Company Code: 603163 Company Abbreviation : Acter Group
Acter Technology Integration Group Co.,
Ltd.Annual Report 2023
Important Notices
I. The Board of Directors, Supervisory Committee, Directors, Supervisors and Senior Management ofthe Company guarantee the truthfulness, accuracy and completeness of the contents of the annualreport, and assume individual and joint legal liabilities for any false records, misleading statements ormaterial omissions.II. All Directors of the Company attended the Board meeting.III. ShineWing Certified Public Accountants LLP has issued a standard unreserved audit report forthe Company.IV. Liang Jinli, the person in charge of the Company, Chen Zhihao, the person in charge of accountingwork, and Xiao Jingxia, the person in charge of the accounting organization (accounting supervisor)hereby certify that the financial report set out in the annual report is true, accurate and complete. V.Proposals for profit distribution or capitalization of provident fund for the reporting period adoptedby resolution of the Board of DirectorsThe Board of Directors of the Company proposes to distribute a cash dividend of RMB 8 (inclusive of tax)for every 10 shares to all shareholders on the basis of the total share capital of 100 million shares as at theend of 2023, totaling RMB 80,000,000.00 (inclusive of tax), with no stock dividend or capitalization, andthe remaining undistributed profits will be carried forward to be distributed in future years.VI. Risk Disclosure of Forward-Looking Statements
√ Applicable □ N/A
The forward-looking descriptions of future plans, development strategies and other forward-lookingstatements in this report do not constitute substantial commitments of the Company to investors, andinvestors are advised to pay attention to investment risks.
VII. Whether there is non-operational appropriation of funds by controlling shareholders and otherrelated partiesNoVIII. Whether there is any violation of the required decision-making procedures for the provision ofexternal guaranteesNoIX. Whether more than half of the directors are unable to guarantee the truthfulness, accuracy andcompleteness of the annual report disclosed by the CompanyNoX. Significant Risk WarningFor details, please refer to the possible risks mentioned in “Section III: Management Discussion and AnalysisVI、Discussion and Analysis of the Future Development of the Company (IV) Possible Risks”.XI. Others
□ Applicable √ N/A
Table of Contents
Section I Definitions ...... 4
Section II Company Profile and Key Financial Indicators ...... 6
Section III Management Discussion and Analysis ...... 11
Section IV Corporate Governance ...... 42
Section V Environmental and Social Responsibility ...... 64
Section VI Important Events ...... 66
Section VII Changes in Shares and Information about Shareholders ...... 87
Section VIII Relevant Information of Preferred Stock ...... 96
Section IX Relevant Information of Bonds ...... 97
Section X Financial Reporting ...... 97
| Catalog of Documents Available for Inspection | The full text and abstract of this annual report signed by the current legal representative and sealed by the Company; |
| Financial statements containing the signatures and seals of the person in charge of the company, the person in charge of accounting work, and the person in charge of the accounting organization (accounting supervisor). | |
| The original audit report containing the seal of the accounting firm and the signature and seal of the certified public accountant; | |
| The originals of all the Company’s documents and announcements publicly disclosed in the newspapers designated by the CSRC during the reporting period. |
Section I DefinitionsI.DefinitionsIn this report, unless the context otherwise requires, the following terms shall have the meanings set outbelow:
| Definitions of commonly used terms | ||
| Company, the Company, Acter Group, Suzhou Acter | refer to | Acter Technology Integration Group Co., Ltd. |
| Sheng Huei Limited | refers to | Sheng Huei (Suzhou) Engineering Co., Ltd., the predecessor of the Company |
| Sheng Huei International | refers to | Sheng Huei International Co., Ltd., a direct controlling shareholder of the Company |
| Acter (Taiwan) | refers to | Acter Co., Ltd., an indirect controlling shareholder of the Company |
| Suzhou Songhuei | refers to | Suzhou Songhuei Business Management Consulting Partnership (Limited Partnership), an employee shareholding platform of the Company |
| Suzhou Shengzhan | refers to | Suzhou Shengzhan Business Management Consulting Partnership (Limited Partnership), a platform for shareholding by employees of the Company |
| Acter (Shenzhen) | refers to | Shenghuei Engineering Technology (Shenzhen) Co., Ltd. |
| Shenzhen Dingmao | refers to | Shenzhen Dingmao Trading Co., Ltd. |
| Acter (Vietnam) | refers to | Sheng Huei Engineering Technology Company Limited |
| Acter (Hong Kong) | refers to | Acter International Limited |
| Acter (Singapore), Sheng Huei (Singapore) | refer to | Acter Technology Singapore Pte. Ltd. |
| Acter (Indonesia), Sheng Huei (Indonesia) | refer to | Pt. Acter Technology Indonesia |
| Acter (Malaysia), Sheng Huei (Malaysia) | refer to | Acter Technology Malaysia Sdn. Bhd. |
| Acter (Thailand), Sheng Huei (Thailand) | refer to | Acter Technology Company Limited |
| Space (Thailand) | refers to | Space Engineering Company Limited |
| New Point (Seychelles) | refers to | New Point Group Limited |
| Indonesia Joint Venture | refers to | Pt. Acter Integration Technology Indonesia |
| HER SUO (Taiwan) | refers to | HER SUO ENG., CO., LTD. |
| Enrich (Taiwan) | refers to | Enrich Tech Co., Ltd. |
| NOVA (Taiwan) | refers to | NOVA Technology Corp. |
| Winmega (Taiwan) | refers to | Winmega Technology Corp. |
| WASTE | refers to | WASTE Recovery Technology Inc. |
| Winmax (Shanghai) | refers to | Winmax Technology Corp. |
| Winmax (Suzhou) | refers to | Suzhou Winmax Technology Corp. It used to be called Suzhou Guanbo Controlling Technology Co., Ltd. |
| Novatech (Singapore) | refers to | Novatech Engineering & Construction Pte. Ltd. |
| Rayzher Industrial | refers to | Rayzher Industrial Co., Ltd. |
| SMIC | refers to | Smic Manufacturing (Shaoxing) Co., LTD |
| Foxconn Technology Group | refers to | Lankao Yufu Precision Technology Co., Ltd., Futaihua Industrial (Shenzhen) Co., Ltd., Shanghai Foxconn Co., Ltd., Yecheng Optoelectronics (Wuxi) Co., Ltd. ., Interface Optoelectronics (SZ) Co., Ltd. , Interface Technology (Chengdu) Co., Ltd. |
| Siliconware Technology | refers to | Siliconware Technology (Suzhou) Limited Quliang Electronics Co., Ltd |
| Sanan Integrated | refers to | Xiamen Sanan Integrated Circuit Co., Ltd. |
| Wistron InfoComm | refers to | Wistron Info Comm Co., Ltd. |
| ASE | refers to | ASE WeiHai Inc. |
| Nexchip | refers to | Nexchip Semiconductor Corporation |
| Wafer Works | refers to | Wafer Works (Shanghai) Co., Ltd. |
| Reporting Period | refers to | The period from January 1, 2023 to December 31, 2023 |
| Articles of Association | refers to | Articles of Association of Acter Technology Integration Group Co., Ltd. |
| General Meeting | refers to | General Meeting of Shareholders of Acter Technology Integration Group Co., Ltd. |
| Board of Directors | refers to | The Board of Directors of Acter Technology Integration Group Co., Ltd. |
| Supervisory Committee | refers to | Supervisory Committee of Acter Technology Integration Group Co., Ltd. |
| CSRC | refers to | CSRC |
| Company Law | refers to | Company Law of the People’s Republic of China |
| Securities Law | refers to | Securities Law of the People’s Republic of China |
| RMB/Yuan, RMB Million/100, RMB Million*100 | refer to | Renminbi/Chinese Yuan, RMB Ten Thousand Yuan, RMB One Hundred Million Yuan |
| Clean Room | refers to | an enclosed space for high-end manufacturing industry, also known as clean plant and clean room, to control airborne particles, harmful gases, microorganisms, temperature, relative humidity, spatial airflow distribution, airflow speed in all directions, as well as vibration, static electricity, electromagnetic interference and noise, etc., in order to satisfy the needs of the production process of products. |
| Cleanliness | refers to | the concentration of dust existedin the air within an air environment. Typically, it refers to the quantity of particles equal to or exceeding a specified particle size within a designated volume of air. Elevated dust levels are linked to reduced cleanliness, whereas low dust content signifies high cleanliness. |
| System Integration | refers to | the business of combining software, hardware and communication technology to solve information processing problems for users. The separated parts of the integration |
| are originally independent systems, and the parts of the integrated whole can work organically and coordinately with each other to bring out the overall effect and achieve the purpose of overall optimization. | ||
| Hook-up | refers to | the connection from the main system piping to the process equipment. Scope includes electricity, water supply and drainage pipes, process piping, exhaust systems, etc. |
| IC Semiconductor | refers to | a semiconductor manufacturing process in which a number of transistors, resistors, capacitors, and other components are fabricated on a small monocrystalline silicon wafer and assembled into a complete electronic circuit using multi-layer wiring or tunnel wiring. |
| Package | refers to | the shell in which a semiconductor integrated circuit chip is mounted, which not only plays the role of placing, fixing, sealing, protecting the chip and enhancing the electrical and thermal properties, but also serves as a bridge between the internal and external circuits of the chip. |
| Electronics Industry | refers to | an industrial sector that manufactures electronic equipment, electronic components, electronic devices, and specialized raw materials. It mainly produces electronic computers, televisions, radios, and equipment for communication, radar, broadcasting, navigation, electronic control, and electronic instrumentation; resistors, capacitors, inductors, printed circuit boards, plug-in components, and devices such as tubes, transistors, and integrated circuits; as well as high-frequency magnetic materials, high-frequency insulating materials, and semiconductor materials, and other specialized raw materials. |
| BIM | refers to | Building Information Modeling in short, which is a new tool for architecture, engineering and civil engineering, and is a computer-aided design tool based on three-dimensional graphics, object orientation and architecture. |
| PCB | refers to | Printed Circuit Board in short, which is an important electronic component, the support body of electronic components, and the carrier for the electrical interconnection of electronic components. |
| EPCO | refers to | the general contracting entrusted by the owner, in accordance with the contract for the whole process of design, procurement, construction, operation and other integration of engineering construction projects. |
| GMP | refers to | Good Manufacturing Practice in short, a system for ensuring the continuous production of pharmaceutical products at a specified quality. |
Section II Company Profile and Key Financial IndicatorsI. Company Information
| Full Legal Name in Chinese | 圣晖系统集成集团股份有限公司 |
| Short Legal Name in Chinese | 圣晖集成 |
| Full Legal Name in English | ACTER TECHNOLOGY INTEGRATION GROUP CO., LTD. |
| Short Legal Name in English | ACTER GROUP |
| Legal Representative | Liang Jinli |
II. Contact Information
| Secretary of the Board of Directors | Securities Representative | |
| Name | Chen Zhihao | Gao Jiejie |
| Address | No. 189, Shilin Road, Xushuguan Economic Development Zone, Suzhou Hi-Tech Zone, Jiangsu Province, China | No. 189, Shilin Road, Xushuguan Economic Development Zone, Suzhou Hi-Tech Zone, Jiangsu Province, China |
| Tel. | 0512-85186368 | 0512-85186368 |
| Fax | 0512-87773169 | 0512-87773169 |
| acter.china@acter.com.cn | 603163@acter.com.cn |
III. Basic Information
| Registered Address | No. 189, Shilin Road, Xushuguan Economic Development Zone, Suzhou Hi-Tech Zone, Jiangsu Province, China |
| Historical Changes in Registered Address | N/A |
| Business Address | No. 189, Shilin Road, Xushuguan Economic Development Zone, Suzhou Hi-Tech Zone, Jiangsu Province, China |
| Zip Code of the Business Address | 215151, Suzhou |
| Company’s Website | www.acter.com.cn |
| acter.china@acter.com.cn |
IV. Place for Information Disclosure and Deposit
| Name and website of the media for information disclosure in annual report | China Securities Journal: https://www.cs.com.cn/ Shanghai Securities News: https://www.cnstock.com/ STCN: http://www.stcn.com/ Securities Daily: http://www.zqrb.cn/ |
| Website of the stock exchange for publishing annual reports | www.sse.com.cn |
| Deposit place of annual report | Office of the Board of Directors of Acter Group, No. 189, Shilin Road, Xuushuguan Economic Development Zone, Suzhou Hi-Tech Zone, Jiangsu Province, China |
V. Profile of Company Stock
| Profile of Company Stock | ||||
| Stock Type | Stock Exchange of Shares Listed | Stock Short Name | Stock Code | Stock Short Name Before Change |
| A-share | Shanghai Stock Exchange | Acter Group | 603163 | N/A |
VI. Other Information
| Accounting Firm engaged by the Company (domestic) | Name of Firm | ShineWing Certified Public Accountants LLP |
| Business Address | 8/F, Block A, Fuhua Mansion, No. 8 Chaoyangmen North Street, Dongcheng District, Beijing, China |
| Name of the Signatory Accountants | Liu Yuehua, Hou Shoufeng | |
| Sponsoring organization performing continuous supervision during the reporting period | Name of Sponsor | Soochow Securities Co., Ltd. |
| Office Address | No. 5 Xingyang Street, Suzhou Industrial Park | |
| Name of Signatory Sponsor Representative | Xia Jianyang, Zhang Boxiong | |
| Period of Continuous Supervision | October 13, 2022 to December 31, 2024 |
VII. Key Accounting Data and Financial Indicators for the Previous Three Years(I) Key Accounting Data
Unit: Yuan Currency: RMB
| Key Accounting Data | 2023 | 2022 | Yoy change (%) | 2021 |
| Operating revenue | 2,008,924,995.68 | 1,627,895,120.49 | 23.41 | 1,702,334,398.59 |
| Net profit attributable to shareholders of listed companies | 138,590,474.42 | 122,867,982.79 | 12.80 | 123,603,770.26 |
| Net profit attributable to shareholders of the listed company after extraordinary gains and losses | 136,061,341.30 | 113,463,515.78 | 19.92 | 123,839,170.02 |
| Net cash flows from operating activities | 133,522,931.23 | 161,089,465.80 | -17.11 | -64,818,199.36 |
| End of 2023 | End of 2022 | Yoy change (%) | End of 2021 | |
| Net assets attributable to shareholders of listed companies | 1,082,257,514.27 | 1,009,348,273.61 | 7.22 | 423,289,612.23 |
| Total assets | 1,904,362,490.44 | 1,777,146,294.25 | 7.16 | 1,159,716,566.13 |
(II) Key Financial Indicators
| Key Financial Indicators | 2023 | 2022 | Yoy change (%) | 2021 |
| Basic earnings per share (yuan/share) | 1.39 | 1.51 | -7.95 | 1.65 |
| Diluted earnings per share (yuan/share) | 1.39 | 1.51 | -7.95 | 1.65 |
| Basic earnings per share after extraordinary gains and losses (yuan/share) | 1.36 | 1.40 | -2.86 | 1.65 |
| Weighted average return on net assets (%) | 13.67 | 21.19 | Decrease of 7.52% | 33.59 |
| Weighted average return on equity after extraordinary gains and losses Average return on net assets (%) | 13.42 | 19.56 | Decrease of 6.14% | 33.65 |
Explanations on key accounting data and financial indicators of the Company for the previous three yearsas at the end of the reporting period
√ Applicable □ N/A
According to the “Proposal on the Profit Distribution Plan for the Year 2022” considered and approvedat the Sixth Meeting of the Second Session of the Board of Directors and the Fifth Meeting of the Second
Session of the Supervisory Committee of the Company held on April 7, 2023 and the Annual GeneralMeeting of the Company held on April 28, 2023, based on the total share capital of 80,000,000 shares priorto the implementation of the equity distribution, the Company transferred 2.5 shares for every 10 shares toall shareholders by way of capitalization of capital reserve, resulting in a total of 20,000,000 shares. Afterthis capitalization, the total share capital of the Company became 100,000,000 shares. The equity distributionwas completed during the reporting period. In order to ensure the comparability of accounting indicators, thebasic earnings per share for 2022 and 2021 have been recalculated and presented based on the changednumber of shares.
VIII. Differences in Accounting Data under Domestic and Overseas Accounting Standards(I) Difference in net profit and net assets attributable to shareholders of the listed company betweenthe financial reports disclosed in accordance with international accounting standards and thosedisclosed in accordance with China accounting standards
□ Applicable √ N/A
(II) Difference in net profit and net assets attributable to shareholders of the listed company betweenthe financial reports disclosed in accordance with overseas accounting standards and thosedisclosed in accordance with China accounting standards
□ Applicable √ N/A
(III) Explanation of the differences between domestic and overseas accounting standards:
□ Applicable √ N/A
IX. Key Financial Data of 2023 by Quarter
Unit: Yuan Currency: RMB
| Q1 (January-March) | Q2 (April-June) | Q3 (July-September) | Q4 (October-December) | |
| Operating Revenue | 419,848,138.55 | 495,472,283.17 | 530,389,260.88 | 563,215,313.08 |
| Net profit attributable to shareholders of listed companies | 36,223,388.39 | 40,844,180.88 | 37,061,523.72 | 24,461,381.43 |
| Net profit after extraordinary gains and losses attributable to shareholders of listed companies | 34,320,192.92 | 41,129,128.30 | 36,239,469.39 | 24,372,550.69 |
| Net cash flows from operating activities | -32,077,131.59 | 73,739,081.78 | -99,323,932.35 | 191,184,913.39 |
Explanation of differences between quarterly data and data in disclosed periodic reports
□ Applicable √ N/A
X. Non-recurring Profit and Loss and Amount
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Non-recurring profit and loss items | Amount for 2023 | Note (If applicable) | Amount for 2022 | Amount for 2021 |
| Profits or losses on disposal of non-current assets, including elimination of provision for asset impairment | 52,564.23 | 237,578.33 | 352,738.82 | |
| Government grants recognized in profit or loss for the current period, except for those government grants that are closely related to | 3,731,552.00 | 3,524,827.14 | 174,197.46 |
| the Company’s normal business operations, in line with national policies and in accordance with defined criteria, and have a continuing impact on the Company’s profit or loss | ||||
| Profits or losses from changes in fair value of financial assets and liabilities held by non-financial enterprises and profits or losses from the disposal of financial assets and liabilities, except for effective hedging business related to the Company’s normal business operations | 117,673.57 | -11,643.74 | ||
| Occupancy fees charged to non-financial enterprises recognized in profit or loss for the period | ||||
| Profits or losses on entrusted investment or asset management | ||||
| Profits or losses on entrusted external loans | ||||
| Losses on assets due to force majeure, such as natural disaster | ||||
| Reversal of provision for impairment of receivables individually tested for impairment | -35,000.00 | |||
| Gain arising from the difference between the cost of investment in subsidiaries, associates and joint ventures and the fair value of net identifiable assets of the investee at the time of investment acquisition | ||||
| Subsidiaries arising from a business combination under the same control Net gain or loss for the period from the beginning of the period to the date of the combination | ||||
| Gain or loss on exchange of non-monetary assets | ||||
| Profits or losses on debt restructuring | ||||
| One-time costs incurred by the enterprise due to discontinuation of relevant business activities, such as employee relocation expenses, etc. | ||||
| One-time impact on profit or loss due to adjustments in tax, accounting and other laws and regulations. | ||||
| One-time share-based payment expenses recognized due to cancellation or modification of the share incentive plan | ||||
| Gains or losses arising from changes in the fair value of employee remuneration payable after the feasible date for cash-settled share-based payments | ||||
| Gains or losses from changes in fair value of investment properties subsequently measured using the fair value model | ||||
| Profits or losses from transactions with an apparent unfair price | ||||
| Gains or losses arising from contingencies unrelated to the Company’s normal business operations | ||||
| Custodian fee income from entrusted operations |
| Non-operating revenue and expenses other than those mentioned above | -811,609.16 | -840,019.94 | -785,670.35 | |
| Other profits or losses that meet the definition of non-recurring profits or losses | 9,569,293.94 | |||
| Less: Income tax effect | 445,099.41 | 3,204,886.03 | -69,978.05 | |
| Effect of minority interests (after tax) | -1,725.46 | |||
| Total | 2,529,133.12 | 9,404,467.01 | -235,399.76 |
If the company recognizes as non-recurring profit and loss items that are not listed in “InterpretativeAnnouncement for Information Disclosure of Companies Issuing Public Securities No. 1 - Non-RecurringProfit and Loss” and the amount is material, and if the company defines non-recurring profit and loss itemslisted in “Interpretative Announcement for Information Disclosure of Companies Issuing Public SecuritiesNo. 1 - Non-Recurring Profit and Loss” as recurring profit and loss, the reasons shall be explained.
□ Applicable √ N/A
XI. Items Measured Using Fair Value
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item Name | Opening balance | Closing balance | Current period changes | Amount of impact on current profit |
| Structured deposits | 122,119,888.89 | 0 | 122,000,000.00 | -119,888.89 |
| Total | 122,119,888.89 | 0 | 122,000,000.00 | -119,888.89 |
XII. Others
□ Applicable √ N/A
Section III Management Discussion and Analysis
I. Discussion and Analysis of Operating ConditionsIn 2023, the Company continues to implement the corporate culture policy of “doing it right the firsttime, doing it well every time”, consistently and wholeheartedly providing comprehensive services to everyclient, and is committed to becoming a creator of high-quality spaces. Looking back on the past year,“involution” has become the best summary cliche of the increasingly intense Chinese market competition,while the foreign market is facing pressure due to the increase in labor cases, leading to a shortage of versatileand professional talents. Facing the complex Chinese and international business environment, the Companycontinuously optimizes internal processes, actively takes risk response measures, focuses on the quarterlybusiness goals conveyed by the lean meeting, and implements strategic measures with small steps and steadyprogress. It diligently organizes various tasks, actively adjusts client and product structures, and lays a goodfoundation for stability and improvement of competitiveness in terms of cost, quality, safety, progress, andenvironmental protection.
The year of 2023 marks a year in which the Company’s research and development technologyachievements are demonstrated. During the reporting period, the Company was honored as a “high-techenterprise”. As of the end of 2023, the Company held 61 patents, including 9 invention patents, 52 utilitymodel patents, and 3 software copyrights.
In 2023, the Company achieved steady growth in its business performance. The annual business goalswere met as scheduled, with substantial increases in both revenue and net profit. During the reporting period,the Company achieved operating revenue of RMB 2,009 million, an increase of 23.41% year-on-year, and anet profit of RMB 140 million, an increase of 13.86% year-on-year. The Company’s performance growthwas mainly due to increased demand from downstream application clients in the clean room industry, thefruitful results of the Company’s early layout in the Southeast Asia region, continuous development of newclients while maintaining stable relationships with existing high-quality clients, and strengthening serviceinnovation capabilities and overall competitiveness through talent development, skills training, and industry-university-research cooperation. The Company’s management team led all employees in standing up toexternal pressures, overcoming internal difficulties, and making strenuous efforts to successfully fulfill themain objective tasks.
As of the end of 2023, the Company has held a total of 61 authorized patents,including 9 invention patents, 52 utility model patents, and 3 softwarecopyrights. Besides, the Company has also registered a total of 15 trademarks.Operating Revenue (RMB 100 million)
Operating Revenue (RMB 100 million)Year-on-yeargrowth rate:
23.41%
Year-on-yeargrowth rate:
23.41%
2022
| 2022 | 2023 |
RMB 1,628 million
RMB 1,628 millionRMB 2,009 million
RMB 2,009 millionNet profit (RMB 100 million)
Net profit (RMB 100 million)Year-on-yeargrowth rate:
13.86%
Year-on-yeargrowth rate:
13.86%
2022
| 2022 | 2023 |
RMB 123 million
RMB 123 millionRMB 140 million
II. Industry in which the Company operated during the reporting period(I) Basic Overview of the Industry
The Company is primarily engaged in providing clean room system integration engineering solutionsfor the advanced manufacturing industry as a professional service provider. According to the classificationstandards of the “National Economic Industry Classification” and the “Industry Classification Guidelines forListed Companies” issued by the CSRC, the Company’s clean room engineering service belongs to the sub-category “E49 – Building Installation” within the “E – Construction” industry.From the perspective of the industrial chain, the clean room industry can be divided into upstreamsupply, midstream construction, and downstream applications. Specifically:
- Upstream involves suppliers of building materials, system equipment, and electromechanicalequipment, which directly impact the progress and completion of projects. Their prices directly affect theindustry’s costs and significantly influence the profits of industry enterprises.
- Midstream encompasses the Company’s industry, mainly including engineering survey, engineeringdesign, and engineering construction processes.
- Downstream refers to industries that require clean rooms in their production or operation processes,mainly in the fields of integrated circuits (IC), photovoltaics, and display panels. The IC semiconductorindustry in the electronics sector is currently the primary downstream industry for clean room engineering,and its development significantly influences the future development of industry enterprises. It drives thedemand for clean room engineering services, which are fulfilled by industry enterprises. With the continuousadvancement of industrial technology, downstream industries constantly raise their requirements for cleanrooms, thereby pushing industry enterprises to continually research and develop new technologies, and applynew construction techniques to adapt to the changing market demand.
The Company focuses on the integrated engineering of clean room systems in the advancedmanufacturing industry, with the “Engineering, Procurement, Construction, and Operation (EPCO)”. It canprovide clean workshop construction planning, design suggestions, equipment configuration, clean roomenvironmental system integration engineering, and maintenance services, belonging to the midstreamconstruction industry of the clean room industry chain.
(II) Development Overview of Clean Room Industry
The development of the clean room industry in China began in the 1960s, drawing on the earlytechnology of the former Soviet Union, mainly used in national defense, aerospace, atomic energy, andscientific research, and later gradually expanded to the control of environmental conditions in industries such
Cleanroom Industry Chain DiagramUpstream Supply
| Upstream Supply | Midstream Construction | |
BuildingMaterials/Hardware
BuildingMaterials/HardwareFire Protection/Control
Equipment
Fire Protection/Control
EquipmentAirconditioning/Purification
Equipment
Airconditioning/Purification
EquipmentElectromechanical/Lighting
Equipment, etc.
Electromechanical/Lighting
Equipment, etc.Engineering Survey
Engineering SurveyEngineering Design
Engineering Design
EngineeringConstruction
EngineeringConstruction
DownstreamApplications
DownstreamApplications
IC Semiconductor
IC SemiconductorOptoelectronic Panels
Optoelectronic Panels
PrecisionManufacturing
PrecisionManufacturingBiopharmaceuticals
BiopharmaceuticalsFood & Chemicals
Food & ChemicalsAerospace
AerospaceNew Energy, etc.
as precision machinery, non-ferrous metal purification in metallurgical systems, and pulling monocrystallinesilicon.The clean room industry in China experienced vigorous development from the 1970s to the 1990s. In1977, the first high-level biological clean room was established, and since the 1980s, the construction ofbiological clean rooms has gradually increased, extensively used in the daily chemical industry.Subsequently, clean rooms began to be applied in the pharmaceutical and food industries, especially afterthe announcement of China’s GMP certification in 1982, leading to a significant increase in the demand forclean room construction in the pharmaceutical industry. The construction of clean rooms for medicalfacilities such as aseptic operating rooms also rapidly expanded. After the reform and opening up, theintroduction of foreign-funded enterprises led to the widespread application of higher-level air cleaningtechnologies in various fields.From the 1990s to the present, China’s technological level has been developing vigorously. The globaltransfer of production capacity in precision electronics such as semiconductors and new displays hasaccelerated towards China, greatly increasing the market demand and technological research anddevelopment level of the clean room industry as a result of advances in the research and development ofpharmaceuticals and biotechnology. This has effectively driven the rapid development of China’s clean roomindustry. In order to achieve the strategic goal of “carbon neutrality,” China will reduce carbon emissionsthrough energy substitution, energy conservation, and efficiency improvement. According to data from theNational Energy Administration, it is expected that during the “14th Five-Year Plan” period, China’s averageannual increase in newly installed photovoltaic capacity will be between 70-90GW. As an important part ofthe construction of solar cell production plants, the demand for the construction of clean rooms will continueto grow alongside the vigorous development of photovoltaic production lines.
(III) Cyclical Characteristics of the Clean Room Industry
The downstream industries of the clean room engineering are influenced by the macroeconomicsituation, industry policy regulation, and downstream industry investment conditions, and therefore show acertain cyclical characteristic. The main downstream industries of the clean room engineering industry arestrategic emerging industries such as the electronics industry. In order to narrow the gap with developedcountries and promote the development of intelligent manufacturing, information technology, and otherindustries in China, a number of policies have been formulated in China in recent years to promote thedevelopment of related industries. This has also led to a relatively stable and sustained development markettrend in the clean room engineering industry.
The “Outline of the Fourteenth Five-Year Plan for National Economic and Social Development andthe Long-Range Objectives Through the Year 2035 of the People’s Republic of China” clearly states thecultivation of advanced manufacturing clusters, promoting the innovative development of industries such asintegrated circuits, aerospace, pharmaceuticals, and medical devices. It focuses on strategic emergingindustries such as next-generation information technology, biotechnology, new energy, new materials, high-end equipment, new energy vehicles, green environmental protection, as well as aerospace, and marineequipment. Industrial policies not only promote the development of industries such as semiconductors andintegrated circuits but also drive the development of the upstream industry, the clean room engineering
industry. The continuous expansion of the scale of downstream industries, the ongoing process oflocalization substitution, the rise of new fields such as new energy and automotive electronics, and thegradual improvement in the quality of life of the population have provided good development opportunitiesfor the clean room industry, with rapid construction of new production lines for downstream industryproducts.(IV) Industry Position of the CompanyCurrently, the competition in the Chinese clean room market is intense, with a larger number ofbusiness groups, but a smaller number of enterprises are capable of undertaking high-level clean roomsystem integration solutions. Enterprises with the strength to undertake clean room engineering projects aregradually gaining a stable market share in the high-end segment. Our focus lies on clean room engineeringprojects for high-tech plants in the electronic industry such as IC semiconductors and precisionmanufacturing. The investment in high-tech plants in the high-end electronic industry is substantial, withhigh requirements for clean room stability. To mitigate investment risks, lower costs, and ensure productyield, owners typically choose to collaborate with engineering service companies with rich experience,historical performance, and industry leadership. Only few companies in this fieldpossess the technical know-how to create high-level clean rooms for such specialized applications.Our Company is currently the Chinese company with the capability and experience to construct cleanrooms for the entire semiconductor industry chain, possessing strong brand influence in enhancing clientproduct yield. With leading computational fluid dynamics analysis and air sampling and analysis technology,we can provide clients with pre-simulation analysis and post-sampling analysis, optimize clean room layout,improve production processes, reduce production costs, and enhance product yield, significantly improvingthe stability and reliability of clean room engineering projects.
For the past twenty years, our Company has been focused on the integration and engineering ofadvanced manufacturing clean room systems. We have undertaken clean room projects for leadingcompanies in various industries, including Siliconware Technology, Sanan Integrated, ASE, FoxconnTechnology Group, Wistron Info Comm, SMIC, Nexchip, and Wafer Works. In 2023, we were honored withmultiple recognitions such as “Excellent Safety Vendor,” “Best Safety Management,” and “Best Supplier,”which reflects the consistent approval of our engineering quality by the clients. We hold a substantial marketshare in the high-end clean room engineering field, enjoying a strong reputation and market influence withinthe industry, and possess a high industry standing.(V) Major Laws and Regulations of the Industry and the Impact of Industrial PoliciesThe current legal and regulatory framework related to the clean room system integration engineeringservices provided by our Company mainly includes industry qualification management, industry businessstandards, and industry quality management, as follows:
The industrial policy support for the main downstream industries served by the Company is conduciveto the sustainable growth of the related industries, thus driving the overall market demand for clean roomengineering. In recent years, China has continuously introduced relevant policies to promote thedevelopment of industries such as semiconductors, new displays, life sciences, and food and pharmaceuticals,thereby promoting the growth of the clean room industry demand. In addition, clean room engineering ispart of the construction industry, and China has been continuously introducing policies to promote thegreening and intelligent development of the construction industry, vigorously promoting the application ofBIM technology and other information technologies used in clean room construction, and policies promotingthe development of prefabricated buildings have also driven the development of clean rooms.The main industrial policies of the downstream industries served by the Company are as follows:
III. Businesses in which the Company was engaged during the reporting period(I) Overview of the Main Business of the Company
The Company’s main business is to provide clean room engineering, electromechanical engineering,and other services for the construction of IC semiconductor, optoelectronics, high-tech electronic industries,as well as for the food, pharmaceutical, cloud computing centers, and related fields. This includes cleanfactory construction planning, design recommendations, equipment configuration, clean room environmentsystem integration engineering, and maintenance services.
The Company has the qualifications of Grade I General Contractor of Electromechanical Engineering,Grade I Specialist Contractor of Building Electromechanical Installation Engineering, Grade II SpecialistContractor of Electronic and Intelligent Engineering, Grade II Specialist Contractor of Building Decorationand Decoration Engineering and Grade II Specialist Contractor of Fire Fighting Facilities Engineering, whichprovide a solid technical foundation and professional guarantee for the development of the business of theCompany.The Company’s business scope includes system integration services; design and installation ofelectromechanical systems, HVAC systems, aseptic systems, and building equipment management systems;construction of air purification engineering, fire engineering, building construction engineering, interior andexterior decoration engineering, municipal public works, and pipeline engineering, as well as providingrelated technical consulting and after-sales services; research and development and manufacturing ofindustrial switch power converters and components; wholesale, import, and export of similar productsproduced by the company, as well as building materials, dust-free, aseptic purification equipment and relatedequipment, components; type III medical device operation; type II medical device sales; metal structuremanufacturing; construction decoration, plumbing and other building metal products manufacturing.Licensed projects include construction engineering design and building intelligent system design.
(II) Main Products and Their Uses
The production process of IC semiconductor and other advanced manufacturing industries has highrequirements on process precision, process media and process environment. As a professional clean roomsystem integration engineering service provider, the Company’s main business is centered around the coreprocess of downstream clients, combined with the characteristics of the industry, to provide standards-compliant process environment solutions, the main products are clean technology plant or clean room in abroad sense.
The clean rooms involved in the company are mainly industrial clean rooms. The clean room systemintegration provided by the Company includes clean room-related air treatment system, airflow and airwaysystem, water treatment system, interior system, vibration damping system, static electricity control system,electromagnetic interference control system, process system, environment inspection system, electric power
system, fire safety system and other clean room-related systems. The clean room system integration projectis shown as follows:
(III) Business ModelThe Company is a one-stop professional service provider of clean room system integration engineeringsolutions for advanced manufacturing industries, with the ability to implement a complete industry chainfrom engineering design to procurement, construction, operation and maintenance and other systemintegration. During the project implementation stage, the Company purchases the required equipment andmaterials in accordance with the specific project conditions and subcontracts the construction of clean roomsystem projects, and the Company organizes and coordinates the contracting units of each system, supervisesand guides them, and coordinates the overall progress of the project. The Company makes profits byproviding clients with overall solutions for clean room projects.
1. Sales Mode
The Company’s clean room engineering clients are mainly large-scale enterprises in semiconductor,electronics and other industries. The Company’s marketing staff obtains client resources through searchingmarket information, continuous service of existing clients, and recommendation of new clients by existingclients, etc., and makes contact with clients. The Company mainly approaches clients through client bidding,invitation for bidding and commercial negotiation. The bidding mode of the Company is generally as follows:
obtaining bidding information, purchasing bids, passing the qualification examination of the bidding party,bidding deposit, making bidding documents, on-site bidding, on-site opening of bids, obtaining thenotification of successful bid and signing the contract, and so on.
2. Procurement Mode
The Company conducts procurement of construction materials in accordance with the contract signedwith the owner or contractor, mainly including construction materials and equipment. The procurement planof the Company is prepared based on the project cost budget and the requirements of the project executionschedule, and the corresponding procurement plan is prepared and executed on a project basis. The personin charge of the project prepares the procurement plan according to the project progress, project materialinput plan, processing time requirements of customized materials, etc., and the procurement period of eachtype of materials is clearly defined.
3. Engineering Contracting Mode
CleanroomSystemIntegrationEngineering
Air handling systems
Air handling systems
Pollutant detection
| Pollutant detection | Particle filtration | Air pressure control | AMC control | Temperature control | Humidity control |
Atmosphere
AtmosphereWatersupply
Watersupply
Water treatment systems
Water treatment systems
Temperaturecontrol
| Temperature control | Particle filtration |
Acid
-
baseadjustment
| Acid-base adjustment | Particle filtration |
Compliance
Water
Compliance
Water
Interior Systems
| Interior Systems | Environmental Inspection System | |
Clean Room
| Clean Room | ||
| Airflow & Ducting System | ||
Vibration Damping System
Vibration Damping System
Electromagneticinterference control system
Electromagneticinterference control system
Static electricitycontrol system
Static electricitycontrol system
Electricity System
| Electricity System | Fire Safety System | Other Systems | |||
GeneralWastewater
GeneralWastewater
Sewerage
SewerageWaste
liquidsWaste gas
Waste
liquidsWaste gas
Waste liquid and gas
treatment system
Waste liquid and gas
treatment system
Specialliquid
Specialty
Gases
Specialliquid
Specialty
Gases
Specialty liquid and gas
storage systems
In accordance with the Construction Law of the People’s Republic of China, Civil Code of the People'sRepublic of China, Labor Law of the People’s Republic of China, Provisions on the Administration of theQualifications of Construction Enterprises and other relevant laws and regulations, as well as the projectconstruction contract signed with the owner, the Company will contract out the clean room constructionprojects according to the specific clean room projects during the implementation stage of the clean roomproject. If there are restrictive clauses or explicit provisions in the general contract, the Company shall obtainthe consent of the owner before contracting before selecting the contracting manufacturer. The Companycentrally coordinates, organizes, supervises, guides and uniformly manages the contracting units of eachsystem during the construction process.The Procurement Department of the Company is responsible for maintaining the list of suppliers andevaluating the contractors based on their qualifications, financial strength, engineering achievements andother relevant information. When there is a demand for contracting in a construction project, the person incharge of the project will initiate a requisition for contracting, and the Procurment Department will sign acontract after comparing the contractors’ experience, technology, price and other factors with the approvalof the corresponding supervisor. Subsequently, the Company organizes engineers and technicians to givetechnical briefings to the contractors, and conducts training, supervision and management of the contractorsin accordance with the terms of the contract, design documents and construction specifications to ensure thenormal progress of the construction.
IV. Analysis of Core Competitiveness During the Reporting Period
√ Applicable □ N/A
The core competitiveness of the Company is reflected in its strong clean room system integrationtechnology, high-end clean room project experience and engineering management capability. After years oftechnology research and development and project accumulation, the Company is able to plan the overallsolution of clean room project by taking into account the industrial characteristics and demands of clients,the timeliness of construction and reliability of operation, etc., to achieve the precise control of the mainindexes such as cleanliness, temperature and humidity, micro-vibration, AMC, etc., and to collaborate withthe clients in upgrading the production process, optimizing the product manufacturing process and improvingthe yield rate of production, etc. The core competitiveness of the Company is shown in the following. Thecore competitiveness of the company is specifically manifested in the following aspects:
(I) Advantage in Technology and R&D
The Company mainly focuses on the clean room engineering projects of high-tech plants in the field ofIC semiconductors, photoelectric panels and other electronic industries, which belongs to the high-end fieldof the clean room engineering industry and is characterized by high level of cleanliness, large scale ofinvestment, wide construction area, complex system integration and high requirements for engineeringquality. Since it takes a long time of research and development and accumulation of practical experience toacquire the construction technology required for such clean room projects, only a few enterprises in theindustry have the technical level to construct high-grade clean rooms in such fields. The Company hasundertaken many high-end clean room projects for high-tech plants in China and is a leading and well-knownenterprise in the industry.
In 2023, the Company adds 18 patents, including 7 invention patents and 11 utility model patents. TheCompany has set up an engineering database for clean room engineering projects, which is a systematizationof years of engineering experience, providing strong technical and data support for the company to contractand implement engineering projects. The Company has industry-leading computational fluid dynamicsanalysis application technology and air sampling and analysis technology, which can provide clients withpre-simulation analysis and post-sampling analysis, optimize the layout of the clean room, improve theproduction process, reduce the production cost and improve the yield rate of the finished products, andsignificantly improve the stability and reliability of the clean room project.
(II) Engineering Performance and Brand AdvantageThe downstream industries served by the Company, especially the high-end electronics industry,demand high stability for clean rooms. In order to reduce investment risk, lower costs, and ensure productyield, clients typically choose to cooperate with engineering service companies that have rich experience, aproven track record, and industry-leading capabilities. With over 20 years of continuous development, theCompany has gained the ability to provide “Engineering, Procurement, Construction, and Operation(EPCO)”, successfully implementing thousands of clean room-related projects and accumulating richconstruction experience.The Company has become a professional clean room engineering service provider with strong industrystrength, high engineering service quality, and significant performance. “Acter” has also become a well-known brand in the Chinese clean room engineering industry, possessing strong competitive advantages.
(III) Project Management and Talent Advantages
1. Excellent management team
Excellent management personnel can do targeted research, development and innovation for clients indifferent industries and have rich experience in the industry. Since its establishment, the Company has beenengaged in clean room and other system integration engineering business, and the management personnelare professional and stable. Seventy percent of the middle management personnel are promoted from thegrassroots level, with a low staff turnover rate, which enables the Company to provide clients with long-termand sustainable engineering services. The core management team has many years of experience in theindustry, has long been serving the global famous enterprises in the industry, and has been developing andexpanding along with the growth of the clients. They have a deep understanding and accurate knowledge ofthe technical application, construction organization mode, competition pattern and future development trendof the clean room engineering industry, and have a deep knowledge of the technical development of thedownstream client industry.The Company attaches great importance to business management and advocates the synergisticdevelopment of employees’ personal performance and corporate strategy. The Company carries outconstruction and inspection of projects in strict accordance with the requirements of ISO9001 quality systemmanagement, and has established a complete set of effective quality management system from supplierselection and management, raw material quality acceptance, construction process quality control, project
R&D Target Achievements in the Past Three Years
In 2021, 6 intellectualproperty rights wereobtained, including 3utility model patents and 3software copyrights.
| In 2021, 6 intellectual property rights were obtained, including 3 utility model patents and 3 software copyrights. | In 2022, 18 utility model patents were obtained. | In 2023, 18 patents were obtained, including 11 utility model patents and 7 invention patents. |
Acter Integration is committed to becoming ahigh-quality space shaper, impressing customerswith professional technology and attentiveservice, and has won over 50 customerrecognitions.
completion acceptance and project site management. Each project team of the Company organizes andcompiles project files for each project in accordance with the Company’s internal control requirements,covering the refined management and supervision of each step of the project process. The Company haspassed GB/T50430, ISO9001 quality management system certification, ISO14001 environmentalmanagement system certification and ISO45001 occupational safety and health management systemcertification, and participated in the implementation of clean rooms and other system integration projectswith good quality feedback, widely recognized by clients and unanimously praised.
2. Scientific and reasonable education and training
In recent years, the Company has vigorously implemented the “apprenticeship system”, primarilyassigning seasoned senior employees to provide one-on-one training for new employees with richconstruction experience, aiming to pass on construction experience to new employees and help themsmoothly navigate the initial stage, quickly become familiar with and handle related business. Regular“reserve manager training” is conducted every year, inviting a teaching team including lawyers, accountants,and technical experts to provide training on internal control, engineering management related laws andregulations, financial knowledge, etc., to enhance team management skills and improve businessmanagement skills. KPI, OKR, and skill competitions such as design and drawing skills are used to motivateemployees to understand the Company’s goals and achieve each goal in stages and tasks. The Companyopens a Magic Academy, E-Learning system, and organizes various offline trainings. Each quarter, seniorengineering personnel summarize and analyze closed cases, and monthly offline courses are conducted fordifferent professional systems, enabling everyone to understand the advantages and disadvantages of otherprojects while strengthening their own professional abilities, thus better exerting personal initiative andboosting operational efficiency.
