upholds the policy of "punishing andpreventing simultaneously". It strictly abides by applicablelaws and regulations such as the Anti-Unfair CompetitionLaw of the People's Republic of China and the InterimProvisions on Prohibiting Commercial Bribery. The Companyhas established documents such as the Employee BehaviorManagement Measures and the Joint Meeting System forIntegrity and Self-Discipline to define "red line" behaviors,clarify internal supervision and reporting channels, and jointlyfoster a culture of integrity.The Company has established a Supervision Departmentto promote the establishment of an integrity system andstandardize the relevant control measures and procedures forpreventing and identifying corruption risks. The departmentconducts special supervisory audits and strengthens theCompany's anti-corruption risk management and control.In 2023, the Company did not see any corruption lawsuitsagainst the Company or its employees.The Company is committed to eliminating any form of unfaircompetition, maintaining a fair and competitive market,and promoting the sound development of the industry. In2023, the Company was invited to sign the Self-disciplineConvention for Increasing the Transparency of InternetPlatform Rules. It continuously strengthens the developmentof platform rules, adheres to the principles of openness,fairness, and impartiality, and respects public order and goodcustoms, continuously providing users with quality serviceexperiences.
The Company has always adhered to the philosophy of operation integrity and strictly observed business ethics, rankingon the list of 2023 "Top 500 Chinese Credit Enterprises".
Business Ethics andAnti-corruption
On May 4, 2023, the Internet Society of China (ISC) issued the Self-discipline Convention for Increasing theTransparency of Internet Platform Rules in Beijing. Seventy-one Internet companies, including KingNet Network,attended the issuance conference and signed the convention.The signing and implementation of the convention will form a joint force for industry self-discipline, furtherguiding and regulating platform companies to enhance the transparency of their platform rules, maintaining afair and orderly market, and promoting the sound and sustainable development of China's Internet industry.
Signing of Self-discipline Convention for Increasing the Transparency of InternetPlatform Rules
Abiding by Business Ethics
KingNet Network adheres to the core principles of "creation encouragement, e?ective utilization, legal protection, and scientic management" to continuously and e?ectively protectintellectual property. The Company strictly abides by laws and regulations such as the Patent Law of the People's Republic of China, the Copyright Law of the People's Republic ofChina, and the Trademark Law of the People's Republic of China. It has established ve internal systems, including the Intellectual Property Management System and the TrademarkManagement Measures, to establish an intellectual property management system. It respects the intellectual property of others while protecting its intellectual property from infringement.In 2023, the Company issued the Regulations on the Management of Commissioned Technology Development Business and the Regulations on the Management of IP Introduction andAdapted Game Projects, to clarify the ownership of intellectual property and prevent intellectual property disputes.
The Company has established whistleblowing channels, including email (jubao@kingnet.com), and postal address, to encourage all employees, business partners, and otherstakeholders to report any actual or potential corruption, fraud, and violations involving employees through emails, letters, etc. The Company's Supervision Department takes the lead incomprehensively investigating the reported matters, ensuring the condentiality of whistleblowers' personal information according to laws, regulations, and the Company's systems, andtaking corresponding measures to protect whistleblowers, witnesses, and investigators from retaliation.
Intellectual Property Protection
Whistleblowing Mechanism and Whistleblower Protection
New Intellectual Property Systems of KingNet Network in 2023
The regulations clarify the applicable standards in the process of acquiring IP resources, managing IP projects,introducing IPs, initiating IP projects, managing and supporting IP projects, and require the review of the authorizedIP ownership during IP introduction.
Before a commissioned technology development contract is signed, there should be su?cient communication withthe client to determine the owner of the product's intellectual property.Regulations on the Managementof Commissioned TechnologyDevelopment BusinessRegulations on the Management ofIP Introduction and Adapted Game
Projects
NameKey points
The Legal Department of the Company provided training on intellectual propertyapplications for business colleagues responsible for software copyright applications.The Company invited external lawyers to conduct specialized training themed "PrivacyRights, Intellectual Property, and Regulation".
Trademark and patentapplication and renewalIntellectual propertylitigation
Purchase of genuine
software
Special training onintellectual property
The Company completed a total of 94 trademark registration, renewal, and changeapplications and renewed 19 patents.The Company safeguarded its game IPs through litigation, and took measures toguarantee that the Company had not infringed upon the intellectual property of others.The Company purchased 270 sets of Adobe genuine software, with an authorizationperiod until December 11, 2026.The Company purchased 15 Founder types, including common font styles, with anauthorization period until October 8, 2026.