(IV) Advantage of stable client relationship
The investment amount in the high-tech factory buildings of the high-end electronic industry issubstantial, with high requirements for the stability of clean rooms. In order to reduce investment risks, lowercosts, and ensure product yield, owners typically choose to collaborate with experienced engineering servicecompanies with leading industry expertise and a proven track record. If the initial quality of the engineeringwork is recognized, owners generally maintain a cooperative relationship with the service provider,increasing the likelihood of awarding subsequent clean room engineering projects to the same contractor. Asignificant proportion of the Company’s main business revenue comes from repeat orders from existingclients. The Company’s cooperative clients are mostly leading enterprises in segmented industries and well-known upstream and downstream companies in the industry chain, such as Siliconware Technology,Foxconn Technology Group, etc., with whom the Company has maintained a partnership for over 15 years.In addition, the Company has established a good, stable, and continuous partnership with Sanan Integrated,Wistron InfoComm, Nexchip, Wafer Works, SMIC, laying a solid foundation for business development. Asclient investment plans are implemented, there is a gradual increase in demand for clean rooms in the factory
SalesTechnicianFinancial StaffAdministrative StaffProfessionalStructure
ProfessionalStructure
Master’ DegreeBachelor’s DegreeAssociate DegreeBelow AssociateDegree
Master’ DegreeBachelor’s DegreeAssociate DegreeBelow AssociateDegree
Education
alstructure
Education
alstructure
KeyPerformance
KeyPerformanceDuring the reporting period, 56 employee training sessions were conducted, totaling
10,935 hours of training, with an average training duration of 17 hours per person,
achieving a training coverage rate of 100%.
During the reporting period, 56 employee training sessions were conducted, totaling
10,935 hours of training, with an average training duration of 17 hours per person,
achieving a training coverage rate of 100%.people
peoplepeople
| people | people |
258 people
258 peoplepeople
peoplepeople
peoplepeople
peoplepeople
construction process. The Company’s long-term efforts in establishing stable client relationships haveprovided strong support for the Company’s further development.
(V) Industrial diversification, geographical layout advantagesThe Company has a diversified layout in IC semiconductor, optoelectronic panel, PCB, precisionmanufacturing, biomedical and other industries. With stable and reliable quality of engineering services andrich product structure, the Company’s engineering services have been recognized by many famousenterprises and have maintained long-term cooperative relationships. In China, the Company has twobusiness centers in Suzhou and Shenzhen, as well as branches in Shenzhen and Xiamen, with the servicescope radiating to the Yangtze River Delta and the Pearl River Delta, and through the establishment ofmarketing outlets in Hefei, Zhengzhou, Changsha, Wuhan, and Chongqing, the Company is able to directlyface the clients, quickly docking, and closely serve the downstream clients of the local advancedmanufacturing industry. Early deployment in Southeast Asia enables the Company to be more familiar withlocal regulations and requirements, and rely on its rich experience in plant construction to provide goodlocalized services to overseas clients. With steady growth in overseas revenue in 2023, the Company hasgreat potential for development in the Southeast Asian market.
V. Major Operating Conditions During the Reporting PeriodThe Company is committed to consistently providing good service to every client, optimizingconstruction management processes, continuously improving skills and R&D capabilities, responding toclient needs with localized service layout, and achieving the transformation from solution to mass productionfinished products. This has laid the foundation for the development of multiple industries and multiple clients,thereby realizing the “production,” “sales,” “people,” “development,” and “profit” five-step developmentroad-map. The Company actively maintains and stabilizes business relationships with existing clients whilealso laying a good foundation for the development of new clients. In 2023, the Company’s main businessrevenue was RMB 2,006 million, an increase of 23.38% year-on-year.
WuhanChongqing
ChongqingSuzhou
SuzhouZhengzhou
ZhengzhouHefei
HefeiChangsha
ChangshaShenzhen
ShenzhenXiamen
Based on the different types of engineering services provided, the Company’s main business revenuein 2023 is divided as follows: 85.65% from clean room system integration-related projects, with 75.62%from system integration and 10.03% from hook-up works; 13.77% from other electromechanical installationprojects, and 0.58% from equipment sales.
Clean room system integration-related projects include clean room system integration engineering andhook-up works. ①Clean room system integration engineering refers to clean room system-related designand construction projects before the factory is put into use, including systems directly related to clean rooms(such as air handling systems, water treatment systems, airflow systems, air molecular pollution controlsystems, static control systems, etc.) and clean room support system engineering (such as piping systems,power systems, fire safety systems, etc.). ②Hook-up works refer to secondary clean room support (such aspower systems, water treatment systems, and airflow systems) for new equipment and production lines afterthe clean room is put into operation, with minimal impact on the cleanliness, air molecular pollution,vibration, temperature, humidity, pressure, and static electricity of the original clean room area. The designand construction precision and fault tolerance of hook-up works are relatively low. Other electromechanicalinstallation projects refer to non-clean room-related factory and office building electromechanical projects.
Based on the segmentation by downstream client industries, in the main business of the Company in2023, clients from the IC semiconductor industry accounted for 67.09%, followed by precisionmanufacturing at 23.96%.
According to the division of revenue regions, the main business income of the company in 2023 wasRMB 1,570 million domestically, accounting for 78.27%, and RMB 436 million internationally, accountingfor 21.73%, showing an upward trend compared to last year. This indicates an upward trend compared to theprevious year, attributed mainly to the company's strategic presence in the Southeast Asian market. TheCompany initiated its operational bases in Vietnam in 2007, expanded to Malaysia in 2011, established asubsidiary in Indonesia in 2013, and initiated strategic deployment in Thailand in 2019. With the localizationof employee recruitment and education and the establishment of a stable supply chain relationship,familiarity with local customs, taxation, and various policies and regulations, riding the wave of investmentin Southeast Asia, the Company is optimistic about the future growth space of overseas performance.
2006Million(RMB)
Name
| Percentage | ||||
System Integration
| System Integration | 1517 Million | 75.62% |
| Secondary Distribution Engineering | 201 Million | 10.03% |
| Electromechanical Installation | 276 Million | 13.77% |
| Equipment Sales | 12 Million | 0.58% |
2006Million(RMB)
2006Million(RMB)
Name
| Percentage | ||||
IC Semiconductor Industry
| IC Semiconductor Industry | 1346 Million | 67.09% |
| Precision Manufacturing Industry | 481 Million | 23.96% |
| Optoelectronics Industry | 101 Million | 5.06% |
| Others | 78 Million | 3.89% |
(I) Main Business Analysis
1. Analysis of changes in relevant accounts in the income statement and cash flow statement
Unit: Yuan Currency: RMB
| Account | Number of current period | Number of same period last year | Change (%) |
| Operating revenue | 2,008,924,995.68 | 1,627,895,120.49 | 23.41 |
| Operating costs | 1,738,841,241.47 | 1,376,528,425.17 | 26.32 |
| Cost of sales | 7,954,281.67 | 6,301,894.42 | 26.22 |
| Administrative expenses | 59,193,009.85 | 60,147,184.98 | -1.59 |
| Finance costs | -5,530,329.32 | 6,101,177.95 | -190.64 |
| R&D expenses | 25,121,209.62 | 19,101,658.87 | 31.51 |
| Net cash flows from operating activities | 133,522,931.23 | 161,089,465.80 | -17.11 |
| Net cash flows from investing activities | 106,839,659.13 | -126,308,081.06 | N/A |
| Net cash flows from financing activities | -75,002,375.36 | 365,160,792.84 | -120.54 |
| Taxes and surcharges | 4,370,539.18 | 3,800,051.12 | 15.01 |
| Other gains | 3,731,552.00 | 3,524,827.14 | 5.86 |
| Investment income | 1,661,794.44 | -99,328.94 | N/A |
| Gain on change in fair value | -119,888.89 | 105,417.14 | -213.73 |
| Credit impairment loss | -3,860,633.85 | -5,805,476.85 | N/A |
| Impairment loss on assets | 1,148,478.91 | 5,978,570.41 | -80.79 |
| Gain on disposal of assets | 116,542.37 | 246,990.20 | -52.81 |
| Non-operating revenue | 14,361.33 | 75,601.66 | -81.00 |
| Non-operating expenses | 889,948.63 | 925,033.47 | -3.79 |
| Income tax expense | 40,713,458.90 | 35,997,255.91 | 13.1 |
| Minority interests | 1,473,367.57 | 151,056.57 | 875.37 |
| Translation differences on foreign currency statements | 290,286.73 | 2,027,897.54 | -85.69 |
| Other comprehensive income attributable to minority shareholders, net of taxes | 79,151.41 | 84,748.55 | -6.60 |
Name
| Percentage | ||||
Domestic
| Domestic | 1570 Million | 78.27% |
| Overseas | 436 Million | 21.73% |
2006Million(RMB)
Explanation for the changes in finance costs: Finance costs decreased by 190.64% compared with theprevious period, which was attributable to the higher interest income from bank wealth management in thecurrent period;Explanation for the changes in R&D expenses: Research and development expenses increased by 31.51%compared with the previous period, which was attributable to the increase in research and developmentinvestment in the current period and the higher amount of research and development expenses;Explanation for the changes in net cash flows from investing activities: The larger change in net cash flowsfrom investing activities compared with the previous period was due to the higher amount of structureddeposits recovered in the current period;Explanation for the changes in net cash flows from financing activities: Net cash flows from financingactivities decreased by 120.54% compared with the previous period, which was attributable to the higheramount of dividend payment in the current period and the receipt of large amount of fund-raising in theprevious period;Explanation for the changes in investment income: Investment income was higher than that of the previousperiod, which was mainly due to the higher income from the purchase of structured finance in the currentperiod;Explanation for the changes in gain on fair value changes: Gain on changes in fair value decreased by 213.73%compared to the previous period due to the change in fair value of structured deposits in the current period;Explanation for the changes in credit impairment losses: Credit impairment losses decreased by a largemargin compared with the previous period, mainly due to the decrease in bad debts provided for in the currentperiod as a result of the decrease in accounts receivable;Explanation for the changes in impairment losses on assets: The decrease of 80.79% in impairment losseson assets as compared with that of the previous period was attributable to the higher amount of reversal ofsingle provision in the previous period;Explanation for the changes in gain on disposal of assets: The decrease of 52.81% in gain on disposal ofassets as compared with that of the previous period was attributable to the higher gain on disposal of vehiclesin the previous period;Explanation for the changes in non-operating revenue: Non-operating revenue decreased by 81.00%compared with that of the previous period, which was due to the higher amount of write-off of long-termunpaid amount in the previous period;Explanation for the changes in minority interests: Minority interests increased by 875.37% compared withthe previous period, which was due to the substantial increase in net profit attributable to minority interestsin the current period;Explanation for the changes in translation differences of foreign currency statements: The decrease of 85.69%in translation difference of foreign currency statement compared with the same period of last year was dueto the smaller change of exchange rate fluctuation in the current period compared with the previous period.Detailed description of significant changes in the company's business type, profit composition or profitsources during the period
□ Applicable √ N/A
2. Revenue and Cost Analysis
√ Applicable □ N/A
During the Reporting Period, the operating revenue of the Company amounted to RMB 2,008,924,995.68,representing an increase of 23.41% as compared with the same period of the previous year, which was mainly
due to the fact that the Company expanded new clients and undertook projects of higher amount in the currentperiod; at the same time, the rapid growth of the overseas business in the current period led to a furtherincrease in profitability in the current period.
(1). Main business by industry, product, region and sales pattern
Unit: Yuan Currency: RMB
| Main business by industry | ||||||
| By Industry | Operating Revenue | Operating Cost | Gross Profit Rate (%) | Yoy change in operating revenue (%) | Yoy change in operating costs (%) | Yoy change in gross profit margin (%) |
| IC Semiconductor | 1,345,947,194.70 | 1,203,919,098.11 | 10.55 | 54.35 | 66.52 | Decrease of 6.54% |
| Precision Manufacturing | 480,697,188.05 | 392,693.935.54 | 18.31 | 17.91 | 8.34 | Increase of 7.22% |
| Optoelectronics | 101,391,692.37 | 80,642,910.19 | 20.46 | -64.07 | -67.39 | Increase of 8.10% |
| Others | 78,023,584.38 | 61,470,990.91 | 21.21 | 21.95 | 47.70 | Decrease of 13.74% |
| Total | 2,006,059.659.50 | 1,738,726,934.75 | 13.33 | 23.38 | 26.32 | Decrease of 2.01% |
| Main business by product | ||||||
| By Product | Operating Revenue | Operating Cost | Gross Profit Rate (%) | Yoy change in operating revenue (%) | Yoy change in operating costs (%) | Yoy change in gross profit margin (%) |
| Clean room engineering | 1,718,207,574.41 | 1,497,267,444.29 | 12.86 | 9.21 | 12.22 | Decreased of 2.33% |
| Of which: System integration | 1,516,916.425.65 | 1,324,585,896.16 | 12.68 | 9.84 | 13.10 | Decrease of 2.52% |
| Hook-up works | 201,291,148.76 | 172,681.548.13 | 14.21 | 4.73 | 5.87 | Decrease of 0.92% |
| Other electrical and mechanical installation works | 276,230,223.29 | 232,095.004.42 | 15.98 | 761.16 | 783.62 | Decrease of 2.13% |
| Equipment sales | 11,621,861.80 | 9,364,486.04 | 19.42 | -43.33 | -32.62 | Decrease of 12.81% |
| Total | 2,006,059.659.50 | 1,738,726,934.75 | 13.33 | 23.38 | 26.32 | Decrease of 2.01% |
| Main business by region | ||||||
| By Region | Operating Revenue | Operating Cost | Gross Profit Rate (%) | Yoy change in operating revenue (%) | Yoy change in operating costs (%) | Yoy change in gross profit margin (%) |
| China | 1,570,222,066.57 | 1,387,939,755.27 | 11.61 | 16.89 | 23.06 | Decrease of 4.43% |
| Of which: East China | 801,380,310.95 | 686,106.791.33 | 14.38 | -9.64 | -9.23 | Decrease of 0.39% |
| Central China | 351,672,073.28 | 326,136.350.31 | 7.26 | 137.60 | 228.66 | Decrease of 25.70% |
| South China | 318,483,907.01 | 296,248.742.42 | 6.98 | 464.18 | 469.27 | Decrease of 0.83% |
| Southwest | 78,094,245.59 | 61,551,648.92 | 21.18 | -65.98 | -70.28 | Increase 11.38% |
| Other Areas | 20,591,529.74 | 17,896,222.29 | 13.09 | -8.42 | 31.73 | Decrease of 26.49% |
| Overseas | 435,837,592.93 | 350,787,179.48 | 19.51 | 54.28 | 42.27 | Increase of 6.79% |
| Of which: Vietnam | 301,368,854.86 | 238,845.934.40 | 20.75 | 58.02 | 40.60 | Increase of 9.83% |
| Indonesia | 13,789,617.99 | 10,147,679.18 | 26.41 | -67.17 | -68.51 | Increase of 3.13% |
| Thailand | 111,326,700.08 | 92,907,698.80 | 16.54 | 123.64 | 108.97 | Increase of 5.85% |
| Other Areas | 9,352,420.00 | 8,885,867.10 | 4.99 | N/A | N/A | N/A |
| Total | 2,006,059.659.50 | 1,738,726,934.75 | 13.33 | 23.38 | 26.32 | Decrease of 2.01% |
Explanation of main business by industry, product, region and sales modeThe reasons for the substantial increase in revenue and cost of main business by industry, product andregion were mainly due to the new orders signed during the period and the higher contract amount, whichled to the substantial increase in revenue and cost; the gross profit margin in the country Decreased of 4.43%as compared with the same period of the previous year, which was mainly due to the development of newclients and the acceptance of projects at a lower price.
(2). Analysis of production and sales volume
□ Applicable √ N/A
(3). Fulfillment of major purchase contracts and major sales contracts
□ Applicable √ N/A
(4). Cost analysis table
Unit: Yuan
| By Industry | |||||||
| By Industry | Cost Composition Item | Amount for the current period | Percentage of total cost for the current period (%) | Amount for the same period of the previous year | Percentage of total costs for the same period of the previous year (%) | Percentage change from same period last year (%) | Explanation |
| Building Construction | Equipment and materials | 975,046,287.01 | 56.08 | 812,667,645.72 | 59.04 | 19.98 | |
| Labor subcontracting | 648,595,269.15 | 37.30 | 462,360,128.70 | 33.59 | 40.28 | Note 1 | |
| Labor cost | 75,883,841.01 | 4.36 | 60,640,452.42 | 4.41 | 25.14 | ||
| Other expenses | 39,201,537.58 | 2.26 | 38,728,323.98 | 2.81 | 1.22 | ||
| Share-based payment | 2,017,567.63 | 0.15 | -100.00 | ||||
| Total | 1,738,726,934.75 | 100.00 | 1,376,414,118.45 | 100.00 | 26.32 | ||
Other notes on cost analysisNote 1: Represents a significant increase in labor subcontracting due to the large volume of work executedduring the period.
(5). Changes in the scope of consolidation due to changes in the equity interests of majorsubsidiaries during the reporting period
□ Applicable √ N/A
(6). Significant changes or adjustments in the Company’s business, products or services during thereporting period
□ Applicable √ N/A
(7). Major sales clients and major suppliers
A. Major sales clients of the Company
√ Applicable □ N/A
The sales of the top five clients amounted to RMB 889.0282 million, accounting for 44.25% of the totalannual sales; of which the sales of related parties among the sales of the top five clients amounted to RMB0 million, accounting for 0% of the total annual sales.
| No. | Top 5 Clients | Project Revenue (RMB Million/100) | Percentage of Revenue (%) |
| 1 | Client 1 | 30,620.79 | 15.24 |
| 2 | Client 2 | 25,671.44 | 12.78 |
| 3 | Client 3 | 13,087.55 | 6.51 |
| 4 | Client 4 | 10,788.32 | 5.37 |
| 5 | Client 5 | 8,734.72 | 4.35 |
| Total | 88,902.82 | 44.25 | |
The proportion of sales to a single client exceeding 50% of the total amount, the existence of new clientsamong the top 5 clients, or heavy reliance on a small number of clients during the reporting period.
□ Applicable √ N/A
B. Major suppliers of the Company
√ Applicable □ N/A
The purchase amount of the top five suppliers is RMB 169.8003 million, accounting for 10.39% of thetotal annual purchase amount; among them, the purchase amount of related parties among the top fivesuppliers is RMB 0 million, accounting for 0% of the total annual purchase amount.
| No. | Top 5 Suppliers | Procurement amount (RMB Million/100) | Proportion of annual procurement amount (%) |
| 1 | Supplier 1 | 5,905.37 | 3.61 |
| 2 | Supplier 2 | 3,477.24 | 2.13 |
| 3 | Supplier 3 | 3,088.24 | 1.89 |
| 4 | Supplier 4 | 2,471.68 | 1.51 |
| 5 | Supplier 5 | 2,037.50 | 1.25 |
| Total | 16,980.03 | 10.39 | |
The proportion of purchases from a single supplier exceeding 50% of the total amount, the existence of newsuppliers among the top 5 suppliers, or heavy reliance on a small number of suppliers during the reportingperiod.
□ Applicable √ N/A
Other NotesNone
3. Expenses
√ Applicable □ N/A
| Item | 2023 | 2022 | Percentage of change in the current period over the same period of the previous year (%) | ||
| Amount (RMB) | Percentage of operating revenue (%) | Amount (RMB) | Percentage of operating revenue (%) | ||
| Selling expenses | 7,954,281.67 | 0.40 | 6,301,894.42 | 0.39 | 26.22 |
| Administrative expenses | 59,193,009.85 | 2.95 | 60,147,184.98 | 3.69 | -1.59 |
| R&D expenses | 25,121,209.62 | 1.25 | 19,101,658.87 | 1.17 | 31.51 |
| Finance costs | -5,530,329.32 | -0.28 | 6,101,177.95 | 0.37 | -190.64 |
| Total | 86,738,171.82 | 4.32 | 91,651,916.22 | 5.63 | -5.36 |
4. R&D investment
(1). Table of R&D investment
√ Applicable □ N/A
Unit: Yuan
| Expensed R&D investment for the period | 25,121,209.62 |
| Capitalized R&D investment for the period | |
| Total R&D investment | 25,121,209.62 |
| Total R&D investment as a percentage of operating revenue (%) | 1.25 |
| Share of capitalized R&D investment (%) |
(2). Table of R&D personnel
√ Applicable □ N/A
| Number of R&D personnel of the Company | 51 |
| Proportion of the number of R&D personnel to the total number of employees of the Company (%) | 7.97 |
| Educational Structure of R&D personnel | |
| Category of Educational Structure | Education Structure |
| Doctorate | 0 |
| Master’s Degree | 1 |
| Bachelor’s Degree | 32 |
| College Degree | 18 |
| High School and Below | 0 |
| Age Structure of R&D personnel | |
| Category of Age Structure | Age Structure |
| Below 30 years old (excluding 30 years old) | 33 |
| 30-40 years old (including 30 years old, not including 40 years old) | 13 |
| 40-50 years old (including 40 years old, not including 50 years old) | 4 |
| 50-60 years old (including 50 years old, not including 60 years old) | 1 |
| 60 and above | 0 |
(3). Description of situation
□ Applicable √ N/A
(4). Reasons for significant changes in the composition of R&D personnel and impact on theCompany's future development
□ Applicable √ N/A
5. Cash flow
√ Applicable □ N/A
| Account | Amount of the current period (RMB) | Amount of the same period of the previous year (RMB) | Percentage change (%) |
| Net cash flows from operating activities | 133,522,931.23 | 161,089,465.80 | -17.11 |
| Net cash flows from investing activities | 106,839,659.13 | -126,308,081.06 | -184.59 |
| Net cash flows from financing activities | -75,002,375.36 | 365,160,792.84 | -120.54 |
| Net increase in cash and cash equivalents | 167,656,624.74 | 400,390,070.99 | -58.13 |
(II) Explanation of significant changes in profit due to non-principal businesses
□ Applicable √ N/A
(III) Analysis of assets and liabilities
√ Applicable □ N/A
1. Assets and liabilities
Unit: Yuan
| Item Name | Closing balance of the current period | Percentage of total assets at the end of the period (%) | Closing balance of the previous period | Percentage of total assets at the end of the previous period (%) | Percentage change in the amount at the end of the period over the end of the previous period (%) | Description |
| Currency funds | 722,496,330.38 | 37.94 | 550,235,202.99 | 30.96 | 31.31 | Note 1 |
| Financial assets for trading | 122,119,888.89 | 6.87 | -100.00 | Note 2 | ||
| Bills receivable | 43,157,918.28 | 2.27 | 20,790,441.73 | 1.17 | 107.59 | Note 3 |
| Accounts receivable | 396,889,272.26 | 20.84 | 484,443,368.28 | 27.26 | -18.07 | |
| Receivables financing | 3,572,953.18 | 0.19 | 729,937.36 | 0.04 | 389.49 | Note 4 |
| Prepayments | 89,024,613.33 | 4.67 | 50,995,260.16 | 2.87 | 74.57 | Note 5 |
| Other receivables | 13,378,598.48 | 0.70 | 13,057,575.31 | 0.73 | 2.46 | |
| Inventory | 66,824.45 | -100.00 | Note 6 | |||
| Contract assets | 424,897,205.60 | 22.31 | 389,293,108.13 | 21.91 | 9.15 | |
| Other current assets | 97,604,166.69 | 5.13 | 58,265,105.32 | 3.28 | 67.52 | Note 7 |
| Item Name | Closing balance of the current period | Percentage of total assets at the end of the period (%) | Closing balance of the previous period | Percentage of total assets at the end of the previous period (%) | Percentage change in the amount at the end of the period over the end of the previous period (%) | Description |
| Long-term equity investments | 2,332,022.40 | 0.12 | 2,314,172.96 | 0.13 | 0.77 | |
| Investment real estate | 598,758.96 | 0.03 | 713,065.68 | 0.04 | -16.03 | |
| Fixed Assets | 38,895,511.08 | 2.04 | 40,095,530.47 | 2.26 | -2.99 | |
| Construction in progress | 13,103,863.94 | 0.69 | 0 | N/A | Note 8 | |
| Intangible assets | 7,244,475.94 | 0.38 | 7,426,847.54 | 0.42 | -2.46 | |
| Utilization right assets | 3,840,232.40 | 0.20 | 4,672,377.60 | 0.26 | -17.81 | |
| Deferred tax assets | 12,482,616.81 | 0.66 | 14,578,928.51 | 0.82 | -14.38 | |
| Other non-current assets | 34,843,950.71 | 1.83 | 17,348,658.87 | 0.98 | 100.85 | Note 9 |
| Short-term loans | 31,249,307.82 | 1.76 | -100.00 | Note 10 | ||
| Accounts payable | 629,857,317.33 | 33.07 | 589,919,678.26 | 33.19 | 6.77 | |
| Salaries payable to employees | 47,459,670.87 | 2.49 | 39,456,513.03 | 2.22 | 20.28 | |
| Taxes payable | 7,980,749.03 | 0.42 | 7,330,079.22 | 0.41 | 8.88 | |
| Other payables | 25,427,208.65 | 1.34 | 1,611,097.74 | 0.09 | 1,478.25 | Note 11 |
| Contract liabilities | 73,351,891.04 | 3.85 | 74,584,070.11 | 4.20 | -1.65 | |
| Non-current liabilities due within one year | 1,748,003.79 | 0.09 | 1,710,381.30 | 0.10 | 2.20 | |
| Lease liabilities | 2,150,631.55 | 0.11 | 3,151,902.66 | 0.18 | -31.77 | Note 12 |
| Projected liabilities | 11,292,847.91 | 0.59 | 9,238,016.80 | 0.52 | 22.24 | |
| Long-term employee remuneration payable | 632,325.46 | 0.03 | 610,379.24 | 0.03 | 3.60 | |
| Deferred tax liabilities | 14,496,782.15 | 0.76 | 4,892,632.32 | 0.28 | 196.30 | Note 13 |
| Equity | 100,000,000.00 | 5.25 | 80,000,000.00 | 4.50 | 25.00 | |
| Capital surplus | 562,632,775.45 | 29.54 | 582,632,775.45 | 32.78 | -3.43 | |
| Other comprehensive income | 3,318,147.61 | 0.17 | 3,027,860.88 | 0.17 | 9.59 |
| Item Name | Closing balance of the current period | Percentage of total assets at the end of the period (%) | Closing balance of the previous period | Percentage of total assets at the end of the previous period (%) | Percentage change in the amount at the end of the period over the end of the previous period (%) | Description |
| Earmarked reserves | 44,578,849.52 | 2.34 | 45,372,652.93 | 2.55 | -1.75 | |
| Surplus reserves | 39,501,301.38 | 2.07 | 28,443,197.81 | 1.60 | 38.88 | Note 14 |
| Undistributed profits | 332,226,440.31 | 17.45 | 269,871,786.54 | 15.19 | 23.11 | |
| Minority interests | 7,707,548.39 | 0.40 | 4,043,962.14 | 0.23 | 90.59 | Note 15 |
Other NotesNote 1: The increase of 31.31% in money funds as compared with that of the previous period was due to theredemption of all structured deposits at the end of the period and the increase in the amount of bank deposits;Note 2: The decrease of 100% in trading financial assets as compared with that of the previous period wasdue to the redemption of all structured deposits at the end of the period;Note 3: Bills receivable increased by 107.59% compared with the previous period, which was due to thehigher amount of commercial acceptance bills received at the end of the period;Note 4: The increase of 389.49% in receivables financing compared with the previous period was due to thereceipt of more bank acceptance bills with higher credit value during the period;Note 5: Prepayment increased by 74.57% compared with the previous period, which was caused by the largeamount of prepayment for materials and equipment in advance for the new projects undertaken in the currentperiod;Note 6: Inventory decreased by 100% compared with the previous period, which was caused by the fact thatall the remaining inventory in the current period was fully utilized in the projects, and there was no balanceat the end of the period;Note 7: Other current assets increased by 67.52% compared with the previous period due to the increase ofprepayment of taxes for more projects carried out in the field;Note 8: Construction in progress had a big change compared with the previous period, which was caused bythe newly purchased office space of Wuhan and Hefei branches and the company's workshop renovationproject in the current period;Note 9: Other non-current assets increased by 100.85% compared with the previous period, which was dueto the substantial increase of the unexpired warranty over one year compared with the same period of theprevious year;Note 10: Short-term borrowings decreased by 100% compared with the previous period, which was due tothe maturity of bank borrowings in the current period, which were all returned;Note 11: Other payables increased by 1,478.25% compared with the previous period, which was mainly dueto the higher amount of loan from Sheng Huei International during the current period;Note 12: Lease liabilities decreased by 31.77% compared with the previous period, which was due to theexpiration of part of the leasing contracts during the current period;Note 13: Deferred tax liabilities increased by 196.30% compared with the previous period, which was mainlydue to the increase of overseas net profit in the current period and the high amount of deferred tax arisingfrom profit distribution;Note 14: Surplus reserve increased by 38.88% compared with the previous period, which was due to theincrease in net profit for the current period compared with the previous period and the increase in the amountof surplus reserve;
Note 15: Minority interests increased by 90.59% compared with the previous period, which was due to thesignificant increase in net assets attributable to minority interests for the current period.
2. Foreign assets
√ Applicable □ N/A
(1) Asset size
Of which: Overseas assets 345,879,823.73 (Unit: Yuan Currency: RMB), accounting for 18.16% of thetotal assets.
(2) Explanations for the high proportion of overseas assets
□ Applicable √ N/A
3. Restrictions on major assets as at the end of the reporting period
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Carrying amount at the end of the period | Reason for restriction |
| Currency funds | 12,499,607.35 | Mainly deposited as guarantee deposits for the Group's application for issuance of guarantee letters from banks |
4. Other Notes
□ Applicable √ N/A
(IV) Analysis of industry operating information
√ Applicable □ N/A
For analysis of industry operating information, please refer to “Section III Management Discussion andAnalysis”, “II. Industry in which the Company operated during the reporting period”.Analysis of operating information of the construction industry
1. Projects completed and accepted during the reporting period
√ Applicable □ N/A
Unit: Million/100 Yuan Currency: RMB
| Breakdown by industry | Housing construction | Infrastructure projects | Specialized engineering | Architectural decoration | Others | Total |
| Number of projects | 491 | 19 | 39 | 549 | ||
| Total amount | 135,357.02 | 371.61 | 836.10 | 136,564.73 |
√ Applicable □ N/A
Unit: Million/100 Yuan Currency: RMB
| Project area | Number of projects | Total amount (untaxed) |
| Domestic | 430 | 120,087.41 |
| Oversea | 119 | 16,477.32 |
| Of which: | ||
| Vietnam | 84 | 6,761.57 |
| Indonesia | 23 | 6,160.69 |
| Thailand | 11 | 3,528.96 |
| Other | 1 | 26.10 |
| Total | 549 | 136,564.73 |
Other Notes
□ Applicable √ N/A
2. Projects under construction during the reporting period
√ Applicable □ N/A
Unit: Million/100 Yuan Currency: RMB
| Segmentation by industry | Housing construction | Infrastructure projects | Specialized engineering | Building decoration | Others | Total |
| Number of projects | 1 | 395 | 3 | 22 | 421 | |
| Total amount (untaxed) | 1,128.44 | 391,324.43 | 1,406.61 | 5,040.77 | 398,900.25 |
√ Applicable □ N/A
Unit: Million/100 Yuan Currency: RMB
| Project Area | Number of projects | Total amount (untaxed) |
| Domestic | 278 | 288,523.46 |
| Oversea | 143 | 110,376.79 |
| Of which: | ||
| Vietnam | 90 | 67,657.56 |
| Indonesia | 33 | 15,268.21 |
| Thailand | 17 | 20,392.18 |
| Other | 3 | 7,058.84 |
| Total | 421 | 398,900.25 |
Other Notes
□ Applicable √ N/A
3. Status of major projects under construction
√ Applicable □ N/A
Unit: Million/100 Yuan Currency: RMB
| Project Name | Business Mode | Project Amount (untaxed) | Duration | Percentage of completion | Recognized income for the period | Cumulative recognized income | Cumulative recoveries as at the end of the period (including tax) | Project progress in line with expectations | Progress of payments in line with expectations |
| Project 1 | Construction Contract | 33,164.86 | 580 | 78.32 % | 22,085.28 | 25,973.81 | 25,227.80 | Yes | Yes |
| Project II | Construction Contract | 38,305.70 | 491 | 67.02 % | 25,671.44 | 25,671.44 | 18,441.34 | Yes | Yes |
Other Notes
√ Applicable □ N/A
1. As it involves commercial secrets and sensitive information of the Company, the cost inputs for thecurrent period and cumulative cost inputs are not disclosed;
2. As the transaction relating to Project 1 involves confidentiality-related provisions and for theconsideration of commercial secrets and strategic development, the specific project status of the counter-party is not disclosed. For details of the relevant announcement, please refer to the announcement of theCompany disclosed on the website of the Shanghai Stock Exchange on March 10, 2023 under theannouncement number of 2023-005, and the difference in the contract amount is for the additional works tobe incurred in the subsequent period;
3. As the transactions relating to Project 2 involve confidentiality-related clauses, and due toconsiderations of commercial secrets and strategic development, the specific project information of thecounter-party will not be disclosed. For details of the relevant announcement, please refer to the Company’sannouncement on the website of the Shanghai Stock Exchange dated August 1, 2023 under theannouncement number 2023-032, and the difference in the contract amount is for the additional works arisingthereafter.
4. Accumulated new projects signed during the reporting period
√ Applicable □ N/A
The cumulative number of newly signed projects during the reporting period was 553 (by count),amounting to RMB 2,297.1984 million (including tax) and RMB 2,141.6111 million (before tax).
5. Orders in hand at the end of the reporting period
√ Applicable □ N/A
The total amount of orders in hand at the end of the reporting period was RMB 1319.4146 million (beforetax). Among them, the amount of projects for which contracts have been signed but construction has not yetcommenced is RMB 0 million, and the amount of uncompleted portion of projects under construction isRMB 1,319.4146 million (before tax).Other Notes
□ Applicable √ N/A
6. Other Notes
□ Applicable √ N/A
(V) Analysis of investment statusOverall analysis of external equity investments
□ Applicable √ N/A
1. Significant equity investments
□ Applicable √ N/A
2. Significant non-equity investments
□ Applicable √ N/A
3. Financial assets at fair value through profit or loss
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Asset category | Beginning of the period | Gain or loss on fair value changes during the period | Accumulated fair value changes recognized in equity | Impairment provision for the period | Purchase during the period | Amount sold/redeemed during the period | Other changes | Amount at end of period |
| Structured deposits | 122,119,888.89 | -119,888.89 | 225,000,000.00 | 347,000,000.00 | 0.00 | |||
| Total | 122,119,888.89 | -119,888.89 | 225,000,000.00 | 347,000,000.00 | 0.00 |
Investment in securities
□ Applicable √ N/A
Explanation of investment in securities
□ Applicable √ N/A
Investment in private equity funds
□ Applicable √ N/A
Investment in derivatives
□ Applicable √ N/A
4. Specific progress of major asset reorganization and integration during the reporting period
□ Applicable √ N/A
(VI) Sale of major assets and equity interests
□ Applicable √ N/A
(VII) Analysis of major holding and participating companies
√ Applicable □ N/A
| Company name | Main business | Registered capital | Shareholding ratio (%) | Total Assets (yuan) | Net assets (yuan) | Net profit (yuan) |
| Acter Engineering Technology (Shenzhen) Co., Ltd. | Development of onshore clean room engineering business | RMB 35.2967 million | 100.00 | 76,384,006.24 | 56,361,008.22 | -8,183,626.99 |
| Shenzhen Dingmao Trading Co., Ltd. | Purchase and sale of domestic equipment | RMB 5 million | 100.00 | 86,704,391.44 | 54,883,916.53 | 8,961,679.24 |
| Acter International Limited | Oversea investment platform | HK$25.327397 million | 100.00 | 44,712,312.31 | 23,035,494.85 | 830,977.68 |
| Acter Technology Singapore Pte., Ltd. | Overseas Investment Platform | S$3.37585 million | 100.00 | 16,483,155.80 | 16,365,630.37 | -172,029.20 |
| Sheng Huei Engineering Technology Company Limited | Development of oversea clean room engineering business | US$3.5 million | 100.00 | 194,043,856.06 | 91,624,738.40 | 41,682,402.73 |
| PT. Acter Technology Indonesia | Rp 10,100 million | 100.00 | 29,961,907.35 | 21,211,040.14 | 1,959,545.93 | |
| Acter Technology Malaysia Sdn. Bhd | RM 2.6 million | 100.00 | 8,184,340.44 | -714,256.11 | -1,044,253.28 | |
| Acter Technology Co., Ltd | Baht 30 million | 88.38 | 46,947,278.87 | 27,068,731.18 | 12,676,965.47 | |
| PT Acter Integration Technology Indonesia | Rp 50,050 million | 67.00 | 5,546,972.90 | 5,338,188.97 | -591,849.42 |
Net profit from individual subsidiaries had an impact of 10% or more on the Company’s net profitRevenue from main business and profit from main business:
Unit: Yuan Currency: RMB
| Company name | Revenue from main business | Profit from main business |
| Sheng Huei Engineering Technology Company Limited | 298,027,836.06 | 59,278,380.51 |
(VIII) Structured entities controlled by the Company
□ Applicable √ N/A
VI. Discussion and Analysis of the Future Development of the Company(I) Industry pattern and trend
√ Applicable □ N/A
(1) Strong demand from downstream industries, providing broad market space for the clean room industryIn recent years, China has attached great importance to the semiconductor industry, and the “Outlinefor Promoting the Development of the National Integrated Circuit Industry”, “Made in China 2025”, “13thFive-Year Plan for the Development of National Strategic Emerging Industries”, “Several Policies forPromoting the Development of the Integrated Circuit Industry and the Software Industry in a New Era withHigh Quality”, and the “Fourteenth Five-Year” Plan and a number of favorable semiconductor localizationpolicies have been introduced intensively, with the semiconductor market scale continues to expand, therelevant enterprises to build factories and expand production boom, driven by the rapid construction of cleanroom plant.
Semiconductor industry is one of the most widely used high-end clean room applications, along withcloud computing, Internet of Things, big data, 5G and other new-generation information technologyapplications, as well as data centers, drones and other industrial development drive, the global semiconductorindustry market size is showing steady growth. According to the World Fab Forecast, from 2022 to 2024,the global semiconductor industry plans to start operating 82 new fabs, including 11 projects in 2023 and 42projects in 2024, with wafer sizes ranging from 300mm to 100mm. Wafer processing plant belongs to thesemiconductor industry chain in the middle, its booming development will inevitably drive the industry chainupstream IC design and downstream packaging and testing expansion demand continues to intensify. Fromthe announcement of Chinese semiconductor wafer foundry factories such as SMIC and Nexchip, it can beseen that the Chinese semiconductor industry is still actively laying out the production expansion boomcontinues to promote IC semiconductor and other high-end electronics manufacturing industry is the mainfield of the clean room project.According to the relevant data, the global cleanroom technology market size was US$ 3,900 million in2022 and is expected to reach around US$ 6,960 million by 2032, with a projected compound annual growthrate of 5.97% during the 2023-2032 forecast period. Additionally, data from Zhiyan Consulting indicatesthat China’s cleanroom market is expected to reach approximately RMB 237,500 million by 2029.
(2) Specialized clean room system integration engineering enterprises “value" advantage highlighted
Clean room engineering belongs to the basic engineering of advanced manufacturing industry, whichis an essential part of high-end manufacturing industry such as electronics industry. The development ofadvanced manufacturing industry is largely affected by the quality and level of clean room, and thedevelopment of related industries will undoubtedly promote the growth of the scale of clean roomengineering. With different application fields, the focus of clean technology is also different. With theexpansion of market space and the evolution of specialization of technical needs, the clean room engineeringindustry shows a trend of further specialization.
In the electronics industry, the production program of specific precision electronic manufacturingusually requires factories to maintain 24-hour uninterrupted production, and clients have high requirementsfor the stability and reliability of clean rooms, which put forward higher requirements for the technical level
and comprehensive management level of clean room engineering companies. Since it takes a long time toacquire the construction technology required for such clean room projects, only a few companies in theindustry have the technical level to construct high-grade clean rooms in these fields. In order to minimizeinvestment risks, reduce costs, and ensure product yields, owners usually choose to cooperate withengineering service companies that have rich experience, proven track records, and are leaders in the industry.Small and medium-sized industrial clients are limited by the lack of professional factory construction team,so they are more inclined to choose professional system integration engineering enterprises with richexperience in factory construction to provide services for them.
The clean room industry is characterized by a large number of participants and intense competition inthe low-end segment, with a fragmented market structure. In contrast, high-end clean rooms have stringentcleanliness requirements, and the investment scale of individual projects is generally larger. The cleanlinessof the factory directly affects product yield, so project owners place greater emphasis on the historical projectexperience of the contractors. The bidding process is typically dominated by invitation-based tenders. As aprovider of integrated clean room system solutions, the Company has undertaken numerous high-end cleanroom projects for high-tech manufacturing facilities in China, placing it at the forefront of the industry. It isone of the most competitive clean room engineering service providers in the Chinese market.
(3) Southeast Asia’s “investment fever” drives the layout of clean room engineering enterprises to extend
Southeast Asia is gradually becoming a global semiconductor technology investor must contend.Diplomat Magazine said that many countries in Southeast Asia has established a wide range of chip assembly,packaging and testing industry clusters. Electronic circuits (semiconductors) have been identified as one ofVietnam’s nine key national industries. The Vietnamese media quoted Linda Tan, Chairman of the SoutheastAsian Semiconductor Industry Association, as saying that the Vietnamese semiconductor market is expectedto grow by 6.12% in the period from 2022 to 2027; Southeast Asian countries represented by Singapore andMalaysia are already an important link in the global semiconductor industry chain. Compared with Singaporeand Malaysia, which are at the forefront of the chip industry in Southeast Asia, Thailand, which is a regionalautomobile manufacturing center, focuses on building an automotive semiconductor industry chain.
Various countries have implemented a range of policies to support industrial development. A review ofindustry policies in Southeast Asian nations reveals the following:
The semiconductor companies’ investments in establishing manufacturing facilities in Southeast Asiawill objectively promote the further development of the local industry. However, Southeast Asia also faceschallenges in terms of power supply, technical workforce, and upstream and downstream industrial chainsupport. Accompanying the shift of industrial clients, based on announcements from relevant industry peers,a number of Chinese clean room construction companies have gradually set their sights on the SoutheastAsian region, and have begun to seize the overseas market through measures such as establishing subsidiariesand increasing investment amounts.
(II) Development strategy of the Company
√ Applicable □ N/A
The Company has conducted an analysis and forecast of the current macroeconomic situation and thelong-term planning of infrastructure construction in the main business regions, and combined with its own
actual situation, formulated the Company’s business development strategy and plan for the next three years,making reasonable expectations, plans and arrangements for the Company’s business development. Due tothe possibility that the Chinese macroeconomic policies may be moderately adjusted in the future accordingto the Chinese and foreign economic situation, regional and industrial development and characteristics, theCompany does not rule out the possibility of adjusting its business development goals based on the actualoperating conditions and economic development situation. The Company adheres to the belief of being a“high-quality space creator” and will continue to uphold the business philosophy of “integrity,professionalism, internationalization, and innovation”, implement the development strategy of “quality first,technology leadership, and perfect service”, focusing on clean room engineering services as its main business,with serving the high-tech industry as the core, client demand orientation, technology and R&D as thesupport, and green energy conservation as the direction, to form independent innovation and R&Dcapabilities, achieve sustainable corporate development, and grow into a leading international provider ofclean room system integration engineering services for the high-tech industry.
(III) Business plan
√ Applicable □ N/A
The Company is optimistic about future revenue and profit. Accompanied by the development trend ofthe industry, national policy drive, business development planning and corporate governance, the Companywill continue to adhere to the development strategy of “multi-client, multi-industry, multi-task, multi-region”,introduce ESG development concepts, assembly construction, and actively enhance its competitiveness. Atpresent, the construction of the R&D center project has officially begun, and the construction progress willcontinue to be pushed forward in 2024. After the completion of the project, the Company will actively carryout various research and development work to help clients shorten the construction period, save operatingcosts, and improve the yield rate of products.The driving force for future growth and acquisition of better market share is mainly reflected in thefollowing aspects:
1. The booming development of downstream clean room industries such as domestic substitution, third-generation compound semiconductors, AI intelligence and 5G will provide a broad market space for theCompany’s future growth.
2. Through horizontal integration and vertical division of labor in the industrial chain, we will seize thecore of the industry, gather more high-quality resources, and enhance the enterprise value.
3. Set up civil construction service team, obtain design qualification, introduce more quality teams andtalents to join Acter, and expand business development channels in different industries.
4. Steady business growth in Vietnam, Thailand and Indonesia, and accelerate the continuous expansionof Malaysia market, and there is still room for growth of overseas revenue in 2024 compared with that in2023.
5. Promote “green engineering” management; the Company adheres to the path of green development,introduces ESG development concepts, the concept of energy-saving machine rooms, fully integrates “greenplanning, green procurement, and green engineering methods”, and applies green engineering technologiesto help enterprises achieve carbon neutrality. We have introduced the concept of ESG development and theconcept of energy-saving server room.
6. Continuously increase the development of the Chinese market: the Company has now built a total ofeight molecular companies, including Shenzhen, Xiamen, Hefei, Zhengzhou, Wuhan, Chongqing, andconsolidate and establish the regional centers in East China, South China and Southeast Asia, whilecollecting, organizing and establishing an information resource base, giving full play to the Company’s brand,products, technology, talent and management advantages, extending marketing channels, expanding thescope of business regions, strengthening the allocation of resources, and promoting the sustainabledevelopment of the core business. We will give full play to our advantages in brand, products, technology,talents and management, extend marketing channels, expand the scope of business regions, strengthenresource allocation and promote the sustainable growth of core business.
7. Strengthening brand building: more and more clients take the initiative to invite tenders to thecompany, and the brand building of Acter as “quality space creator” has achieved results. Next, the companywill further promote the Company’s brand through high-quality engineering quality and service, show theCompany’s brand image to clients in all aspects, penetrate the brand concept, and strengthen the brandrecognition. The Company will further realize the promotion of the Company’s brand through high-qualityprojects and services, show the Company’s brand image to clients in all directions, penetrate the brandconcept, strengthen the brand cognition and enhance the brand value.
8. Increase R&D investment: the Company will be recognized as a high-tech enterprise in 2023, and itis expected to maintain more than 3% R&D investment in 2024. The Company will further improve theorganizational structure of technology R&D, enrich the team of talent in technology R&D, improve theperformance evaluation system for encouraging independent innovation, and put the R&D managementmethods and R&D incentive system into practice, so as to provide comprehensive R&D institutionalguarantee for technological innovation. Integrate drawing and resources with BIM to produce valueengineering and improve net profit; accelerate progress and improve project quality with “assemblyinstallation”.
9. Strengthen human resource development: human resource is the core driving force of the Company’sdevelopment, and it is the Company’s long-term planning and goal of human resource management toreasonably allocate, integrate and develop human resources, and establish a perfect human resourcemechanism, so as to make the best use of them and bring their potentials into full play. Combined with theCompany’s future business development plan, we will enhance the Company’s overall human resource levelin the following aspects:
(1) Strengthen the continuing education of the employees, upgrade the qualification certificates of theemployees, increase the qualification of the existing employees in construction, environment and otherrelated practice, establish relevant incentive system to encourage colleagues, upgrade the number ofemployees with middle and senior titles, and encourage the on-the-job continuing learning of the servingcolleagues.
(2) Strengthen the construction of talent echelon, adopting the methods of rotation, academic upgrading,external project management training, internal trainer, position agent, etc. to cultivate middle-level cadres;adopting the methods of master-apprentice system, passing on skills, on-the-job education, and the “ReserveCadre Academy” to cultivate grass-roots cadres and core backbone staffs. By “selecting, nurturing, utilizing,and retaining talents”, appropriate praise and affirmation, pertinent comments and suggestions, and positiveexpectations and concerns, we can form a succession of excellent cadres and a core reserve of manpower tomeet the needs of future business development.(IV) Possible risks
√ Applicable □ N/A
1. Macro policy risk
The Company is mainly engaged in clean room engineering services for IC semiconductors,optoelectronics and other high-tech industries. The market of the Company’s downstream industries has astrong correlation with the macroeconomic development cycle, and the fluctuation of the economic growthrate and macro economy will directly affect the operation and development of the entire downstreamindustries, which will in turn have an impact on the operation of the clean room engineering services business.Therefore, the slowdown in economic growth and macroeconomic fluctuations will affect the Company’sbusiness development and bring certain risks to the Company’s development and operation.
2. Industry competition risk
After years of development, China’s clean room engineering industry has been growing and entering asteady development stage. With the entry of various types of social capital into the clean room industry, thenumber of enterprises in the industry is increasing year by year, and the market competition is relativelyfierce. The Company’s service targets are mainly concentrated in the segmented market of electronic industry,and it has strong competitive strength and certain leading advantages. Acter Group is one of the enterprisesin the industry that possesses the first-class qualification of general contracting for electromechanicalengineering and the first-class qualification of specialized contracting for architectural electromechanicalinstallation, and ranks upstream in the industry in terms of business performance, business level, marketbrand and management level, and has a certain degree of popularity in the industry. With the increasingnumber of entrants in the industry, the Company will face competition from enterprises in the same industry.Therefore, if the company fails to maintain its advantages in technology, management, brand name andprocess, the Company’s position in the industry will be affected to a certain extent.
3. Risk of gross profit rate fluctuation
During the reporting period, the gross profit rate of the Company’s main business was 13.33%, withcertain fluctuation compared with the same period of last year. The fluctuation of gross profit margin ismainly related to the intensity of competition, and factors such as cost control, technology level, project sitemanagement ability and client groups will also affect the change of gross profit margin to a certain extent.If the competition in the industry further intensifies in the future and the Company fails to take furthermeasures to enhance its core competitiveness, the Company may face the risk of fluctuation in gross profitmargin.
4. Risk of higher concentration of clients
During the reporting period, the sales of the top five clients of the company amounted to RMB 889.0282million, accounting for 44.25% of the total annual sales, with a high concentration of clients. It is mainly dueto the fact that the company has high reputation and good word of mouth, and mainly undertakes key projectsand large-scale projects in the industry, and the amount of individual projects is large. clean roomengineering industry is a project-based business, the Company needs to continue to develop new clients,undertake new business to ensure that the Company’s operating results of sustained and stable growth, suchas the Company’s market development strategy does not meet the market changes or does not meet the needsof clients, the Company’s existence can not be sustained, stable development of new clients and maintainthe old clients to add new business may be, and thus face the risk of performance decline.
5. “Transnational” management risk
The Company has been dedicated to providing clean room engineering services for high-techmanufacturing projects since its inception. After years of development, the Company has accumulatedsubstantial expertise in business network layout, client resources, and technology. Particularly in recent years,the continuous growth of overseas business has not only promoted the Company’s development but alsoposed greater challenges to the Company’s risk control and asset management capabilities. If the Company’smanagement structure and capabilities cannot keep up with the needs of its sustained development, and itsasset management ability fails to be correspondingly enhanced, it will constrain the Company’s developmentpace and potentially adversely impact its operating performance.
(V) Others
□ Applicable √ N/A
VII. Information and reasons for the Company’s failure to disclose information in accordance withthe Guidelines due to non-application of the provisions of the Guidelines or for special reasons suchas state secrets or commercial secrets.
□ Applicable √ N/A
Section IV Corporate Governance
I. Explanation on Corporate Governance
√ Applicable □ N/A
During the reporting period, the Company continuously improved its corporate governance structure,internal management and internal control system and standardized its operation in accordance with therequirements of the Company Law, the Securities Law, relevant laws and regulations of the Shanghai StockExchange and the actual situation of the Company. The shareholders’ general meeting, the Board of Directorsand the Supervisory Committee of the Company have clear division of powers and responsibilities and eachof them performs its own duties, and the decision-making is independent, efficient and transparent. TheBoard of Directors of the Company has set up specialized committees such as the Remuneration andAssessment Committee, the Audit Committee, the Nomination Committee and the Strategy Committee tofurther improve the corporate governance structure of the Company. Details of the corporate governance ofthe Company are as follows:
(I) The Company and its controlling shareholders: The controlling shareholders of the Companyexercise their rights and obligations in accordance with the law, and effectively fulfill their obligations ofgood faith to the Company and other shareholders. The Company and the controlling shareholder arecompletely independent in five aspects, namely, business, assets, personnel, organization and finance, andthe Company has a complete business system and the ability to operate independently in the market.
(II) The shareholders’ meeting is the Company’s highest authority. The Company strictly follows theprovisions and requirements of the Articles of Association, the Rules of Procedure for Shareholders’Meetings, and other regulations to standardize the convening, holding, and deliberation procedures of theshareholders’ meeting. The Company engages lawyers to issue legal opinions on the legality of theshareholders’ meeting, ensuring the equal status of all shareholders, especially minority shareholders, fullyexercising the legitimate rights and interests of shareholders, and ensuring shareholders' right to know,participate, and vote on major corporate matters.
(III) The board of directors strictly exercises its powers in accordance with the Company Law, theArticles of Association, the Rules of Procedure for the Board of Directors, and other regulations. Thisincludes organizing and implementing the resolutions of the shareholders’ meeting, deciding on theCompany’s business plans and investment plans, formulating the Company’s annual financial budget, final
accounts, and profit distribution plans, drafting major acquisition plans, and appointing or dismissing theCompany’s general manager and other senior management personnel. All directors faithfully and diligentlyperform their duties, actively participate in the decision-making of the Company’s major matters, andactively participate in relevant training. The specialized committees under the board of directors operate well,and the convening of meetings and resolutions comply with the relevant system requirements, allowing themto play their normal role.(IV) The Supervisory Committee exercises its powers and functions in strict accordance with theCompany Law, the Articles of Association and the Rules of Procedure for the Board of Directors, andperforms its supervisory functions diligently and conscientiously, including the effective supervision of thefulfillment of duties by the Directors and senior management as well as the operation of the Company inaccordance with the law.
(V) The company strictly follows the requirements of the Information Disclosure Management Systemand the Registration Management System for Insiders by implementing measures such as insider registrationand external information reporting registration. This strengthens the management of insiders, standardizesthe review process for external information reporting, clarifies the obligations and responsibilities of relevantpersonnel to maintain the confidentiality of undisclosed information, and enhances the Company’sawareness of information disclosure. This effectively avoids the occurrence of violations in informationdisclosure. Meanwhile, the Company strengthens communication and interaction with investors, and paysattention to maintaining investor relations.
Whether there is any material difference between the corporate governance and the laws, administrativeregulations and CSRC’s regulations on the governance of listed companies; if there is such a materialdifference, the reasons shall be explained.
□ Applicable √ N/A
II. Specific measures taken by the controlling shareholders and actual controllers of the Company toensure the independence of the Company in terms of assets, personnel, finances, organization andbusiness, as well as the solutions, work progress and follow-up plans in case of the company’sindependence being affected.
□ Applicable √ N/A
Controlling shareholders, actual controllers and other parties controlled by them engaged in business that aresame as or similar to the company, peer competition and impact of significant changes in peer competitionon the company, solutions adopted, working progress and subsequent solution plans
□ Applicable √ N/A
III. General Meeting of Shareholders
| Session of the meeting | Date of meeting | Index of searches on designated websites where resolutions are published | Date of publication of resolutions | Resolutions |
| 2022 Annual General Meeting | April 28, 2023 | www.sse.com .cn | April 29, 2023 | 1. Proposal on the Work Report of the Board of Directors for the Year 2022 2. Proposal on the Work Report of the Supervisory Board for the Year 2022 3. Proposal on the Full Text and Summary of the Annual Report for the Year 2022 4. Proposal on the Financial Settlement Report for the Year 2022 5. Proposal on the Financial Budget Report for the Year 2023 6. Proposal on the Estimated Guarantee Total for the Year 2023 |
| 7. Proposal on the Application for Comprehensive Credit Limit from Financial Institutions for the Year 2023 8. Proposal on Changing the Implementation Location and Method of Some Raised Fund Investment Projects 9. Proposal on Adjusting the Construction Content of Some Raised Fund Investment Projects 10. Proposal to Revise the “Major Operating and Investment Decision Management System” 11. Proposal to Revise the “Articles of Association” 12. Proposal on the Profit Distribution Plan for the Year 2022 | ||||
| The First Extraordinary General Meeting of 2023 | August 29, 2023 | www.sse.com.cn | August 30, 2023 | 1. Proposal on the Reappointment of the Accounting Firm 2. Proposal on the Absorption and Merger of the Wholly-owned Subsidiary 3. Proposal on the Change of Registered Capital, Revision of the Articles of Association, and Handling of the Industrial and Commercial Registration Change |
Preferred shareholders whose voting rights have been restored requested an extraordinary generalmeeting□ Applicable √ N/AExplanation of general meetings
√ Applicable □ N/A
During the reporting period, the Company held 2 general meetings of shareholders, and the above meetingscomplied with the relevant laws and regulations and the Articles of Association in respect of the conveningmethod, proceedings, voting method and contents of resolutions.
IV. Directors, Supervisors and Senior Management Personnel(I) Changes in shareholdings and remuneration of incumbent and outgoing Directors, Supervisors and senior management during the reporting period
√ Applicable □ N/A
Unit: Share
| Name | Position | Gender | Age | Appointment date | Expiration date of appointment | Shareholdings at the beginning of the year | Shareholdings at the end of the year | Increase/decrease in shares during the year | Reasons for increase or decrease | Total amount of pre-tax remuneration received from the Company during the reporting period (RMB Million/100) | Whether remuneration was received from related parties of the Company |
| Liang Jinli | Chairman | Male | 62 | July 1, 2019 | July 1, 2025 | 0 | 0 | 0 | Unchanged | 48.57 | Yes |
| Chen Zhihao | Vice Chairman, Secretary of the Board | Male | 58 | July 1, 2019 | July 1, 2025 | 0 | 0 | 0 | Unchanged | 111.66 | No |
| Zhu Qihua | Director, General Manager | Male | 51 | July 1, 2019 | July 1, 2025 | 0 | 0 | 0 | Unchanged | 108.85 | No |
| Su Yuzhou | Director | Male | 48 | July 1, 2019 | July 1, 2025 | 0 | 0 | 0 | Unchanged | 49.02 | No |
| Shi Kang | Independent Director | Male | 59 | July 31, 2020 | July 1, 2025 | 0 | 0 | 0 | Unchanged | 8.00 | No |
| Wu Weihua | Independent Director | Male | 53 | July 1, 2019 | July 1, 2025 | 0 | 0 | 0 | Unchanged | 8.00 | No |
| Gu Hailan | Independent Director | Female | 52 | July 1, 2019 | July 1, 2025 | 0 | 0 | 0 | Unchanged | 8.00 | No |
| Huang Yaping | Chairwoman of the Supervisory Board | Female | 48 | July 1, 2019 | July 1, 2025 | 0 | 0 | 0 | Unchanged | 36.85 | No |
| Liao Chongyou | Supervisor | Male | 47 | July 1, 2019 | July 1, 2025 | 0 | 0 | 0 | Unchanged | 58.40 | No |
| Wang Yu | Supervisor | Female | 43 | July 1, 2019 | July 1, 2025 | 0 | 0 | 0 | Unchanged | 35.22 | No |
| Xiao Jingxia | Chief Financial Officer | Female | 55 | July 1, 2019 | July 1, 2025 | 0 | 0 | 0 | Unchanged | 37.61 | No |
| Total | / | / | / | / | / | / | 0 | 0 | / | 510.18 | / |
| Name | Main Working Experience |
| Liang Jinli | Born in October 1962, with Chinese nationality of Taiwan, no permanent residence in foreign countries, master’s degree of EMBA, senior engineer. He was the Engineering Manager of Gongshan Air Conditioning & Refrigeration Co., Ltd.; the Director and Chairman of the board of Sheng Huei Limited; Supervisor of Winmax (Shanghai); and Supervisor of Winmax (Suzhou). Currently, he is the CEO and Chairman of Acter (Taiwan); Chairman of HER SUO (Taiwan); Director of Acter (Shenzhen); Director of Acter (Hong Kong); Director of New Point (Seychelles); Director of Sheng Huei International; Chairman of NOVA (Taiwan); Director of Acter (Singapore); Director of Acter (Malaysia); Director of Shenzhen Dingmao; Director and CEO of Enrich (Taiwan); Chairman of Winmega (Taiwan); Director of Novatech (Singapore); Chairman of Winmax (Suzhou); Chairman of Winmax (Shanghai); Managing Partner of Suzhou Songhuei; Director of Sheng Huei (Vietnam); Director of WASTE; Chairman of the Board of Directors of Rayzher Industrial; Director of Acter (Thailand); Chairman of the Board of Directors of Hengji Construction Company Limited; Director of Indonesia Joint Venture; and Chairman of the Board of Directors of Acter Group from July 2019 to the present. |
| Chen Zhihao | Born in May 1966, with Chinese nationality of Taiwan, no permanent residence in foreign countries, bachelor’s degree, senior engineer. He was the Deputy General Manager of Wuhan Ronghuei Industry and Trade Co., Ltd; the Deputy General Manager of Guangzhou Danli International Trade Co., Ltd; the Deputy General Manager of Zhongshan Acter Mechanical and Electrical Engineering Co., Ltd.; the Deputy General Manager and General Manager of Acter (Shenzhen); General Manager and Director of ShengHuei Limited; Director and Secretary of the Board of Directors of Acter Group. Currently, he is the Director of Acter (Hong Kong); the Chairman of Acter (Shenzhen); the Chairman of Shenzhen Dingmao; the Director of Lantia Innovation Co., Ltd.; the Director of Acter (Singapore); the Director of Sheng Huei (Vietnam); the Director of Space (Thailand); and the Director of Indonesia Joint Venture; and from July 2020 to now, he has been the Vice Chairman and the Secretary of the Board Of Directors of Acter Group. |
| Zhu Qihua | Born in April 1973, with Chinese nationality of Taiwan, no permanent residence in foreign countries, master degree in EMBA, mid-level engineer. He was the Assistant Manager of the Engineering Department of Kuang I Engineering Co., Ltd.; the Director of Acter (Taiwan), the Assistant Manager of the Engineering Department of Suzhou HongHuei Mechanical and Electrical Engineering Co., Ltd. and served as the Assistant Manager, Manager, Associate Manager, Deputy General Manager, General Manager and Director of Sheng Huei Limited. Currently, he is the Director and General Manager of Acter (Shenzhen); the Director and General Manager of Shenzhen Dingmao; the Supervisor of Sheng Huei (Vietnam); the Director of Acter (Hong Kong); the Director of Acter (Malaysia); the Director of Acter (Thailand); the Supervisor of Acter (Indonesia); the Supervisor of Indonesia Joint Venture; and from July 2019 to now, he has been the Director and General Manager of Acter Group. |
| Su Yuzhou | Born in May 1976, with Chinese nationality of Taiwan, no permanent residence in foreign countries, bachelor’s degree, senior engineer. He was an engineer of Acter (Taiwan) and the Manager of the Engineering Department of Sheng Huei Limited. Currently, he is the Managing Partner of Suzhou Shengzhan; the Director of Space (Thailand); from July 2019 to now, he is the Manager of the Engineering Department and the Director of Acter Group. |
| Shi Kang | Born on August 15, 1965, with Chinese nationality, no permanent residency in foreign countries, bachelor’s degree. He was the Secretary of the Youth League Committee and President of the Youth League School of the School of Computer and Information Engineering of Jiangsu University; President of the Youth League School of Jiangsu University Youth League Committee; the Lecturer of the Specialized Vehicle Teaching and Research Department of the School of Automotive Engineering in Jiangsu University; the Assistant General Manager of Jiangsu University Industrial Corporation; the Professional Lecturer of the Automobile Teaching Department of the School of Automobile Engineering in Jiangsu University; the Director of Office of the School of Business Administration in Jiangsu University; the Deputy Secretary of the Party Committee and Vice Dean of the College of Finance and Economics in Jiangsu University; the Vice President and Deputy Secretary of Jiangsu University Press and Magazines; the Deputy Director of the Labor Union of Jiangsu University; the President, General Manager and Executive Director of Jiangsu University Press Co., Ltd.; and the Director of Jiangsu University Asset |
| Management Co., Ltd. Currently, he is a Grade 5 staff member of the Logistics Department (Logistics Group) of Jiangsu University; from July 2020 to present, he has been an Independent Director of Acter Group. | |
| Wu Weihua | Born in November 1971, with Chinese nationality, no permanent residency in foreign countries, master’s degree and licensed to practice law in China. He was a practicing lawyer of Suzhou Foreign Law Firm, a practicing lawyer of H&Z Group Law Firm, a practicing lawyer of Suzhou Renhai Fangzhou Law Firm, a Director of the Finance and Insurance Committee of Suzhou Lawyers Association, a member of Suzhou Hi-Tech District Government Lawyers’ Advisory Group, and a Standing Director of the Bankruptcy Law Research Association of Jiangsu Law Society. Currently, he is a lecturer of Suzhou University of Science and Technology; a practicing lawyer of Jiangsu Lantern Law Firm; the Deputy Secretary-General of Small and Medium-sized Enterprises Committee of Jiangsu Federation of Industry and Commerce; the Vice President of Suzhou Bankruptcy Administrators’ Association; a Director of Suzhou Lawyers’ Association; and an Independent Director of Acter Group from July 2019 to the present. |
| Gu Hailan | Born in October 1972, with Chinese nationality, no permanent residency in foreign countries, master degree in MBA, certified public accountant in China. She was the Financial Manager of Kunshan Huaheng Welding Equipment Technology Co., Ltd; the Financial and Administrative Manager of Hangzhou Zhixing Automobile Co. Ltd. and Hangzhou Dongxingxing Auto Repair Co., Ltd.; the Chief Financial Officer of Kunshan Huaheng Welding Equipment Co., Ltd.; Chief Financial Officer, Deputy General Manager and Chief Financial Officer, Deputy General Manager and Secretary of the Board of Directors of Shanghai Qinsen Landscape Co., Ltd.; the Secretary to the Board of Directors and Chief Financial Officer of Origincell Technology Group Ltd. Currently, she is the Secretary of the Board Of Directors and Chief Financial Officer of Jiaxing Hechang Elevator Control Technology Co., Ltd.; from July 2019 to present, he is an Independent Director of Acter Group. |
| Huang Yaping | Born in February 1976, with Chinese nationality of Taiwan, permanent residency in the United States and has a graduate degree. She was the Accounts Receivable Specialist of McAllister, the Finance Specialist of Texas Instruments Incorporated, the Finance Manager of Acter (Shenzhen), and the Manager of Administration Department of Sheng Huei Limited. Currently, she is the Supervisor of Shenzhen Dingmao; the Supervisor of Acter (Shenzhen); and from July 2019 to now, she is the Chief Executive Officer and Chairman of the Supervisory Committee of Acter Group. |
| Liao Chongyou | Born in May 1977, with Chinese nationality of Taiwan, no permanent residency in foreign countries and college degree. He was an engineer of Ming Sheng Electromechanical Co., Ltd. and the Head of Engineering Department of SILPORT Technologies Inc. and the Manager of Engineering Department of Acter (Taiwan) and the Associate Manager of Engineering Department of Sheng Huei Limited. From July 2019 to now, he has been the Associate Manager and Supervisor of the Engineering Department of Acter Group. |
| Wang Yu | Born in June 1981, with Chinese nationality, no permanent residency in foreign countries, bachelor’s degree. She used to work as a laborer in Haoweinai Precision Technology (Suzhou) Co., Ltd; a staff member in the Management Department of Suzhou Honghuei Mechanical and Electrical Engineering Co., Ltd. From July 2019 to now, she has been the Assistant Manager, Deputy Manager and Employee Representative Supervisor of the Management Integration Department of Acter Group. |
| Xiao Jingxia | Born in April 1969, with Chinese nationality, no permanent residency in foreign countries and bachelor’s degree. She was the Team Leader of the Audit Department of the First Joint Accounting Firm; the Assistant Manager of the Underwriting Department of Fubon Securities Co., Ltd.; the Financial Manager of Taiwan Green Point Enterprises Co., Ltd.; the Financial Director of Megaforce Compan Limited; the Accountant of Shen Chuan Paper (Suzhou) Co., Ltd.; the Finance Manager of Sheng Huei Limited; and the Supervisor of Suzhou Yumanchang Food Technology Co., Ltd. From July 2019 to present, she is the Chief Financial Officer of Acter Group. |
Other Information
□ Applicable √ N/A
(II) Occupation of Directors, Supervisors and Senior Management Currently in Office and Outgoing During the Reporting Period
1. Appointments in shareholders’ organizations
√ Applicable □ N/A
| Name of the incumbent | Name of shareholder unit | Position held in the shareholders’ organization | Date of commencement of term of office | Date of termination |
| Liang Jinli | Acter (Taiwan) | Chief Executive Officer and Chairman of the Board | August 1993 | |
| Liang Jinli | Sheng Huei International | Director | May 2008 | |
| Liang Jinli | Suzhou Songhuei | Managing Partner | April 2018 | |
| Su Yuzhou | Suzhou Shengzhan | Managing Partner | April 2018 | |
| Statement of employment in shareholders’ organizations | None | |||
2. Employment in other organizations
√ Applicable □ N/A
| Name of incumbent | Name of other units | Positions held in other units | Date of commencement of term of office | Date of termination |
| Liang Jinli | New Point (Seychelles) | Director | March 2008 | |
| Enrich (Taiwan) | Director, Chief Executive Officer | June 2014 | ||
| HER SUO (Taiwan) | Chairman of the Board | April 1998 | ||
| NOVA (Taiwan) | Chairman of the Board | March 2009 | ||
| Winmega (Taiwan) | Chairman of the Board | July 2014 | ||
| Novatech (Singapore) | Director | June 2016 | ||
| Winmax (Shanghai) | Chairman of the Board | May 2023 | ||
| Winmax (Suzhou) | Chairman of the Board | May 2023 | ||
| Rayzher Industrial | Chairman of the Board | June 2021 | ||
| WASTE | Director | October 2019 | ||
| Acter (Singapore) | Director | November 2009 |
| Acter (Malaysia) | Director | December 2011 | ||
| Acter (Shenzhen) | Director | June 2005 | ||
| Shenzhen Dingmao | Director | October 2012 | ||
| Acter (Thailand) | Director | September 2019 | ||
| Acter (Hong Kong) | Director | November 2007 | ||
| Sheng Huei (Vietnam) | Director | September 2018 | ||
| Hengji Construction Corporation | Chairman of the Board | May 2023 | ||
| Indonesia Joint Venture | Director | April 2023 | ||
| Winmax (Suzhou) | Supervisor | May 2016 | May 2023 | |
| Winmax (Shanghai) | Supervisor | October 2016 | May 2023 | |
| Chen Zhihao | Acter (Shenzhen) | Chairman of the Board | October 2009 | |
| Shenzhen Dingmao | Chairman of the Board | October 2012 | ||
| Acter (Hong Kong) | Director | November 2007 | ||
| Sheng Huei (Vietnam) | Director | July 2019 | ||
| Acter (Singapore) | Director | October 2018 | ||
| Space (Thailand) | Director | October 2019 | ||
| Lantia Innovation Co., Ltd. | Director | September 2015 | ||
| Indonesia Joint Venture | Director | April 2023 | ||
| Zhu Qihua | Acter (Shenzhen) | Director, General Manager | January 2018 | |
| Shenzhen Dingmao | Director, General Manager | January 2018 | ||
| Acter (Hong Kong) | Director | July 2019 | ||
| Sheng Huei (Vietnam) | Supervisor | December 2018 |
| Acter (Malaysia) | Director | September 2019 | ||
| Acter (Thailand) | Director | September 2019 | ||
| Acter (Indonesia) | Supervisor | January 2023 | ||
| Indonesia Joint Venture | Supervisor | April 2023 | ||
| Su Yuzhou | Space (Thailand) | Director | October 2019 | |
| Huang Yaping | Acter (Shenzhen) | Supervisor | October 2018 | |
| Shenzhen Dingmao | Supervisor | October 2018 | ||
| Xiao Jingxia | Suzhou Yumanchang Food Technology Co., Ltd. | Supervisor | October 2021 | April 2023 |
| Gu Hailan | Jiaxing Hechang Elevator Control Technology Co., Ltd. | Secretary of the Board of Directors and Chief Financial Officer | November 2022 | |
| Shi Kang | Jiangsu University Press Co., Ltd. | President, General Manager and Executive Director | May 2017 | December 2023 |
| Jiangsu University Asset Management Co., Ltd. | Director | May 2017 | December 2023 | |
| Logistics Department of Jiangsu University (Logistics Group) | Grade 5 Staff | January 2024 | ||
| Wu Weihua | Suzhou University of Science and Technology | Lecturer | July 1993 | |
| Jiangsu Lantern Law Firm | Lawyer | December 2004 | ||
| Small and Medium-sized Enterprises Committee of Jiangsu Federation of Industry and Commerce | Deputy Secretary General | October 2018 | ||
| Suzhou Bankruptcy Administrators Association | Vice President | June 2019 | ||
| Suzhou Lawyers Association | Director | February 2016 | ||
| Description of positions held in other organizations | None | |||
(III) Remuneration of directors, supervisors and senior management personnel
√ Applicable □ N/A
| Decision-making procedures for remuneration of Directors, Supervisors and senior management personnel | With reference to the remuneration level of the Company’s industry and the region, and taking into account the Company’s actual operating conditions and job responsibilities, the Company shall draw up a plan and implement it after consideration and approval by the Board of Directors and the general meeting of shareholders. Among them, the remuneration of Directors and Supervisors shall be decided by the shareholder’' meeting, and the remuneration of senior management shall be decided by the Board of Directors. |
| Whether a director recuses himself/herself from the Board of Directors’ discussion on his/her own remuneration? | Yes |
| Details of the recommendations made by the Remuneration and Evaluation Committee or the special meeting of independent directors in respect of the remuneration of directors, supervisors and senior management personnel | On April 7, 2023, the Remuneration and Evaluation Committee considered and approved the “Proposal on the Remuneration Plan for Senior Management for the Year 2023”. |
| Basis for determining the remuneration of Directors, Supervisors and senior management personnel | Except for the allowance for independent directors of the Company, the remuneration of Directors, Supervisors and senior management who are in receipt of remuneration from the Company shall be determined on the basis of the Company's overall remuneration policy, salary standards, the specific executive positions held by the individuals in the Company, their work performance as well as the actual circumstances of the fulfillment of the Company’s annual business plan. |
| Actual payment of remuneration to Directors, Supervisors and senior management personnel | The actual payment of the remuneration of Directors, Supervisors and senior management was made on time in accordance with the relevant provisions mentioned above, and the remuneration data were true and accurate. |
| Total actual remuneration received by all Directors, Supervisors and senior management as at the end of the Reporting Period | RMB 5.1018 million |
(IV) Changes in Directors, Supervisors and senior management of the Company
□ Applicable √ N/A
(V) Explanation of penalties imposed by securities regulators in the previous three years
□ Applicable √ N/A
(VI) Others
□ Applicable √ N/A
V. Information on the Board of Directors’ meetings held during the reporting period
| Session of the meeting | Date of meeting | Resolution of the meeting |
| The Sixth Meeting of the Second Session of the Board of Directors | April 7, 2023 | 1. Proposal on the Work Report of the General Manager for the Year 2022 2. Proposal on the Work Report of the Board of Directors for the Year 2022 3. Proposal on the Performance Report of Independent Directors for the Year 2022 4. Proposal on the Report on the Performance of the Audit Committee of the Board of Directors for the Year 2022 5. Proposal on the Internal Control Evaluation Report for the Year 2022 6. Proposal on the Internal Control System Declaration for the Year 2022 7. Proposal on the Full Text and Summary of the Annual Report for the Year 2022 8. Proposal on the Financial Settlement Report for the Year 2022 9. Proposal on the Financial Budget Report for the Year 2023 10. Proposal on the Business Plan for the Year 2023 11. Proposal on the Remuneration Plan for Senior Management for the Year 2023 12. Proposal on the Confirmation of Routine Related Transactions for the Year 2022 and the Expected Routine Related Transactions for the Year 2023 13. Proposal on Signing a Rental Contract for Real Estate and Related Transactions with Suzhou Winmax Technology Corp. 14. Proposal on the Estimated Guarantee Total for the Year 2023 15. Proposal to Request the Board of Directors’ Confirmation of the Detailed Guarantees between the Company and its Subsidiaries Holding Over 50% of Shares within the Scope of Consolidated Financial Statements 16. Proposal on the Application for Comprehensive Credit Limit from Financial Institutions for the Year 2023 17. Proposal on Applying for Comprehensive Credit Limit from China Construction Bank Suzhou High-Tech Industrial Development Zone Branch 18. Proposal on Providing Financial Support to the Holding Subsidiary Company 19. Proposal on Providing Loans to Employees for Home Purchases and Formulating the “Employee Home Purchase Loan Management Measures” 20. Proposal on Changes in Accounting Policies 21. Proposal on the Special Report on the Deposit and Actual Use of Funds Raised by the Company in 2022 22. Proposal on Using Some Idle Own Funds for Cash Management 23. Proposal on Changing the Implementation Location and Method of Some Raised Fund Investment Projects 24. Proposal on Adjusting the Construction Content of Some Raised Fund Investment Projects |
| 25. Proposal to Request the Board of Directors to Approve the Establishment of the Joint Venture Company for External Investment 26. Proposal to Revise the “Major Operating and Investment Decision Management System” 27. Proposal to Revise the “Articles of Association” 28. Proposal on the Profit Distribution Plan for the Year 2022 29. Proposal to Convene the 2022 Annual Shareholders’ Meeting. | ||
| Seventh Meeting of the Second Board of Directors | April 27, 2023 | 1. Proposal on the Q1 Report for 2023 2. Proposal on Confirming that Overdue Accounts Receivable Exceeding Normal Credit for 3 Months Are Not Included in Fund Lending |
| Eighth Meeting of the Second Board of Directors | August 11, 2023 | 1. Proposal on the Full Text and Summary of the Semi-Annual Report for the Year 2023 2. Proposal on the Special Semi-Annual Report on the Deposit and Actual Use of Funds Raised by the Company in 2023 3. Proposal on Providing Financial Support to the Holding Subsidiary Company 4. Proposal on Capital Increase to the Hong Kong Subsidiary 5. Proposal on Applying for Comprehensive Credit Line from the Bank 6. Proposal on Confirming that Overdue Accounts Receivable Exceeding Normal Credit for 3 Months Are Not Included in Fund Lending 7. Proposal on Seeking the Board’s Approval for Relevant Matters 8. Proposal on the Reappointment of the Accounting Firm 9. Proposal on the Absorption and Merger of the Wholly-Owned Subsidiary 10. Proposal on the Change of Registered Capital, Revision of the Articles of Association, and Handling of the Industrial and Commercial Registration Change 11. Proposal on Convening the First Extraordinary General Meeting of Shareholders in 2023 |
| Ninth Meeting of the Second Board of Directors | October 27, 2023 | 1. Proposal on the Q3 Report for 2023 2. Proposal on the Expected Trading Volume of Financial Derivative Products 3. Proposal on Using Some Idle Raised Funds for Cash Management 4. Proposal on the Postponement of Some Raised Investment Projects 5. Proposal on Confirming that Overdue Accounts Receivable Exceeding Normal Credit for 3 Months Are Not Included in Fund Lending 6. Proposal on the Outbound Investment 7. Proposal to Request the Board of Directors’ Confirmation of the Detailed Guarantees between the Company and its Subsidiaries Holding Over 50% of Shares within the Scope of Consolidated Financial Statements |
VI. Fulfillment of Duties by Directors
(I) Participation of Directors in the Board of Directors’ Meetings and Shareholders’ Meetings
| Name of Director | Independent Director or not | Participation in the Board of Directors | Participation in shareholders’ meetings | |||||
| Required attendances of Board meetings | Attendance in person | Attendance by telecommunication | Attendances by proxy | Absences | Whether there have been two consecutive failures to attend in person | Number of attendances at the shareholders' meeting | ||
| Liang Jinli | No | 4 | 4 | 4 | 0 | 0 | No | 2 |
| Chen Zhihao | No | 4 | 4 | 0 | 0 | 0 | No | 2 |
| Zhu Qihua | No | 4 | 4 | 0 | 0 | 0 | No | 2 |
| Su Yuzhou | No | 4 | 4 | 4 | 0 | 0 | No | 2 |
| Shi Kang | Yes | 4 | 4 | 4 | 0 | 0 | No | 2 |
| Wu Weihua | Yes | 4 | 4 | 4 | 0 | 0 | No | 2 |
| Gu Hailan | Yes | 4 | 4 | 4 | 0 | 0 | No | 2 |
Explanation for two consecutive failures to attend in person
□ Applicable √ N/A
| Number of board meetings held during the year | 4 |
| Of which: Number of on-site meetings | 0 |
| Number of meetings held via telecommunication | 0 |
| Number of meetings held on-site and via communication | 4 |
(II) Objections raised by directors to matters relating to the Company
□ Applicable √ N/A
(III) Others
□ Applicable √ N/A
VII. Specialized committees under the Board of Directors
√ Applicable □ N/A
(I) Membership of specialized committees under the Board of Directors
| Type of specialized committees | Name of member |
| Audit Committee | Liang Jinli, Wu Weihua, Gu Hailan |
| Nomination Committee | Liang Jinli, Shi Kang, Wu Weihua |
| Remuneration and Appraisal Committee | Liang Jinli, Shi Kang, Gu Hailan |
| Strategy Committee | Liang Jinli, Chen Zhihao, Zhu Qihua |
(II) The Audit Committee held 4 meetings during the reporting period
| Date of meeting | Contents of meetings | Important opinions and recommendations | Other performance of duties |
| April 7, 2023 | 1. Proposal on the Report on the Performance of the Audit Committee of the Board of Directors for the Year 2022 2. Proposal on the Internal Control Evaluation Report for the Year 2022 3. Proposal on the Internal Control System Declaration for the Year 2022 4. Proposal on the Full Text and Summary of the Annual Report for the Year 2022 5. Proposal on the Financial Settlement Report for the Year 2022 6. Proposal on the Financial Budget Report for the Year 2023 7. Proposal on the Confirmation of Routine Related Transactions for the Year 2022 and the Expected Routine Related Transactions for the Year 2023 8. Proposal on Signing a Rental Contract for Real Estate and Related Transactions with Suzhou Winmax Technology Corp. 9. Proposal on the Estimated Guarantee Total for the Year 2023 10. Proposal to Request the Board of Directors’ Confirmation of the Detailed Guarantees between the Company and its Subsidiaries Holding Over 50% of Shares within the Scope of Consolidated Financial Statements 11. Proposal on the Application for Comprehensive Credit Limit from Financial Institutions for the Year 2023 | Considered and approved | None |
| 12. Proposal on Applying for Comprehensive Credit Limit from China Construction Bank Suzhou High-Tech Industrial Development Zone Branch 13. Proposal on Providing Financial Support to the Holding Subsidiary Company 14. Proposal on Providing Loans to Employees for Home Purchases and Formulating the “Employee Home Purchase Loan Management Measures” 15. Proposal on Changes in Accounting Policies 16. Proposal on the Special Report on the Deposit and Actual Use of Funds Raised by the Company in 2022 17. Proposal on Using Some Idle Own Funds for Cash Management 18. Proposal on Changing the Implementation Location and Method of Some Raised Fund Investment Projects 19. Proposal on Adjusting the Construction Content of Some Raised Fund Investment Projects 20. Proposal on the Profit Distribution Plan for the Year 2022 | |||
| April 27, 2023 | 1. Proposal on the Q1 Report for 2023 2. Proposal on Confirming that Overdue Accounts Receivable Exceeding Normal Credit for 3 Months Are Not Included in Fund Lending | Considered and approved | None |
| August 11, 2023 | 1. Proposal on the Full Text and Summary of the Semi-Annual Report for the Year 2023 2. Proposal on the Special Semi-Annual Report on the Deposit and Actual Use of Funds Raised by the Company in 2023 3. Proposal on Providing Financial Support to the Holding Subsidiary Company 4. Proposal on Capital Increase to the Hong Kong Subsidiary 5. Proposal on Applying for Comprehensive Credit Line from the Bank 6. Proposal on Confirming that Overdue Accounts Receivable Exceeding Normal Credit for 3 Months Are Not Included in Fund Lending 7. Proposal on Seeking the Board's Approval for Relevant Matters 8. Proposal on the Reappointment of the Accounting Firm | Considered and approved | None |
| October 27, 2023 | 1. Proposal on the Q3 Report for 2023 2. Proposal on the Expected Trading Volume of Financial Derivative Products 3. Proposal on Using Some Idle Raised Funds for Cash Management 4. Proposal on the Postponement of Some Raised Investment Projects 5. Proposal on Confirming that Overdue Accounts Receivable Exceeding Normal Credit for 3 Months Are Not Included in Fund Lending 6. Proposal on the Outbound Investment 7. Proposal to Request the Board of Directors’ Confirmation of the Detailed Guarantees between the Company and its Subsidiaries Holding Over 50% of Shares within the Scope of Consolidated Financial Statements | Considered and approved | None |
(III) The Nomination Committee held one meeting during the reporting period
| Date of meeting | Contents of the meeting | Important opinions and recommendations | Other performance of duties |
| October 27, 2023 | 1. Proposal to Review the Qualifications of the Current Independent Directors of the Company | Considered and approved | None |
(IV) The Remuneration and Evaluation Committee held one meeting during the reporting period
| Date of meeting | Content of the meeting | Important opinions and recommendations | Other performance of duties |
| April 7, 2023 | 1. Proposal on the Remuneration Plan for Senior Management for the Year 2023 | Considered and approved | None |
(V) The Strategy Committee held three meetings during the reporting period
| Date of meeting | Contents of meetings | Important opinions and recommendations | Other performance of duties |
| April 7, 2023 | 1. Proposal on the Business Plan for the Year 2023 2. Proposal to Request the Board of Directors to Approve the Establishment of the Joint Venture Company for External Investment | Considered and approved | None |
| August 11, 2023 | 1. Proposal on the Absorption and Merger of the Wholly-Owned Subsidiary | Considered and approved | None |
| October 27, 2023 | 1. Proposal on the Expected Trading Volume of Financial Derivative Products 2. Proposal on the Outbound Investment | Considered and approved | None |
(VI) Details of disagreements
□ Applicable √ N/A
VIII. Explanation of risks found by the Supervisory Committee to exist in the Company
□ Applicable √ N/A
The Supervisory Committee has no objection to the supervisory matters during the reporting period.
IX. Employees of the parent company and major subsidiaries at the end of the reporting period(I) Employees
| Number of employees in service of the Parent Company | 442 |
| Number of employees on board of major subsidiaries | 198 |
| Total number of staff | 640 |
| Number of retired employees subject to expenses of the parent company and major subsidiaries | 1 |
| Specialty Composition | |
| Type of breakdown by function | Number of Professionals |
| Production staff | 0 |
| Sales staff | 5 |
| Technical staff | 525 |
| Finance staff | 25 |
| Administrative staff | 72 |
| Management staff | 13 |
| Total | 640 |
| Educational Level | |
| Breakdown by educational background | Number (persons) |
| Master's degree and above | 13 |
| Bachelor’s degree | 324 |
| College | 258 |
| College and below | 45 |
| Total | 640 |
(II) Remuneration policy
√ Applicable □ N/A
The Company’s remuneration system closely follows the principles of prioritizing efficiency, taking into account fairness and incentives. Internally, it reflects the valuedifferences of different levels, grades and positions according to the differences in responsibilities, abilities and performance achievements; externally, it conducts annualmarket salary level surveys to ensure the market competitiveness of the Company’s salaries.