The Company signed the Industry Initiative to Protect Game Copyright.
Industrial ecosystem
development
Intellectual Property Management Measures and Achievements of KingNet Network in 2023
In 2023, the Company continuously strengthened intellectual property protection and managed intellectual property from dimensions such as trademark application and renewal,intellectual property protection litigation, and special training on intellectual property protection. In 2023, the Company did not see any incidents of infringing on the intellectual property ofothers.
Signing of Industry Initiative to Protect Game Copyright
Intellectual Property Training by External Lawyer
The Company employs di?erentiated supplier management and takes measures such as interviews,supplier performance assessment, and hierarchical management to incentivize and guide some keysuppliers.The Company completed the 2023 supplier assessment and issued rectication notices to two suppliers.
Supplier Lifecycle Management of KingNet Network
Assessment
RelationManagement
If a supplier violates business ethics or if the Company su?ers signicant losses due to the supplier'sinability to fulll its supply obligations, the Company will immediately terminate the cooperation withthat supplier.Exit
Before engaging suppliers, the Company conducts background checks on them, including qualicationaudits and on-site inspections, to ensure that their capabilities meet procurement needs, while alsoexaminingtheir performance in environmental and social responsibilities.Admission
The Company signs the Integrity and HonestyCommitment with suppliers, clarifying to suppliersand business partners its attitude of zero tolerancetowards corruption and jointly creating a cleansupply chain with suppliers. In 2023, a total of 89new suppliers signed the Integrity and HonestyCommitment.In terms of supplier data security management, theCompany has formulated systems, encompassingthe Project Outsourcing Management Regulationsand signs condentiality agreements with suppliers.The Company requires the suppliers to possessdata security protection capabilities and inspectssuppliers' compliance with laws, regulations, andindustry standards.
The types of suppliers for KingNet Network mainly include information technology, engineering construction, comprehensive materials, marketing planning, information products, andservice-related suppliers.A sustainable supplier system is critical for the Company to achieve long-term robust development. KingNet Network has established systems, encompassing the Supplier ManagementRules, to ensure that suppliers undergo systematic closed-loop management throughout the entire process from introduction, process management, and performance assessment, toexit. This ensures standardized procurement management procedures, a clear and transparent procurement process, and a procurement organization system with clear responsibilitiesand authorities, guaranteeing the quality, integrity, and transparency of procurement activities.
Supplier Sustainability Management
IndicatorUnit202120222023RevenueRMB 0,000237,530.36372,553.45429,539.03Total protRMB 0,00093,618.52138,427.44169,724.34
IndicatorUnit202120222023Total power consumptionkWh901,6882,098,7802,060,894Purchase of greenelectricity certicates
kWh————825,000Proportion of greenelectricity in annual powerconsumption
%————40.03Power consumptiondensity per unit operatingrevenue
kWh/
RMB 0,000
3.805.634.80
IndicatorUnit202120222023
Gasoline consumption ofself-owned vehicles
L——17,847.4742,452.00Scope 1 GHGemissions
,
tCO
e——39.0094.03Scope 2 GHG emissions
tCO
e523.881,197.22734.37Total GHG emissions(Scope 1+ Scope 2)
tCO
e523.881,236.22828.40GHG emission intensity(Scope 1 + Scope 2) perunit revenue
tCO
e/RMB million
0.220.330.19Total water consumptionm
368,9806,377Water consumptiondensity per unit revenue
m
/RMB 0,000
0.000150.0240.015