(III) Training program
√ Applicable □ N/A
In order to achieve the Company’s mission, vision, and development goals, Acter Group continues to invest resources in cultivating talents to maintain the corecompetitive advantage of “diversified layout and multi-tasking talents”. Following the “education and training program” and the strategic direction of talent development of“developing employees’ potentials and promoting self-learning”, Acter Group invests sufficient resources in employees of different positions and grades to learn and developin a systematic training program, such as new employee training, on-the-job training, and self-study, etc., to strengthen employees’ professional skills, improve work efficiencyand quality, and at the same time, satisfy employees’ lifelong learning needs and support the Company’s long-term growth.
The Company conducts a training needs survey in the Q4 of each year, plans corresponding development courses based on the functional needs of supervisors andemployees, and offers online or physical courses to achieve the goals of cultural inheritance, strengthening the management qualities of all levels of management, anddeveloping the strength of talents. In addition to setting up mandatory courses to assist employees in improving their work performance, employees can also participate invarious training courses based on their personal needs and future development plans, so as to prepare for the next stage of career planning and development in advance.
(IV) Labor Outsourcing
√ Applicable □ N/A
| Total number of labor hours outsourced | 18,960 hours |
| Total remuneration paid for labor outsourcing | RMB 391,200.00 |
X. Proposed profit distribution or capitalization of capital reserves(I) Formulation, implementation or adjustment of cash dividend policy
√ Applicable □ N/A
In accordance with the CSRC’s “Notice on Further Implementation of Matters Relating to Cash Dividends for Listed Companies”, “Supervisory Guideline for ListedCompanies No. 3 - Cash Dividends for Listed Companies” and other relevant regulations, the Company has formulated the cash dividend policy, and the decision-makingprocedures and mechanisms relating to profit distribution matters are clearly stipulated in the Articles of Association of the Company. As considered and approved at theTwelfth Meeting of the Second Session of the Board of Directors of the Company, the Company proposes to distribute profits for the year 2023 on the basis of the total sharecapital registered on the date of registration of the shareholders for the implementation of the equity distribution. The Company proposes to distribute a cash dividend of RMB8 (including tax) for every 10 shares to all shareholders. As at December 31, 2023, the total share capital of the Company was 100,000,000 shares, and the total cash dividendto be distributed is RMB 80,000,000 (including tax). The cash dividend distribution ratio of the Company for the year is 57.72%. The implementation of this profit distributionplan is in compliance with the provisions of the Articles of Association and the requirements of the resolution of the shareholders’ meeting. This profit distribution proposalhas yet to be submitted to the 2023 Annual General Meeting for consideration.During the reporting period, the Company did not adjust or change its profit distribution policy.
(II) Special explanation on cash dividend policy
√ Applicable □ N/A
| Compliance with the provisions of the Articles of Association of the Company or the requirements of the resolutions of the shareholders’ general meeting | √ Yes □ No |
| Whether the criteria and proportion of dividend distribution are clear and unambiguous | √ Yes □ No |
| Whether the relevant decision-making procedures and mechanisms are complete | √ Yes □ No |
| Whether the independent directors have performed their duties and played their due role | √ Yes □ No |
| Whether the small and medium-sized shareholders have sufficient opportunities to express their opinions and demands, and whether their legitimate rights and interests are adequately protected | √ Yes □ No |
(III) If the reporting period is profitable and the parent company has positive profit available for distribution to shareholders but has not put forward a proposalfor a cash profit distribution plan, the Company shall disclose in detail the reasons therefor as well as the use of the undistributed profit and the plan for itsutilization
□ Applicable √ N/A
(IV) Proposals for profit distribution and capitalization of capital reserve for the reporting period
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Number of bonus shares per 10 shares (shares) | 0.00 |
| Dividend per 10 shares (yuan) (including tax) | 8.00 |
| Dividend per 10 shares (shares) | 0.00 |
| Cash dividend amount (including tax) | 80,000,000.00 |
| Net profit attributable to ordinary shareholders of the listed company in the consolidated statement for the year of dividend distribution | 138,590,474.42 |
| Ratio to net profit attributable to ordinary shareholders of the listed company in the consolidated statement (%) | 57.72 |
| Amount of shares repurchased for cash included in cash dividends | 0.00 |
| Total amount of dividends (including tax) | 80,000,000.00 |
| Ratio of total dividend amount to net profit attributable to ordinary shareholders of the listed company in the consolidated statement (%) | 57.72 |
XI. Status of the Company’s share incentive scheme, employee shareholding plan or other employee incentives and their impacts
(I) Where the relevant incentive matters have been disclosed in the interim announcement and there is no progress or change in subsequent implementation
□ Applicable √ N/A
(II) Incentives not disclosed in the interim announcement or with subsequent progressEquity incentives
□ Applicable √ N/A
Other Notes
□ Applicable √ N/A
Employee Stock Ownership Plan
□ Applicable √ N/A
Other incentives
□ Applicable √ N/A
(III) Share incentives granted to Directors and senior management during the reporting period
□ Applicable √ N/A
(IV) Evaluation mechanism for senior management personnel and establishment and implementation of incentive mechanism during the reporting period
□ Applicable √ N/A
XII. Construction and Implementation of Internal Control System During the Reporting Period
√ Applicable □ N/A
For the evaluation of the Company’s internal control, please refer to the “Internal Control Evaluation Report for the Year 2023” disclosed by the Company on March 30,2024 on the website of Shanghai Stock Exchange (www.sse.com.cn).
Explanation on the existence of significant deficiencies in internal control during the reporting period
□ Applicable √ N/A
XIII. Management Control over Subsidiaries During the Reporting Period
√ Applicable □ N/A
During the reporting period, the Company formulated the “Management System for Subsidiaries” in accordance with the Company Law, the Securities Law, the Self-disciplinary Supervision Guidelines for Listed Companies of Shanghai Stock Exchange No. 1 - Standardized Operation and other laws and regulations as well as relevantprovisions of the Articles of Association of the Company, and in conjunction with the actual situation of the Company. The Company has strictly complied with the “SubsidiaryManagement System”, further strengthened the management of subsidiaries, established an effective control mechanism, and carried out risk control over the organization,resources, assets, investment and operation of the Company, so as to improve the overall operational efficiency and risk-resistant capability of the Company.The subsidiaries operate in compliance with the law within the framework of the Company’s overall policies and objectives and report information on material matters to theCompany in a timely, accurate, truthful and complete manner in strict accordance with the provisions of the Company’s “Information Disclosure Management System”, andthere is no information on material matters that shall be disclosed but has not been disclosed.
XIV. Explanation of the Relevant Information of the Internal Control Audit Report
√ Applicable □ N/A
The Company has engaged ShineWing Certified Public Accountants LLP to conduct an independent audit of the internal control of the Company and issued a standardunqualified opinion. Details of the internal control audit report can be found in the “Internal Control Audit Report for the Year 2023” disclosed by the Company on March30, 2024 on the website of Shanghai Stock Exchange (www.sse.com.cn).Whether to disclose the internal control audit report: YesType of opinion of the internal control audit report: Standard unqualified opinion
XV. Self-Inspection and Rectification of Issues in the Special Action on Governance of Listed CompaniesIn FY2023, the Company carried out the self-inspection activities of the special action for governance of listed companies, and there were no rectification matters after self-inspection of the Company.
XVI. Others
□ Applicable √ N/A
Section V Environmental and Social Responsibility
I. Environmental Information
| Whether to establish mechanisms related to environmental protection | Yes |
| Investment in environmental protection during the reporting period (Unit: RMB Million/100) | 18.61 |
(I) Explanation of the environmental protection status of the Company and its major subsidiaries which are key emission units announced by the environmentalprotection department
□ Applicable √ N/A
(II) Explanation on the environmental protection situation of companies other than key emission units
□ Applicable √ N/A
(III) Information related to the protection of ecology, prevention of pollution and fulfillment of environmental responsibility
□ Applicable √ N/A
(IV) Measures taken to reduce its carbon emissions during the reporting period and their effects
| Whether to take measures to reduce carbon emissions | Yes |
| Reduction of carbon dioxide equivalent emissions (unit: tons) | N/A |
| Type of carbon reduction measures (e.g., use of clean energy for power generation, use of carbon reduction technologies in production processes, R&D and production of new products that contribute to carbon reduction, etc.) | The Company implements pollution prevention for environmental factors involved in the construction and service process, controls and treats them in accordance with the regulations of relevant departments, controls sewage and noise emissions, reduces construction dust and construction waste, saves energy and reduces consumption, rationally utilizes resources and energy, and prevents or reduces pollution to the environment; it also cooperates with suppliers and contractors to jointly prevent pollution and protect the ecological environment. We will take strong measures to prevent pollution throughout the construction process. |
Specific description
√ Applicable □ N/A
The Company has introduced modern environmental management methods and formulated environmental management systems such as Quality, Environment and SafetyManagement Manual, Safety and Civilized Construction Management Procedures and Energy Saving and Consumption Reduction Control Procedures in strict accordancewith the requirements of GB/T24001-2016/IS014001:2015. The environmental management involved in the construction of electromechanical installation works, fire-fightingworks and architectural works within the scope of qualification is evaluated by an external certification organization, and the company has obtained ISO14001 certification.
II. Social Responsibility(I) Whether to disclose social responsibility report, sustainable development report or ESG report separately
√ Applicable □ N/A
For details, please refer to the “2023 Environmental, Social and Governance (ESG) Report of Acter Technology Integration Group Co., Ltd.” disclosed on the website ofShanghai Stock Exchange (www.sse.com.cn) on March 30, 2024 by the Company.
(II) Details of social responsibility work
√ Applicable □ N/A
| External donations and public welfare items | Number/content | Description |
| Total input (RMB Million/100) | 29.60 | |
| Of which: Funds (RMB Million/100) | 29.60 | |
| Material Discount (RMB Million/100) | 0.00 | |
| Number of people benefited (persons) | Unknown |
Specific description
√ Applicable □ N/A
During the reporting period, the Company conscientiously fulfilled its social responsibilities, actively promoted the harmonious development of society, extensivelyparticipated in various social activities, and supported public welfare undertakings. The Company established and improved various rules and regulations internally,strengthened corporate culture construction, actively took various measures to protect the legitimate rights and interests of employees, and improved employee benefits.Externally, the Company has always adhered to sharing its development achievements with society, actively engaged in public welfare and charity undertakings, called onemployees to join the volunteer team, and invested resources in multiple public welfare and charity areas such as earthquake relief, education assistance, and assistance tovulnerable groups, continuously fulfilling social responsibilities and shaping the image of a responsible enterprise.Online public welfare delivers boundless love. The Acter Volunteer Group went to the Suzhou Social Welfare Home to bring stickers, coloring boards, puzzles, and othertoys to the children in the welfare home, and accompanied them in making delicate handicrafts, allowing them to feel the warmth and care of society.Caring for education, warming the heart. In order to encourage all students to achieve academic success, Acter Group held the second “Acter Scholarship” award ceremonyat Wuhan University of Science and Technology, with a total of 20 students receiving scholarships. In order to effectively improve the current lack of modern teachingequipment in schools in Tibetan areas and enhance the overall teaching quality of schools, the Company donated computers to Xueyu Civilization Charity School to help theschool cultivate more talents and contribute to the revitalization of rural education.In the future, the Company will continue to actively fulfill its social responsibilities, express the original intention of the enterprise to convey warmth and give back to societywith practical actions, take the initiative to assume the social responsibilities bestowed upon enterprises in the new era, and achieve high-quality and sustainable developmentof the enterprise through hard work.
III. Consolidating and Expanding the Results of Poverty Alleviation, Rural Revitalization and Other Specifics
□ Applicable √ N/A
Specific description:
□ Applicable √ N/A
Section VI Important Events
I. Fulfillment of commitments(I) Commitments made by the Company’s actual controllers, shareholders, connected parties, acquirers and other parties related to the Company’s commitmentsduring the reporting period or continuing into the reporting period
√ Applicable □ N/A
| Background of commitments | Type of commitment | Commitment party | Commitment Content | Date of Commitment | Whether there is a deadline for fulfillment | Commitment period | Timely and strict compliance | If not fulfilled in time, specify the reasons for incomplete fulfillment. | If not fulfilled in time, next steps shall be indicated. |
| Commitments relating to the IPO | Restriction on Sale of Shares | Sheng Huei International, Acter (Taiwan) | Note 1 | June 22, 2021 | Yes | October 13, 2022 to October 12, 2025 | Yes | N/A | N/A |
| Commitments relating to the IPO | Restriction on Sale of Shares | Suzhou Songhuei, Suzhou Shengzhan | Note 2 | June 22, 2021 | Yes | October 13, 2022 to October 12, 2023 | Yes | N/A | N/A |
| Commitments relating to the IPO | Restriction on Sale of Shares | Liang Jinli, Chen Zhihao, Zhu Qihua, Su Yuzhou, Huang Yaping, Liao Chongyou, Wang Yu, Xiao Jingxia | Note 3 | June 22, 2021 | Yes | October 13, 2022 to October 12, 2023 Yes | Yes | N/A | N/A |
| Commitments relating to the IPO | Resolution of competition | Sheng Huei International, Acter (Taiwan) | Note 4 | June 22, 2021 | No | Long-term | Yes | N/A | N/A |
| Commitments relating to the IPO | Others | Acter Group, Sheng Huei International, Acter (Taiwan), directors and senior management of the Company | Note 5 | June 22, 2021 | No | Long-term | Yes | N/A | N/A |
| Commitments relating to the IPO | Others | Acter Group, Sheng Huei International, Acter (Taiwan), directors (excluding | Note 6 | June 22, 2021 | Yes | October 13, 2022 to October 12, 2025 | Yes | N/A | N/A |
| independent directors) and senior management | |||||||||
| Commitments relating to the IPO | Others | Acter Group, Sheng Huei International, Acter (Taiwan), directors, supervisors, senior management, Suzhou SongHuei, Suzhou ShengZhan | Note 7 | June 22, 2021 | No | Long-term | Yes | N/A | N/A |
Note 1:
The direct controlling shareholder of the Company, Sheng Huei International, and the indirect controlling shareholder of the Company, Acter (Taiwan), undertook that:
(1) Within 36 months from the date of listing of the Company's shares, the Company will not transfer or entrust others to manage the shares issued before the publicoffering of the Company directly or indirectly held by the Company, nor will the Company repurchase such shares.
(2) Within 6 months after the listing of the Company, if the closing price of the Company's shares is lower than the issue price for 20 consecutive trading days, or if theclosing price of the Company's shares is lower than the issue price at the end of the 6-month period after the listing (or if such day is not a trading day, then it shall be the firsttrading day thereafter), the lock-up period for the Company's shareholdings in the Company shall be automatically extended for 6 months. During the extended lock-up period,the Company shall not transfer or delegate the management of the shares directly or indirectly held by the Company that were issued prior to the public offering of theCompany, nor shall the Company repurchase such shares.
(3) Within two years after the expiration of the aforesaid lock-up period, the Company shall reduce its shareholding in each year by not more than 25% of the totalnumber of shares held by the Company directly and indirectly at a price not lower than the issue price. The said issue price refers to the issue price of the Company's IPO. Incase of ex-rights and ex-dividends due to equity distribution, capitalization of provident fund, share allotment, etc., the ex-rights and ex-dividends shall be dealt with inaccordance with the relevant provisions of the Shanghai Stock Exchange. The methods of share reduction include centralized bidding transactions, block trading, transfer byagreement and other methods in compliance with the regulations of the CSRC and the Shanghai Stock Exchange.
(4) When the Company reduces its shareholding in the Company, it will strictly comply with the provisions of the Securities Law of the People's Republic of China,Certain Provisions on Reduction of Shareholdings by Shareholders, Directors and Supervisors of Listed Companies, Implementing Rules for the Reduction of Shareholdingsby Shareholders, Directors, Supervisors and Senior Management of Listed Companies of the Shanghai Stock Exchange, Rules for Listing of Stocks of the Shanghai StockExchange and other relevant laws, regulations and standardized documents. If the CSRC and the Shanghai Stock Exchange issue other regulations before the Company reducesits shareholding in the Company, the Company undertakes to strictly comply with the regulations in force at the time of the reduction of the Company's shareholding in theCompany to implement the reduction.
(5) In the event that the Company violates the aforesaid undertakings, the proceeds from the transfer of the Company's shares in breach of the undertakings ("proceedsfrom the transfer in breach of the undertakings") shall belong to the Company. If the Company fails to hand over to the Company the proceeds from the aforesaid violation,the Company shall have the right to freeze the remaining shares of the Company held by the Company and may withhold the cash dividends payable to the Company andapply them against the proceeds from the violation due to the Company until the proceeds from the violation due to the Company have been remedied.Note 2:
The shareholders of the Company, Suzhou Songhuei and Suzhou Shengzhan, undertook that:
(1) Within 12 months from the date of listing of the Company's shares, the Company will not transfer or delegate the management of the shares held directly or indirectlyby the Company prior to the public offering of the Company's shares, nor will the Company repurchase such shares.
(2) If the Company reduces its holdings of the Company's shares within two years after the expiration of the lock-up period for the Company's shares, the price of suchreduction shall not be less than the issue price of the Company's IPO. The aforesaid issue price refers to the issue price of the Company's IPO. In the event of ex-rights andex-dividends due to equity distribution, capitalization of capital from provident fund, share allotment, etc., the ex-rights and ex-dividends shall be dealt with in accordancewith the relevant provisions of the Shanghai Stock Exchange.
(3) In addition to the aforesaid lock-up period, during the period when the shareholders/partners of the Company serve as directors/senior management personnel of theCompany, the shares of the Company to be transferred by the Company each year shall not exceed 25% of the total number of shares of the Company directly or indirectlyheld by the Company; and the shareholders of the Company shall not transfer the shares of the Company directly or indirectly held by the Company within half a year afterthey have ceased to serve as directors/senior management personnel of the Company.
(4) In reducing its shareholding in the Company, the Company will strictly comply with the provisions of the Securities Law of the People's Republic of China, CertainProvisions on Reduction of Shareholdings by Shareholders, Directors and Supervisors of Listed Companies, Implementing Rules for the Reduction of Shareholdings byShareholders, Directors, Supervisors and Senior Management of Listed Companies of the Shanghai Stock Exchange, Rules for the Listing of Stocks on the Shanghai StockExchange and other relevant laws, regulations and standardized documents. If the CSRC and the Shanghai Stock Exchange have any other regulations before the Companyreduces its shareholding in the Company, the Company undertakes to strictly comply with the regulations in force at the time of the reduction of the Company's shareholdingin the Company to implement the reduction.
(5) In the event that the Company violates the aforesaid undertakings, the proceeds of the violation shall belong to the Company. If the Enterprise fails to hand over tothe Company the proceeds of the aforesaid violation of transfer, the Company shall have the right to freeze the remaining shares of the Company held by the Enterprise andmay withhold the cash dividends payable to the Enterprise and apply them against the proceeds of the violation of transfer due to the Company until it makes up for theproceeds of the violation of transfer due to the Enterprise.Note 3:
Directors, Supervisors and senior management who indirectly hold shares of the Company, Liang Jinli, Chen Zhihao, Zhu Qihua, Su Yuzhou, Huang Yaping, LiaoChongyou, Wang Yu and Xiao Jingxia undertook that:
(1) Within 12 months from the date of listing of the Company's shares, I will not transfer or delegate the management of the shares held by me directly or indirectly thatwere issued before the Company's public offering, nor will the Company repurchase such shares.
(2) Within 6 months after the listing of the Company, if the closing price of the Company's shares is lower than the issue price for 20 consecutive trading days, or if theclosing price of the Company's shares is lower than the issue price at the end of the 6-month period after the listing (or if that day is not a trading day, then it is the first tradingday thereafter), the lock-up period of the Company's shares held by me shall be automatically extended for 6 months. During the extended lock-up period, I will not transferor delegate the management of the shares held directly or indirectly by me that were issued prior to the public offering of the Company, nor will the Company repurchasesuch shares.
(3) If I reduce my holdings of the Company's shares within two years after the expiration of the lock-up period, the price of such reduction shall not be less than the issueprice of the Company's IPO. The aforesaid issue price refers to the issue price of the Company's IPO. In case of ex-rights and ex-dividends due to equity distribution,capitalization of capital from provident fund, share allotment, etc., the ex-rights and ex-dividends shall be dealt with in accordance with the relevant provisions of the ShanghaiStock Exchange.
(4) In addition to the foregoing lock-up period, during the period in which I serve as a director, supervisor and senior management of the Company, and if I leave officebefore the expiration of my term of office, during the term of office determined at the time of my assumption of office and within 6 months after the expiration of the term of
office: (I) the transfer of the shares shall not exceed 25% of the total number of the shares of the Company held directly or indirectly by me each year; and (II) I shall nottransfer the shares of the Company held directly or indirectly by me within 6 months of my leaving office.
(5) When I reduce my shareholding in the Company, I will strictly comply with the provisions of the Securities Law of the People's Republic of China, Certain Provisionson Reduction of Shareholdings by Shareholders, Directors and Supervisors of Listed Companies, Implementing Rules for the Reduction of Shareholdings by Shareholders,Directors, Supervisors and Senior Managers of Listed Companies on the Shanghai Stock Exchange, Rules for Listing of Stocks on the Shanghai Stock Exchange, and otherrelevant laws, regulations and standardized documents. If the CSRC and the Shanghai Stock Exchange have other regulations before I reduce my shareholding in the Company,I undertake to strictly comply with the regulations in force at the time I reduce my shareholding in the Company.
(6) I will not refuse to fulfill the above undertakings due to change of position or departure from office. If I violate the above undertaking, the proceeds of the violationof the transfer shall belong to the Company. If I fail to hand over to the Company the proceeds of the aforesaid illegal transfer, the Company shall have the right to freeze theremaining shares of the Company held by me and may withhold the cash dividends payable to me and apply them against the proceeds of the illegal transfer due to theCompany until it makes up for the proceeds of the illegal transfer due to me.Note 4:
(I) Sheng Huei International, the direct controlling shareholder of the Company, has issued the "Commitment Letter on the Avoidance of Competition in the SameIndustry" in respect of the avoidance of competition in the same industry, with specific commitments as follows:
1. As at the date of this commitment letter, except for the investment company, the Company and the subsidiaries directly or indirectly controlled by the Company havenot engaged in any business which is or may be in the same line of competition with the Company and its subsidiaries in any manner, directly or indirectly, within or outsidethe PRC.
2. The Company and the subsidiaries directly or indirectly controlled by the Company will not in the future engage in any form of business or activity that constitutes orhas the potential to constitute competition in the same line of business with the business operated by the Company and its subsidiaries, and will not, directly or indirectly, takea controlling interest in, acquire or merge with any enterprise or other economic organization that competes or is likely to compete with the business operated by the Companyand its subsidiaries.
3. If the Company and its subsidiaries directly or indirectly controlled by the Company have any business opportunities to participate in or acquire shares in any businesswhich may compete or may compete with the business operated by the Company and its subsidiaries, the Company will immediately notify the Company and provide suchbusiness opportunities to the Company and its subsidiaries in an appropriate manner with priority, and the Company and its subsidiaries will have priority to acquire the assetsor equity involved in the business under the same conditions. The Company will immediately notify the Company of such business opportunities in an appropriate manner,and the Company and its subsidiaries will have priority in acquiring the assets or equity interests involved in the relevant business under the same conditions, so as to avoidcompeting with the Company and its subsidiaries.
4. From the date of this Undertaking, if the Company further expands its main products and main business scope, the Company and other enterprises controlled by theCompany at that time guarantee that they will not compete with the Company's expanded main products or main business; in case of competition with the Company's expandedmain products or main business, the Company and other enterprises controlled by the Company at that time guarantee to withdraw from the competition with the Companyin accordance with the following methods, including but not limited to
(1) Cessation of production of products that compete or may compete with the Company's expanded principal products;
(2) Cessation of the operation of businesses that compete or may compete with the Company's expanded main business;
(3) Incorporate into the Company, with the Company's consent, businesses that compete with the Company's expanded principal business;
(4) Transferring the business competing with the Company's expanded main business to an unrelated third party.
5. This commitment letter shall be effective from the date of issuance and shall remain effective during the period in which the Company is the controlling shareholderof Acter Group.
6. In case of any breach of the above undertakings, the Company is willing to bear the corresponding compensation liability arising from the breach of the aboveundertakings in accordance with the law.
(II) Acter (Taiwan), the indirect controlling shareholder of the Company, has issued the "Commitment Letter on the Avoidance of Competition in the Same Industry"in respect of avoidance of competition in the same industry, with specific commitments as follows:
1. As at the date of this commitment letter, except for the investment company, the Company and the subsidiaries directly or indirectly controlled by the Company havenot engaged in any business in any manner, directly or indirectly, other than in the Taiwan region of the PRC, that is in the same business competition or potential samebusiness competition with the Company and its subsidiaries.
2. The Company and the subsidiaries directly or indirectly controlled by the Company will not in the future engage in any form of business or activities that compete orpotentially compete with the business operated by the Company and its subsidiaries in any manner, directly or indirectly, in other regions outside of the Taiwan region ofChina, and will not directly or indirectly, in other regions outside of the Taiwan region of China, take a controlling stake in, acquire, merge or amalgamate businesses thatcompete or potentially compete with the business operated by the Company and its subsidiaries. We will not directly or indirectly hold, acquire, merge with or acquireenterprises or other economic organizations that compete or may compete with the business operated by the Company and its subsidiaries in any region other than Taiwan,China.
3. If the Company and its subsidiaries directly or indirectly controlled by the Company have any business opportunities in other regions outside of the Taiwan region ofChina to participate in or acquire shares in any business that may compete or potentially compete with the business operated by the Company and its subsidiaries, the Companywill immediately notify the Company and provide such business opportunities to the Company and its subsidiaries on a priority basis in an appropriate manner so that theCompany and its subsidiaries can acquire the business involved on a priority basis under the same terms and conditions. The Company will immediately notify the Companyto provide such business opportunities to the Company and its subsidiaries on a priority basis in an appropriate manner, and the Company and its subsidiaries will acquire theassets or equity involved in the relevant business on a priority basis under the same conditions, so as to avoid competing with the Company and its subsidiaries.
4. From the date of this commitment letter, if Acter Group further expands its main products and main business scope, the Company and other enterprises controlled bythe Company at that time guarantee that they will not compete with the Company's expanded main products or main business; in case of competition with Acter Group'sexpanded main products or main business, the Company and other enterprises controlled by the Company at that time guarantee that they will withdraw from the competitionin accordance with the following methods The Company and other enterprises controlled by the Company at that time undertake to withdraw from competition with theCompany in the following manner, including but not limited to the following:
(1) Cease production of products that compete or may compete with the Company's expanded principal products;
(2) Cease to operate businesses that compete or may compete with the Company's expanded main business;
(3) Incorporate into the Company, with the Company's consent, businesses that compete with the Company's expanded principal business;
(4) Transferring the business competing with the Company's expanded main business to an unrelated third party.
5. This commitment letter shall be effective from the date of issuance and shall continue to be effective during the period in which the Company is an indirect controllingshareholder of the Company.
6. In the event of any breach of the above undertakings, the Company is willing to bear the corresponding liability for compensation arising from the breach of the aboveundertakings in accordance with the law.
Note 5:
(I) In order to ensure that the Company's measures to fill the immediate returns can be effectively fulfilled, the Company's direct controlling shareholder, Sheng HueiInternational, and its indirect controlling shareholder, Acter (Taiwan), have made the following undertakings:
1. Undertake not to intervene in the operation and management activities of the Company beyond their authority.
2. Undertake not to encroach on the interests of the Company.
3. Undertake not to harm the interests of the Company.
4. Undertake not to effectively fulfill any commitments made by the Company in relation to the measures to fill in the returns. If the Company violates such commitmentsand causes losses to the Company or the investors, the Company is willing to bear the compensation liability to the Company or the investors in accordance with the law.
The Company, as the responsible party for the above undertakings, will be liable for compensation in accordance with the law if it violates the above undertakings andcauses losses to the Company or investors.
(II) In order to guarantee that the Company's measures to fill in the immediate returns can be practically fulfilled, the directors and senior management of the Companyundertake that:
1. I undertake not to transfer benefits to other units or individuals without compensation or on unfair terms, nor to use other means to harm the interests of the Company;
2. I undertake to restrain my consumption behavior in office;
3, I undertake not to use the Company's assets to engage in investment and consumption activities unrelated to the performance of their duties;
4. I undertake to fully support the remuneration system when it is formulated by the Board of Directors or the Remuneration and Evaluation Committee to link theremuneration system with the implementation of the Company's measures to fill in the returns, and to vote in favor of the relevant motions when they are being considered (ifI have the right to vote);
5. If the Company subsequently launches the equity incentive policy, I undertake to fully support the Board of Directors' and shareholders' meetings' motions to beannounced that the exercise conditions of the Company's equity incentives are linked to the implementation of the Company's measures to fill in the returns and I will bewilling to vote in favor of (if I have the right to vote) such motions;
6. After the date of this undertaking and before the completion of the implementation of the IPO and listing of the Company, if the CSRC makes any other new regulatoryprovisions on the measures and undertakings for filling the returns, and if the above undertakings fail to satisfy such provisions of the CSRC, I undertake to issue supplementaryundertakings in accordance with the latest provisions of the CSRC at that time;
7. I undertake to effectively fulfill the relevant measures formulated by the Company to fill in the returns and any commitments I have made in relation to the measuresto fill in the returns, and I am willing to bear the responsibility of compensating the Company or investors in accordance with the law in the event of any violation of suchcommitments by me and any loss caused to the Company or investors.
8. As one of the parties responsible for the measures to fill in the returns, if I violate the above undertakings or refuse to fulfill the above undertakings, I agree to bepunished or take relevant management measures in accordance with the relevant regulations and rules formulated or issued by the CSRC and the Shanghai Stock Exchangeand other securities regulatory authorities.
(III) In order to protect the right to information of small and medium-sized investors and safeguard the interests of small and medium-sized investors, the Company hasconducted a careful analysis of the impact of the IPO on the dilution of the immediate returns, and has put forward specific measures and undertakings to cover the dilutedimmediate returns:
1. Comprehensively enhance the management level of the Company and improve the efficiency of capital utilization
To improve the Company's operational efficiency, strengthen budget management, control the Company's expenses, improve the efficiency of capital utilization,comprehensively and effectively control the Company's operation and risk management, and enhance operational efficiency and profitability. In addition, the Company willimprove the remuneration and incentive mechanism, introduce outstanding talents in the market and maximize the motivation of its employees to tap the creativity and
potential power of the Company's employees. Through the above measures, the Company will comprehensively improve the operational efficiency, reduce costs and enhancethe Company's operating results.
2. Strengthen the supervision of investment projects to ensure the reasonable and legal use of funds raised.In order to standardize the use and management of the Company's issue proceeds and ensure that the issue proceeds are used in a standardized, safe and efficient manner,the Company has formulated the "Proceeds Management System" and other relevant systems. The Board of Directors has passed a resolution on the establishment of a specialaccount for the use and management of the issue proceeds, and the issue proceeds will be deposited in the special account designated by the Board of Directors for the exclusiveuse of the special account. The Company will strictly manage the use of proceeds in accordance with relevant laws and regulations and the requirements of the "ProceedsManagement System", and will actively cooperate with the regulatory banks and sponsoring organizations in the inspection and supervision of the use of proceeds, so as toensure that the proceeds are reasonably used in a normal manner and to reasonably guard against the risk of the use of proceeds.
3. Accelerate the investment progress of the fund-raising projects and strive to realize the expected benefits of the projects as soon as possible.The implementation of the fund-raising investment projects of the Offering is in line with the Company's development strategy, which can effectively enhance theCompany's business capacity and profitability, and is conducive to the Company's sustainable and rapid development. Prior to the availability of the proceeds, the Issuerintends to actively raise funds through a variety of channels to accelerate the investment progress of the fund-raising projects, and strive to realize the expected benefits of theprojects as early as possible, so as to enhance the shareholders' returns in the next few years and to reduce the risk of dilution of the current returns caused by the Issue.
4. Further improve the profit distribution system and strengthen the investor return mechanism.The Company has amended the Draft Articles of Association in accordance with relevant laws and regulations and established a sound and effective shareholder returnmechanism. Upon completion of the Offering, the Company will, in accordance with the provisions of laws and regulations and the Draft Articles of Association, activelypromote the distribution of profits to shareholders where the conditions for profit distribution are met, so as to effectively maintain and increase the returns to shareholders.Note 6:
In order to protect the interests of investors and further specify the measures to stabilize the share price of the Company when the share price of the Company is lowerthan the net asset per share within three years after the listing of the Company, and in accordance with the relevant requirements of the Opinions on Further Promoting theReform of the New Issue System of New Shares issued by the CSRC, the Second Extraordinary Shareholders' General Meeting of the Company for the year 2021 consideredand passed the Proposal of Stabilizing the Share Price of Acter Technology Integration Group Co., Ltd.''.(I) Effective period of the PlanThe Plan shall be valid for three years from the date of listing of the Company's shares.(II) Conditions for activation and cessation of the share price stabilization plan
1. Conditions for activation
Within three years after the listing of the Company's shares, if the closing price of the Company's shares for 20 consecutive trading days is lower than the Company'saudited net asset value per share as at the end of the most recent period (in the event that the closing price of the said shares is not comparable with the Company's audited netasset value per share as at the end of the most recent period due to ex-rights and ex-dividend matters, the said net asset value per share shall be adjusted accordingly) and ifthe provisions of relevant laws, regulations and standardized documents relating to the buyback and holding of additional shares are also met, the plan shall be triggered.normative documents, then the Company, controlling shareholders, directors (excluding independent directors) and senior management shall be triggered to fulfill the measuresto stabilize the Company's share price.
2. Cessation Conditions
During the implementation period, if any of the following circumstances occurs, the implementation of the stock price stabilization measures and the fulfillment of thecommitments shall be deemed to be completed and the announced stock price stabilization plan shall cease to be implemented:
① The closing price of the Company's shares for 5 consecutive trading days is higher than the Company's unaudited net assets per share for the latest period (if theclosing price of the said shares is not comparable with the Company's audited net assets per share at the end of the latest period due to ex-rights and ex-dividend matters, thesaid net assets per share shall be adjusted accordingly);
② Continuing to repurchase or hold additional shares of the Company will result in the Company's shareholding distribution failing to meet the listing conditions;
③ Continuing to hold additional shares will result in the need to fulfill the obligation to make a tender offer and it has not planned to implement the tender offer.
3. Specific measures of the share price stabilization plan
(1) Buyback by the Company
① The Company shall convene the Board of Directors within 10 trading days from the date of triggering the activation conditions of the share price stabilization measuresin accordance with the laws, regulations and the Articles of Association of the Company. The Board of Directors shall formulate a clear and specific buyback plan, the contentof which shall include, but not be limited to, the types of shares to be repurchased by the Company, the number of ranges, the price ranges, the period of implementation, etc.,and submit it to the General Meeting of Shareholders of the Company for deliberation and approval; the buyback plan will become effective upon consideration and approvalby the General Meeting. The buyback plan shall become effective after it is considered and approved by the general meeting of the Company. However, if the share price ofthe Company before or during the implementation of the share buyback plan already fails to meet the conditions for initiating measures to stabilize the Company's share price,the program may not be continued.
② After the share buyback plan is approved by the shareholders' meeting, the Company will notify creditors in accordance with the law and submit relevant materials tothe competent authorities, such as the securities regulatory authorities and stock exchanges, for approval or filing. The buyback price of the Company shall not be higher thanthe Company's audited net asset value per share as at the end of the most recent period (if the closing price of the said shares is not comparable to the Company's audited netasset value per share as at the end of the most recent period due to ex-rights and ex-dividend matters, the said net asset value per share shall be adjusted accordingly), and themethod of buyback of shares shall be by way of centralized competitive bidding and trading, by way of an offer, or by other methods approved by the securities regulatoryauthorities.
③ If the share price of the Company triggers the above conditions for price stabilization measures several times in a fiscal year, the Company will continue to implementthe above share price stabilization plan, but shall follow the following principles: (i) the amount of funds used for share buyback in a single buyback shall not be higher than10% of the audited net profit attributable to the shareholders of the parent company of the previous fiscal year; (ii) the total amount of buyback funds used to stabilize theshare price in a single fiscal year shall not exceed 30% of the audited net profit attributable to shareholders of the parent company in the preceding fiscal year. If the abovecriteria are exceeded, the relevant share price stabilization measures will not be continued in the current year. However, in the event that circumstances requiring the activationof share price stabilization measures continue to arise in the following year, the Company will continue to implement the share price stabilization plan in accordance with theabove principles.
(2) Increase in shareholdings by controlling shareholders
① If the board of directors fails to formulate and announce a share buyback plan within 10 trading days after triggering the obligation, or if the share buyback plan isrejected by the shareholders' meeting, or if the company fails to fulfill or is unable to fulfill the obligation to repurchase shares within 30 days after announcing the specificimplementation plan for the buyback, or if the company fails to stabilize the closing price of its stock above the audited net asset value per share for more than 5 consecutivetrading days after reaching the upper limit of the buyback plan, it will trigger the obligation for the controlling shareholder to increase its shareholding.
② On the premise of not affecting the company's listing conditions, the company's controlling shareholders shall be triggered within 3 trading days from the date of theobligation to increase the proposed plan to increase the company's shareholding (including the number of shares to be increased, price range, time, etc.), and in accordancewith the law to carry out the necessary approvals, and notify the company within 3 trading days of approval, the company shall be in accordance with the relevant provisionsof the disclosure of the plan for the increase in the purchase of shares. The Company shall disclose the plan to increase its shareholding in accordance with the relevant
regulations. Three trading days after the Company discloses the plan to increase its shareholding in accordance with the plan, the Company shall commence the implementationof the plan to increase its shareholding in accordance with the plan.
③ The method for the controlling shareholder of the Company to increase its shareholding shall be by way of centralized bidding and trading, offer or other methodsapproved by the securities regulatory authorities, and the price of the additional shareholding shall not exceed the audited net asset value per share as at the end of the mostrecent period (in the event that the closing price of the aforesaid shares is not comparable with the audited net asset value per share as at the end of the most recent period dueto ex-rights and ex-dividend, etc., the aforesaid net asset value per share shall be adjusted accordingly). However, if the share price of the Company no longer meets theconditions for activating the measures to stabilize the Company's share price prior to or in the course of the implementation of the plan to increase the shareholding of theCompany, the plan may not be continued.If the Company's share price triggers the above conditions for the need to take share price stabilization measures several times within a fiscal year, the controllingshareholder will continue to implement the share price stabilization plan in accordance with the above, but shall follow the following principles: (i) the amount of funds usedto increase shareholdings on a single occasion shall not be less than 20% of the amount of after-tax cash dividends received by the controlling shareholder from the Companyon the most recent occasion; (ii) the amount of funds used to stabilize the share price to increase shareholdings in a single year shall not exceed 50% of the amount of after-tax cash dividends received by the controlling shareholder from the Company on the most recent occasion. If the above criteria are exceeded, the relevant share pricestabilization measures will not be continued in the current year. However, in the event that circumstances requiring the activation of share price stabilization measures continueto arise in the following year, the Company will continue to implement the share price stabilization plan in accordance with the above principles. In the event that the shareprice stabilization measures are triggered in the following year, the amount of funds already used for share price stabilization in previous years will no longer be counted aspart of the cumulative cash dividends.
(3) Increase in shareholdings by directors (excluding independent directors) and senior management personnel
① If the controlling shareholder of the Company fails to propose a plan to increase the shareholding of the Company within 10 trading days from the date of triggeringthe obligation to increase shareholding, or fails to commence the implementation of the plan to increase shareholding within 30 days from the date of the Company'sannouncement of the plan to increase shareholding, or if, after the controlling shareholder of the Company has reached the maximum limit of the plan to increase shareholding,the closing price of the Company's shares still fails to be stabilized at a level higher than the Company's audited net asset value per share as of the end of the most recentperiod for a period of more than 5 trading days, then the obligation of the Company's directors (excluding independent directors) and senior management will be triggered toincrease their holdings of the Company's shares.
② Without affecting the listing conditions of the company, the company's directors (excluding independent directors), senior management shall be triggered within 3trading days from the date of the obligation to increase the proposed plan to increase the company's shares (including the number of shares to be increased, the price range,time, etc.), and comply with the law to carry out the necessary approval procedures, and notify the company within 3 trading days of approval, the company shall disclose theplan to increase the acquisition of shares in accordance with the relevant provisions. The Company shall disclose the plan to increase its shareholding in accordance with therelevant regulations. After 3 trading days from the date of disclosure of the Company's plan to increase its shareholding in the Company, it will commence the implementationof the plan to increase its shareholding in the Company in accordance with the plan.
③ The directors (excluding independent directors) and senior management of the Company will purchase the Company's shares through competitive bidding transactionsto stabilize the Company's share price at a price not higher than the Company's audited net asset value per share as at the end of the most recent period (in the event that theclosing price of the aforesaid shares is not comparable to the audited net asset value per share as at the end of the most recent period due to ex-rights and ex-dividend, etc.,the aforesaid net asset value per share shall be adjusted accordingly). However, if the share price of the Company does not meet the conditions for the activation of measuresto stabilize the Company's share price within 3 trading days of the disclosure of the Company's purchase plan or in the course of the implementation of the plan, the Companymay cease to implement the above plan to increase the Company's shareholding. If the share price of the Company triggers the above conditions for price stabilization measuresseveral times within a fiscal year, the directors (excluding independent directors) and senior management of the Company will continue to implement the above share price
stabilization plan, but shall comply with the following principles: (i) the amount of funds used for the purchase of shares on a single occasion shall not be less than 20% ofthe after-tax remuneration that he/she received from the Company during the previous fiscal year while he/she was serving as a director or a senior manager; (ii) the amountof funds used to stabilize the share price in a single year shall not exceed 50% of the after-tax remuneration received from the Company in the previous fiscal year during theperiod in which he or she held the position of director or senior executive. If the above criteria are exceeded, the relevant share price stabilization measures shall not becontinued in the current year. However, in the event that circumstances requiring the activation of price stabilization measures continue to arise in the following year, theshare price stabilization plan will continue to be implemented in accordance with the above principles.If the Company appoints new directors (excluding independent directors) and senior management, the Company will require the newly appointed directors and seniormanagement to fulfill the corresponding commitments made by the directors and senior management when the Company was listed.
4. Restrictive measures for failure to activate share price stabilization measures
If the Company, controlling shareholders, directors (excluding independent directors) and senior management fail to take the above specific measures to stabilize theshare price when the conditions for the activation of the price stabilization measures are met, the Company undertakes to accept the following binding measures:
(1) The Company, controlling shareholders, directors (excluding independent directors) and senior management will publicly explain the specific reasons for failing totake the aforesaid stock price stabilization measures and apologize to the shareholders of the Company and public investors in the general meeting of the Company and inthe disclosure media designated by the CSRC.
(2) The controlling shareholder of the Company undertakes that if the controlling shareholder fails to take the above specific measures to stabilize the share price whenthe conditions for the initiation of the share price stabilization measures are met, the Company shall have the right to withhold or deduct the cash dividends payable to theUnit in an amount equal to the amount used for the implementation of the Share Increase Plan.
(3) The directors (excluding independent directors) and senior management of the Company undertake that when the conditions for the activation of the share pricestabilization measures are met, the Company shall have the right to withhold or reduce the remuneration and cash dividends payable to the Company if the Company fails totake the aforesaid specific measures to stabilize the share price.
5. Legal Procedures of the Proposal
In the event that the Company shall make adjustments to the proposal in the event that the proposal is inconsistent with the relevant provisions due to revisions of lawsand regulations or changes in policies, such adjustments shall be approved by more than two-thirds of the total number of voting shares held by shareholders present at thegeneral meeting of shareholders.Note 7:
(I) Restrictive measures by the Company regarding non-fulfillment of public commitments:
The Company will strictly fulfill all matters of public commitments made by the Company in connection with the IPO and listing of shares and actively accept socialsupervision. Unless otherwise specifically constrained, if the Company fails to fully and effectively fulfill the undertakings made in the course of its IPO and listing, theCompany undertakes to take the following measures to be constrained:
1. If the Company fails to fulfill its public commitments or if the fulfillment of the commitments is not conducive to the protection of the Company's rights and interestsdue to reasons other than force majeure, the Company shall propose to replace the original commitments with new commitments or propose to waive the fulfillment of theobligations under the commitments. The above changes shall be submitted to the shareholders' general meeting for consideration, and the Company will provide shareholderswith the means of internet voting and will urge the shareholders involved in the commitment matters to abstain from voting. If new commitments are proposed to replace theoriginal ones, the relevant commitments shall comply with the prevailing laws, regulations and the Articles of Association of the Company, and the Company undertakes toaccept the following constraints until the fulfillment of the commitments or the implementation of the corresponding remedial measures is completed:
(1) Publicly explain the specific reasons and apologize to the shareholders and public investors in the general meeting of shareholders and the disclosure media designatedby the CSRC;
(2) Reduction or suspension of the remuneration or allowances of directors, supervisors and senior management who are personally liable for the Company's failure tofulfill the undertakings (if such persons are on the Company's payroll);
(3) Not to approve the application for voluntary departure of directors, supervisors and senior management who have failed to fulfill their undertakings, but may makechanges in their positions;
(4) In case of losses caused to investors, the Company will be liable to compensate investors in accordance with the law;
(5) In accordance with the laws, regulations and the requirements of the relevant regulatory bodies to assume the corresponding responsibilities.
2. If the company fails to fulfill its public commitments or fails to fulfill its public commitments on schedule due to force majeure, the Company shall propose newcommitments (the relevant commitments shall comply with the laws, regulations, articles of association and fulfill the relevant approval procedures) and shall be subject tothe following constraints until the commitments have been fulfilled or the corresponding remedial measures have been implemented:
(1) To publicly explain the specific reasons and apologize to shareholders and public investors in the shareholders' general meeting and in the disclosure media designatedby the CSRC;
(2) To expeditiously study the handling plan to minimize the loss of investors' interests and submit it to the shareholders' general meeting for consideration, so as toprotect the interests of the Company's investors as far as possible.
(II) Controlling Shareholders' Restrictive Measures on Failure to Fulfill Public Undertakings
Unless otherwise specifically constrained, if Sheng Huei International, the direct controlling shareholder of the Company, and Acter (Taiwan), the indirect controllingshareholder of the Company, fail to fully and effectively fulfill the undertakings they have made in the course of the IPO and listing of Acter Group, they undertake to takethe following measures to be constrained:
1. In the event that the Company fails to fully and effectively fulfill its obligations or responsibilities under the aforementioned undertakings, the Company undertakesto actively cooperate with the relevant regulatory authorities in their investigations and accept the corresponding penalties;
2. To compensate public investors with its own funds for direct losses suffered as a result of relying on the relevant undertakings to implement the transactions, with theamount of compensation to be determined on the basis of the amount negotiated between the Company and the investor, or in the manner or in the amount determined by therelevant regulatory authorities or judicial organs;
(3) If income is obtained as a result of non-performance of the undertakings (i.e. such income cannot be obtained in the case of performance of the undertakings), theincome obtained shall belong to the Company, which will pay the aforesaid income to the Company's designated account within 5 days of obtaining the income; and if lossesare incurred by the Company or other investors as a result of the non-performance of the undertakings, the Company or other investors shall be held liable for compensationaccording to the law.
(III) Restrictive measures for directors, supervisors and senior management of the Company in respect of non-fulfillment of the undertakings:
The directors, supervisors and senior management of the Company undertake:
I have made relevant undertakings in the process of IPO and listing of shares of Acter Group, and if I fail to fulfill them, or if I am unable to fulfill them, or if I am unableto fulfill them on schedule (except for those due to relevant laws and regulations, policy changes, natural disasters, and other force majeure, and other objective reasons beyondmy control), or if the fulfillment of the relevant undertakings will be detrimental to the safeguarding of the rights and interests of the Company and the investors, I will takethe following measures:
1. Through the Company to disclose in a timely manner the specific reasons why I have failed to fulfill my commitments, unable to fulfill them or unable to fulfill themon schedule;
2. To submit to the Company and its investors an application for change of undertakings or exemption from fulfillment of undertakings and submit it to the shareholders'general meeting for consideration in order to protect the rights and interests of the Company and its investors. I will recuse myself from voting at the shareholders' meetingwhen the matter is considered (if I am a shareholder of the Company at that time);
3. Attribute to the Company the proceeds from my breach of my undertaking.
If any loss is caused to the Company or investors as a result of my undertaking not being fulfilled, not being able to be fulfilled, or not being able to be fulfilled on time,I will compensate the Company or investors in accordance with the law and the following procedures:
1. I agree that the Company shall reduce or cease to pay my salary, bonus, allowance, dividend (if any), etc., and use the reduced or ceased salary, bonus, allowance,dividend (if any), etc., to implement the unfulfilled commitments or to compensate for the losses caused to the Company and the investors as a result of the unfulfilledcommitments;
2. If I reduce my shareholding before the compensation is completed, the funds obtained from the reduction will be supervised by the Board of Directors of the Companyand used exclusively for the fulfillment of the commitments or compensation until I have fulfilled my commitments or compensated for the losses incurred by the Companyand the investors (if I am a shareholder of the Company at that time).
In the event that I fail to fulfill my commitments, unable to fulfill them or unable to fulfill them on schedule due to objective reasons beyond my control, such as relevantlaws and regulations, policy changes, natural disasters, etc., I will disclose through the Company in a timely manner the specific reasons why I fail to fulfill my commitments,unable to fulfill them or unable to fulfill them on schedule, and will actively take measures to change my commitments, supplement my commitments and other means tosafeguard the rights and interests of the Company and the investors.
I will not refuse to fulfill the above commitments due to change of position, departure and other reasons.
(IV) Suzhou Songhuei and Suzhou Shengzhan on the binding measures for failure to fulfill the commitments
The shareholders of the Company, Suzhou Songhuei and Suzhou Shengzhan, undertake:
As shareholders of the Company, unless otherwise specified, if the Company fails to fully and effectively fulfill the undertakings made in the course of the Company'sIPO and listing, the Company undertakes to take the following measures to bind itself:
1. If the Enterprise fails to fully and effectively fulfill the obligations or responsibilities in the foregoing undertakings, the Company undertakes to actively cooperatewith the relevant regulatory authorities in their investigations and accept the corresponding penalties;
2. To compensate public investors with its own funds for direct losses suffered as a result of relying on the relevant undertakings to implement the transactions, with theamount of compensation to be determined on the basis of the amount negotiated between the Company and the investor, or in the manner or in the amount determined by therelevant supervisory authorities or judicial organs;
3. If the Company obtains income from the non-fulfillment of the commitments (i.e. such income cannot be obtained in the case of fulfillment of the commitments), theincome obtained shall belong to the Company, and the Company will pay the aforesaid income to the designated account of the Company within 5 days from the date ofobtaining the income; and if the non-fulfillment of the commitments causes losses to the Company or other investors, the Company will be liable to compensate for the lossesto the Company or other investors according to the law.
(II) If there is a profit forecast for the Company's assets or projects and the reporting period is stillin the profit forecast period, the Company shall make a statement on whether the assets or projectshave met the original profit forecast and the reasons thereof.
□ Achieved □ Not achieved √ N/A
(III) Completion of performance commitments and their impact on the impairment test of goodwill
□ Applicable √ N/A
II. Non-operational appropriation of funds by controlling shareholders and other connected partiesduring the reporting period
□ Applicable √ N/A
III. Violation of guarantees
□ Applicable √ N/A
IV. Explanation of the Board of Directors of the Company on the "Non-standard Opinion AuditReport" of the Accounting Firm
□ Applicable √ N/A
V. Explanation of the Company's analysis of the reasons for and impact of changes in accountingpolicies, accounting estimates or correction of material accounting errors(I) Explanation of the Company's analysis of the reasons for and impact of changes in accountingpolicies and accounting estimates
√ Applicable □ N/A
Unit: Yuan
| Contents and reasons for changes in accounting policies | Name of statement items materially affected | Amount of impact |
| On November 30, 2022, the Ministry of Finance ("MOF") issued "Interpretation No. 16 of the Accounting Standards for Business Enterprises (ASBE)" (C.K. [2022] No. 31, hereinafter referred to as Interpretation No. 16), "Accounting Treatment of Deferred Taxes Related to Assets and Liabilities Arising from Individual Transactions to which the Initial Recognition Exemption Doesn't Apply" has been implemented since January 1, 2023, allowing enterprises to implement it in advance from the year of issuance. | Deferred tax assets | 1,135,468.71 |
| Deferred tax liabilities | 1,316,653.59 | |
| Undistributed profits | -177,717.08 | |
| Minority interests | -3,467.80 |
(II) Explanation of the Company's analysis of the reasons for and impact of the correction ofsignificant accounting errors
□ Applicable √ N/A
(III) Communication with the former accounting firm
□ Applicable √ N/A
(IV) Approval procedures and Other Notes
□ Applicable √ N/A
VI. Appointment and Dismissal of Accounting Firms
Unit: Yuan Currency: RMB
| Current Appointment | |
| Name of domestic accounting firm | ShineWing Certified Public Accountants LLP |
| Remuneration of domestic accounting firm | 801,886.79 |
| Years of audit experience of domestic accounting firm | 2 |
| Name of certified public accountants of the domestic accounting firm | Liu Yuehua, Hou Shoufeng |
| Cumulative years of audit service of the certified public accountants of the domestic accounting firms | 2 |
| Name of overseas accounting firm | N/A |
| Remuneration of the overseas accounting firm | N/A |
| Years of audit by overseas accounting firms | N/A |
| Name | Remuneration | |
| Internal control audit accounting firm | ShineWing Certified Public Accountants LLP | 188,679.25 |
| Financial consultant | N/A | N/A |
| Sponsor | N/A | N/A |
Appointment and dismissal of accounting firm
√ Applicable □ N/A
At the Eighth Meeting of the Second Session of the Board of Directors held on August 11, 2023 and the FirstExtraordinary General Meeting of Shareholders of the Company held on August 29, 2023, the Companyconsidered and passed the "Resolution on the Re-appointment of Accounting Firm", and agreed to re-appointShineWing Certified Public Accountants LLP as the auditing organization of the Company's annual financialreport and internal control for the year of 2023.Explanation on the reappointment of the accounting firm during the audit period
□ Applicable √ N/A
Explanation on the decrease of 20% or more (including 20%) in the audit fee as compared with that of theprevious year
□ Applicable √ N/A
VII. Situations facing the risk of delisting(I) Reasons for delisting risk warning
□ Applicable √ N/A
(II) Countermeasures to be taken by the Company
□ Applicable √ N/A
(III) Circumstances and reasons for termination of listing
□ Applicable √ N/A
VIII. Matters Relating to Bankruptcy and Reorganization
□ Applicable √ N/A
IX. Significant Litigation and Arbitration Matters
□ Major litigation and arbitration matters in the current year
√ No major litigation and arbitration matters in the current year
X. Punishment and rectification on the listed company, its directors, supervisors, senior
management, controlling shareholders and actual controllers due to suspect of law violations.
□ Applicable √ N/A
XI. Explanation on the integrity status of the Company, its controlling shareholders and actualcontrollers during the reporting period
□ Applicable √ N/A
XII. Significant Related Transactions(I) Related transactions related to daily operations
(1) Matters disclosed in the interim announcement and with no progress or change in subsequentimplementation
□ Applicable √ N/A
2. Matters disclosed in the interim announcement but with progress or changes in subsequentimplementation
√ Applicable □ N/A
On April 7, 2023, the Company held the Sixth Meeting of the Second Session of the Board of Directors andthe Fifth Meeting of the Second Session of the Board of Supervisors to consider and approve the ''Resolutionon the Confirmation of Daily Related Transactions of the Company for the Year 2022 and the Estimation ofDaily RelatedTransactions for the Year 2023'' respectively. As at the end of the reporting period, the dailyrelated transactions between the Company and the proposed connected persons are as follows, and have notexceeded the projected amounts:
| Category of related transactions | Related party | Estimated amount for 2023 (RMB Million/100) | Actual amount in 2023 (RMB Million/100) |
| Rental of buildings to related parties | Suzhou Winmax Technology Corp. | 350 | 330.09 |
| Acceptance of rental housing from related parties | NOVA TECH ENGINEERING & CONSTRUCTION PTE. | 10 | 3.86 |
| Total | 360.00 | 333.95 | |
For details of the relevant matters, please refer to the ''Proposal on the Confirmation of Routine RelatedTransactions for the Year 2022 and the Expected Routine Related Transactions for the Year 2023''(Announcement No. 2023-009) disclosed by the Company on the website of the Shanghai Stock Exchange(www.sse.com.cn) and the designated media on April 8, 2023.
3. Matters not disclosed in the interim announcement
□ Applicable √ N/A
(II) Related transactions arising from the acquisition or disposal of assets or equity interests
1. Matters disclosed in the Interim Announcement with no progress or changes in subsequentimplementation
□ Applicable √ N/A
2. Matters that have been disclosed in the interim announcement but with progress or changes insubsequent implementation
□ Applicable √ N/A
3. Matters not disclosed in the interim announcement
□ Applicable √ N/A
4. If performance agreement is involved, the performance realization of the reporting period shall bedisclosed.
□ Applicable √ N/A
(III) Significant related transactions of joint foreign investment
1. Matters that have been disclosed in the interim announcement and there is no progress or changein subsequent implementation
□ Applicable √ N/A
2. Matters that have been disclosed in the interim announcement but with progress or change insubsequent implementation
□ Applicable √ N/A
3. Matters not disclosed in the interim announcement
□ Applicable √ N/A
(IV) Related debt transactions
1. Matters disclosed in the interim announcement with no progress or change in subsequentimplementation
□ Applicable √ N/A
2. Matters that have been disclosed in the interim announcement but with progress or changes insubsequent implementation
□ Applicable √ N/A
3. Matters not disclosed in the interim announcement
□ Applicable √ N/A
(V) Financial business between the Company and finance companies with which it has a connectedrelationship, and between the Company's holding company and connected parties
□ Applicable √ N/A
(VI) Others
□ Applicable √ N/A
XIII. Significant Contracts and Their Fulfillment(I) Trusteeship, contracting and leasing matters
1. Trusteeship
□ Applicable √ N/A
2. Contracting
□ Applicable √ N/A
3. Leasing
□ Applicable √ N/A
(II) Guarantees
√ Applicable □ N/A
Unit: Yuan Currency. RMB
| External guarantees of the Company (excluding guarantees to subsidiaries) | |||||||||||||||
| Guarantor | Relationship with the listed company | Guaranteed party | Amount of guarantee | Date of guarantee (date of agreement) | Guarantee starting date | Guarantee expiration date | Type of guarantee | Collateral (if any) | Whether the guarantee has been fulfilled | Whether the guarantee is overdue | Amount overdue | Counter-guarantee | Guarantee for related parties | Relationship | |
| Total amount of guarantees incurred during the reporting period (excluding guarantees to subsidiaries) | 0 | ||||||||||||||
| Total guarantee balance at the end of the reporting period (A) (excluding guarantees to subsidiaries) | 0 | ||||||||||||||
| Guarantees by the Company and its subsidiaries to subsidiaries | |||||||||||||||
| Total amount of guarantee incurred for subsidiaries during the reporting period | 296,188,978.35 | ||||||||||||||
| Total balance of guarantees to subsidiaries at the end of the reporting period (B) | 537,116,975.79 | ||||||||||||||
| Status of total corporate guarantees (including guarantees to subsidiaries) | |||||||||||||||
| Total amount of guarantees (A+B) | 537,116,975.79 | ||||||||||||||
| Ratio of total guarantees to the company's net assets (%) | 49.63 | ||||||||||||||
| Of which: | |||||||||||||||
| Amount of guarantees in favor of shareholders, actual controllers and their related parties (C) | 0 | ||||||||||||||
| Amount of debt guarantees provided directly or indirectly for guaranteed objects with asset-liability ratio exceeding 70% (D) | 0 | ||||||||||||||
| Amount of the portion of total guarantees exceeding 50% of net assets (E) | 0 | ||||||||||||||
| Total amount of the above three guarantees (C+D+E) | 0 | ||||||||||||||
| Explanation of possible joint and several liability for outstanding guarantees | None | ||||||||||||||
| Description of guarantees | None | ||||||||||||||
(III) Entrusted Cash Asset Management
1. Entrusted financial management
(1) Overall entrusted wealth management
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Type | Source of funds | Amount incurred | Outstanding balance | Overdue amount not recovered |
| Bank financial products | Collected Funds | 92,000,000.00 | ||
| Bank financial products | Own Funds | 100,000,000.00 |
Others
□ Applicable √ N/A
(2) Individual entrusted financial management
□ Applicable √ N/A
Others
□ Applicable √ N/A
(3) Provision for impairment of entrusted finance
□ Applicable √ N/A
2. Entrusted loans
(1) Overall situation of entrusted loans
□ Applicable √ N/A
Others
□ Applicable √ N/A
(2) Individual entrusted loans
□ Applicable √ N/A
Others
□ Applicable √ N/A
(3) Provision for impairment of entrusted loans
□ Applicable √ N/A
3. Others
Others □ Applicable √ N/A
(IV) Other significant contracts
□ Applicable √ N/A
XIV. Explanation on the Progress of the Use of Proceeds
√ Applicable □ N/A
(I) Overall utilization of proceeds raised
√ Applicable □ N/A
Unit: Yuan
| Source of fund-raising | Time of arrival of the fund-raising | Total amount of fund-raising | Of which: Amount of over-raised funds | Net proceeds after issue expenses | Total committed investment of proceeds | Adjusted total committed investment of proceeds (1) | Cumulative total amount of proceeds invested as of the end of the reporting period (2) | Cumulative progress of inputs as at the end of the reporting period (%) (3)=(2)/(1) | Amount invested during the year (4) | Percentage of current year's input amount (%) (5) = (4)/(1) | Total amount of proceeds from change of use |
| IPO | September 29, 2022 | 545,000,000.00 | 485,347,160.34 | 485,347,160.34 | 485,347,160.34 | 458,213,767.30 | 94.41% | 311,140,820.87 | 64.11% | / |
(II) Details of the fund-raising projects
√ Applicable □ N/A
Unit: Million/100 Yuan
| Item name | Project nature | Involving investment change | Proceeds Source | Time of fundraising funds in place | Whether to use over-raised funds | Total committed investment of project fund-raising | Adjusted total investment of proceeds(1) | Amount invested this year | Accumulated total amount of issue proceeds invested as of the end of the reporting period (2) ) | Cumulative input progress as of the end of the reporting period (%) ) (3) =(2)/(1) | Date project reaches intended useable condition | Closed or not | Whether the progress of inputs is in line with the planned schedule | Specific reasons why inputs did not progress as planned | Benefits realized during the year | Benefits realized or R&D results of the project | Has there been a significant change in the feasibility of the project, and if so, please provide details | Amount of savings |
| Supplemental Clean Room Project Supporting Working Capital Project | O&M | No | IPO | September 29, 2022 | No | 43,764.42 | 43,764.42 | 29.703.25 | 43,988.47 | 100.51% | / | Yes | Yes | / | N/A | N/A | No | / |
| R&D Center Construction Project | R&D | No | IPO | September 29, 2022 | No | 2,539.50 | 2,539.50 | 117.37 | 230.64 | 9.08 % | January 2025 | No | Yes | / | N/A | N/A | No | / |
| Marketing and Service Network Construction Project | O&M | No | IPO | September 29, 2022 | No | 2,230.80 | 2,230.80 | 1,293.47 | 1,602.26 | 71.8 2% | October 2024 | No | Yes | / | N/A | N/A | No | / |
(III) Changes in or termination of fund-raising investments during the reporting period
□ Applicable √ N/A
(IV) Other use of proceeds during the reporting period
1. Prior investment and replacement of issue proceeds investment projects
□ Applicable √ N/A
2. Temporarily supplementing liquidity with idle proceeds
□ Applicable √ N/A
3. Cash management of idle issue proceeds and investment in related products
√ Applicable □ N/A
Unit: Million/100 Yuan Currency: RMB
| Considered by the Board of Directors | Effective Consideration Amount of Proceeds Used for Cash Management | Start Date | Ending date | Cash management balance at the end of the reporting period | Whether the maximum balance for the period exceeds the authorized amount |
| October 27, 2022 | 40,000.00 | November 22, 2022 | November 21, 2023 | / | No |
| October 27, 2023 | 3,000.00 | October 27, 2023 | October 26, 2024 | 1,600.00 | No |
Other NotesNone
4. Permanent replenishment of working capital or repayment of bank loans with over-provisioned funds
□ Applicable √ N/A
5. Others
□ Applicable √ N/A
XV. Explanation of other significant matters that have a significant impact on investors’ value judgment and investment decisions
□ Applicable √ N/A
Section VII Changes in Shares and Information about Shareholders
I. Changes in Share Capital(I) Table of changes in shares
1. Table of changes in shares
Unit: Shares
| Before this change | Increase/decrease (+, -) | After this change | |||||||
| Number | Proportion (%) | Issue of new shares | Bonus shares | Conversion of shares from provident fund | Others | Subtotal | Number of shares | Proportion (%) | |
| I. Restricted shares | 60,000,000 | 75.00 | 15,000,000 | -10,002,750 | 4,997,250 | 64,997,250 | 65.00 | ||
| 1. Shares held by the state | |||||||||
| 2. Shares held by state-owned corporations | |||||||||
| 3. Other domestic shares | 8,002,200 | 10.00 | 2,000,550 | -10,002,750 | -8,002,200 | 0 | |||
| Of which: shares held by domestic non-state legal persons | 8,002,200 | 10.00 | 2,000,550 | -10,002,750 | -8,002,200 | 0 | |||
| Shares held by domestic natural persons | |||||||||
| 4. Overseas shares | 51,997,800 | 65.00 | 12,999,450 | 12,999,450 | 64,997,250 | 65.00 | |||
| Of which: shares held by overseas legal persons | 51,997,800 | 65.00 | 12,999,450 | 12,999,450 | 64,997,250 | 65.00 | |||
| Shares held by overseas natural persons | |||||||||
| II. Unlimited shares in | 20,000,000 | 25.00 | 5,000,000 | 10,002,750 | 15,002,750 | 35,002,750 | 35.00 | ||
| circulation | |||||||||
| 1. RMB common shares | 20,000,000 | 25.00 | 5,000,000 | 10,002,750 | 15,002,750 | 35,002,750 | 35.00 | ||
| 2. Domestic listed foreign shares | |||||||||
| 3. Overseas listed foreign shares | |||||||||
| 4. Others | |||||||||
| III. Total number of shares | 80,000,000 | 100.00 | 20,000,000 | 20,000,000 | 100,000,000 | 100.00 |
2. Description of changes in shares
√ Applicable □ N/A
The Company held the Sixth Meeting of the Second Session of the Board of Directors and the Fifth Meetingof the Second Session of the Supervisory Committee on April 7, 2023 and the Annual General Meeting of2022 on April 28, 2023 respectively, and considered and passed the Proposal on the Profit Distribution Planof the Company for the Year 2022. Based on the total share capital of 80,000,000 shares before theimplementation of the profit distribution and capitalization plan, the Company will transfer 2.5 shares forevery 10 shares to all shareholders, and after the transfer of 20,000,000 shares, the total share capital of theCompany will be 100,000,000 shares. For details, please refer to "Announcement on Implementation of 2022Annual Equity Distribution of Acter Technology Integration Group Co., Ltd." (Announcement No. 2023-028) published on the website of Shanghai Stock Exchange on June 9, 2023 at www.sse.com.cn.
3. Impact of changes in shares on financial indicators such as earnings per share and net assets pershare for the last year and the last period (if any)
√ Applicable □ N/A
| Major financial indicators | Current reporting period | The same period of the previous year |
| Basic earnings per share (yuan/share) | 1.39 | 1.51 |
| Net assets per share attributable to shareholders of listed companies (yuan/share) | 10.82 | 12.42 |
According to the "Proposal on the Profit Distribution Plan for the Year 2022" considered and approved atthe Sixth Meeting of the Second Session of the Board of Directors and the Fifth Meeting of the SecondSession of the Supervisory Committee of the Company held on April 7, 2023 and the Annual GeneralMeeting of the Company for the year 2022 held on April 28, 2023, the Company shall transfer 2.5 shares forevery 10 shares to all shareholders by way of capitalization of capital reserve on the basis of the total sharecapital of 80,000,000 shares prior to the implementation of the equity distribution, with the total number ofshares to be transferred by way of capitalization of capital reserve to be increased by a total of 20,000,000shares. After this capitalization, the total share capital of the Company became 100,000,000 shares. Theequity distribution was completed during the reporting period. In order to ensure the comparability ofaccounting indicators, the basic earnings per share for the year 2022 has been recalculated and presented onthe basis of the changed number of shares.
4. Other disclosures deemed necessary by the Company or required by securities regulatoryauthorities
□ Applicable √ N/A
(II) Changes in restricted shares
√ Applicable □ N/A
Unit: Shares
| Name of shareholder | Number of restricted shares at the beginning of the year | Number of shares released from restricted sale during the year | Increase in the number of restricted shares during the year | Number of restricted shares at the end of the year | Reason for restriction | Date of release of restricted shares |
| SHENG HUEI INTERNATIONAL CO. LTD. | 51,997,800 | 12,999,450 | 64,997,250 | IPO | October 13, 2025 | |
| Suzhou Songhuei Enterprise Management Consulting Partnership (Limited Partnership) | 6,498,000 | 8,122,500 | 1,624,500 | IPO | October 13, 2023 | |
| Suzhou Shengzhan Enterprise Management Consulting Partnership (Limited Partnership) | 1,504,200 | 1,880,250 | 376,050 | IPO | October 13, 2023 | |
| Total | 60,000,000 | 10,002,750 | 15,000,000 | 64,997,250 | / | / |
II. Issuance and Listing of Securities(I) Issuance of securities up to the reporting period
□ Applicable √ N/A
Explanation of securities issuance as of the reporting period (for bonds with different interest rates duringthe subsistence period, please explain separately)
□ Applicable √ N/A
(II) Changes in the total number of shares and shareholder structure of the Company and changesin the Company's asset and liability structure
√ Applicable □ N/A
According to the ''Proposal on the Profit Distribution Plan for the Year 2022'' considered and approvedat the Sixth Meeting of the Second Session of the Board of Directors and the Fifth Meeting of the SecondSession of the Supervisory Committee of the Company held on April 7, 2023 and the Annual GeneralMeeting of the Company for the year 2022 held on April 28, 2023, the Company shall, on the basis of thetotal share capital of 80,000,000 shares prior to the implementation of the distribution of the Company'sshare capital, increase 2.5 shares for every 10 shares by way of capitalization of capital reserve to allshareholders, totaling 20,000,000 shares. After this capitalization, the total share capital of the companybecame 100,000,000 shares. Before the implementation of this equity distribution, Sheng Huei Internationalheld 51.9978 million shares with a shareholding ratio of 65.00%, Suzhou Songhuei held 6.498 million shareswith a shareholding ratio of 8.12%, and Suzhou Shengzhan held 1.5042 million shares with a shareholdingratio of 1.88%; the shareholding ratio remained unchanged after the implementation of the equity distribution,with Sheng Huei International's shareholding changed to 64.99725 million shares, Suzhou SongHuei to
8.1225 million shares and Suzhou ShengZhan to 1.88025 million shares.
At the beginning of the reporting period, total assets amounted to RMB 1778.2818 million and totalliabilities amounted to RMB 765.0707 million, with an asset-liability ratio of 43.02%; at the end of thereporting period, total assets amounted to RMB 1904.3625 million and total liabilities amounted to RMB
814.3974 million, with an asset-liability ratio of 42.76%.
(III) Existing internal employee shares
□ Applicable √ N/A
III. Shareholders and actual controllers(I) Total number of shareholders
| Total number of common shareholders as of the end of the reporting period (households) | 10,170 |
| Total number of common shareholders as of the end of the month prior to the date of the annual report (households) | 9,715 |
| Total number of preferred stockholders with voting rights restored as of the end of the reporting period (households) | N/A |
| Total number of preferred stockholders with voting rights restored at the end of the month preceding the annual report disclosure date (households) | N/A |
(II) Shareholdings of top ten shareholders and top ten outstanding shareholders (or shareholderswith unlimited rights to sell) as at the end of the reporting period
Unit: shares
| Shareholdings of the top ten shareholders (excluding shares lent through transfer) | |||||||
| Name of shareholders (full name) | Increase/decrease during the reporting period | Number of shares held at the end of the period | Proportion (%) | Number of shares held under limited selling conditions | Pledged, marked or frozen | Nature of shareholders | |
| Shareholding Status | Number | ||||||
| SHENG HUEI INTERNATIONAL CO. LTD. | 12,999,450 | 64,997,250 | 65.00 | 64,997,250 | None | 0 | Overseas legal person |
| Suzhou Songhuei Enterprise Management Consulting Partnership (Limited Partnership) | 1,624,500 | 8,122,500 | 8.12 | 0 | None | 0 | Other |
| Suzhou Shengzhan Enterprise Management Consulting Partnership (Limited Partnership) | 376,050 | 1,880,250 | 1.88 | 0 | None | 0 | Other |
| Ping An Asset - ICBC - Ping An Asset Ruyi No. 15 Asset Management Product | 581,125 | 581,125 | 0.58 | 0 | None | 0 | Other |
| Huang Junfeng | 460,600 | 460,600 | 0.46 | 0 | None | 0 | Domestic natural person |
| Zhu Zexin | 390,900 | 390,900 | 0.39 | 0 | None | 0 | Domestic natural person |
| Industrial and Commercial Bank of China Limited - CITIC Prudential Multi-Strategy Flexible Allocation Mixed Securities Investment Fund (LOF) | 325,800 | 325,800 | 0.33 | 0 | None | 0 | Other |
| Tian An Life Insurance Company Limited - Ping An Asset Multi-Asset Portfolio | 300,000 | 300,000 | 0.30 | 0 | None | 0 | Other | ||
| Zhu Zejia | 287,800 | 287,800 | 0.29 | 0 | None | 0 | Domestic natural person | ||
| Kelsang Rinzin | 112,525 | 257,525 | 0.26 | 0 | None | 0 | Domestic natural person | ||
| Shareholdings of the top ten shareholders with unlimited sales conditions | |||||||||
| Name of shareholders | Number of shares held in circulation with unlimited selling conditions | Type and number of shares | |||||||
| Type | Number of shares | ||||||||
| Suzhou Songhuei Enterprise Management Consulting Partnership (Limited Partnership) | 8,122,500 | Renminbi ordinary shares | 8,122,500 | ||||||
| Suzhou Shengzhan Enterprise Management Consulting Partnership (Limited Partnership) | 1,880,250 | Renminbi ordinary shares | 1,880,250 | ||||||
| Ping An Assets - ICBC - Ping An Assets Ruyi No. 15 Asset Management Product | 581,125 | Renminbi ordinary shares | 581,125 | ||||||
| Huang Junfeng | 460,600 | Renminbi ordinary shares | 460,600 | ||||||
| Zhu Zexin | 390,900 | Renminbi ordinary shares | 390,900 | ||||||
| Industrial and Commercial Bank of China Limited - CITIC-Prudential Multi-Strategy Flexible Allocation Mixed Securities Investment Fund (LOF) | 325,800 | Renminbi ordinary shares | 325,800 | ||||||
| Tian An Life Insurance Company Limited - Ping An Asset Multi-Asset Portfolio | 300,000 | Renminbi ordinary shares | 300,000 | ||||||
| Zhu Zejia | 287,800 | Renminbi ordinary shares | 287,800 | ||||||
| Kelsang Rinchen | 257,525 | Renminbi ordinary shares | 257,525 | ||||||
| Zhu Xuewen | 240,950 | Renminbi ordinary shares | 240,950 | ||||||
| Description of buyback special accounts among the top ten shareholders | None | ||||||||
| Explanation of the above shareholders' proxy voting rights, entrusted voting rights and waiver of voting rights | None | ||||||||
| Description of the above shareholders' affiliation or concerted action | None | ||||||||
| Description of preferred stockholders whose voting rights have been restored and the number of shares they hold | None | ||||||||
Participation of the top ten shareholders in lending of shares in the transfer and financing business
□ Applicable √ N/A
Changes in the top ten shareholders compared with the previous period
√ Applicable □ N/A
Unit: shares
| Changes in the top ten shareholders from the end of the previous period | |||||
| Name of shareholders (full name) | New/withdrawn during the reporting period | Number of shares lent on transfer and not yet returned at the end of the period | Number of shares held in shareholders' ordinary accounts and credit accounts and outstanding shares lent on transfer at the end of the period | ||
| Total Quantity | Proportion (%) | Total Quantity | Proportion (%) | ||
| Bank of China -E-Funds Positive Growth Securities Investment Fund | Withdrawal | N/A | N/A | 0 | 0.00 |
| Sun Qinghua | Withdrawal | N/A | N/A | 0 | 0.00 |
| Shao Jialin | Withdrawal | N/A | N/A | 0 | 0.00 |
| CITIC Securities Co., Ltd. | Withdrawal | N/A | N/A | 200,351 | 0.20 |
| Guotai Junan Securities Co., Ltd. | Withdrawal | N/A | N/A | 77,161 | 0.08 |
| Everbright Securities Co., Ltd. | Withdrawal | N/A | N/A | 47,604 | 0.05 |
| Ping An Asset - ICBC - Ping An Asset Ruyi No. 15 Asset Management Product | New | N/A | N/A | 581,125 | 0.58 |
| Huang Junfeng | New | N/A | N/A | 460,600 | 0.46 |
| Zhu Zexin | New | N/A | N/A | 390,900 | 0.39 |
| Industrial and Commercial Bank of China Limited - CITIC-Prudential Multi-Strategy Flexible Allocation Mixed Securities Investment Fund (LOF) | New | N/A | N/A | 325,800 | 0.33 |
| Tian An Life Insurance Company Limited - Ping An Asset Multi-Asset Portfolio | New | N/A | N/A | 300,000 | 0.30 |
| Zhu Zejia | New | N/A | N/A | 287,800 | 0.29 |
Number of shares held by the top ten shareholders with limited selling conditions and the conditions oflimited selling
√ Applicable □ N/A
Unit: shares
| No. | Name of restricted shareholders | Number of shares subject to selling restrictions | Listing and trading of shares subject to selling restrictions | Restricted shares | |
| Time of availability for listing and trading | Number of new shares available for listing and trading | ||||
| 1 | SHENG HUEI INTERNATIONAL CO. LTD. | 64,997,250 | October 13, 2025 | 0 | Lock-up of shares for 36 months from the date of listing |
| Description of the relationship or concerted action of the above shareholders | None | ||||
(III) Strategic investors or general corporations becoming top 10 shareholders as a result of placingof new shares
□ Applicable √ N/A
IV. Controlling shareholders and actual controllers(I) Controlling shareholders1 Legal person
√ Applicable □ N/A
| Name of the Company: | SHENG HUEI INTERNATIONAL CO. LTD. |
| Person in charge of the organization or legal representative | Liang Jinli |
| Date of Establishment | July 15, 2003 |
| Main Businesses | Equity investment |
| Equity interests in other domestic and overseas listed companies held and participated in during the reporting period | None |
| Other information | None |
2 Natural persons
□ Applicable √ N/A
3 Special explanations on the absence of controlling shareholders of the Company
□ Applicable √ N/A
4 Explanation on the change of controlling shareholders during the reporting period
□ Applicable √ N/A
5 Block diagram of the ownership and control relationship between the Company and thecontrolling shareholders
√ Applicable □ N/A
(II) Situation of actual controllers1 Legal person
□ Applicable √ N/A
2 Natural person
□ Applicable √ N/A
3 Special explanation on the absence of actual controllers of the Company
□ Applicable √ N/A
4 Explanation on the change of control of the Company during the reporting period
□ Applicable √ N/A
5 Block diagram of the ownership and control relationship between the Company and the actualcontroller
□ Applicable √ N/A
6 Control of the Company by the actual controller through trust or other asset managementmethods
□ Applicable √ N/A
(III) Other information of controlling shareholders and actual controllers
□ Applicable √ N/A
V. The proportion of shares pledged by controlling shareholders or the largest shareholder andpersons acting in concert with them to the number of shares held by them reaches more than80%.
Acter Co., Ltd.Acter TechnologyIntegration Group
Co., Ltd.
Acter TechnologyIntegration Group
Co., Ltd.
Acter TechnologyIntegration GroupCo., Ltd. ShenzhenBranch
Acter TechnologyIntegration GroupCo., Ltd. ShenzhenBranchActer TechnologyIntegration Group
Co., Ltd. Hefei
Branch
Acter TechnologyIntegration Group
Co., Ltd. Hefei
BranchActer TechnologyIntegration Group
Co., Ltd.Zhengzhou Branch
Acter TechnologyIntegration Group
Co., Ltd.Zhengzhou BranchActer TechnologyIntegration GroupCo., Ltd. Wuhan
Branch
Acter TechnologyIntegration GroupCo., Ltd. Wuhan
BranchActer Engineering
Technology(Shenzhen) Co.,Ltd.
Acter Engineering
Technology(Shenzhen) Co.,Ltd.Acter Engineering
Technology(Shenzhen) Co.,
Ltd. Xiamen
Branch
Acter Engineering
Technology(Shenzhen) Co.,
Ltd. Xiamen
BranchShenzhen DingmaoTrading Co., Ltd.
□ Applicable √ N/A
VI. Other legal shareholders holding more than 10% of the company's shares
□ Applicable √ N/A
VII. Explanation on the restriction on the reduction of shareholding
□ Applicable √ N/A
VIII. Specific implementation of share buyback during the reporting period
□ Applicable √ N/A
Section VIII Preferred Stock
□ Applicable √ N/A
Section IX Relevant Information of BondsI. Enterprise bonds, corporate bonds and debt financing instruments for non-financial enterprises
□ Applicable √ N/A
II. Convertible corporate bonds
□ Applicable √ N/A
Section X Financial ReportingI. Audit Report
√ Applicable □ N/A
Audit Report
XYZH/2024SUAA1B0017Acter Technology Integration Group Co., Ltd.
All shareholders of Acter Technology Integration Group Co., Ltd.
I. Audit Opinion
We have audited the financial statements of Acter Technology Integration Group Co., Ltd., Ltd(hereinafter referred to as "Acter Group"), which comprise the consolidated and parent companybalance sheets as of December 31, 2023, the consolidated and parent company income statements, theconsolidated and parent company cash flow statements, and the consolidated and parent companystatements of changes in stockholders' equity for the year ended December 31, 2023, and the relatednotes to the financial statements.In our opinion, the accompanying financial statements present fairly, in all material respects, theconsolidated and parent company financial position of Acter Group as of December 31, 2023 and theconsolidated and parent company results of operations and cash flows for the year ended December 31,2023 in conformity with the Accounting Standards for Business Enterprises (ASBE).II. Basis of Audit Opinion
We have performed our audit in accordance with the provisions of the Chinese Standards onAuditing for Certified Public Accountants. Our responsibilities under those standards are furtherdescribed in the "Responsibilities of Certified Public Accountants for the Audit of Financial Statements"section of the audit report. In accordance with the Code of Ethics for Certified Public Accountants ofthe People's Republic of China, we are independent of Acter Group and have fulfilled our otherresponsibilities with respect to professional ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our audit opinion.
III. Key Audit Matters
Key audit matters are matters that, in our professional judgment, are of most significance to theaudit of the financial statements. These matters are dealt with in the context of the audit of the financialstatements as a whole and the formation of an audit opinion, and we do not express an opinion on thesematters separately.
| 1. Revenue recognition for construction contracts | |
| Please refer to the accounting policies described in "IV. Significant Accounting Policies and Accounting Estimates" 32 in the notes to the financial statements and "VI. Notes to the Financial Statements" 35 in the notes to the financial statements. | |
| Key Audit Matters | Audit Response |
| Acter Group is mainly engaged in the design and construction of MEP related to clean room projects, and the revenue from construction contracts in FY2023 amounted to RMB 1,994,437,797.70, accounting for 99.28% of the operating revenue in the consolidated income statement. Starting from January 1, 2020, Acter Group will implement “ASBE No. 14,"Revenue (Revised)”. Acter Group evaluated the terms of the contracts and business arrangements and concluded that construction contracts are performance obligations to be fulfilled within a certain period of time, and recognized revenue based on the progress of performance over the period of time in which the construction contracts are performed. The progress of performance is determined based on the proportion of actual contract costs incurred by Acter Group to the estimated total contract costs. Management of Acter Group is required to make reasonable judgments regarding the progress of completion or performance of construction contracts. During the course of execution of the contracts, Acter Group is required to continually evaluate and make adjustments to the contract amounts and estimated total contract costs, which involves the exercise of significant management judgments. | The audit procedures related to the evaluation of revenue recognition of construction contracts mainly include the following procedures: (1) Understanding and evaluating the design and operating effectiveness of key internal controls over financial reporting related to revenue recognition for construction contracts; (2) Selecting the construction contracts signed between Acter Group and its clients, examining the main terms of the contracts and evaluating whether the accounting policies of Acter Group for revenue recognition are in compliance with the requirements of the Accounting Standards for Business Enterprises (ASBE); (3) Selecting construction contracts and examining the basis for the estimated total cost of the contracts and the related cost budget information. If there is any adjustment to the estimated total cost of the contract, check whether the adjustment to the estimated total cost has been approved and inquire the management about the reasons and basis for the adjustment to evaluate whether the estimation made by the management is reasonable and based on sufficient information; (4) Selecting contract costs actually incurred during the reporting period and checking relevant supporting documents such as procurement contracts, purchase orders, material receipts, requisition ratios, invoices, etc. to evaluate the authenticity and accuracy of the actual construction costs; (5) Contract costs incurred around the balance sheet date are selected and reconciled to the relevant supporting documents, including purchase contracts, purchase orders, material receipts, requisition ratios, invoices, and other relevant supporting documents, in order to evaluate |
| 1. Revenue recognition for construction contracts | |
| Please refer to the accounting policies described in "IV. Significant Accounting Policies and Accounting Estimates" 32 in the notes to the financial statements and "VI. Notes to the Financial Statements" 35 in the notes to the financial statements. | |
| Key Audit Matters | Audit Response |
| We identified revenue recognition for construction contracts as a key audit matter because revenue is one of the key performance indicators of Acter Group, there is an inherent risk that Acter Group may manipulate revenue to meet certain objectives or expectations, and revenue recognition for construction contracts involves significant management judgment. | whether the relevant contract costs are recorded in the appropriate accounting period; (6) Selecting construction contracts that have not been completed at the end of the reporting period, reviewing the accuracy of the calculation of the percentage of completion or progress of performance, and recalculating the cumulative revenue recognized and the revenue to be recognized in the current period, and reconciling them with the financial records; (7) Selecting clients and conducting correspondence regarding the amount of construction contracts and receivables signed between Acter Group and them during the reporting period; (8) Selecting construction contracts not yet completed as at the end of the reporting period, conducting on-site inspections of the project sites, observing the image of the on-site works, interrogating the project engineers or management personnel, and checking the progress information of the projects at the construction sites, so as to evaluate the reasonableness of the management's estimation on the progress of the project completion or the progress of the fulfillment of the contract; (9) Selecting construction contracts, checking the total costing sheet of the approved contract budget and the actual implementation of the budget during the reporting period, reviewing the difference between the total budgeted cost and the actual cost of completed contracts, and evaluating whether there is any indication of management bias; (10) Evaluating whether the revenue from construction contracts has been appropriately disclosed in the financial statements. |
| 2. Evaluation of bad debt provision for accounts receivable | |
| Please refer to the accounting policies described in "IV. Significant Accounting Policies and Accounting Estimates" 13 in the notes to the financial statements and "VI. Notes to the Financial Statements" 4 in the notes to the financial statements. | |
| Key Audit Matters | Audit Response |
| As at December 31, 2023, the original value of accounts receivable in the consolidated balance sheet of Acter Group was RMB | The audit procedures related to the evaluation of the bad debt provision for accounts receivable included the following procedures: |
| 2. Evaluation of bad debt provision for accounts receivable | |
| Please refer to the accounting policies described in "IV. Significant Accounting Policies and Accounting Estimates" 13 in the notes to the financial statements and "VI. Notes to the Financial Statements" 4 in the notes to the financial statements. | |
| Key Audit Matters | Audit Response |
| 432,299,306.51, and the provision for bad debts was RMB 35,410,034.25. Based on the expected credit loss rate of accounts receivable, the management measured the bad debt provision for accounts receivable at an amount equivalent to the expected credit losses over the life of the accounts receivable. The expected credit loss rate takes into account the age of the accounts receivable, historical payments, current market conditions and forward-looking information, and this assessment involves significant management judgment and estimates. | (1) Understanding and evaluating the design and operating effectiveness of Acter Group’s key internal controls over financial reporting related to credit risk control, collection and provisioning for bad debts; (2) Evaluating whether the accounting policy for bad debt provision of Acter Group for the reporting period complies with the requirements of enterprise accounting standards; (3) Evaluating the appropriateness of the aging of accounts receivable by selecting items from the accounts receivable aging table, reviewing relevant supporting documents, and taking into account the information on the credit periods granted by Acter Group to its clients; (4) Understanding the key parameters and assumptions used in Acter Group’s expected credit loss model, including management’s judgment on whether to group accounts receivable based on clients’ credit risk characteristics and the historical loss data included in Acter Group’s expected loss ratio; (5) Evaluating the appropriateness of Acter Group’s estimate of expected credit losses by examining the information used by Acter Group to make the estimate, including examining the accuracy of the historical loss data, and evaluating whether management has adjusted the historical loss rate by taking into account the current market conditions and forward-looking information in determining the expected credit loss rate; (6) Recalculation of bad debt allowance as of December 31, 2023 based on the expected credit loss model of accounts receivable of Acter Group. |
IV. Other Information
The management of Acter Group (hereinafter referred to as "management") is responsible for theother information. Other information includes the information covered in the 2023 annual report ofActer Group, but excludes the financial statements and our audit report.