Note 1: [Statistical scope] The statistical scope for the total consumption and density of relevant types of energy and total water consumption and density in 2021 covers KingNet Network's Headquarters. In 2022 and 2023, the statistical scopefor the total consumption and density of electricity, total water consumption and density, and total waste covers KingNet Network and its subsidiaries Shanghai KingNet, Shanghai KingNet Software, Shanghai Doushi, and Zhejiang Shenghe. Theproperty fee of the Headquarters includes water fees that cannot be calculated separately. The water consumption of the Headquarters covers the water for the Company's reception and individual restrooms. Due to changes in statistical scopesof data, there were large changes in 2022 and 2023 compared to 2021. Gasoline consumption of self-owned vehicles covers Zhejiang Shenghe in 2022 and extends to KingNet Network and its subsidiaries Shanghai KingNet, Shanghai KingNetSoftware, Shanghai Doushi, and Zhejiang Shenghe which contributes to the big increase in data.Note 2: In 2023, the Company purchased a total of 825 green electricity certicates, each representing 1 MWh of green electricity, and the period when the electricity consumption was o?set lasted from January 1, 2023 to December 31, 2023.Note 3: The total GHG emissions includes the Scope 1 and Scope 2 GHG emissions. Scope 1 GHG emissions are direct GHG emissions generated by gasoline consumption of self-owned vehicles. The calculated GHG types include CO
, CH
,and N
O. The calculation coe?cients for GHG emissions generated by gasoline consumption follow the Accounting Method and Reporting Guide of GHG Emissions from Land Transportation Enterprises (Trial)(2015) issued by the NationalDevelopment and Reform Commission and the China Energy Statistical Yearbook (2022) published by the National Bureau of Statistics of China. Scope 2 GHG emissions are GHG emissions generated from purchased electricity and thecalculated GHG type is CO
. In 2021-2022, the Company calculated GHG from electricity generation based on location. In 2023, the Company disclosed GHG from electricity generation calculated based on both location and market. The Scope 1GHG based on location amounted to 1,175.33 tCO
e. The emission factor for purchased electricity is referenced from the Guidelines on Enterprise’s Greenhouse Gas Emission Accounting and Reporting for Power Generation Facilities (Revisedin 2022) and the Notice on the Management of Greenhouse Gas Emission Reporting for Power Generation Enterprises for 2023-2025 issued by the Ministry of Ecology and Environment of China. The Scope 2 GHG based on the market amountedto 734.37 tCO
e. The emission factor for purchased electricity (excluding non-fossil energy electricity traded in the market) is referenced from the Announcement of the Ministry of Ecology and Environment and the National Bureau of Statisticson the Release of Carbon Dioxide Emission Factors for Electricity in 2021. The emission factor for non-fossil energy electricity traded in the market is 0 tCO
per megawatt-hour.
ESG Data Performance TableEconomic Performance Table
Environmental Performance Table
IndicatorUnit202120222023Investment in socialpublic welfare
RMB1,848,100.003,949,670.506,516,983.39Of which:Public welfaredonation
RMB1,848,100.003,076,710.001,274,715.00
IndicatorUnit202120222023
Total number of employeesPerson1,3821,7021,869By gender
MalePerson1,0011,2471,366FemalePerson381455503By type ofemployment
Labor contractPerson1,3821,7021,869Labor dispatch systemPerson000Part-timePerson000By region
Chinese mainlandPerson1,3821,7021,869Hong Kong, Macau,Taiwan, and overseas
Person000
Community Investment Performance Table
IndicatorUnit202120222023
By age
Over 50 years oldPerson01230-50 years oldPerson618803927Under 30 years oldPerson764898940Percentage of female employees in themanagement
%————14.94Turnover of employees
%39.9417.8618.89By gender
Male%40.3617.8019.11Female%38.8518.0218.29By age
Over 50 years old%0100030-50 years old%34.6310.2114.35Under 30 years old%44.2424.6123.4Return rate of employees on parentalleave
%100100100Retention rate of employees onparental leave
%100100100Signing rate of labor contracts%100100100Percentage of employees acceptingregular performance and careerdevelopment assessment
%100100100Coverage of employees in training
%100100100By gender
Male%95.0135.7032.02Female%62.0364.3067.98
Employment and Training Performance Table
Note 1: In 2022, the Company was concerned about " industry-university-research" cooperation and made two largedonations (exceeding RMB 2 million), resulting in an increase in social welfare investment compared to 2021. In2023, the Company made a large material donation (with materials worth of more than RMB 5 million), resulting in anincrease in social welfare investment compared to 2022.