Our audit opinion on the financial statements does not cover the other information, and we do notexpress any form of assurance conclusion on the other information.
In connection with our audit of the financial statements, it is our responsibility to read the otherinformation and, in doing so, to consider whether the other information is materially inconsistent with,or appears to be materially misstated in relation to, the financial statements or our knowledge gained inthe course of the audit.
Based on the work we have performed, if we determine that other information is materiallymisstated, we shall report that fact. We have no matters to report in this regard.
V. Management’s and Governance’s Responsibility for the Financial Statements
The management is responsible for the preparation of financial statements that present fairly, inaccordance with the provisions of the Ind AS, and for designing, implementing and maintaining internalcontrol necessary to enable the preparation of financial statements that are free from materialmisstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing Acter Group'sability to continue as a going concern, disclosing, as applicable, matters related to going concern andapplying the going concern assumptions, unless management plans to liquidate Acter Group,discontinue operations or has no realistic alternative.
Governance is responsible for overseeing the financial reporting process of Acter Group.
VI. CPA's Responsibility for the Audit of Financial Statements
Our objective is to obtain reasonable assurance about whether the financial statements as a wholeare free from material misstatement, whether due to fraud or error, and to issue an audit reportcontaining an audit opinion. Reasonable assurance is a high level of assurance, but it does not guaranteethat an audit performed in accordance with auditing standards will always detect a materialmisstatement when it exists. Misstatements may result from fraud or error and are generally consideredto be material if it is reasonable to expect that the misstatements, individually or in the aggregate, couldaffect the economic decisions of users of financial statements based on the financial statements.
We use professional judgment and maintain professional skepticism in performing the audit inaccordance with auditing standards. We also perform the following tasks:
(1) Identifying and assessing the risks of material misstatement of the financial statements due tofraud or error, design and perform audit procedures to address those risks, and obtaining sufficientappropriate audit evidence as a basis for an audit opinion. The risk of not detecting a materialmisstatement due to fraud is higher than the risk of not detecting a material misstatement due to errorbecause fraud may involve collusion, forgery, willful omission, misrepresentation, or overridinginternal controls.
(2) Obtaining an understanding of internal control relevant to the audit in order to design auditprocedures that are appropriate in the circumstances, but not for the purpose of expressing an opinionon the effectiveness of internal control.
(3) Evaluating the appropriateness of accounting policies selected and the reasonableness ofaccounting estimates and related disclosures made by management.
(4) Expressing a conclusion on the appropriateness of management's use of the going concernassumption. At the same time, based on the audit evidence obtained, we conclude whether there is amaterial uncertainty regarding the matters or circumstances that may cast significant doubt on the abilityof Acter Group to continue as a going concern. If we conclude that a material uncertainty exists, auditingstandards require that we draw the attention of users of the financial statements to the relevantdisclosures in our audit report; if the disclosures are not sufficient, we shall express an unqualifiedopinion. Our conclusions are based on information available at the date of the audit report. However,future events or circumstances may cause Acter Group to be unable to continue as a going concern.
(5) Evaluating the overall presentation, structure and content of the financial statements and toevaluate whether the financial statements present fairly the related transactions and events.
(6) Obtaining sufficient and appropriate audit evidence about the financial information of theentities or business activities of Acter Group to express an opinion on the financial statements. We areresponsible for directing, supervising and performing the audit of the Group and accept fullresponsibility for the audit opinion.
We communicate with governance on matters such as the scope, timing and significant findings ofthe planned audit, including internal control deficiencies of concern identified in our audit.
We also provide governance with a statement of compliance with ethical requirements related toindependence and communicate with governance all relationships and other matters that couldreasonably be perceived to affect our independence, as well as related safeguards.
From the matters communicated with governance, we determined which matters were mostsignificant to the audit of the current financial statements and therefore constituted key audit matters.We describe these matters in our audit report except where public disclosure of the matters is prohibitedby law or regulation or, in rare circumstances, we determine that a matter shall not be communicated inthe audit report if it is reasonably foreseeable that the adverse consequences of communicating thematter would outweigh the benefits to the public interest.
ShineWing Certified Public Accountants LLP Certified Public Accountants, China:
(Project Partner)
Certified Public Accountant, China:
Beijing, China March 29, 2024
II. Financial Statements
Consolidated Balance SheetDecember 31, 2023Prepared by: Acter Technology Integration Group Co., Ltd.
Unit: Yuan Currency: RMB
| Item | Notes | December 31, 2023 | December 31, 2022 |
| Current assets | |||
| Monetary funds | 722,496,330.38 | 550,235,202.99 | |
| Provision for settlement fund | |||
| Funds lent | |||
| Financial assets held for trading | 122,119,888.89 | ||
| Derivative financial assets | |||
| Bills receivable | 43,157,918.28 | 20,790,441.73 | |
| Accounts receivable | 396,889,272.26 | 484,443,368.28 | |
| Receivables financing | 3,572,953.18 | 729,937.36 | |
| Prepayments | 89,024,613.33 | 50,995,260.16 | |
| Premiums receivable | |||
| Reinsurance receivables | |||
| Reserve for reinsurance contracts receivable | |||
| Other receivables | 13,378,598.48 | 13,057,575.31 | |
| Of which: Interest receivable | |||
| Dividends receivable | |||
| Financial assets purchased for resale | |||
| Inventories | 66,824.45 | ||
| Contract assets | 424,897,205.60 | 389,293,108.13 | |
| Assets held for sale | |||
| Non-current assets due within one year | |||
| Other current assets | 97,604,166.69 | 58,265,105.32 | |
| Total current assets | 1,791,021,058.20 | 1,689,996,712.62 | |
| Non-current assets: | |||
| Loans and advances granted | |||
| Debt investments | |||
| Other debt investments | |||
| Long-term receivables | |||
| Long-term equity investments | 2,332,022.40 | 2,314,172.96 | |
| Investments in other equity instruments | |||
| Other non-current financial assets | |||
| Investment properties | 598,758.96 | 713,065.68 | |
| Fixed assets | 38,895,511.08 | 40,095,530.47 | |
| Construction in progress | 13,103,863.94 | ||
| Producing biological assets | |||
| Oil and gas assets | |||
| Utilization right assets | 3,840,232.40 | 4,672,377.60 | |
| Intangible assets | 7,244,475.94 | 7,426,847.54 | |
| Development expenditure | |||
| Goodwill | |||
| Long-term prepaid expenses | |||
| Deferred income tax assets | 12,482,616.81 | 14,578,928.51 | |
| Other non-current assets | 34,843,950.71 | 17,348,658.87 | |
| Total non-current assets | 113,341,432.24 | 87,149,581.63 | |
| Total assets | 1,904,362,490.44 | 1,777,146,294.25 | |
| Current liabilities: | |||
| Short-term borrowings | 31,249,307.82 | ||
| Borrowing from the central bank | |||
| Funds borrowed | |||
| Financial liabilities held for trading | |||
| Derivative financial liabilities | |||
| Bills payable | |||
| Accounts payable | 629,857,317.33 | 589,919,678.26 | |
| Advance receipts | |||
| Contract liabilities | 73,351,891.04 | 74,584,070.11 | |
| Amounts for sale and buyback of financial assets | |||
| Deposit-taking and interbank deposits | |||
| Securities trading agency | |||
| Underwriting of securities | |||
| Employee remuneration payable | 47,459,670.87 | 39,456,513.03 | |
| Taxes payable | 7,980,749.03 | 7,330,079.22 | |
| Other payables | 25,427,208.65 | 1,611,097.74 | |
| Of which: Interest payable | |||
| Dividends payable | |||
| Fees and commissions payable | |||
| Sub-insurance payable | |||
| Liabilities held for sale | |||
| Non-current liabilities due within one year | 1,748,003.79 | 1,710,381.30 | |
| Other current liabilities | |||
| Total current liabilities | 785,824,840.71 | 745,861,127.48 | |
| Non-current liabilities: | |||
| Reserves for insurance contracts | |||
| Long-term borrowings | |||
| Bonds payable | |||
| Of which: Preferred stock | |||
| Perpetual bonds | |||
| Lease liabilities | 2,150,631.55 | 3,151,902.66 | |
| Long-term accounts payable | |||
| Long-term employee remuneration payable | 632,325.46 | 610,379.24 | |
| Projected liabilities | 11,292,847.91 | 9,238,016.80 | |
| Deferred income | |||
| Deferred tax liabilities | 14,496,782.15 | 4,892,632.32 | |
| Other non-current liabilities | |||
| Total non-current liabilities | 28,572,587.07 | 17,892,931.02 | |
| Total liabilities | 814,397,427.78 | 763,754,058.50 | |
| Owners' equity (or shareholders' equity) | |||
| Paid-in capital (or share capital) | 100,000,000.00 | 80,000,000.00 | |
| Other equity instruments | |||
| Of which: Preference stock | |||
| Perpetual bonds | |||
| Capital surplus | 562,632,775.45 | 582,632,775.45 | |
| Less: Treasury stock | |||
| Other comprehensive income | 3,318,147.61 | 3,027,860.88 | |
| Earmarked reserves | 44,578,849.52 | 45,372,652.93 | |
| Surplus reserves | 39,501,301.38 | 28,443,197.81 | |
| Provision for general risks | |||
| Undistributed profits | 332,226,440.31 | 269,871,786.54 | |
| Total owners' equity (or shareholders' equity) attributable to the parent company | 1,082,257,514.27 | 1,009,348,273.61 | |
| Minority interests | 7,707,548.39 | 4,043,962.14 | |
| Total owners' equity (or shareholders' equity) | 1,089,965,062.66 | 1,013,392,235.75 | |
| Total liabilities and owners' equity (or shareholders' equity) | 1,904,362,490.44 | 1,777,146,294.25 | |
Person in charge of the Company: Liang JinliPerson in charge of Accounting: Chen ZhihaoPerson of Accounting Organization: Xiao Jingxia
Parent Company Balance Sheet
December 31, 2023 Prepared by: Acter Technology IntegrationGroup Co., Ltd.
Unit: Yuan Currency: RMB
| Item | Notes | December 31, 2023 | December 31, 2022 |
| Current assets | |||
| Monetary funds | 562,122,045.11 | 426,921,105.55 | |
| Financial assets held for trading | 122,119,888.89 | ||
| Derivative financial assets | |||
| Bills receivable | 41,826,722.94 | 3,741,507.00 | |
| Accounts receivable | 315,117,444.36 | 389,406,545.69 | |
| Receivables financing | 2,161,091.23 | 350,000.00 | |
| Prepayment | 62,282,120.10 | 30,190,351.40 | |
| Other receivables | 31,069,788.93 | 39,103,210.81 | |
| Of which: Interest receivable | |||
| Dividends receivable | |||
| Inventories | 62,842.15 | ||
| Contract assets | 316,838,756.89 | 307,849,835.96 | |
| Assets held for sale | |||
| Non-current assets due within one year | |||
| Other current assets | 45,758,769.25 | 21,837,642.67 | |
| Total current assets | 1,377,176,738.81 | 1,341,582,930.12 | |
| Non-current assets: | |||
| Debt investments | |||
| Other debt investments | |||
| Long-term receivables | |||
| Long-term equity investments | 88,485,289.33 | 84,542,333.88 | |
| Investments in other equity instruments | |||
| Other non-current financial assets | |||
| Investment properties | 598,758.96 | 713,065.68 | |
| Fixed assets | 36,738,851.20 | 38,986,702.82 | |
| Construction in progress | 13,103,863.94 | ||
| Producing biological assets | |||
| Oil and gas assets | |||
| Utilization right assets | 2,451,451.14 | 2,760,402.11 | |
| Intangible assets | 7,206,780.52 | 7,379,278.80 | |
| Development expenditure | |||
| Goodwill | |||
| Long-term amortization | |||
| Deferred tax assets | 9,838,099.85 | 11,724,393.96 | |
| Other non-current assets | 29,178,404.91 | 3,168,562.17 | |
| Total non-current assets | 187,601,499.85 | 149,274,739.42 | |
| Total assets | 1,564,778,238.66 | 1,490,857,669.54 | |
| Current liabilities: | |||
| Short-term borrowings | |||
| Transaction financial liabilities | |||
| Derivative financial liabilities | |||
| Notes payable | |||
| Accounts payable | 521,711,872.40 | 504,944,256.04 | |
| Receipts in advance | |||
| Contract liabilities | 46,861,981.30 | 38,253,734.48 | |
| Employee remuneration payable | 36,511,580.37 | 32,483,986.99 | |
| Taxes payable | 810,992.90 | 3,265,740.36 | |
| Other payables | 1,806,759.40 | 1,278,644.31 | |
| Of which: Interest payable | |||
| Dividends payable | |||
| Liabilities held for sale | |||
| Non-current liabilities due within one year | 968,648.33 | 902,393.93 | |
| Other current liabilities | |||
| Total current liabilities | 608,671,834.70 | 581,128,756.11 | |
| Non-current liabilities: | |||
| Long-term loans | |||
| Bonds payable | |||
| Of which: Preferred stock | |||
| Perpetual bonds | |||
| Lease liabilities | 1,797,832.84 | 2,118,253.78 | |
| Long-term accounts payable | |||
| Long-term employee remuneration payable | |||
| Projected liabilities | 7,199,017.54 | 5,723,958.25 | |
| Deferred income | |||
| Deferred tax liabilities | 367,717.70 | ||
| Other non-current liabilities | |||
| Total non-current liabilities | 9,364,568.08 | 7,842,212.03 | |
| Total liabilities | 618,036,402.78 | 588,970,968.14 | |
| Owners' equity (or shareholders' equity) | |||
| Paid-in capital (or share capital) | 100,000,000.00 | 80,000,000.00 | |
| Other equity instruments | |||
| Of which: Preferred stock | |||
| Perpetual bonds | |||
| Capital surplus | 564,223,330.95 | 584,223,330.95 | |
| Less: Treasury stock | |||
| Other comprehensive income | |||
| Earmarked reserves | 36,814,726.26 | 37,608,529.67 | |
| Surplus reserves | 39,501,301.38 | 28,443,197.81 | |
| Undistributed profits | 206,202,477.29 | 171,611,642.97 | |
| Total owners' equity (or shareholders' equity) | 946,741,835.88 | 901,886,701.40 | |
| Total liabilities and owners' equity (or shareholders' equity) | 1,564,778,238.66 | 1,490,857,669.54 | |
Person in charge of the Company: Liang JinliPerson in charge of Accounting: Chen ZhihaoPerson in charge of Accounting Organization: Xiao Jingxia
Consolidated Income Statement
January-December 2023
Unit: Yuan Currency: RMB
| Item | Notes | FY2023 | FY2022 |
| I. Total operating revenue | 2,008,924,995.68 | 1,627,895,120.49 | |
| Of which: operating revenue | 2,008,924,995.68 | 1,627,895,120.49 | |
| Interest income | |||
| Earned premiums | |||
| Fee and commission income | |||
| II. Total operating costs | 1,829,949,952.47 | 1,471,980,392.51 | |
| Of which: Operating costs | 1,738,841,241.47 | 1,376,528,425.17 | |
| Interest expenses | |||
| Handling fee and commission expenses | |||
| Surrender premiums | |||
| Net claims expenses | |||
| Net withdrawal of insurance liability reserve | |||
| Policy dividend expense | |||
| Reinsurance expenses | |||
| Taxes and surcharges | 4,370,539.18 | 3,800,051.12 | |
| Selling expenses | 7,954,281.67 | 6,301,894.42 | |
| Administrative expenses | 59,193,009.85 | 60,147,184.98 | |
| R&D expenses | 25,121,209.62 | 19,101,658.87 | |
| Finance costs | -5,530,329.32 | 6,101,177.95 | |
| Of which: Interest expense | 1,360,920.96 | 3,693,006.56 | |
| Interest income | 6,309,355.80 | 1,787,232.96 | |
| Add: Other gains | 3,731,552.00 | 3,524,827.14 | |
| Investment income (loss denoted by "-") | 1,661,794.44 | -99,328.94 | |
| Of which: Investment income from associates and joint ventures | |||
| Gain on derecognition of financial assets measured at amortized cost | |||
| Foreign exchange gains (loss denoted by "-") | |||
| Gain on net open hedges (loss denoted by "-") | |||
| Gain on change in fair value (loss denoted by "-") | -119,888.89 | 105,417.14 | |
| Credit impairment loss (loss denoted by "-") | -3,860,633.85 | -5,805,476.85 | |
| Impairment loss on assets (loss denoted by "-") | 1,148,478.91 | 5,978,570.41 | |
| Gain on disposal of assets (loss denoted by "-") | 116,542.37 | 246,990.20 | |
| III. Operating profit (loss denoted by "-") | 181,652,888.19 | 159,865,727.08 | |
| Add: Non-operating revenue | 14,361.33 | 75,601.66 | |
| Less: Non-operating expenses | 889,948.63 | 925,033.47 |
| IV. Total profit (total loss denoted by " - ") | 180,777,300.89 | 159,016,295.27 | |
| Less: Income tax expense | 40,713,458.90 | 35,997,255.91 | |
| V. Net profit (net loss denoted by "-") | 140,063,841.99 | 123,019,039.36 | |
| (I) Classification by continuity of operations | |||
| 1. Net profit from continuing operations (net loss denoted by "-") | 140,063,841.99 | 123,019,039.36 | |
| 2. Net profit from discontinued operations (net loss denoted by "-") | |||
| (II) Classification by ownership attribution | |||
| 1. Net profit attributable to shareholders of the parent company (net loss denoted by "-") | 138,590,474.42 | 122,867,982.79 | |
| 2. Gains and losses of minority shareholders (net loss denoted by "-") | 1,473,367.57 | 151,056.57 | |
| VI. Other comprehensive income, net of tax | 369,438.14 | 2,112,646.09 | |
| (I) other comprehensive income attributable to owners of the parent company, net of taxes | 290,286.73 | 2,027,897.54 | |
| 1. Other comprehensive income that cannot be reclassified to profit or loss | |||
| (1) Remeasurement of changes in defined benefit plans | |||
| (2) Other comprehensive income that cannot be reclassified to profit or loss under the equity method | |||
| (3) Changes in fair value of investments in other equity instruments | |||
| (4) Changes in fair value of own credit risk | |||
| 2. Other comprehensive income to be reclassified to profit or loss | 290,286.73 | 2,027,897.54 | |
| (1) Other comprehensive income available for reclassification to profit or loss under the equity method | |||
| (2) Changes in fair value of other debt instruments | |||
| (3) Reclassification of financial assets to other comprehensive income | |||
| (4) Provision for credit impairment of other debt investments | |||
| (5) Cash flow hedge reserve | |||
| (6) Translation difference of foreign currency financial statements | 290,286.73 | 2,027,897.54 | |
| (7) Others | |||
| (II) Other comprehensive income attributable to minority shareholders, net of taxes | 79,151.41 | 84,748.55 | |
| VII. Total comprehensive income | 140,433,280.13 | 125,131,685.45 | |
| (I) Total comprehensive income attributable to owners of the parent company | 138,880,761.15 | 124,895,880.33 | |
| (II) Total comprehensive income attributable to minority shareholders | 1,552,518.98 | 235,805.12 | |
| VIII. Earnings per share: | |||
| (I) Basic earnings per share (yuan/share) | 1.39 | 1.51 | |
| (II) Diluted earnings per share (yuan/share) | 1.39 | 1.51 | |
In the event of a business combination under the same control during the current period, the netprofit realized by the party to be merged before the merger was RMB 0. The net profit realized by theparty to be merged in the previous period was RMB 0.
Person in chage of of the Company: Liang Jinli
Person in charge of Accounting: Chen Zhihao
Person in charge of Accounting Organization: Xiao Jingxia
Income Statement of the Parent Company
January-December 2023
Unit: Yuan Currency: RMB
| Item | Notes | FY2023 | FY2022 |
| I. Operating Revenue | 1,515,434,141.27 | 1,205,851,820.93 | |
| Less: Operating costs | 1,338,966,817.43 | 1,039,711,074.27 | |
| Taxes and surcharges | 4,057,620.88 | 3,006,779.95 | |
| Selling expenses | 3,076,194.29 | 1,981,006.21 | |
| Administrative expenses | 38,930,717.90 | 43,029,776.70 | |
| R&D expenses | 25,121,209.62 | 19,101,658.87 | |
| Finance costs | -5,338,139.72 | -1,787,439.33 | |
| Of which: Interest expense | 153,118.72 | 1,494,488.49 | |
| Interest Income | 5,636,874.72 | 1,844,141.45 | |
| Add: Other gains | 3,731,552.00 | 2,766,188.78 | |
| Investment income (loss denoted by "-") | 18,594,851.65 | 9,000,000.00 | |
| Of which: Investment income from associates and joint ventures | |||
| Gain on derecognition of financial assets carried at amortized cost | |||
| Gain on net exposure hedge (loss denoted by "-") | |||
| Gain on changes in fair value (loss denoted by "-") | -119,888.89 | 119,888.89 | |
| Credit impairment loss (loss denoted by "-") | -3,623,180.11 | -7,083,121.30 | |
| Impairment loss on assets (loss denoted by "-") | 521,068.35 | 5,527,231.49 | |
| Gain on disposal of assets (loss denoted by "-") | 115,572.93 | 224,175.66 | |
| II. Operating profit (loss denoted by "-") | 129,839,696.80 | 111,363,327.78 | |
| Add: Non-operating revenue | 0.01 | 1.75 | |
| Less: Non-operating expenses | 612,922.35 | 820,188.78 | |
| III. Total profit (total loss denoted by "-") | 129,226,774.46 | 110,543,140.75 | |
| Less: Income tax expense | 18,645,738.73 | 22,934,895.19 | |
| IV. Net profit (net loss denoted by "-") | 110,581,035.73 | 87,608,245.56 | |
| (I) Net profit from continuing operations (net loss denoted by "-") | 110,581,035.73 | 87,608,245.56 | |
| (II) Net profit from discontinued operations (net loss denoted by "-") | |||
| V. Other comprehensive income, net of tax | |||
| (I) Other comprehensive income that cannot be reclassified to profit or loss | |||
| 1. Remeasurement of changes in defined benefit plans |
| 2. Other comprehensive income that cannot be reclassified to profit or loss under the equity method | |||
| 3. Changes in fair value of investments in other equity instruments | |||
| 4. Change in fair value of own credit risk | |||
| (II) Other comprehensive income to be reclassified to profit or loss | |||
| 1. Other comprehensive income that can be reclassified to profit or loss under the equity method | |||
| 2. Changes in fair value of other debt investments | |||
| 3. Reclassification of financial assets to other comprehensive income | |||
| 4. Provision for credit impairment of other debt investments | |||
| 5. Cash flow hedge reserve | |||
| 6. Translation differences on foreign currency financial statements | |||
| 7. Others | |||
| VI. Total comprehensive income | 110,581,035.73 | 87,608,245.56 | |
| VII. Earnings per share: | |||
| (I) Basic earnings per share (yuan/share) | |||
| (II) Diluted earnings per share (yuan/share) | |||
Person in charge of the Company: Liang JinliPerson in charge of Accounting: Chen ZhihaoPerson in charge of Accounting organization: Xiao Jingxia
Consolidated Cash Flow Statement
January-December 2023
Unit: Yuan Currency: RMB
| Item | Notes | FY2023 | FY2022 |
| I. Cash flows from operating activities: | |||
| Cash received from sales of goods and rendering of services | 2,167,140,386.68 | 1,676,483,526.48 | |
| Net increase in client deposits and interbank placings | |||
| Net increase in borrowings from the central bank | |||
| Net increase in borrowings from other financial institutions | |||
| Cash received from premiums for primary insurance contracts | |||
| Net cash received from reinsurance business | |||
| Net increase in policyholders' deposits and investment funds | |||
| Cash received from interest, fees and commissions | |||
| Net increase in funds received | |||
| Net increase in buyback transactions | |||
| Net cash received from securities trading | |||
| Tax rebates received | 4,870,426.57 | 21,093,638.18 | |
| Cash received from other operating activities | 18,560,464.10 | 34,436,667.12 | |
| Subtotal of cash inflow from operating activities | 2,190,571,277.35 | 1,732,013,831.78 | |
| Cash paid for goods and services | 1,805,795,893.11 | 1,343,472,760.93 | |
| Net increase in loans and advances to clients | |||
| Net increase in deposits with central banks and interbanks | |||
| Cash paid for original insurance contract claims | |||
| Net increase in funds withdrawn | |||
| Cash paid for interest, fees and commissions | |||
| Cash paid for policy dividends | |||
| Cash paid to and for employees | 130,630,318.35 | 99,870,108.89 | |
| Taxes paid | 76,654,922.21 | 77,937,514.35 | |
| Cash paid for other operating activities | 43,967,212.45 | 49,643,981.81 | |
| Subtotal of cash outflow from operating activities | 2,057,048,346.12 | 1,570,924,365.98 | |
| Net cash flows from operating activities | 133,522,931.23 | 161,089,465.80 | |
| II. Cash flows from investing activities: | |||
| Cash received from recovery of investments | 371,000,000.00 | 202,252.61 | |
| Cash received from investment income | 1,809,868.77 | ||
| Net cash received from the disposal of fixed assets, intangible assets and other long-term assets | 28,000.00 | 273,005.91 | |
| Net cash received from the disposal of subsidiaries and other operating units | |||
| Cash received from other investing activities | |||
| Subtotal of cash inflow from investing activities | 372,837,868.77 | 475,258.52 | |
| Cash paid for acquisition and construction of fixed assets, intangible assets and other long-term assets | 16,998,209.64 | 4,783,339.58 | |
| Cash paid for investment | 249,000,000.00 | 122,000,000.00 | |
| Net increase in pledged loans | |||
| Net cash paid for acquisition of subsidiaries and other business units | |||
| Cash paid for other investing activities | |||
| Subtotal of cash outflow from investing activities | 265,998,209.64 | 126,783,339.58 | |
| Net cash flows from investing activities | 106,839,659.13 | -126,308,081.06 | |
| III. Cash flows from financing activities: | |||
| Cash received from investment absorption | 2,114,535.07 | 504,551,886.80 | |
| Of which: Cash received by subsidiaries from minority investment | |||
| Cash received from loans | 6,388,838.45 | 233,739,019.50 | |
| Cash received from other financing activities | 22,605,625.00 | ||
| Subtotal of cash inflow from financing activities | 31,108,998.52 | 738,290,906.30 | |
| Cash paid for debt repayment | 37,837,088.45 | 317,108,556.88 | |
| Cash paid for distribution of dividends, profits or repayment of interest | 66,094,012.34 | 33,149,681.50 | |
| Of which: Dividends and profits paid to minority shareholders by subsidiaries | |||
| Cash paid for other financing activities | 2,180,273.09 | 22,871,875.08 | |
| Subtotal of cash outflow from financing activities | 106,111,373.88 | 373,130,113.46 | |
| Net cash flows from financing activities | -75,002,375.36 | 365,160,792.84 | |
| IV. Impact of exchange rate changes on cash and cash equivalents | 2,296,409.74 | 447,893.41 | |
| V. Net increase in cash and cash equivalents | 167,656,624.74 | 400,390,070.99 | |
| Add: Cash and cash equivalents balance at beginning of period | 542,340,098.29 | 141,950,027.30 | |
| VI. Cash and cash equivalents at end of period | 709,996,723.03 | 542,340,098.29 | |
Person in charge of the Company: Liang Jinli Person in charge of Accounting: Chen Zhihao Person in charge of AccountingOrganization: Xiao Jingxia
Cash flow statement of the parent company
January-December 2023
Unit: Yuan Currency: RMB
| Item | Notes | FY2023 | FY2022 |
| I. Cash flows from operating activities: | |||
| Cash received from sales of goods and rendering of services | 1,647,517,583.36 | 1,092,516,773.62 | |
| Tax refunds received | 3,748,084.73 | ||
| Cash received from other operating activities | 14,972,801.49 | 7,963,498.00 | |
| Subtotal of cash inflow from operating activities | 1,666,238,469.58 | 1,100,480,271.62 | |
| Cash paid for goods and services | 1,406,939,420.43 | 969,724,417.70 | |
| Cash paid to and for employees | 96,230,925.37 | 71,802,528.56 | |
| Taxes paid | 60,761,461.48 | 49,226,203.45 | |
| Cash paid for other operating activities | 27,542,918.50 | 27,217,857.28 | |
| Subtotal of cash outflow from operating activities | 1,591,474,725.78 | 1,117,971,006.99 | |
| Net cash flows from operating activities | 74,763,743.80 | -17,490,735.37 | |
| II. Cash flows from investing activities: | |||
| Cash received from recovery of investments | 347,000,000.00 | ||
| Cash received from investment income | 19,008,542.74 | 9,000,000.00 | |
| Net cash recovered from disposal of fixed assets, intangible assets and other long-term assets | 20,000.00 | 88,000.00 | |
| Net cash received from disposal of subsidiaries and other business units | |||
| Cash received from other investing activities | |||
| Subtotal of cash inflow from investing activities | 366,028,542.74 | 9,088,000.00 | |
| Cash paid for the purchase and construction of fixed assets, intangible assets and other long-term assets | 15,334,338.59 | 3,625,785.24 | |
| Cash paid for investment | 225,000,000.00 | 122,000,000.00 | |
| Net cash paid for acquisition of subsidiaries and other operating units | 4,242,955.45 | ||
| Cash paid for other investing activities | |||
| Subtotal of cash outflow from investing activities | 244,577,294.04 | 125,625,785.24 | |
| Net cash flows from investing activities | 121,451,248.70 | -116,537,785.24 | |
| III. Cash flows from financing activities: | |||
| Cash flows from financing activities | 504,551,886.80 | ||
| Cash received from obtaining loans | 89,551,555.00 | ||
| Cash received from other financing activities | 34,906,384.33 | 64,016,599.07 | |
| Subtotal of cash inflow from financing activities | 34,906,384.33 | 658,120,040.87 | |
| Cash paid for debt repayment | 89,551,555.00 | ||
| Cash paid for distribution of dividends, profits or interest repayment | 65,000,000.00 | 31,177,990.13 | |
| Cash paid for other financing activities | 29,198,376.93 | 63,272,188.69 | |
| Subtotal of cash outflow from financing activities | 94,198,376.93 | 184,001,733.82 | |
| Net cash flows from financing activities | -59,291,992.60 | 474,118,307.05 | |
| IV. Impact of exchange rate changes on cash and cash equivalents | 7,753.07 | 125,339.27 | |
| V. Net increase in cash and cash equivalents | 136,930,752.97 | 340,215,125.71 | |
| Add: Opening balance of cash and cash equivalents | 425,166,975.58 | 84,951,849.87 | |
| VI. Cash and cash equivalents at end of period | 562,097,728.55 | 425,166,975.58 |
Person in charge of the Company: Liang Jinli Person in charge of Accounting: Chen Zhihao Person in charge of AccountingOrganization: Xiao Jingxia
Consolidated Statement of Changes in Owners' Equity
January-December 2023
Unit: Yuan Currency: RMB
| Item | Year 2023 | ||||||||||||||
| Owners' equity attributable to the parent company | Minority interests | Total equity | |||||||||||||
| Paid-in capital (or equity) | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Earmarked reserves | Surplus reserves | General risk allowance | Undistributed profits | Undistributed profit | Subtotal | |||||
| Preferred stock | Perpetual debt | Other | |||||||||||||
| I. Closing balance of the previous year | 80,000,000.00 | 582,632,775.45 | 3,027,860.88 | 45,372,652.93 | 28,443,197.81 | 269,871,786.54 | 1,009,348,273.61 | 4,043,962.14 | 1,013,392,235.75 | ||||||
| Add: change in accounting policy | -177,717.08 | -177,717.08 | -3,467.80 | -181,184.88 | |||||||||||
| Correction of prior-period errors | |||||||||||||||
| Others | |||||||||||||||
| II. Opening balance for the year | 80,000,000.00 | 582,632,775.45 | 3,027,860.88 | 45,372,652.93 | 28,443,197.81 | 269,694,069.46 | 1,009,170,556.53 | 4,040,494.34 | 1,013,211,050.87 | ||||||
| III. Increases/decreases during the period | 20,000,000.00 | -20,000,000.00 | 290,286.73 | -793,803.41 | 11,058,103.57 | 62,532,370.85 | 73,086,957.74 | 3,667,054.05 | 76,754,011.79 | ||||||
| Amount (Decrease denoted by " - ") | |||||||||||||||
| (I) Total comprehensive income | 290,286.73 | 138,590,474.42 | 138,880,761.15 | 1,552,518.98 | 140,433,280.13 | ||||||||||
| (II) Owners' inputs and capital reduction | 2,114,535.07 | 2,114,535.07 | |||||||||||||
| 1. Ordinary shares invested by owners | 2,114,535.07 | 2,114,535.07 | |||||||||||||
| 2. Contribution of capital by holders of other equity instruments | |||||||||||||||
| 3. Share-based payments recognized in owners' equity | |||||||||||||||
| 4. Others | |||||||||||||||
| (III) Profit distribution | - | - | - | - | - | - | - | - | 11,058,103.57 | - | -76,058,103.57 | - | -65,000,000.00 | - | -65,000,000.00 |
| 1. Withdrawal of surplus reserves | 11,058,103.57 | -11,058,103.57 | |||||||||||||
| 2. Provision for general risks | |||||||||||||||
| 3. Distribution to owners (or shareholders) | -65,000,000.00 | -65,000,000.00 | -65,000,000.00 | ||||||||||||
| 4. Others | |||||||||||||||
| (IV) Internal transfer of ownership interest | 20,000,000.00 | -20,000,000.00 | |||||||||||||
| 1. Capitalization of capital surplus to capital (or share capital) | 20,000,000.00 | -20,000,000.00 | |||||||||||||
| 2. Transfer of surplus reserves to capital (or share capital) | |||||||||||||||
| 3. Surplus reserves to cover losses | |||||||||||||||
| 4. Amount of changes in defined benefit plan carried forward to retained earnings | |||||||||||||||
| 5. Other comprehensive income Transfer of other comprehensive income to retained earnings | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Earmarked reserves | -793,803.41 | -793,803.41 | -793,803.41 | ||||||||||||
| 1. Withdrawal during the period | |||||||||||||||
| 2. Used during the period | 793,803.41 | 793,803.41 | 793,803.41 | ||||||||||||
| (VI) Others | |||||||||||||||
| IV. Closing balance of the period | 100,000,000.00 | - | - | - | 562,632,775.45 | - | 3,318,147.61 | 44,578,849.52 | 39,501,301.38 | - | 332,226,440.31 | - | 1,082,257,514.27 | 7,707,548.39 | 1,089,965,062.66 |
| Year 2022 | |||||||||||||||
| Equity attributable to owners of the parent company | Minority interests | Total owners' equity | |||||||||||||
| Paid-in capital (or share capital) | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Earmarked reserves | Surplus reserves | General risk allowance | Undistributed profits | Undistributed profit | Subtotal | |||||
| Preferred stock | Perpetual debt | Other | |||||||||||||
| I. Closing balance of the previous year | 60,000,000.00 | 110,110,859.85 | 999,963.34 | 46,731,787.48 | 19,682,373.25 | 185,764,628.31 | 423,289,612.23 | 3,808,157.02 | 427,097,769.25 | ||||||
| Add: change in accounting policy | |||||||||||||||
| Correction of prior-period errors | |||||||||||||||
| Others | |||||||||||||||
| II. Opening balance for the year | 60,000,000.00 | 110,110,859.85 | 999,963.34 | 46,731,787.48 | 19,682,373.25 | 185,764,628.31 | 423,289,612.23 | 3,808,157.02 | 427,097,769.25 | ||||||
| III. Increases/decreases during the period (Decrease denoted by " - ") | 20,000,000.00 | 472,521,915.60 | 2,027,897.54 | -1,359,134.55 | 8,760,824.56 | 84,107,158.23 | 586,058,661.38 | 235,805.12 | 586,294,466.50 | ||||||
| (I) Total comprehensive income | 2,027,897.54 | 122,867,982.79 | 124,895,880.33 | 235,805.12 | 125,131,685.45 | ||||||||||
| (II) Owners' inputs and capital reduction | 20,000,000.00 | 472,521,915.60 | 492,521,915.60 | 492,521,915.60 | |||||||||||
| 1. Ordinary shares invested by owners | 20,000,000.00 | 465,347,160.33 | 485,347,160.33 | 485,347,160.33 | |||||||||||
| 2. Contribution of capital by holders of other equity instruments | |||||||||||||||
| 3. Share-based payments recognized in owners' equity | 7,174,755.27 | 7,174,755.27 | 7,174,755.27 | ||||||||||||
| 4. Others | |||||||||||||||
| (III) Profit distribution | 8,760,824.56 | -38,760,824.56 | -30,000,000.00 | -30,000,000.00 | |||||||||||
| 1. Withdrawal of surplus reserves | 8,760,824.56 | -8,760,824.56 | |||||||||||||
| 2. Provision for general risks | |||||||||||||||
| 3. Distribution to owners (or shareholders) | -30,000,000.00 | -30,000,000.00 | -30,000,000.00 | ||||||||||||
| 4. Others | |||||||||||||||
| (IV) Internal transfer of ownership interest | |||||||||||||||
| 1. Capitalization of capital surplus to capital (or share capital) | |||||||||||||||
| 2. Transfer of surplus reserves to capital (or share capital) | |||||||||||||||
| 3. Surplus reserves to cover losses | |||||||||||||||
| 4. Amount of changes in defined benefit plan carried forward to retained earnings | |||||||||||||||
| 5. Other comprehensive income Transfer of other comprehensive income to retained earnings | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Earmarked reserves | -1,359,134.55 | -1,359,134.55 | -1,359,134.55 | ||||||||||||
| 1. Withdrawal during the period | |||||||||||||||
| 2． Used during the period | 1,359,134.55 | 1,359,134.55 | 1,359,134.55 | ||||||||||||
| (VI) Others | |||||||||||||||
| IV. Closing balance of the period | 80,000,000.00 | 582,632,775.45 | 3,027,860.88 | 45,372,652.93 | 28,443,197.81 | 269,871,786.54 | 1,009,348,273.61 | 4,043,962.14 | 1,013,392,235.75 |
Person in charge of the Company: Liang Jinli Person in charge of Accounting: Chen Zhihao Person in charge of AccountingOrganization: Xiao Jingxia
Statement of changes in equity of the parent company
January-December 2023
Unit: Yuan Currency: RMB
| Item | Year 2023 | ||||||||||
| Paid-in capital (or share capital) | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Earmarked reserves | Surplus reserves | Undistributed earnings | Total owners' equity | |||
| Preferred stock | Perpetual debt | Others | |||||||||
| I. Balance at the end of the previous year | 80,000,000.00 | 584,223,330.95 | 37,608,529.67 | 28,443,197.81 | 171,611,642.97 | 901,886,701.40 | |||||
| Add: Change in accounting policy | 67,902.16 | 67,902.16 | |||||||||
| Correction of prior period errors | |||||||||||
| Others | |||||||||||
| II. Opening balance for the year | 80,000,000.00 | 584,223,330.95 | 37,608,529.67 | 28,443,197.81 | 171,679,545.13 | 901,954,603.56 | |||||
| III. Amount of increase or decrease during the period (Decrease denoted by " - ") | 20,000,000.00 | -20,000,000.00 | -793,803.41 | 11,058,103.57 | 34,522,932.16 | 44,787,232.32 | |||||
| (I) Total comprehensive income | 110,581,035.73 | 110,581,035.73 | |||||||||
| (II) Owners' contributions and capital reduction | |||||||||||
| 1. Ordinary shares invested by owners | |||||||||||
| 2. Capital contributions from holders of other equity instruments | |||||||||||
| 3. Share-based payments recognized in owners' equity | |||||||||||
| IV. Others | |||||||||||
| (III) Distribution of profits | 11,058,103.57 | -76,058,103.57 | -65,000,000.00 | ||||||||
| 1. Withdrawal of surplus reserves | 11,058,103.57 | -11,058,103.57 | |||||||||
| 2. Distribution to owners (or shareholders) | -65,000,000.00 | -65,000,000.00 | |||||||||
| 3. Other | - | ||||||||||
| (IV) Internal transfer of owners' equity | 20,000,000.00 | -20,000,000.00 | |||||||||
| 1. Transfer of capital surplus to capital (or share capital) | 20,000,000.00 | -20,000,000.00 | |||||||||
| 2. Transfer of surplus to capital (or share capital) | |||||||||||
| 3. Making up of losses from surplus surplus | |||||||||||
| 4. Carry-over of changes in defined benefit plans to retained earnings | |||||||||||
| 5. Other comprehensive income carried forward to retained earnings | |||||||||||
| 6. Others | |||||||||||
| (V) Earmarked reserves | -793,803.41 | -793,803.41 | |||||||||
| 1. Withdrawal during the period | - | ||||||||||
| 2. Utilized during the period | 793,803.41 | 793,803.41 | |||||||||
| (VI) Others | - | ||||||||||
| IV. Closing balance for the period | 100,000,000.00 | 564,223,330.95 | 36,814,726.26 | 39,501,301.38 | 206,202,477.29 | 946,741,835.88 | |||||
| Item | Year 2022 | ||||||||||
| Paid-in capital (or share capital) | Other equity instruments | Capital surplus | Less: Treasury stock | Other comprehensive income | Earmarked reserves | Surplus reserves | Undistributed earnings | Total owners' equity | |||
| Preferred stock | Perpetual debt | Other | |||||||||
| I. Balance at the end of the previous year | 60,000,000.00 | 111,774,134.07 | 38,967,664.22 | 19,682,373.25 | 122,764,221.97 | 353,188,393.51 | |||||
| Add: Change in accounting policy | |||||||||||
| Correction of prior period errors | |||||||||||
| Others | |||||||||||
| II. Opening balance for the year | 60,000,000.00 | 111,774,134.07 | 38,967,664.22 | 19,682,373.25 | 122,764,221.97 | 353,188,393.51 | |||||
| III. Amount of increase or decrease during the period (Decrease denoted by " - ") | 20,000,000.00 | 472,449,196.88 | -1,359,134.55 | 8,760,824.56 | 48,847,421.00 | 548,698,307.89 | |||||
| (I) Total comprehensive income | 87,608,245.56 | 87,608,245.56 | |||||||||
| (II) Owners' contributions and capital reduction | 20,000,000.00 | 472,449,196.88 | 492,449,196.88 | ||||||||
| 1. Common shares invested by owners | 20,000,000.00 | 465,347,160.33 | 485,347,160.33 | ||||||||
| 2. Capital contributions from other equity instrument holders | |||||||||||
| 3. Share-based payment Share-based payments recognized in owners' equity | 7,102,036.55 | 7,102,036.55 | |||||||||
| 4. Others | |||||||||||
| (III) Distribution of profits | 8,760,824.56 | -38,760,824.56 | -30,000,000.00 | ||||||||
| 1. Withdrawal of surplus reserves | 8,760,824.56 | -8,760,824.56 | |||||||||
| 2. Distribution to owners (or shareholders) | -30,000,000.00 | -30,000,000.00 | |||||||||
| 3. Others | |||||||||||
| (IV) Internal transfer of owners' equity | |||||||||||
| 1. Transfer of capital surplus to capital (or share capital) | |||||||||||
| 2. Transfer of surplus to capital (or share capital) | |||||||||||
| 3. Coverage of losses from surplus surplus | |||||||||||
| 4. Carry-over of changes in defined benefit plans to retained earnings | |||||||||||
| 5. Other comprehensive income carried forward to retained earnings | |||||||||||
| 6. Others | |||||||||||
| (V) Earmarked reserves | -1,359,134.55 | -1,359,134.55 | |||||||||
| 1. Withdrawal during the period | |||||||||||
| 2. Used during the period | 1,359,134.55 | 1,359,134.55 | |||||||||
| (VI) Others | |||||||||||
| IV. Closing balance for the period | 80,000,000.00 | 584,223,330.95 | 37,608,529.67 | 28,443,197.81 | 171,611.642.97 | 901,886,701.40 | |||||
Person in charge of the Company: Liang Jinli Person in charge of Accounting: Chen Zhihao Person in charge of AccountingOrganization: Xiao Jingxia
III. Basic Information of the Company
1. Company profile
√ Applicable □ N/A
Acter Technology Integration Group Co., Ltd. (the “Company”), formerly known as Sheng Huei(Suzhou) Engineering Co., Ltd. (“Sheng Huei Limited”), was established on September 3, 2003 inSuzhou City, Jiangsu Province. At the time of its establishment, the Company's initial registered capitalwas US$0.45 million. After a series of capital increase, as at December 31, 2017, the registered capitalof Sheng Huei Limited was US$7.98 million, and the sole shareholder of Sheng Huei Limited is SHENGHUEI INTERNATIONAL CO., Ltd.In January 2018, Sheng Huei International increased the capital of Sheng Huei Limited, and theregistered capital was increased from US$7.98 million to US$9.03 million. In May 2018, Acter Groupentered into an equity transfer agreement with Suzhou Songhuei Enterprise Management ConsultingPartnership (Limited Partnership) (“Suzhou Songhuei”) and Suzhou Shengzhan EnterpriseManagement Consulting Partnership (Limited Partnership) (“Suzhou Shengzhan”). Pursuant to theagreement, Acter Group agreed to transfer the corresponding registered capital of Sheng Huei Limitedof US$0.977918 million and US$0.226403 million held by Sheng Huei Limited to Suzhou Songhueiand Suzhou Shengzhan at RMB 14,282,400.00 and RMB 3,306,600.00 respectively. After thecompletion of the above transactions, the registered capital of Sheng Huei Limited is US$9.03 millionand the equity structure is as follows:
| No. | Shareholder | Amount of investment (USD Million/100) | Shareholding ratio (%) |
| 1 | Sheng Huei International | 782.5679 | 86.6630 |
| 2 | Suzhou Songhuei | 97.7918 | 10.8300 |
| 3 | Suzhou Shengzhan | 22.6403 | 2.5070 |
| Total | 903.0000 | 100.0000 | |
In June 2019, all the investors of Sheng Huei Limited entered into a promoter agreement, agreeingto change the whole of Sheng Huei Limited into a joint stock limited company and renamed as “ActerTechnology Integration Group Co., Ltd.”. All the investors converted the net assets of Sheng HueiLimited as of April 30, 2019 into 60,000,000 shares with par value of RMB 1 each. The shareholdingstructure after the overall change is as follows:
| No. | Shareholder | Share capital (RMB) | Shareholding ratio (%) |
| 1 | Sheng Huei International | 51,997,800.00 | 86.6630 |
| 2 | Suzhou Songhuei | 6,498,000.00 | 10.8300 |
| 3 | Suzhou Shengzhan | 1,504,200.00 | 2.5070 |
| Total | 60,000,000.00 | 100.0000 | |
On August 23, 2022, the Company applied for the IPO of A shares of not more than 20,000,000.00shares by CSRC (“Official Reply to the Approval of the IPO of Acter Technology Integration GroupCo., Ltd.”) (CSRC License No. [2022] 1915), which was approved by the CSRC. As at December 31,2022, the Company had received the monetary funds obtained through the public offering of A shares,of which the paid-in capital (share capital) amounted to RMB 20,000,000.00 (SAY RMB TWENTYMILLION YUAN ONLY).