IndicatorUnit202120222023By employeetype
Senior management%6.670.960.66Middle management%50.964.657.22Front-line employee%73.5694.3992.12Training time per employee
Hour8.384.3818.84Total number of employeediscrimination incidents
No.000Percentage of employee deaths due towork-related injuries
%000Working days lost due to work-relatedinjuries
d000Incidence rate of work-related accidents%000Note 1: The management encompasses senior management and middle management.Note 2: [Calculation method] Turnover in each category of employees = number of employees who voluntarily resignedwithin the year/total number in each category of employees at the end of the year * 100.Note 3: [Calculation method] The statistical scope for 2021 was the actual return rate of female employees afterparental or nursing leave. The statistical scope for 2022 and 2023 covers male and female employees, with an additionof parental leave compared to 2021. Calculation formula: return rate of employees on parental leave = actual numberof employees returning to work after maternity leave, nursing leave, or parental leave/the number of employees whoshould return to work after maternity leave, nursing leave, or parental leave * 100. The statistical scope of the retentionrate of employees on parental leave covers female employees in the Company. Calculation formula: rate of employeeson parental leave = total number of female employees who have been on duty for 12 months after returning frommaternity or parental leave / total number of employees who returned to work after maternity leave or parental leavein the previous reporting period (2021) * 100.Note 4: [Calculation method] Percentage of employees accepting regular performance and career developmentassessment = employees accepting regular performance and career development assessment during the reportingperiod / total number of employees at the end of the reporting period * 100.Note 5: [Calculation method] Coverage of training for each category of employees = number in each category ofemployees receiving training / total number in each category of employees * 100.Note 6: [Calculation method] Training time per employee = total number of hours of training received by employeesduring the year / total number of employees. In 2023, there is an increase in the number of training hours per employeecompared to the previous two years due to the expansion of the statistical scope.
Note 1: The scope of the number of complaints and complaint handling rate covers the number of complaints receivedby the XY platform and 12345 Citizen Service Hotline. Complaint handling rate = number of complaints timely handledand resolved by the Company / number of complaints about products and services received by the Company withinthe year. In 2023, the categories of products launched by the Company, the number of users, and the number ofcomplaints increased compared to 2022.
IndicatorUnit202120222023
Number of complaints about productsand services
No.7070273Complaint handling rate
%100100100Total number of customer privacyviolations
No.000
Product Responsibility and CustomerService Performance Table
IndicatorUnit202120222023
Total number of suppliersNo.336401461Number of suppliers in Chinesemainland
No.335400460Number of suppliers in overseas andHong Kong, Macao and Taiwan (China)
No.111
IndicatorUnit202120222023
Number of completed corruptionlawsuits led against the issuer or itsemployees during the reporting period
No.000
Supply Chain Management Performance Table
Anti-corruption Performance Indicator Table
Clause and disclosureSection
8.1 Overview
Bu?: Sustainable CareJoining Forces to Help Employees GrowProtecting Security to Optimize UserExperienceStrengthening Governance to Ensure RobustOperation
8.2 Business Principles
Strengthening Governance to Ensure RobustOperation
8.3 Strategic Planning and Working Mechanism for
Social Responsibility
Sustainability Management System
8.4 Disclosure of Social Responsibility ReportsRequirements met
8.5 Protection of Employee Rights and InterestsJoining Forces to Help Employees Grow
8.6: (I)
Compliance with environmental protectionlaws and regulations and industrystandards
With: Sustainable Temperature
8.6: (II)Environmental protection programWith: Sustainable Temperature
8.6: (III)Natural resource useWith: Sustainable Temperature
8.6: (IV)Pollutant disposalWith: Sustainable Temperature
8.6: (V)Pollution prevention and control facilitiesN/A
8.6: (VI)
Payment of taxes and fees related toenvironmental protection
N/A
8.6: (VII)Supply chain environmental securityAbiding by Business Ethics
8.6: (VIII)
Other environmental protectionresponsibilities
With: Sustainable Temperature
8.7: (I)
Environmental protection policies,objectives and e?ectiveness
With: Sustainable Temperature