The shareholding structure after the overall change is as follows:
| No. | Shareholders | Share capital (RMB) | Shareholding ratio (%) |
| 1 | Sheng Huei International | 51,997,800.00 | 64.9973 |
| 2 | RMB ordinary shares (A shares) shareholders | 20,000,000.00 | 25.0000 |
| 3 | Suzhou Songhuei | 6,498,000.00 | 8.1225 |
| 4 | Suzhou Shengzhan | 1,504,200.00 | 1.8803 |
| Total | 80,000,000.00 | 100.0000 | |
Pursuant to the resolution of the 2022 annual general meeting held on April 28, 2023, the Companypaid a cash dividend of RMB 0.8125 per share (inclusive of tax) to all shareholders on the basis of thetotal share capital of 80,000,000.00 shares as at June 14, 2023, and transferred 0.25 shares to allshareholders by way of capital reserve to increase the share capital by a total of 20,000,000.00 shareswith par value of RMB 1 per share, increasing the share capital by RMB 20,000,000.00 in total.
As at December 31, 2023, the shareholding structure after the overall change is as follows:
| No. | Shareholder | Share capital (RMB) | Shareholding ratio (%) |
| 1 | Sheng Huei International | 64,997,250.00 | 64.9973 |
| 2 | RMB ordinary shares (A shares) shareholders | 25,000,000.00 | 25.0000 |
| 3 | Suzhou Songhuei | 8,122,500.00 | 8.1225 |
| 4 | Suzhou Shengzhan | 1,880,250.00 | 1.8803 |
| Total | 100,000,000.00 | 100.0000 | |
The Company's parent company is Sheng Huei International and its ultimate holding company isActer Co., Ltd. (Acter (Taiwan)) The Company's business term is from September 3, 2003 to anindefinite period.
Scope of Business: Engaged in system integration services; design and related equipmentinstallation of mechanical and electrical systems, HVAC systems, aseptic systems, and buildingequipment management systems: construction of air purification engineering, fire engineering, buildingconstruction engineering, interior and exterior decoration engineering, municipal public works, pipelineengineering, and provision of related technical consultation and after-sales service; research anddevelopment and manufacturing of industrial switch power converters and components; wholesale,import, and export of similar products produced by the company and building materials, dust-free,aseptic purification equipment and related equipment, and assembly parts (for products involving quotasand license management, applications shall be handled according to relevant national regulations).Category III medical device business; Category II medical device sales; manufacturing of metalstructures; manufacturing of building decoration, plumbing parts, and other metal products forconstruction (the project shall be carried out only after approval by relevant authorities in accordancewith the law).
Licensed Projects: Construction engineering design; intelligent building system design (thespecific business projects shall be subject to the approval results, and only after approval by relevantauthorities in accordance with the law can the business activities be conducted).
The financial statements were approved by the Board of Directors of the Group on March 29, 2024by resolution.
IV. Basis of Preparation of the Financial Statements
1. Basis of preparation
The financial statements of the Company are prepared in accordance with the "AccountingStandards for Business Enterprises" issued by the Ministry of Finance (hereinafter collectively referredto as the "ASBE") and its application guidance, interpretations, and other relevant regulations, as wellas the disclosure requirements of the China Securities Regulatory Commission's (hereinaftercollectively referred to as the "CSRC") "General Provisions of Financial Reports - No. 15 - Rules onthe Information Disclosure of Companies Issuing Securities" (Revised in 2023), based on the actualtransactions and events.
2. Going concern
√ Applicable □ N/A
The Group evaluated its ability to continue as a going concern for the twelve months endedDecember 31, 2023, and found no matters or circumstances that cast significant doubt on its ability tocontinue as a going concern. The financial statements are presented on a going concern basis.
V. Significant Accounting Policies and Accounting EstimatesSpecific accounting policies and accounting estimates
√ Applicable □ N/A
The preparation of financial statements requires the management of the Group to make estimatesand assumptions that affect the application of accounting policies and the amounts of assets, liabilities,income and expenses. Actual results may differ from these estimates. The Group's managementcontinually evaluates its judgment regarding critical assumptions and uncertainties involved in makingestimates. The effects of changes in accounting estimates are recognized in the period in which theestimate is changed and in future periods.
The following accounting estimates and critical assumptions have a significant risk of causing amaterial adjustment to the carrying amount of assets and liabilities in future periods.
(1) Revenue recognition
Under the new revenue standard, the Group recognizes revenue from construction contracts overa period of time. The recognition of revenue and profit from construction depends on the Group'sestimation of the outcome of the contract and the progress of performance. If the actual amount of totalrevenues and total costs incurred is higher or lower than management's estimates, it will affect theamount of revenue and profit recognized by the Group in future periods;
(2) Impairment of receivables and contract assets
Effective January 1, 2019, the Group uses the expected credit loss model to assess the impairmentof financial instruments. The application of the expected credit loss model requires significantjudgments and estimates that take into account all reasonable and supportable information, includingforward-looking information. In making such judgments and estimates, the Group extrapolates theexpected changes in the credit risk of debtors based on historical repayment data and factors such aseconomic policies, macroeconomic indicators and industry risks. Therefore, the amount of provisionfor impairment of receivables and contract assets may change in accordance with the changes in theabove estimates, and the adjustments to the provision for impairment of receivables and contract assetswill affect the profit or loss in the period in which the estimates are changed.
(3) Accounting estimates for provision for impairment of fixed assets and investment properties
The Group performs impairment tests on fixed assets such as buildings, machinery and equipment,and investment properties at the balance sheet date if there is any indication of impairment. Therecoverable amount of property, plant and equipment and investment properties is the higher of the
present value of estimated future cash flows and the fair value of the assets less costs of disposal, whichrequires the use of accounting estimates.If management revises the gross margins used in the calculation of future cash flows for assetgroups and portfolios of asset groups and the revised gross margins are lower than the currently usedgross margins, the Group is required to increase the provision for impairment for property, plant andequipment and investment properties.If the pre-tax discount rate used for discounting cash flows is revised by the management and therevised pre-tax discount rate is higher than the current rate, the Group is required to make additionalprovision for impairment of fixed assets and investment properties.If the actual gross profit margin or pre-tax discount rate is higher or lower than the management'sestimate, the Group cannot reverse the provision for impairment of fixed assets and investmentproperties.
(4) Useful lives of fixed assets and investment properties
The Group reviews the estimated useful lives of fixed assets and investment properties at leastannually at the end of each year. The estimated useful lives are determined by the management basedon historical experience of similar assets, reference to estimates generally used in the industry andexpected technological updates. Depreciation and amortization expenses for future periods are adjustedaccordingly when there is a significant change in the previous estimates.
(5) Income tax expense
The Group recognizes current and deferred taxes in profit or loss, except for those arising frombusiness combinations and transactions or events directly attributable to owners' equity (including othercomprehensive income).
Current income tax is the expected income tax payable calculated on the basis of the taxableincome for the year at the rates specified in the tax law, plus adjustments to prior years' income taxpayable. At the balance sheet date, if the Group has a legal right to settle on a net basis and intends tosettle on a net basis, or to acquire assets and settle liabilities simultaneously, current income tax assetsand current income tax liabilities are shown net of tax. Deferred tax assets and deferred tax liabilitiesare recognized for deductible temporary differences and taxable temporary differences, respectively. Atemporary difference is the difference between the carrying amount of an asset or liability and its taxbasis, including deductible losses and tax credits that can be carried forward to future years. Deferredtax assets are recognized to the extent that it is probable that taxable income will be available againstwhich the deductible temporary differences can be utilized. Deferred tax is not recognized for temporarydifferences arising from transactions that are not part of a business combination and that at the time ofthe transaction affect neither the accounting profit nor taxable income (or deductible losses). At thebalance sheet date, the Group measures the carrying amount of deferred tax assets and liabilities basedon the expected manner of recovering or settling those assets and liabilities, in accordance with enactedtax laws, at the tax rates that are expected to apply to the period when the assets are recovered or theliabilities are settled. The carrying amount of deferred tax assets is reviewed at the balance sheet date.The carrying amount of deferred tax assets is written down to the extent that it is more likely than notthat sufficient taxable income will not be available to allow the benefit of the deferred tax assets to berealized in future periods. When it is more likely than not that sufficient taxable income will be availableto offset the deferred tax assets, the amount written down is reversed.
On the balance sheet date, deferred tax assets and liabilities are netted out when the followingconditions are met:
A taxable entity has a legal right to settle current income tax assets and current income tax liabilitieson a net basis;
Deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxauthority on the same taxable entity or on different taxable entities, provided that in each future periodin which significant deferred tax assets and liabilities reverse, the taxable entity intends to settle the
current tax assets and liabilities on a net basis, or to realize the assets and settle the liabilitiessimultaneously.
1. Statement of Compliance with ASBE
The financial statements prepared by the Company comply with the requirements of the ASBE andgive a true and complete account of the Company's financial position, results of operations, changes inshareholders' equity, cash flows and other relevant information.
2. Accounting period
The Company's fiscal year begins on January 1 and ends on December 31 of the Gregorian calendar.
3. Business cycle
√ Applicable □ N/A
The Group uses 12 months as the business cycle and the criteria for classifying the liquidity ofassets and liabilities.
4. Currency of accounts
The Group and its Chinese subsidiaries use Renminbi ("RMB") as the local currency of account;Acter International Limited ("Acter (Hong Kong)") uses United States dollars ("USD") as the localcurrency of account; Acter Technology Singapore Pte. Ltd ("Acter (Singapore)") is denominated inSingapore dollars; PT Acter Technology Indonesia ("Acter (Indonesia)") and PT Acter IntegrationTechnology Indonesia ("Indonesia Joint Venture") are denominated in Indonesian Rupiah; ActerTechnology Malaysia Sdn. Bhd ("Acter (Malaysia)") is denominated in Malaysian Ringgit and Sheng HueiEngineering Technology Company Limited ("Sheng Huei (Vietnam)") is denominated in Vietnamese Dong;Acter Technology Company Limited ("Acter (Thailand)") uses Thai Baht as its local currency. The Groupand its subsidiaries have selected the local currency of accounts based on the currency of valuation andsettlement of major business receipts and expenditures. Some subsidiaries of the Group have adoptedcurrencies other than the Group's local currency as their local currency, and the foreign currency financialstatements of these subsidiaries have been translated in accordance with this Section V.10 in the preparationof these financial statements.
5. Method of determining materiality criteria and basis of selection
√ Applicable □ N/A
| Item | Materiality Criteria |
| Significant accounts payable with an age of more than one year | Individual amount exceeding RMB 3 million |
| Important prepaid accounts with an age of more than one year | Individual amount exceeding RMB 1 million |
6. Accounting treatment of business combinations under the same control and non-same control
√ Applicable □ N/A
(1) Business combination under the same control
Assets and liabilities acquired by the Group as a consolidated party in a business combination under thesame control are measured at the carrying amount of the party being consolidated in the consolidatedstatements of the party ultimately in control at the date of consolidation. The difference between the carryingamount of net assets acquired and the carrying amount of the consideration paid for the merger is adjustedto capital surplus; if the capital surplus is not sufficient to cover the difference, it is adjusted to retainedearnings.
(2) Business combination not under common control
A business combination under non-identical control occurs when the parties involved in thecombination are not under the ultimate control of the same party or parties before and after the combination.Identifiable assets, liabilities and contingent liabilities of the acquiree acquired in a business combinationnot under common control are measured at fair value at the acquisition date. The cost of consolidation is the
sum of the fair values of cash or non-cash assets paid, liabilities issued or assumed, and equity securitiesissued by the Group at the date of acquisition for the purpose of obtaining control over the acquiree, as wellas all directly related expenses incurred in the business combination (for business combinations effected instages through multiple transactions, the cost of consolidation is the sum of the costs of each individualtransaction). If the cost of combination is greater than the fair value of the acquiree's identifiable net assets,goodwill is recognized. If the cost of combination is less than the fair value of the acquiree's identifiable netassets, the fair value of the identifiable assets, liabilities and contingent liabilities acquired in the combinationas well as the fair value of the non-cash assets or equity securities issued as consideration for the combinationare first reviewed. If, after the review, the cost of consolidation is still less than the fair value of the netidentifiable assets of the acquiree, the difference is recognized as non-operating revenue in the current periodof consolidation.
7. Criteria for judging control and method of preparing consolidated financial statements
√ Applicable □ N/A
The scope of consolidation of the Group's consolidated financial statements is determined on the basisof control, which includes the Company and all subsidiaries controlled by the Company (includingenterprises, divisible parts of invested entities and structured entities controlled by enterprises, etc.). TheGroup determines control on the basis of the Group's power over an investee, the Group's ability to earnvariable returns from participating in the investee's activities, and the Group's ability to exercise its powerover the investee to affect the amount of the investee's returns.In the preparation of consolidated financial statements, if the subsidiaries adopt accounting policies oraccounting periods that are different from those of the Company, the subsidiaries' financial statements shallbe adjusted as necessary in accordance with the Company's accounting policies or accounting periods.The effects on the consolidated financial statements of internal transactions between the Company andits subsidiaries and between subsidiaries are eliminated on consolidation. The share of ownership interest ofsubsidiaries that is not attributable to the parent company and the share of net profit or loss, othercomprehensive income and total comprehensive income that is attributable to minority interests are presentedin the consolidated financial statements under the headings of "Minority interests, minority interests in profitor loss, other comprehensive income attributable to minorities and total comprehensive income attributableto minorities", respectively.The results of operations and cash flows of subsidiaries acquired in a business combination under thesame control are included in the consolidated financial statements from the beginning of the period in whichthe combination occurs. In preparing the comparative consolidated financial statements, adjustments aremade to the relevant items in the prior year's financial statements, and the consolidated entity is deemed tohave been in existence since the point in time when the ultimate controlling party began to exercise control.
For subsidiaries acquired in a business combination not under common control, the results of operationsand cash flows are included in the consolidated financial statements from the date the Group obtains control.In preparing the consolidated financial statements, the financial statements of subsidiaries are adjusted onthe basis of the fair value of each identifiable asset, liability and contingent liability determined at the dateof purchase.
8. Classification of joint arrangements and accounting treatment of joint operations
√ Applicable □ N/A
The Group's joint venture arrangements include joint operations and joint ventures. Joint operationrefers to a joint arrangement in which the parties to the arrangement are entitled to the assets and bear theliabilities related to the arrangement. A joint venture is a joint arrangement in which the joint venturers haverights only to the net assets of the arrangement.
For joint ventures, the Group recognizes assets held and liabilities assumed individually or in proportionto the assets held and liabilities assumed by the Group as a joint venturer, and recognizes revenues andexpenses individually or in proportion to the relevant agreements. When a joint venture enters into atransaction for the purchase or sale of an asset that does not constitute part of the business, only the portionof the gain or loss arising from the transaction that is attributable to the other participants in the joint ventureis recognized.
9. Criteria for determining cash and cash equivalents
Cash equivalents are investments held by an enterprise that have a short maturity (generally maturingwithin three months from the date of purchase), are highly liquid, are readily convertible to known amountsof cash, and are subject to an insignificant risk of changes in value.
10. Foreign currency operations and translation of foreign currency statements
√ Applicable □N/A
(1) Foreign currency transactions
The Group's foreign currency transactions are translated into RMB at the spot exchange rate on the dateof the transaction. At the balance sheet date, foreign currency monetary items are translated into RMB usingthe spot exchange rate at the balance sheet date, and the resulting translation differences are recognizeddirectly in profit or loss for the current period, except for exchange differences arising from special loans inforeign currencies for the purpose of purchasing, constructing or producing assets eligible for capitalization,which are dealt with in accordance with the principle of capitalization. Non-monetary items carried at fairvalue that are denominated in foreign currencies are translated using spot exchange rates at the date whenthe fair value is determined, and the difference between the translated amount in the local currency of theaccount and the original amount in the local currency of the account is treated as a change in fair value(including exchange rate changes) and recognized in profit or loss for the period. Capital received frominvestors in foreign currencies is translated using the spot exchange rate on the date when the transactionoccurs, and the difference in the translated amount between the invested capital in foreign currencies and thecorresponding local currency of the monetary items does not result in a difference between the foreign-currency capital and the corresponding local currency of the monetary items.
(2) Translation of foreign currency financial statements
Assets and liabilities in the foreign currency balance sheet are translated at the spot exchange rate at thebalance sheet date; owners' equity items, except for "undistributed profits", are translated at the spotexchange rate at the time of occurrence of the business; and income and expenses in the income statementare translated at the spot exchange rate at the date of occurrence of the transaction. Translation differencesarising from the above translations are recognized in other comprehensive income. Cash flows in foreigncurrencies are translated using the spot exchange rate on the date of cash flows. The effect of exchange ratechanges on cash is shown separately in the statement of cash flows.
11. Financial Instruments
√ Applicable □ N/A
The Group recognizes a financial asset or a financial liability when it becomes a party to a financialinstrument contract.
The effective interest method is a method of calculating the amortized cost of a financial asset or afinancial liability and of allocating interest income or interest expense over the accounting period.
The effective interest rate is the rate that exactly discounts estimated future cash flows through theexpected life of the financial asset or financial liability to the book balance of the financial asset or theamortized cost of the financial liability. In determining the effective interest rate, the expected cash flowsare estimated by taking into account all contractual terms of the financial assets or liabilities (e.g. earlyrepayment, rollover, call option or other similar options, etc.), but not the expected credit losses.
The amortized cost of a financial asset or a financial liability is the initial recognized amount of thefinancial asset or the financial liability, less the principal repaid, plus or minus the cumulative amortizationusing the effective interest rate method to amortize the difference between the initial recognized amount andthe maturity amount, and less the cumulative loss allowance (only applicable to financial assets).
(1). Classification, recognition and measurement of financial assets
The Group classifies financial assets into the following three categories based on the business model ofthe financial assets under management and the contractual cash flow characteristics of the financial assets:
1) Financial assets measured at amortized cost
2) Financial assets at fair value through other comprehensive income.
3) Financial assets at fair value through profit or loss.
Financial assets are measured at fair value on initial recognition, except for accounts receivable or billsreceivable arising from the sale of goods or provision of services, etc., which do not contain significantfinancing components or do not take into account the financing components that are not more than one yearold, which are measured initially at the transaction price.
For financial assets at fair value through profit or loss, transaction costs are recognized directly in profitor loss, while transaction costs related to other types of financial assets are recognized in their initialrecognition amounts.
Subsequent measurement of financial assets depends on their classification. All affected financial assetsare reclassified when, and only when, the Group changes its business model for managing financial assets.
1) Financial assets classified as at amortized cost
The Group classifies a financial asset as amortized cost if the contractual terms of the financial assetstipulate that the only cash flows to be generated at a specific date will be payments of principal and interestbased on the amount of principal outstanding, and the business model for managing the financial asset is tocollect the contractual cash flows. The Group recognizes interest income on these financial assets using theeffective interest method, partially measured at amortized cost, bills receivable, accounts receivable, otherreceivables, investments in debt securities and long-term receivables.
The Group uses the effective interest rate method to recognize interest income on these financial assets,which are subsequently measured at amortized cost. Gains or losses arising from impairment orderecognition or modification of such financial assets are recognized in profit or loss for the current period.The Group determines interest income by multiplying the book balance of the financial assets by the effectiveinterest rate, except in the following cases.
a. For financial assets acquired or originated that are impaired, the Group determines interest incomeon the basis of the amortized cost of the financial assets and the effective interest rate adjusted forcreditworthiness from the initial recognition of the financial assets.
b. For financial assets acquired or originated without credit impairment that become impaired in asubsequent period, the Group determines interest income in the subsequent period based on the amortizedcost of the financial assets and the effective interest rate. If, in a subsequent period, the credit risk of afinancial instrument has improved and the financial instrument is no longer impaired, the Group calculatesinterest income by multiplying the effective interest rate by the carrying amount of the financial asset.
2) Financial assets at fair value through other comprehensive income
If the contractual terms of a financial asset stipulate that the cash flows to be generated at a specificdate will consist solely of payments of principal and interest based on the outstanding principal amount, andthe business model for managing the financial asset is based on the objective of collecting the contractualcash flows as well as the objective of selling the financial asset, the Group classifies the financial asset as afinancial asset at fair value through other comprehensive income.
The Group recognizes interest income on such financial assets using the effective interest method.Changes in fair value are recognized in other comprehensive income, except for interest income, impairmentlosses and exchange differences, which are recognized in profit or loss. When the financial assets arederecognized, the cumulative gain or loss previously recognized in other comprehensive income istransferred from other comprehensive income and recognized in profit or loss.
Notes and accounts receivable at fair value through other comprehensive income are presented asreceivables financing, and other financial assets are presented as other debt investments, of which. Otherdebt investments maturing within one year from the balance sheet date are presented as non-current assetswith maturity of less than one year, and other debt investments with original maturity of less than one yearare presented as other current assets.
3) Financial assets designated as at fair value through other comprehensive income
On initial recognition, the Group may irrevocably designate investments in non-trading equityinstruments as financial assets at fair value through other comprehensive income on an individual financialasset basis.
Changes in the fair value of such financial assets are recognized in other comprehensive income and noprovision for impairment is required. Upon derecognition of the financial assets, the cumulative gain or losspreviously recognized in other comprehensive income is transferred from other comprehensive income toretained earnings.
The Group recognizes dividend income and recognizes it in profit or loss when the Group's right toreceive dividends has been established, it is probable that the economic benefits associated with the dividendswill flow to the Group and the amount of dividends can be measured reliably during the period in which theGroup holds the investment in the equity instrument. The Group reports such financial assets underinvestments in other equity instruments.
Investments in equity instruments are classified as financial assets at fair value through profit or loss ifthey meet one of the following conditions: the financial asset is acquired principally for the purpose of sellingin the near future; it is part of a centrally managed portfolio of identifiable financial assets at initialrecognition, and there is objective evidence that a pattern of short-term profit-taking actually exists in thenear future; and It is a derivative (except for derivatives that meet the definition of a financial guaranteecontract and are designated as effective hedging instruments).
4) Financial assets classified at fair value through profit or loss
Financial assets that do not meet the criteria for classification as financial assets at amortized cost or atfair value through other comprehensive income and are not designated as at fair value through othercomprehensive income are classified as financial assets at fair value through profit or loss.
The Group uses fair value for subsequent measurement of these financial assets, and recognizes gainsor losses arising from changes in fair value, as well as dividend and interest income related to these financialassets in profit or loss for the current period.
The Group reports these financial assets under the items of trading financial assets and other non-currentfinancial assets according to their liquidity.
5) Financial assets designated as at fair value through profit or loss
At initial recognition, the Group may irrevocably designate financial assets as financial assets at fairvalue through profit or loss on an individual basis in order to eliminate or significantly reduce accountingmismatches.
If a hybrid contract contains one or more embedded derivatives and the host contract is not one of theabove financial assets, the Group may designate the entire contract as a financial instrument at fair valuethrough profit or loss. However, except for the following situations: a. The embedded derivatives will not
a. The embedded derivatives will not materially alter the cash flows of the hybrid contract.
b. When determining for the first time whether a similar hybrid contract needs to be unbundled, littleanalysis is required to clarify that the embedded derivatives it contains shall not be unbundled. For example,if the embedded loan has an early repayment right that allows the holder to repay the loan early at an amountclose to amortized cost, the early repayment right does not need to be spun off.
The Group uses fair value for subsequent measurement of these financial assets, and recognizes gainsor losses arising from changes in fair value, as well as dividend and interest income related to these financialassets in profit or loss.
The Group reports such financial assets under the items of trading financial assets and other non-currentfinancial assets according to their liquidity.
(2). Classification, recognition and measurement of financial liabilities
The Group classifies a financial instrument or its component parts as a financial liability or an equityinstrument upon initial recognition based on the contractual terms of the financial instrument issued and theeconomic substance reflected therein rather than in legal form only, taking into account the definitions offinancial liabilities and equity instruments. Financial liabilities are classified on initial recognition asfinancial liabilities at fair value through profit or loss, other financial liabilities and derivatives designatedas effective hedging instruments.
Financial liabilities are measured at fair value on initial recognition. For financial liabilities at fair valuethrough profit or loss, transaction costs are recognized directly in profit or loss; for other types of financialliabilities, transaction costs are recognized in the initial recognition amount.
The subsequent measurement of financial liabilities depends on their classification.
1) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading(including derivatives that are financial liabilities) and financial liabilities designated at fair value throughprofit or loss on initial recognition.
Financial liabilities are classified as trading liabilities if they meet one of the following conditions: theyare assumed principally for the purpose of selling or repurchasing in the near future; they are part of acentrally managed portfolio of identifiable financial instruments and there is objective evidence that theenterprise has recently adopted a short-term profit-taking model; they are derivatives, except for thosedesignated as effective hedging instruments and those subject to financial guarantee contracts. Financialliabilities held for trading (including derivatives that are financial liabilities) are subsequently measured atfair value, with all changes in fair value recognized in profit or loss, except for those related to hedgeaccounting.
At initial recognition, in order to provide more relevant accounting information, the Group irrevocablydesignates financial liabilities as financial liabilities at fair value through profit or loss if they meet one ofthe following conditions:
a. Eliminating or significantly reducing accounting mismatches.
b. Managing and evaluating the performance of a portfolio of financial liabilities or a portfolio offinancial assets and financial liabilities on a fair value basis in accordance with an enterprise riskmanagement or investment strategy as set out in a formal written document, and reporting to keymanagement personnel within the enterprise on this basis.
The Group subsequently measures such financial liabilities at fair value, with changes in fair valuerecognized in profit or loss, except for changes in fair value arising from changes in the Group's own credit
risk, which are recognized in other comprehensive income. The Group recognizes all fair value changes(including the effect of changes in the Group's own credit risk) in profit or loss, unless the recognition of fairvalue changes in other comprehensive income caused by changes in the Group's own credit risk would resultin an accounting mismatch in profit or loss or would magnify the accounting mismatch in profit or loss.
(2) Other financial liabilities
Except for the following items, the Company classifies its financial liabilities as financial liabilitiesmeasured at amortized cost, which are subsequently measured at amortized cost using the effective interestmethod, with gains or losses arising from derecognition or amortization recognized in profit or loss for thecurrent period.a. Financial liabilities at fair value through profit or loss.b. Financial liabilities resulting from transfers of financial assets that do not meet the conditions forderecognition or from continuing involvement in the transferred financial assets.c. Financial guarantee contracts that do not fall into the first two categories of this article, and loancommitments to lend at below-market interest rates that do not fall into category 1) of this article.
A financial guarantee contract is a contract that requires the issuer to pay a specified amount of moneyto the holder of the contract who suffers a loss when a specified debtor fails to make payments when due inaccordance with the terms of the original or modified debt instrument. Financial guarantee contracts that arenot financial liabilities designated as at fair value through profit or loss are measured at the higher of theamount of the allowance for losses and the amount initially recognized net of accumulated amortization overthe guarantee period after initial recognition.
(3). Derecognition of financial assets and financial liabilities
1) A financial asset is derecognized, i.e., removed from the accounts and balance sheet, when one ofthe following conditions is met
a. The contractual right to receive cash flows from the financial asset is terminated.
b. The financial asset is transferred and the transfer meets the requirements for derecognition offinancial assets.
2) Conditions for derecognition of financial liabilities
A financial liability (or a portion of a financial liability) is derecognized when the present obligation ofthe financial liability (or the portion of the financial liability) has been discharged. If the Group enters intoan agreement with the lender to replace the original financial liability by assuming a new financial liability,and the contractual terms of the new financial liability are substantially different from those of the originalfinancial liability, or the contractual terms of the original financial liability (or a portion thereof) aresubstantially modified, the original financial liability is derecognized and a new financial liability isrecognized at the same time. The difference between the carrying amount and the consideration paid(including non-cash assets transferred or liabilities assumed) is recognized in profit or loss.
When the Group repurchases a portion of a financial liability, the Group allocates the carrying amountof the financial liability as a whole according to the proportion that the fair value of the continuing portionand the derecognized portion of the financial liability bears to the fair value of the financial liability as awhole at the date of buyback. The difference between the carrying amount allocated to the derecognizedportion and the consideration paid (including non-cash assets transferred or liabilities assumed) shall berecognized in profit or loss.
(4). Basis of recognition and measurement of transfer of financial assets
The Group assesses the extent to which it retains the risks and rewards of ownership of a financial assetwhen a transfer of a financial asset occurs and handles the transfer in each of the following situations:
1) If substantially all the risks and rewards of ownership of a financial asset are transferred, the financialasset is derecognized and the rights and obligations arising from or retained in the transfer are separatelyrecognized as assets or liabilities.
2) If substantially all the risks and rewards of ownership of the financial asset are retained, the financial
asset continues to be recognized.
3) If neither the transfer nor substantially all the risks and rewards of ownership of the financial assetare retained (i.e., in cases other than those in 1) and 2)), the financial asset is recognized and treated asfollows, depending on whether or not control over the financial asset is retained:
a. If control over the financial asset is not retained, the financial asset is derecognized and the rights andobligations arising from or retained in the transfer are recognized separately as assets or liabilities.
b. If control over the financial asset is retained, the financial asset continues to be recognized to theextent of its continuing involvement in the transferred financial asset, and the related liability is recognized
accordingly. The extent to which the Group continues to be involved in the transferred financial asset is theextent to which it bears the risk or rewards of changes in the value of the transferred financial asset.
In determining whether a transfer of financial assets meets the above conditions for derecognition offinancial assets, the principle of substance over form is applied.The Company distinguishes between transfers of financial assets as a whole and partial transfers offinancial assets:
1) If the transfer of financial assets as a whole meets the conditions for derecognition, the differencebetween the following two amounts is recognized in profit or loss:
a. The carrying amount of the transferred financial asset at the date of derecognition.
b. The sum of the consideration received for the transfer of the financial asset and the amount of thederecognized portion of the cumulative change in the fair value of the transferred financial asset that isrecognized in other comprehensive income (the transferred financial asset is a financial asset at fair valuethrough other comprehensive income).
2) If part of a financial asset is transferred and the transferred part meets the conditions for derecognition,the carrying amount of the financial asset as a whole before the transfer is apportioned between thederecognized part and the derecognized part (in which case, the retained service asset shall be regarded as apart of the derecognized financial asset) in accordance with their respective relative fair values at the date oftransfer, and the difference between the following amounts is recognized in the profit or loss for the currentperiod:
a. The carrying amount of the derecognized portion at the date of derecognition.
b. The sum of the consideration received for the derecognized portion and the amount corresponding tothe derecognized portion of the cumulative changes in fair value previously recognized in othercomprehensive income (involving transfers of financial assets at fair value through other comprehensiveincome).and
If the transfer of a financial asset does not meet the conditions for derecognition, the financial assetcontinues to be recognized and the consideration received is recognized as a financial liability.
(5). Methods of determining the fair value of financial assets and liabilities
The fair value of a financial asset or a financial liability for which there is an active market is determinedusing quoted prices in an active market, unless there is a period of restriction on the sale of the financialasset. The fair value of a financial asset that is subject to a sales restriction on the asset itself is determinedbased on quoted prices in an active market, less the amount of compensation that a market participant wouldrequire to assume the risk of not being able to sell the financial asset in the open market within a specifiedperiod of time. Quoted prices in active markets include quoted prices for the relevant assets or liabilities thatare readily and regularly available from exchanges, dealers, brokers, industry groups, pricing agencies orregulatory bodies, etc., and that are representative of actual and regularly occurring market transactions onan arm's length basis.
The fair value of financial assets or liabilities that are initially acquired or derived from financial assetsor liabilities assumed is determined on the basis of quoted market prices.
The fair value of financial assets or financial liabilities for which no active market exists is determinedusing valuation techniques. In valuing financial assets or financial liabilities, the Group uses valuationtechniques that are appropriate in the circumstances and supported by sufficient available data and otherinformation, and selects inputs that are consistent with the characteristics of the assets or liabilities that wouldbe considered by a market participant in a transaction for the relevant assets or liabilities, giving priority tothe use of relevant observable inputs where possible. Unobservable inputs are used where relevant observableinputs are not available or practicable to obtain.
(6). Impairment of financial instruments
The Group applies impairment accounting for financial assets carried at amortized cost, financial assetsclassified as at fair value through other comprehensive income, lease receivables, contract assets, loancommitments that are not financial liabilities at fair value through profit or loss, financial liabilities that arenot financial liabilities at fair value through profit or loss, and financial guarantee contracts that do not meetthe conditions for derecognition due to the transfer of financial assets or financial liabilities arising fromcontinued involvement in the transferred financial assets, based on expected credit losses and recognizes aloss provision.
Expected credit losses are the weighted average of credit losses on financial instruments that areweighted by the risk of default. Credit loss is the difference between all contractual cash flows receivableand all cash flows expected to be received by the Group under the contract, discounted at the original
effective interest rate, i.e. the present value of all cash shortfalls. Financial assets purchased or originated bythe Group that are credit-impaired are discounted at the financial asset's credit-adjusted effective interest rate.For receivables, contract assets and lease receivables arising from transactions governed by the IncomeStandards, the Group applies a simplified measurement approach and measures the allowance for losses asan amount equal to the expected credit losses over the life of the asset.For purchased or originated financial assets that are impaired, only the cumulative change in expectedcredit losses over the life of the asset since initial recognition is recognized as a loss allowance at the balancesheet date. At each balance sheet date, the amount of the change in expected credit losses for the entireduration of the asset is recognized as an impairment loss or gain in profit or loss. Even if the expected creditlosses determined at that balance sheet date are less than the amount of expected credit losses reflected inthe estimated cash flows at the time of initial recognition, the favorable change in expected credit losses isrecognized as an impairment gain.For financial assets other than the above simplified measurement method and purchased or originatedfinancial assets that have been impaired, the Group assesses at each balance sheet date whether the creditrisk of the relevant financial instruments has increased significantly since the initial recognition, andmeasures the allowance for losses, recognizes expected credit losses and the changes in expected credit lossesin accordance with the following scenarios:
1) If the credit risk of the financial instrument has not increased significantly since initial recognitionand is in the first stage, the allowance for losses is measured at an amount equal to the expected credit lossesof the financial instrument in the next 12 months, and interest income is calculated on the basis of the bookbalance and the effective interest rate.
2) If the credit risk of the financial instrument has increased significantly since initial recognition butcredit impairment has not yet occurred, in the second stage, the Group measures the allowance for losses atan amount equal to the expected credit losses for the entire duration of the financial instrument and calculatesinterest income based on the carrying amount and the effective interest rate.
3) If the financial instrument has been impaired since initial recognition, in the third stage, the Groupmeasures the allowance for credit losses at an amount equal to the expected credit losses over the life of thefinancial instrument and calculates interest income at amortized cost and effective interest rate.
Any increase or reversal of the allowance for credit losses on financial instruments is recognized as animpairment loss or gain in profit or loss. The allowance for credit losses is offset against the carrying amountof the financial asset, except for financial assets classified as at fair value through other comprehensiveincome. For financial assets classified as at fair value through other comprehensive income, the Grouprecognizes the allowance for credit losses in other comprehensive income, which does not reduce thecarrying amount of the financial assets in the balance sheet.
If the Group has measured the allowance for losses in a previous accounting period at an amount equalto the expected credit losses over the entire life of the financial instrument, but at the current balance sheetdate the financial instrument no longer represents a significant increase in credit risk since initial recognition,the Group measures the allowance for losses for the financial instrument at an amount equal to the expectedcredit losses over the next 12 months at the current balance sheet date. The reversal of the resulting lossprovision is recognized as an impairment loss.
1) Significant increase in credit risk
The Group uses available reasonable and reliable forward-looking information to determine whetherthere has been a significant increase in the credit risk of a financial instrument since initial recognition bycomparing the risk of default at the balance sheet date with the risk of default at the date of initial recognition.For financial guarantee contracts, the Group applies the provisions for impairment of financial instrumentsby considering the date on which the Group became a party to the irrevocable commitment as the initialrecognition date.
The Group considers the following factors when assessing whether there has been a significant increasein credit risk:
a. Whether there has been a significant change in the debtor's operating results, actual or expected.
b. Whether there has been a significant adverse change in the regulatory, economic or technological
environment in which the debtor operates.
c. Whether there has been a significant change in the value of the collateral pledged as security for thedebt, or in the quality of guarantees or credit enhancements provided by third parties, which is expected toreduce the debtor's financial incentive to repay the debtor within the contractual timeframe or affect theprobability of default; and
d. Whether there has been a significant change in the debtor's expected performance and repaymentbehavior
e. Changes in the Group's approach to credit management of financial instruments.At the balance sheet date, if the Group determines that a financial instrument has only low credit risk,the Group assumes that there has been no significant increase in the credit risk of the financial instrumentsince initial recognition. A financial instrument is considered to have low credit risk if the risk of default islow, the borrower's ability to meet its contractual cash flow obligations in the short term is high, and theborrower's ability to meet its contractual cash flow obligations may not necessarily be reduced byunfavorable changes in the economic situation and business environment in the long term.
2) Financial assets that have suffered credit impairment
A financial asset is impaired when one or more events that have an adverse effect on the expected futurecash flows of the financial asset occur. Evidence that a financial asset is impaired includes observableinformation such as
a. Significant financial difficulty of the issuer or debtor; or
b. A breach of contract by the debtor, such as a default or delinquency in interest or principal payments;
or
c. The creditor has made concessions to the debtor that the debtor would not have made otherwisebecause of economic or contractual considerations related to the debtor's financial difficulties.
d. The debtor is likely to enter into bankruptcy or other financial reorganization.
e. The disappearance of an active market for the financial asset as a result of financial difficulties of the
issuer or the debtor; or
f. A financial asset is purchased or acquired at a significant discount that reflects the fact that a credit
loss has been incurred.