8.7: (II)Annual total resource consumptionWith: Sustainable Temperature
8.7: (III)
Environmental investment andenvironmental technology development
N/A
Clause and disclosureSection
8.7: (IV)Management of pollutant dischargesWith: Sustainable Temperature
8.7: (V)
Construction and operation of environmentalprotection facilities
N/A
8.7: (VI)
Waste treatment, disposal, recycling andcomprehensive utilization of waste products
With: Sustainable Temperature
8.7: (VII)
Voluntary agreements with environmentalauthorities
N/A
8.7: (VIII)
Incentives received from the environmentalauthorities
N/A
8.7: (IX)Other voluntary disclosuresWith: Sustainable Temperature
8.8 Environmental protection policy implementation and
corrective measures
N/A
8.9 Environmental Information DisclosureN/A
8.10: (I)
Product safety laws and regulations andindustry standards
Protecting Security to Optimize UserExperience
8.10: (II)Production environment and production processN/A
8.10: (III)
Product quality and safety guaranteemechanism and contingency plans
Protecting Security to Optimize UserExperience
8.10: (IV)
Other production and product safetyresponsibilities
N/A
8.11: (I)
Employee management system and measuresto deal with violations
Joining Forces to Help Employees Grow
8.11: (II)
Prevention of occupational hazards andsupporting safety measures
N/A
8.11: (III)Employee TrainingJoining Forces to Help Employees Grow
8.11: (IV)
Responsibilities for protecting the rights andinterests of other employees
Joining Forces to Help Employees Grow
8.12 Ethics of scienceRequirements met
8.13 Content of CSR reportRequirements met
Report Standard IndexIndex of Shenzhen Stock Exchange Guideline No. 1 on Self-Regulation of Listed Companies - StandardizedOperation of Companies Listed on the Main Board
Statement of use
KingNet Network has reported the information for the period fromJanuary 1, 2023 to December 31, 2023 with reference to the GRIStandards.GRI 1 usedGRI 1: Foundation 2021GRI StandardsDisclosureLocation
GRI 2:
GeneralDisclosures2021
2-1 Organizational detailsCompany Prole2-2 Entities included in the organization’ssustainability reporting
About the Report2-3 Reporting period, frequency andcontact point
About the Report2-4 Restatements of information
ESG Data
Performance Table2-5 External assurance
Appendix: Third-Party
Independent Audit Report2-6 Activities, value chain and otherbusiness relationships
Company Prole2-7 Employees
Company Prole
ESG Data Performance Table2-8 Workers who are not employeesESG Data Performance Table2-9 Governance structure and composition
Consolidating the Foundation of
Governance
2023 Annual Report2-10 Nomination and selection of thehighest governance body
2023 Annual Report2-11 Chair of the highest governance body2023 Annual Report2-12 Role of the highest governance bodyin overseeing the management of impacts
Sustainability Management
System2-13 Delegation of responsibility formanaging impacts
Sustainability Management
System
GRI StandardsDisclosureLocation
GRI 2:
GeneralDisclosures2021
2-14 Role of the highest governance bodyin sustainability reporting
Message from the ChairmanSustainability ManagementSystem2-15 Conicts of interest2023 Annual Report2-16 Communication of critical concerns
Sustainability ManagementSystem2-17 Collective knowledge of the highestgovernance body
Sustainability ManagementSystem2-22 Statement on sustainable developmentstrategy
Sustainability ManagementSystem2-25 Processes to remediate negativeimpacts
Consolidating the Foundation ofGovernanceEmployment and Protection ofEmployees' Rights and Interests2-27 Compliance with laws and regulations
Employment and Protection ofEmployees' Rights and InterestsCreating a Clean NetworkEnvironmentConsolidating the Foundation ofGovernanceAbiding by Business Ethics2-29 Approach to stakeholder engagementCommunication with StakeholdersGRI 3:
MaterialTopics 2021
3-1 Process to determine material topicsAnalysis of Material Topics3-2 List of material topicsAnalysis of Material Topics3-3 Management of material topicsAnalysis of Material TopicsGRI 201:
EconomicPerformance2016
201-1 Direct economic value generated anddistributed
2023 Sustainability HighlightsESG Data Performance Table201-2 Financial implications and other risksand opportunities due to climate change
With: Sustainable Temperature201-3 Dened benet plan obligations andother retirement plans
Employment and Protection of
Employees' Rights and Interests
Content Index of GRI Sustainability Reporting Standards
GRI StandardsDisclosureLocationGRI 308:
SupplierEnvironmentalAssessment2016
308-2 Negative environmental impacts inthe supply chain and actions taken
Abiding by Business Ethics
GRI 401:
Employment2016
401-1 New employee hires and employeeturnover
ESG Data Performance Table401-2 Benets provided to full-timeemployees that are not provided totemporary or part-time employees
Employment and Protection of
Employees' Rights and Interests401-3 Parental leaveESG Data Performance Table
GRI 403:
OccupationalHealth andSafety 2018
403-3 Occupational health services
Employment and Protection of
Employees' Rights and Interests403-4 Worker participation, consultation,and communication on occupational healthand safety
Employment and Protection of
Employees' Rights and Interests403-5 Worker training on occupationalhealth and safety
Employment and Protection of
Employees' Rights and Interests403-6 Promotion of worker health
Employment and Protection of
Employees' Rights and Interests403-7 Prevention and mitigation ofoccupational health and safety impactsdirectly linked by business relationships
Employment and Protection of
Employees' Rights and Interests403-9 Work-related injuriesESG Data Performance TableGRI 404:
Training andEducation2016
404-1 Average hours of training per yearper employee
ESG Data Performance Table404-2 Programs for upgrading employeeskills and transition assistance programs
Human Capital Development404-3 Percentage of employeesreceiving regular performance and careerdevelopment reviews
ESG Data Performance Table
GRI StandardsDisclosureLocation
GRI 203:
IndirectEconomicImpacts 2016
203-2 Signicant indirect economic impacts
Engaging in Public Welfare toSend KingNet’s LoveGRI 205:
Anti-corruption2016
205-2 Communication and training aboutanti-corruption policies and procedures
Abiding by Business Ethics205-3 Conrmed incidents of corruptionand actions taken
Abiding by Business EthicsGRI 302:
Energy 2016
302-1 Energy consumption within theorganization
ESG Data Performance Table302-3 Energy intensityESG Data Performance Table302-4 Reduction of energy consumptionWith: Sustainable TemperatureGRI 303:
Water andE?uents 2018
303-5 Water consumptionESG Data Performance TableGRI 305:
Emissions2016
305-1 Direct (Scope 1) GHG emissionsESG Data Performance Table
305-2 Energy indirect (Scope 2) GHG
emissions
ESG Data Performance Table
305-4 GHG emissions intensityESG Data Performance Table
GRI 306:
Waste 2020
306-1 Waste generation and signicant
waste-related impacts
Contributing to GreenDevelopment and Implementingthe Concept of EnvironmentalProtection
306-2 Management of signicant waste-
related impacts
Contributing to GreenDevelopment and Implementingthe Concept of EnvironmentalProtection
306-3 Waste generated
Contributing to GreenDevelopment and Implementingthe Concept of EnvironmentalProtection
GRI StandardsDisclosureLocationGRI 416:
CustomerHealth andSafety 2016
416-1 Assessment of the health and safetyimpacts of product and service categories
Creating a Clean NetworkEnvironmentProviding Quality Content andServices416-2 Incidents of non-complianceconcerning the health and safety impacts ofproducts and services
None in 2023
GRI 417:
Marketing andLabeling 2016
417-1 Requirements for product andservice information and labeling
Creating a Clean NetworkEnvironmentProviding Quality Content andServices417-2 Incidents of non-complianceconcerning product and service informationand labeling
Providing Quality Content andServices417-3 Incidents of non-complianceconcerning marketing communications
Creating a Clean NetworkEnvironmentGRI 418:
CustomerPrivacy 2016
418-1 Substantiated complaints concerningbreaches of customer privacy and losses ofcustomer data
ESG Data Performance Table
GRI StandardsDisclosureLocation
GRI 405:
Diversityand EqualOpportunity2016
405-1 Diversity of governance bodies andemployees
ESG Data Performance TableGRI 406:
Non-discrimination2016
406-1 Incidents of discrimination andcorrective actions taken
Employment and Protection of
Employees' Rights and InterestsGRI 408:
Child Labor2016
408-1 Operations and suppliers atsignicant risk for incidents of child labor
Employment and Protection of
Employees' Rights and InterestsGRI 409:
Forced orCompulsoryLabor 2016
409-1 Operations and suppliers atsignicant risk for incidents of forced orcompulsory labor
Employment and Protection of
Employees' Rights and InterestsGRI 413:
LocalCommunities2016
413-1 Operations with local communityengagement, impact assessments, anddevelopment programs
Bu?: Sustainable Care413-2 Operations with signicant actualand potential negative impacts on localcommunities
Bu?: Sustainable CareGRI 414:
Supplier SocialAssessment2016
414-2 Negative social impacts in the supplychain and actions taken
Abiding by Business Ethics
This is the second Sustainability Report and the ninth ESG Report released by KingNet Network Co., Ltd. It aims to disclose to all stakeholders the principles, management methods,e?orts and achievements of the Company in sustainable development topics during its operation.
Scope of organization: The Report covers KingNet Network Co., Ltd. and its subsidiaries.Unless otherwise specified, the scope hereof remains consistent with that in theconsolidated nancial statements of KingNet Network (stock code: 002517.SZ) over thesame period. The full and short names of the Company and subsidiaries involved in theReport are as follows:
The Report is prepared in accordance with the Shenzhen Stock Exchange GuidelineNo. 1 on Self-Regulation of Listed Companies - Standardized Operation of CompaniesListed on the Main Board (revised in December 2023) and with reference to the GRISustainability Reporting Standards 2021 of the Global Sustainability Standards Board(GSSB).Full NameShort NameKingNet Network Co., Ltd.KingNet Network, the Company or weShanghai Doushi Network Technology Co., Ltd.Shanghai DoushiShanghai KingNet Network Technology Co., Ltd.Shanghai KingNetShanghai KingNet Software Technology Co., Ltd.Shanghai KingNet SoftwareZhejiang Shenghe Network Technology Co., Ltd.Zhejiang ShengheShaoxing Shengwang Network Technology Co., Ltd.Shaoxing ShengwangTime range: The reporting period is from January 1, 2023 to December 31, 2023. Unlessotherwise stated, the data in the Report are those within this period.Release cycle: This is an annual report. The previous report was the 2022 Annual Report.Date of the rst release: April 2016, Social Responsibility Report
About the Report
Scope of ReportBasis of Preparation
The data and cases in the Report are derived from official records of the actualoperation of the Company. The nancial data in the Report are all in RMB. In case of anydiscrepancy with the Company's annual nancial report, the annual nancial report shallprevail.
Data Description
·MaterialityThe Company identified the material topics related to the operation that all stakeholders areconcerned about as the highlights of the Report. The presentation of material topics in the Reportfocuses on the industry characteristics involved in the Company's operations and the characteristicsof the region where it is located. See the "Communication with Stakeholders and Analysis of MaterialTopics" in the Report for analysis and results of material topics.
·AccuracyThe Report ensures that the information is as accurate as possible. The data standard, calculationbasis, and assumption conditions have been explained in the quantitative information to guaranteethat the calculation error range will not mislead the users. Quantitative information and notes aredetailed in the Report.The Board of Directors warrants that there are no false records, misleading statements, or materialomissions in the Report.·Impartiality
The Report reects objective facts and impartially discloses positive and negative information relatedto the Company. Against the objects within the scope of the Report, the Company found no negativeevents that should have been disclosed but were not disclosed during the reporting period.·Clarity
The Report is published in simplified Chinese and English. In case of any discrepancy betweenthe two versions, the simplified Chinese version shall prevail. The Report contains informationsuch as tables, diagrammatic gures, and a glossary of terms as a supplement to facilitate a betterunderstanding by stakeholders. To facilitate faster access to information for stakeholders, the Reportprovides a table of contents and a benchmarking index of ESG standards.
·Quantication and ConsistencyThe Report discloses key quantitative performance indicators and, where possible, historical data.The statistics and disclosure of the same indicator in the Report are consistent from one reportingperiod to another; any change shall be fully explained in the notes to the Report so that stakeholderscan conduct meaningful analyses and assess the trend of the Company's ESG performance level.See details in the ESG Data Performance Table.·Integrity
The scope of the disclosure object shall be in line with that of the Company's consolidated nancialstatements.
·TimelinessThe Report is an annual report and the Company endeavors to publish the Report as soon aspossible after the end of the reporting year to provide stakeholders with timely information fordecision-making.·VeriabilityThe cases and data in the Report come from the original records or financial reports of theCompany's actual operations. The Company has adopted the HiESG performance managementsystem to administrate its quantitative sustainability performance over the years so that the source ofthe disclosed data and the calculation process can be traced.
Principles of Preparation
SGS-CSTC Standard Technical Services Co., Ltd. (SGS) independently audited The data in theReport, relevant policies, and management systems. See "Appendix: Third-Party Independent AuditReport" for the details of the Audit Report.External Audit
To continuously improve sustainability and ESG information disclosure,we particularly welcome your opinions and suggestions. Please scanthe QR code to leave your feedback on the Report or contact usthrough the following ways:
Address: 3F, Building 3, Pujiang High-tech Plaza, No. 2388, ChenhangHighway, Minhang District, ShanghaiEmail: csr@kingnet.com
Contact Us
The Report is published in electronic form on the o?cial website of the Company, SZSE, Cninfo.
Access to the Report
Message from the Chairman Sustainability Highlights in 2023 About KingNet Sustainability Management System Part I: Sustainability Part II: ESG Management and Performance AppendixAppendix: Third-Party Independent Audit Report