The occurrence of a credit impairment of a financial asset may be the result of a combination of eventsand not necessarily the result of separately identifiable events.
3) Determination of expected credit losses
The Group assesses expected credit losses on financial instruments on an individual and portfolio basis.In assessing expected credit losses, the Group takes into account reasonable and supportable informationabout past events, current conditions and forecasts of future economic conditions.
The Group categorizes financial instruments into different portfolios based on common credit riskcharacteristics. The common credit risk characteristics adopted by the Group include: ageing portfolio,construction bidding deposit, receivables within the scope of consolidation, etc. The individual evaluationcriteria and portfolio credit risk characteristics of related financial instruments are described in theaccounting policies of related financial instruments. The individual evaluation criteria and portfolio creditrisk characteristics of the related financial instruments are described in the accounting policies of the relatedfinancial instruments.
The Group determines the expected credit losses of related financial instruments in accordance with thefollowing methods.
a. For financial assets, credit losses represent the present value of the difference between the contractualcash flows to be received by the Group and the cash flows expected to be received.
b. For lease receivables, the credit loss is the present value of the difference between the contractualcash flows to be received by the Group and the cash flows expected to be received.
c. For financial guarantee contracts, the credit loss is the present value of the difference between theamount the Group expects to pay to the holder of the contract in respect of credit losses incurred by theholder of the contract, less the amount the Group expects to collect from the holder of the contract, the debtoror any other party.
d. For financial assets that are impaired at the balance sheet date but not purchased or originated, thecredit loss is the difference between the book balance of the financial asset and the present value of theestimated future cash flows discounted at the original effective interest rate.
The Group's method of measuring expected credit losses on financial instruments reflects factors suchas: an unbiased, probability-weighted average amount determined by evaluating a range of possibleoutcomes; the time value of money; and reasonable and substantiated information about past events, currentconditions, and projections of future economic conditions that is available at the balance sheet date withoutundue additional cost or effort.
4) Write-down of financial assets
When the Group no longer has a reasonable expectation that the contractual cash flows of a financialasset will be recovered in whole or in part, the book value of the financial asset is written down directly.Such write-downs constitute derecognition of the related financial assets.
(7). Offsetting financial assets and financial liabilities
Financial assets and financial liabilities are presented separately in the balance sheet and are not offset.However, if the following conditions are met, they are presented in the balance sheet as net amounts afteroffsetting.
1) The Group has a legal right to offset the recognized amounts and the legal right is currentlyenforceable; and
2) The Group intends to settle the net amount, or to realize the financial asset and settle the financialliability at the same time.
12. Bills receivable
√ Applicable □ N/A
Method of determining expected credit losses and accounting treatment of bills receivable
√ Applicable □ N/A
For bills receivable, regardless of whether they contain significant financing elements or not, the Groupalways measures the loss provision at an amount equal to the expected credit losses over the entire duration,and the resulting increase or reversal of the loss provision is recognized as an impairment loss or gain inprofit or loss for the current period.
For details of the Group's method of determining expected credit losses on bills receivable and itsaccounting treatment, please refer to Section V.11. (6) Impairment of financial instruments.Categories of bad debt provision according to credit risk characteristics and the basis of determination
√ Applicable □ N/A
When sufficient evidence of expected credit losses cannot be assessed at a reasonable cost at the levelof individual instruments, the Group classifies bills receivable into certain portfolios based on credit riskcharacteristics with reference to historical credit loss experience, current conditions and judgment of futureeconomic conditions, and calculates expected credit losses on a portfolio basis. The basis for determiningthe portfolio is as follows:
| Portfolio name | Basis for determining portfolios | Method of calculation |
| Commercial acceptances (portfolio 1) | The risk characteristics of commercial acceptances are substantially the same as those of accounts receivable for similar contracts. | Expected credit losses are accrued by reference to accounts receivable. |
| Bank acceptance portfolio (portfolio 2) | The acceptors have high credit ratings, no historical defaults, very low risk of credit loss, and strong ability to fulfill their obligations to pay contractual cash flows in the short term. | Expected credit losses are measured based on historical credit loss experience, current conditions and expectations of future economic conditions. |
Ageing method for recognizing a portfolio of credit risk characteristics based on the age of theaccounts.
√ Applicable □ N/A
For commercial paper receivables, the expected credit loss accrual method is based on the bad debtpolicy for accounts receivable, and the aging point of commercial paper receivables is retroactively adjustedto the aging point of the corresponding accounts receivable.
Judgmental criteria for individual provisioning according to individual provisioning for bad debts
√ Applicable □ N/A
If there is objective evidence that an item is impaired, the Group makes a provision for bad debts andrecognizes expected credit losses for that item.
13. Accounts receivable
√ Applicable □ N/A
Method of determining expected credit losses and accounting treatment of accounts receivable
√ Applicable □ N/A
For details of the Group's method of determining expected credit losses on accounts receivable andaccounting treatment, please refer to this Section V.11. (6) Impairment of financial instruments.Categories of portfolio and basis of determination of bad debt provision according to credit riskprofile portfolio
√ Applicable □ N/A
The Group provides for expected credit losses on an individual basis for accounts receivable withsignificantly different credit risks from those of the portfolio. The Group determines credit losses separatelyfor receivables for which sufficient evidence of expected credit losses can be assessed at a reasonable costat the level of individual instruments.
When sufficient evidence of expected credit losses cannot be assessed at a reasonable cost for anindividual instrument, the Group divides accounts receivable into portfolios based on credit riskcharacteristics by reference to historical credit loss experience, current conditions and judgment of futureeconomic conditions, and calculates expected credit losses on the basis of the portfolios. The basis fordetermining the portfolios is as follows:
| Risk portfolio | Segmentation of portfolio by credit risk characteristics based on ageing of receivables |
| Portfolio of related transactions within the scope of consolidation | The relationship between the receivable and the counterparty is used to characterize the credit risk. |
| Provisioning method for bad debt provisioning by portfolio | |
| Risk portfolio (portfolio 1) | Provision for bad debts by ageing analysis method |
| Portfolio of related transactions within the scope of consolidation (portfolio 2) | Unless there is evidence of impairment, no provision for bad debts is generally made. |
Calculation of ageing method for recognizing credit risk characteristics based on the age of theportfolio
√ Applicable □ N/A
The Group combines accounts receivable classified as risky portfolios with similar credit riskcharacteristics (aging) and estimates the percentage of bad debt provision for such accounts receivable basedon all reasonable and supportable information, including forward-looking information.
The following is a table comparing the aging of the accounts receivable - credit risk characteristicsportfolio with the expected credit loss rate over the entire life of the portfolio:
| Ageing | Expected credit loss rate of accounts receivable (%) |
| 1-6 months (including 6 months) | 3.00 |
| 7-12 months (including 12 months) | 5.00 |
| 1-2 years (including 2 years) | 10.00 |
| 2 to 3 years (including 3 years) | 20.00 |
| 3 to 4 years (including 4 years) | 50.00 |
| 4 to 5 years (including 5 years) | 80.00 |
| More than 5 years | 100.00 |
Determination of bad debt provisioning according to individual items Individual item provisioningjudgment criteria
√ Applicable □ N/A
If there is objective evidence that a receivable is impaired, the Group makes a separate provision forbad debts and recognizes expected credit losses on that receivable.
14. Receivables financing
√ Applicable □ N/A
Method of determining expected credit losses and accounting treatment of receivables financing
√ Applicable □ N/A
For notes and accounts receivable with contractual cash flow characteristics that are consistent withthe underlying lending arrangements and for which the Company's business model for managing suchfinancial assets is to collect the contractual cash flows with the objective of both collection and sale, theGroup classifies them as accounts receivable financing, which are measured at fair value with changesrecognized in other comprehensive income. Interest income, impairment losses and exchange differencesrecognized using the effective interest rate method on receivables financing are recognized in profit or loss,while the remaining changes in fair value are recognized in other comprehensive income. Uponderecognition, the cumulative gain or loss previously recognized in other comprehensive income isremoved from other comprehensive income and recognized in profit or loss.Categories of portfolios and basis of determination of bad debt provisioning according to credit riskcharacteristic portfolios
√ Applicable □ N/A
For details of the Group's method of determining expected credit losses on receivables financing andaccounting treatment, please refer to this Section V.11. (6) Impairment of financial instruments.Aging calculation method for recognizing a portfolio of credit risk characteristics based on aging
√ Applicable □ N/A
For receivable financing classified as a portfolio, the Group calculates the expected credit losses byreferring to the historical credit loss experience, taking into account the current situation and the forecastof the future economic situation, through the default risk exposure and the expected credit loss rate for theentire duration.Judgmental criteria for individual provisioning of bad debt according to individual items
□ Applicable √ N/A
15. Other receivables
√ Applicable □ N/A
Method of determining expected credit losses and accounting treatment of other receivables
√ Applicable □ N/A
The Group measures the provision for losses on other receivables in accordance with the followingcircumstances:
① For financial assets with no significant increase in credit risk since initial recognition, the Groupmeasures the allowance for losses based on the amount of expected credit losses in the next 12 months;
② For financial assets whose credit risk has significantly increased since initial recognition, the Groupmeasures the allowance for losses at an amount equal to the expected credit losses over the entire life ofthe financial instrument;
③ For purchased or originated financial assets that are impaired, the Group measures the allowancefor loss at an amount equal to the expected credit loss over the entire life of the financial instrument.Categories of bad debt provision according to the portfolio of credit risk characteristics and thebasis of determination
√ Applicable □ N/A
For other receivables, the Group is unable to obtain sufficient evidence of significant increase in creditrisk at a reasonable cost at the level of individual instruments, and it is feasible to assess whether there is asignificant increase in credit risk on a portfolio basis. Therefore, the Group groups other receivablesaccording to the type of financial instruments, credit risk ratings, initial recognition dates, and remaining
contractual maturities as the common risk characteristics and considers them on a portfolio basis. The Groupassesses whether there is a significant increase in credit risk.To measure expected credit losses on a portfolio basis, the Group groups the expected credit lossaccrual percentage according to the corresponding ageing credit risk characteristics.
| Basis of portfolio determination | |
| Risk portfolio | The ageing of other receivables is used as the credit risk characteristic to classify the portfolio. |
| Portfolio of related transactions within the scope of consolidation | The credit risk characteristics of other receivables are based on the relationship between the receivables and the counterparties. |
| Portfolio of risk-free receivables such as social security receivables | The credit risk characteristics of other receivables are based on the nature of the receivables. |
| Provisioning method for bad debt by portfolio | |
| Risk portfolio | Provision for bad debts is based on the aging analysis method. |
| Portfolio of risk-free receivables such as social security receivables | Unless there is evidence of impairment, no provision for bad debts is generally made. |
| Portfolio of related transactions within the scope of consolidation | Unless there is evidence of impairment, no provision for bad debts is generally made. |
Aging method for recognizing credit risk characteristics based on the age of the portfolio
√ Applicable □ N/A
The Group combines other receivables classified as risky portfolios with similar credit riskcharacteristics (ageing) and estimates the percentage of bad debt provision for such other receivables basedon all reasonable and supportable information, including forward-looking information.
A table comparing the aging of the other receivables - credit risk characteristics portfolio with the
expected credit loss rate over the entire duration is shown below:
| Ageing | Expected credit loss rate of other receivables (%) |
| Within 1 year (including 1 year) | 5.00 |
| 1 to 2 years (including 2 years) | 10.00 |
| 2 to 3 years (including 3 years) | 30.00 |
| 3 to 4 years (including 4 years) | 50.00 |
| 4 to 5 years (including 5 years) | 80.00 |
| More than 5 years | 100.00 |
Judgmental criteria for individual provisioning according to individual provisioning for bad debts
√ Applicable □ N/A
Other receivables arising from non-operating low-risk businesses are individually impaired accordingto the nature of the business.
For other receivables secured by mortgage, the original value less the recoverable value of the collateralis recognized as the risk exposure for credit losses.
16. Inventories
√ Applicable □ N/A
Categories of inventories, issue valuation method, inventory system, amortization method of low-value consumables and packages
√ Applicable □ N/A
The actual cost of inventories issued is measured using the individual valuation method.Recognition criteria and accrual method for provision for decline in value of inventories
√ Applicable □ N/A
Net realizable value is the estimated selling price of inventories in the ordinary course of business, lessestimated costs to be incurred to completion, estimated selling expenses and related taxes. The net realizablevalue of inventories held for the purpose of executing sales or service contracts is calculated on the basis ofthe contract price.Categories and basis for determining the provision for decline in value of inventories based onportfolios, and basis for determining the net realizable value of different categories of inventories
√ Applicable □ N/A
The net realizable value of inventories is determined on the basis of reliable evidence obtained, takinginto account the purpose of holding the inventories, the impact of events after the balance sheet date, andother factors.
① The net realizable value of inventories held for sale, such as finished goods, merchandise andmaterials for sale, is determined as the estimated selling price of the inventories in the ordinary course ofproduction and operation, less estimated selling expenses and related taxes. The net realizable value ofinventories held for the purpose of executing sales contracts or labor contracts is measured at the contractprice; if the quantity of inventories held exceeds the quantity ordered under the sales contract, the netrealizable value of the excess quantity is measured at the normal selling price. The net realizable value ofmaterials for sale is measured at market price.
② The net realizable value of inventories of materials requiring processing is determined in the normalcourse of production and operation by the estimated selling price of finished goods produced, less estimatedcosts to be incurred until completion, estimated selling expenses, and related taxes. If the net realizable valueof finished goods produced from the materials is higher than the cost, the materials are measured at cost; ifthe decrease in the price of the materials indicates that the net realizable value of the finished goods is lowerthan the cost, the materials are measured at the net realizable value, and a provision for decline in value ofinventories is made for the difference.
③ Provision for decline in value of inventories is generally made on the basis of individual inventoryitems; for large quantities of inventories with low unit prices, provision is made on the basis of categories ofinventories.
④ If the factors affecting the write-down of inventories have disappeared as of the balance sheet date,the amount of the write-down is restored and reversed to the extent of the provision for decline in value ofinventories, and the amount of the reversal is recognized in profit or loss.Calculation method and basis for determining the net realizable value of each age group of inventoriesfor which the net realizable value of inventories is recognized based on the age of the inventories
□ Applicable √ N/A
17. Contract assets
√ Applicable □ N/A
Methods and criteria for recognizing contract assets
√ Applicable □ N/A
A contract asset is a right to receive consideration for merchandise that the Group has transferred to aclient and which depends on factors other than the passage of time. If the Group sells two clearlydistinguishable commodities to a client and has the right to receive payment because one of the commoditieshas been delivered, but the receipt of such payment is also dependent on the delivery of the other commodity,the Group recognizes the right to receive payment as a contract asset.Method of determining expected credit losses on contract assets and accounting treatment
√ Applicable □ N/A
The methods of determining expected credit losses on contract assets and the accounting treatment aredescribed in detail in this Section V.11. (6) Impairment of financial instruments.
Categories of portfolios and basis of determination of bad debt provision according to portfolios ofcredit risk characteristics
√ Applicable □ N/A
The Group classifies contract assets into portfolios based on credit risk characteristics by reference tohistorical credit loss experience, current conditions and judgment of future economic conditions, andcalculates expected credit losses on the basis of the portfolios. The basis for determining the portfolios is asfollows:
| Portfolio name | Portfolio name basis for determining portfolios | Provision method |
| Outstanding guarantee deposits (portfolio 1) | The risk characteristics of outstanding warranties are substantially the same as those of accounts receivable for similar contracts. | Provision for expected credit losses is made by reference to accounts receivable. |
| Completed unsettled assets arising from construction contracts (portfolio 2) | Completed unsettled assets resulting from construction contracts do not result in true accounts receivable; therefore, the expected credit loss rate for completed unsettled assets is generally no higher than the expected credit loss rate for accounts receivable within one year, and 0.5% is used as the expected credit loss rate for the contracted assets | Expected credit losses are measured by reference to historical credit loss experience, taking into account current conditions and expectations of future economic conditions. |
Aging calculation method for recognizing credit risk characteristics based on the age of theaccounts.
√ Applicable □ N/A
For details, please refer to Section V.13. Accounts receivableDetermination of bad debt provisioning according to individual items Individual provisioningjudgment criteria
□ Applicable √ N/A
18. Non-current assets held for sale or disposal groups
□ Applicable √ N/A
Recognition criteria and accounting treatment for non-current assets or disposal groups classified asheld for sale
□ Applicable √ N/A
Recognition criteria and presentation of discontinued operations
√ Applicable □ N/A
Discontinued operation means a separately distinguishable component of the Group that has beendisposed of or classified as held for sale if one of the following conditions is met: (1) the componentrepresents a separate principal business or a separate principal operating region; (2) the component is partof an associated plan to dispose of a separate principal business or a separate principal operating region; and
(3) the component is a subsidiary acquired exclusively for resale.
In the income statement, the Group has added the items "Net profit from continuing operations" and"Net profit from discontinued operations" to the item "Net profit”, reflecting the profit or loss fromcontinuing operations and the profit or loss from discontinued operations, respectively, on a net after-taxbasis. Gains and losses related to discontinued operations shall be reported as discontinued operations, andthe discontinued operations gains and losses shall be reported for the entire reporting period, not only forthe reporting period after it is recognized as discontinued operations.
19. Long-term equity investments
√ Applicable □ N/A
The Group's long-term equity investments are mainly investments in subsidiaries, investments inassociates and investments in joint ventures.The Group judges joint control on the basis that all participants or a portfolio of participants collectivelycontrol the arrangement and that the policies governing the activities of the arrangement must be agreedupon by those participants who collectively control the arrangement.
The Group is generally considered to have significant influence over an investee when it owns, directlyor indirectly through subsidiaries, more than 20% but less than 50% of the investee's voting rights. If theGroup owns less than 20% of the voting power of an investee, it is necessary to consider the facts andcircumstances such as having representatives on the board of directors or similar authority of the investee,or participating in the process of formulating the financial and operating policies of the investee, or engagingin significant transactions with the investee, or dispatching management personnel to the investee, orproviding key technological information to the investee, etc., and determine that the Group has significantinfluence on the investee.
The investee is a subsidiary of the Group if the investor exercises control over the investee. Long-termequity investments acquired through a business combination under the same control are initially recognizedat cost based on the share of the carrying amount of the net assets of the party being consolidated in theconsolidated statements of the party ultimately in control at the date of consolidation. If the carrying amountof the net assets of the party being consolidated is negative at the date of consolidation, the cost of long-termequity investment is determined as zero.
Long-term equity investments acquired through a business combination not under common control arerecognized at the cost of the combination.
Except for the long-term equity investments acquired through business combination mentioned above,the cost of long-term equity investments acquired by cash payment is based on the actual purchase pricepaid; the cost of long-term equity investments acquired by issuance of equity securities is based on the fairvalue of the equity securities issued; and the cost of long-term equity investments invested by investors isbased on the value agreed in the investment contract or agreement.
The Group's investments in subsidiaries are accounted for using the cost method, and investments injoint ventures and associates are accounted for using the equity method.
The carrying amount of long-term equity investments accounted for under the cost method is increasedby the fair value of additional investment and related transaction costs incurred when additional investmentis made. Cash dividends or profits declared by the investee are recognized as investment income at theamount to which they are attributable.
The carrying amount of long-term equity investments accounted for under the equity method shall beincreased or decreased accordingly to the changes in the ownership interest of the investee. In recognizingthe share of net profit or loss of an investee, the fair value of the identifiable assets of the investee at the timeof investment acquisition is used as the basis for recognizing the net profit of the investee in accordance withthe Group's accounting policies and accounting periods, after offsetting the portion of gains or losses oninternal transactions with associates and joint ventures that are attributable to the investor based on theGroup's proportionate interest in the investor's net assets and liabilities.
On disposal of long-term equity investments, the difference between the carrying amount and the actualacquisition price is recognized as investment income. For long-term equity investments accounted for underthe equity method, other comprehensive income accounted for under the equity method shall be accountedfor on the same basis as the direct disposal of the related assets or liabilities by the investee upon terminationof the equity method, and any changes in the equity of the investee due to changes in the equity of theinvestee other than net profit or loss, other comprehensive income and profit distribution shall be fullytransferred to current investment income upon termination of the equity method. The entire amount shall betransferred to investment income when the equity method of accounting is discontinued.
If an investee loses joint control or significant influence over the investee due to the disposal of a portionof the equity investment, the remaining equity interest after disposal shall be accounted for in accordancewith the relevant provisions of the Guidelines on the Recognition and Measurement of Financial Instruments,and the difference between the fair value of the remaining equity interest and its carrying amount at the dateof the loss of joint control or significant influence shall be recognized as profit or loss for the current period.Other comprehensive income recognized as a result of the adoption of the equity method shall be accountedfor on the same basis as the direct disposal of the related assets or liabilities by the investee and carried
forward on a pro rata basis upon the termination of the adoption of the equity method, and all other changesin equity recognized as a result of changes in the investee's ownership interest other than net profit or loss,other comprehensive income, and distribution of profits shall be transferred to investment income on a prorata basis for the current period.If the investee loses control of a portion of the long-term equity investment due to disposal, and theremaining equity interest after disposal is capable of exercising joint control or significant influence overthe investee, it shall be accounted for under the equity method instead, and the difference between thecarrying amount of the equity interest disposed of and the disposal consideration shall be recognized ininvestment income, and the remaining equity interest shall be adjusted as if it were equity-method accountedfor from the time of acquisition; if the remaining equity interest after disposal is not capable of exercisingjoint control or significant influence over the investee, it shall be accounted for under the equity methodinstead. If the remaining equity interest after disposal cannot exercise joint control or significant influenceover the investee, the accounting shall be conducted in accordance with the relevant provisions of theGuidelines on Recognition and Measurement of Financial Instruments, and the difference between thecarrying amount of the equity interest disposed of and the consideration for disposal shall be recognized asinvestment income, while the difference between the fair value of the remaining equity interest at the dateof the loss of control and its carrying amount shall be recognized as profit or loss for the current period.
20. Investment properties
(1). If the cost measurement model is used:
Depreciation or amortization methodThe Group classifies real estate held to earn rentals or for capital appreciation, or both, as investmentproperty. The Group uses the cost model to measure investment properties. The Group depreciates the costof investment properties, net of estimated net salvage value and accumulated impairment allowances, overtheir useful lives using the average annualized method. For details of the impairment test method and themethod of making provision for impairment, please refer to Section V.11. (6) Impairment of financialinstruments. The useful lives, residual values and annual depreciation rates for each type of investmentproperties were as follows.
| No. | Category | Depreciable life (years) | Estimated salvage value (%) | Annual depreciation rate (%) |
| 1 | House buildings | 20 | 5-10 | 4.5-4.75 |
| 2 | Land use rights | 36.75 | 2.72 |
21 Fixed assets
(1). Recognition conditions
√ Applicable □ N/A
The Group's fixed assets are tangible assets with the following characteristics, i.e., held for use in theproduction of goods, provision of services, leasing or business management, and with a useful life of morethan one year.
Fixed assets are recognized when it is probable that the economic benefits associated with them willflow to the Group and their costs can be measured reliably. The Group's fixed assets include buildings,transportation equipment, office and electronic equipment.
(2). Depreciation method
√ Applicable □ N/A
| Category | Depreciation method | Depreciable life (years) | Residual value rate | Annual depreciation rate |
| Buildings | Average life method | 10-20 | 5%-10% | 4.50%-9.50% |
| Transportation equipment | Average life method | 4 | 5% | 23.75% |
| Office and electronic equipment | Average age method | 3 | 5% | 31.67% |
The Group depreciates all fixed assets, except for fully depreciated fixed assets that are still in use andland that is separately accounted for.
22. Construction in progress
√ Applicable □ N/A
(1) Construction in progress is categorized and accounted for by standing items.
(2) Criteria and point in time for carrying forward construction in progress to fixed assets
Construction in progress is recognized as a fixed asset on the basis of all expenditures incurred beforethe asset is constructed and brought to its intended state of use. This includes construction costs, the originalcost of machinery and equipment, other necessary expenses incurred to bring the construction in progress toits intended state of use, as well as borrowing costs incurred before the asset reaches its intended state of usefor borrowing specifically for the project, and borrowing costs incurred for general borrowing used for theproject. The Group transfers construction in progress to property, plant and equipment when the project hasbeen installed or constructed to its intended state of use. Fixed assets that have reached the intended state ofuse but for which final accounts have not yet been finalized are transferred to fixed assets from the date theyreach the intended state of use at their estimated value based on the project budget, construction cost oractual cost of the project, and depreciation is provided for in accordance with the Group's policy ondepreciation of fixed assets, and after final accounts have been finalized the original provisional value isadjusted according to the actual cost, but the amount of depreciation provided for is not adjusted. The originalprovisional value will be adjusted according to the actual cost after the completion of the final accounts,without adjusting the depreciation originally provided.
23. Borrowing costs
√ Applicable □ N/A
(1) Recognition principles and capitalization period for capitalization of borrowing costs
Borrowing costs incurred by the Group for the acquisition, construction or production of assets directlyattributable to the assets eligible for capitalization shall be capitalized to the cost of the relevant assets whenthe following conditions are simultaneously met:
① Expenditures on assets have been incurred;
② Borrowing costs have been incurred;
③ The construction or production activities necessary to bring the asset to its intended state of use havebegun.
Other borrowing interests, discounts or premiums and exchange differences are recognized in profit orloss in the period in which they are incurred.
The capitalization of borrowing costs is suspended when there is an abnormal interruption in theconstruction or production of assets eligible for capitalization for more than three consecutive months.
The capitalization of borrowing costs ceases when the assets eligible for capitalization have reachedtheir intended use or saleable condition; any subsequent borrowing costs are recognized as expenses in theperiod in which they are incurred.
(2) Calculation of the capitalization rate and amount of capitalized borrowing costs
If a special loan is borrowed for the purpose of purchasing, constructing or producing an asset eligiblefor capitalization, the capitalized amount of interest expense on the special loan shall be determined by theactual interest expense incurred on the special loan during the period less the interest income from depositingthe unused borrowed funds in a bank or the investment income from making a temporary investment.
If general borrowings are used for the acquisition, construction or production of assets eligible forcapitalization, the amount of interest to be capitalized on general borrowings shall be calculated bymultiplying the weighted average amount of cumulative asset expenditures in excess of the portion ofspecial-purpose borrowings by the capitalization rate of the general borrowings used to calculate the amountof interest to be capitalized on general borrowings. The capitalization rate is based on the weighted averageinterest rate of general borrowings.
24. Biological assets
□ Applicable √ N/A
25. Oil and gas assets
□ Applicable √ N/A
26. Intangible assets
(1). Useful life, basis for determining useful life, estimation, amortization method or reviewprocedure
√ Applicable □ N/A
Intangible assets, including land use rights and software, are measured at cost and amortized equallyover their estimated useful lives.
(1) Land use rights
Land use rights are amortized equally over their useful lives of 50 years. If it is difficult to allocate thepurchase price of land and buildings between land use rights and buildings, all of them are recognized asfixed assets.
(2) Computer software
Acquired computer software is capitalized on the basis of the costs incurred to acquire and put into usethe specific software. The related costs are amortized on a straight-line basis over the estimated useful livesof 2 to 10 years. Costs related to the maintenance of computer software programs are recognized as expensesas they are incurred.
(3) Periodic review of useful lives and amortization methods
The estimated useful lives and amortization methods of intangible assets with finite useful lives arereviewed and appropriately adjusted at the end of each year. The Group considers intangible assets for whichthe duration of future economic benefits is not foreseeable as intangible assets with indefinite useful livesand does not amortize such intangible assets. As at the end of the reporting period, the Group had nointangible assets with indefinite useful lives. Expenditures on the Group's internal research and developmentprojects are recognized in profit or loss as incurred.
(4) Impairment of intangible assets
When the recoverable amount of an intangible asset is less than its carrying amount, the carrying amountis written down to the recoverable amount.
(2). Scope of attribution of R&D expenditures and related accounting treatment
□ Applicable √ N/A
27. Impairment of long-lived assets
√ Applicable □ N/A
The Group examines items such as long-term equity investments, property and equipment, constructionin progress, right-of-use assets and intangible assets with finite useful lives at each balance sheet date, andperforms impairment tests when there are indications of impairment. Goodwill and intangible assets withindefinite useful lives are tested for impairment at the end of each year, regardless of whether there is anyindication of impairment.
The recoverable amount is determined as the higher of the asset's fair value less costs of disposal andthe present value of the asset's estimated future cash flows. The Group estimates the recoverable amount ofan asset on an individual basis; if it is difficult to estimate the recoverable amount of an individual asset, therecoverable amount of an asset group is determined on the basis of the asset group to which the asset belongs.An asset group is identified on the basis of whether the major cash inflows from the asset group areindependent of those from other assets or groups of assets.
When the recoverable amount of an asset or an asset group is less than its carrying amount, the Groupwrites down its carrying amount to its recoverable amount, and the amount of the write-down is recognizedin profit or loss and a corresponding provision for asset impairment is made.
For the purpose of impairment testing of goodwill, the carrying amount of goodwill arising from abusiness combination is allocated to the relevant asset group on a reasonable basis from the date of purchase;if it is difficult to be allocated to the relevant asset group, the carrying amount is allocated to a portfolio of
the relevant asset groups. The relevant asset group or portfolio of asset groups is one that can benefit fromthe synergies of the business combination and is not larger than the Group's reportable segments.
When testing for impairment of the relevant asset group or portfolio of asset groups containing goodwill,if there is any indication of impairment for the asset group or portfolio of asset groups related to goodwill,the asset group or portfolio of asset groups that does not contain goodwill is first tested for impairment, therecoverable amount is calculated, and the corresponding impairment loss is recognized. If the recoverableamount is lower than the carrying amount, the amount of the impairment loss shall first be offset against thecarrying amount of the goodwill allocated to the asset group or portfolio of assets, and then against thecarrying amount of the other assets proportionally according to the proportion of the carrying amount of theother assets excluded from the asset group or portfolio of assets.
If the carrying amount of an asset exceeds its recoverable amount after an impairment test, the differenceis recognized as an impairment loss, which is not reversed in subsequent periods.
28. Long-term amortized expenses
√ Applicable □ N/A
Long-term amortized expenses are expenses incurred by the Group but shall be borne by the Group inthe current and future periods with an amortization period of more than one year.Long-term amortizationexpenses These expenses are amortized equally over the period of benefit. If a long-term amortized expenseitem does not benefit a future accounting period, the amortized value of the item that has not been amortizedis transferred to profit or loss for the current period.
29. Contract liabilities
√ Applicable □ N/A
Contract liabilities reflect the Group's obligations to transfer goods to clients for consideration receivedor receivable from clients. If the client has paid the contractual consideration or the Group has obtained theunconditional right to receive the contractual consideration before the Group transfers the goods to the client,contract liabilities are recognized for the amount received or receivable at the earlier of the actual paymentmade by the client and the amount due.
30. Employee remuneration
(1). Accounting treatment of short-term remuneration
√ Applicable □ N/A
The Group's employee remuneration includes short-term remuneration, post-employment benefits andtermination benefits.
Short-term remuneration mainly includes employees' salaries, welfare fees and housing fund. Short-term remuneration actually incurred during the accounting period in which the employees render services isrecognized as a liability and charged to current profit or loss or the cost of the relevant assets according tothe beneficiary.
(2). Accounting treatment of post-employment benefits
√ Applicable □ N/A
Post-employment benefits mainly include basic pension insurance premiums, unemployment insurance,etc., which are categorized as defined contribution plans in accordance with the risks and obligationsassumed by the Company. Contributions to a defined contribution plan are recognized as a liability at thebalance sheet date on the basis of contributions made to a separate entity in exchange for services renderedby employees during the accounting period, and are recognized in profit or loss or at the cost of the relatedassets, depending on the beneficiary.
(3). Accounting treatment of termination benefits
□ Applicable √ N/A
(4). Accounting treatment of other long-term employee benefits
□ Applicable √ N/A
31. Projected liabilities
√ Applicable □ N/A
The Group recognizes a projected liability when the obligation relating to the contingency is a presentobligation incurred by the Group, it is probable that the performance of the obligation will result in an outflowof economic benefits to the Group, and the amount can be measured reliably. A projected liability is initiallymeasured at the best estimate of the expenditure required to settle the present obligation. Where the effect ofthe time value of money is material, the projected liability is determined on the basis of the discountedamount of the expected future cash flows. In determining the best estimate, the Group considers a portfolioof factors such as the risks and uncertainties associated with the contingency and the time value of money.Where there is a continuous range of required expenditures and the likelihood of each outcome within thatrange is equal, the best estimate is determined at the midpoint of the range; in other cases, the best estimateis treated as follows:
- Where the contingency relates to a single item, it is determined on the basis of the most probableamount to be incurred.
- Where a contingency relates to more than one item, it is determined on the basis of various possibleoutcomes and related probabilities.
The Group reviews the carrying amount of the estimated liability at the balance sheet date and adjuststhe carrying amount to the current best estimate.
32. Share-based payment
√ Applicable □ N/A
(1) Types of share-based payment and accounting treatment
Share-based payment is a transaction in which a company grants an equity instrument or assumes aliability determined on the basis of an equity instrument in order to obtain services from employees. Share-based payment is categorized into equity-settled share-based payment and cash-settled share-based payment.
1) Equity-settled share-based payment
Stock option plans are equity-settled share-based payments in exchange for services rendered byemployees and are measured at the fair value of the equity instruments granted to employees at the grantdate. Options may be exercised only upon completion of services or fulfillment of specified performanceconditions during the waiting period. During the waiting period, based on the best estimate of the number ofequity instruments that can be exercised, the services acquired during the period are recognized in the relatedcosts or expenses at the fair value of the equity instruments on the grant date, and the capital surplus isincreased accordingly.
2) Cash-settled share-based payment
The stock appreciation rights plan is a cash-settled share-based payment, which is measured at the fairvalue of the liability assumed by the Company based on the number of shares of the Company. The cash-settled share-based payment is subject to the completion of services or the fulfillment of performanceconditions during the waiting period. At each balance sheet date during the waiting period, based on the bestestimate of the feasibility of the rights, the services acquired during the period are recognized as a cost orexpense at the amount of the fair value of the liabilities assumed by the Company, and the liabilities areincreased accordingly. The fair value of the liability is remeasured at each balance sheet date until theliability is settled and at the date of settlement, with the change recognized in profit or loss.
(2) Method of determining the fair value of equity instruments
The fair value of shares granted to employees is measured at the market price of the Company's shares,adjusted to take into account the terms and conditions under which the shares were granted (excluding theconditions for exercising the rights other than market conditions).
For stock options granted to employees, the fair value of the options granted is estimated using an optionpricing model.
(3) Basis for recognizing the best estimate of feasible equity instruments
At each balance sheet date during the waiting period, the number of equity instruments expected tobecome exercisable is revised by making a best estimate based on the latest available subsequent information,such as changes in the number of employees with exercisable rights.
(4) Handling of modification and termination of the share-based payment plan
If the modification of a share-based payment plan increases the fair value of the equity instrumentsgranted, the increase in services received shall be recognized accordingly to the increase in the fair value ofthe equity instruments.If a modification of a share-based payment plan increases the number of equity instruments granted,the increase in the fair value of the equity instruments shall be recognized as an increase in services receivedaccordingly.If the conditions for exercising rights are modified in a way that is favorable to the employee, such asshortening the waiting period or changing or eliminating performance conditions (instead of marketconditions), the company takes the modified conditions into account when dealing with the conditions forexercising rights.
If the terms and conditions are modified in a manner that reduces the total fair value of the share-basedpayment or is otherwise unfavorable to the employee, the services received continue to be accounted for asif the change had never occurred, unless some or all of the equity instruments granted are canceled.
If the granted equity instruments are canceled during the waiting period, the canceled equity instrumentsare treated as accelerated exercise, and the remaining amount to be recognized during the waiting period isimmediately recognized in profit or loss, and capital surplus is recognized. If the employees or other partiescan choose to meet the non-optional conditions but fail to do so within the waiting period, the cancellationis treated as a cancellation of the granted equity instruments.
33. Preferred stock, perpetual bonds and other financial instruments
□ Applicable √ N/A
34. Revenues
(1). Disclosure of accounting policies adopted for revenue recognition and measurement by type ofbusiness
√ Applicable □ N/A
The Ministry of Finance ("MOF") issued ASBE No. 14 - Revenue (Revised) ("New Revenue Standard")in 2017. The New Revenue Standard replaces "ASBE No. 14 - Revenue" and "ASBE No. 15 - ConstructionContracts" ("Previous Revenue Standard") issued in 2006. From January 1, 2020, the Group hasimplemented the new revenue standards. Revenue is the total inflow of economic benefits arising from theGroup's ordinary activities that results in an increase in shareholders' equity and does not relate to thecontribution of capital by shareholders.
The Group recognizes revenue when it has fulfilled its performance obligations under a contract, i.e.when the client obtains control of the related goods or services.
If a contract contains two or more performance obligations, the Group allocates the transaction price toeach individual performance obligation on the basis of the relative proportion of the individual selling priceof the goods or services promised under each individual performance obligation at the inception date of thecontract, and measures revenue on the basis of the transaction price allocated to each individual performanceobligation. For contracts with quality assurance clauses, the Group analyzes the nature of the warrantyprovided and treats the warranty as a separate performance obligation if the warranty provides a separateservice from guaranteeing to the client that the goods sold meet the established standards. Otherwise, theGroup accounts for them in accordance with the provisions of "ASBE No. 13 - Contingencies".
The transaction price is the amount of consideration that the Group expects to be entitled to receive forthe transfer of goods or services to the client, excluding amounts received on behalf of third parties. TheGroup recognizes a transaction price that does not exceed the amount by which it is more likely than not thata material reversal of the cumulative revenue recognized will not occur when the related uncertainty isremoved. Amounts expected to be returned to clients are recognized as a liability for returns and are notincluded in the transaction price.
The Group has a performance obligation at a point in time when one of the following conditions is met;otherwise, the Group has a performance obligation at a point in time:
- The client acquires and consumes the economic benefits arising from the Group's performance at thesame time as the Group's performance;
- The client is able to control the goods under construction in the course of the Group's performance;
- The goods produced in the course of the Group's performance have a non-substitutable use and theGroup is entitled to receive payment for the cumulative portion of performance completed to date throughoutthe term of the contract.The Group recognizes revenue on the basis of the progress of performance over a period of time forperformance obligations that are to be fulfilled within that period. When the progress of performance is notreasonably determinable, the Group recognizes revenue on the basis of the amount of costs incurred untilthe progress of performance is reasonably determinable, provided that the costs incurred by the Group areexpected to be reimbursed.For performance obligations fulfilled at a certain point in time, the Group recognizes revenue at thepoint in time when the client obtains control of the related goods or services. In determining whether a clienthas obtained control of goods or services, the Group considers the following indications:
- The Group has a present right to receive payment for the good or service;
- The Group has physically transferred the good to the client;
- The Group has transferred legal title or the principal risks and rewards of ownership of the good to theclient;
- The client has accepted the goods or services, etc.
The Group accounts for changes in the scope or price of a contract that have been approved by theparties to the contract separately under the following circumstances:
- If a contract change adds clearly distinguishable goods and contract prices, and the new contract pricereflects the separate selling price of the new goods, the changed part of the contract is accounted for as aseparate contract;
- If a contract change does not fall into the above category, and if the goods transferred or servicesprovided are clearly distinguishable from those not transferred or provided at the date of the contract change,the original contract is deemed to be terminated, and the unperformed portion of the original contract andthe changed portion of the contract are combined and accounted for as part of a new contract;
- If a contract change does not fall under the above circumstances, i.e., if there is no clear distinctionbetween goods transferred or services provided and goods not transferred or services not provided at the dateof the contract change, the changed portion of the contract is accounted for as an integral part of the originalcontract, and the resulting impact on the recognized revenue is adjusted to current revenue at the date of thecontract change.
The right to receive consideration for goods or services that the Group has transferred to a client (andwhich is dependent on factors other than the passage of time) is recognized as a contract asset, which isimpaired on the basis of expected credit losses. The Group's unconditional right to receive considerationfrom clients, which is dependent only on the passage of time, is presented as receivables. The Group'sobligations to transfer goods or services to clients for which the Group has received or shall receiveconsideration from the clients are presented as contractual liabilities.
1) Revenue from sales of goods
Revenue is recognized when the Group transfers control of goods to the client upon delivery to thepurchaser and obtains a signed receipt, or when the goods are shipped on board a vessel.
2) Revenue from construction
The client controls the merchandise during the construction of the project. Under this type of contract,the relevant goods are constructed in accordance with the client's specifications, and if the client terminatesthe contract, the Group is entitled to receive an amount that compensates it for the costs incurred and areasonable profit for the portion of the performance that has been performed to date. Accordingly, the Grouprecognizes revenues and costs associated with the construction of the works over time. The Group determinesthe progress of performance based on the proportion of the cumulative actual contract costs incurred to theestimated total contract costs and recognizes revenue in accordance with the progress of performance. Ifrevenue is recognized but not yet billed, the Group recognizes it as a contract asset.
(2). The adoption of different operating models for the same type of business involves differentrevenue recognition and measurement methods
□ Applicable √ N/A
35. Contract costs
□ Applicable √ N/A
36. Government subsidies
√ Applicable □ N/A
(1) Recognition of government grants
Government grants are recognized only when the following conditions are simultaneously met:
1) The Group is able to fulfill the conditions attached to the government grants;
2) The Group is able to receive government grants.
(2) Measurement of government grants
If government grants are monetary assets, they are measured at the amount received or receivable. Ifthe government grants are non-monetary assets, they are measured at fair value; if the fair value cannot bereliably obtained, they are measured at a nominal amount of RMB 1.
(3) Accounting treatment of government grants
1) Asset-related government grants
Government grants obtained by the Company for the purpose of purchasing, constructing or otherwiseforming long-term assets are classified as asset-related government grants. Asset-related government grantsare recognized as deferred income and recognized in profit or loss in a reasonable and systematic mannerover the useful lives of the related assets. Government grants that are measured at nominal amounts arerecognized directly in profit or loss. If an asset is sold, transferred, retired or destroyed before the end of itsuseful life, the unallocated balance of the deferred income is transferred to profit or loss in the period inwhich the asset is disposed of.
2) Government grants related to income
Government grants other than those related to assets are classified as revenue-related government grants.Government grants related to income are accounted for as follows:
Government grants used to compensate the Group for costs or losses incurred in future periods arerecognized as deferred income and recognized in profit or loss in the period in which the costs or losses arerecognized;
For the purpose of compensating the Group for the related costs or losses already incurred, they arerecognized directly in profit or loss for the current period.
Government grants that contain both asset-related and revenue-related components are accounted forseparately; if it is difficult to distinguish between the two, they are categorized as revenue-relatedgovernment grants as a whole.
Government grants related to the Group's daily activities are recognized in other income in accordancewith the substance of the economic operations. Government grants that are not related to the Group's dailyactivities are recognized as non-operating revenue and expenses.
3) Policy-based preferential loan subsidies
If the finance disburses the subsidized interest rate funds to a lending bank, and the lending bankprovides loans to the Group at a preferential interest rate, the actual amount of the loan received shall beregarded as the recorded value of the loan, and the related borrowing costs shall be calculated on the basisof the principal amount of the loan and the preferential interest rate of the policy.
When the subsidized interest rate funds are directly allocated to the Group by the financial authorities,the Group will offset the corresponding subsidized interest rate against the relevant borrowing costs.
4) Return of government grants
When recognized government grants are to be returned, the carrying amount of the assets shall beadjusted if the carrying amount of the assets is reduced upon initial recognition; if there is a balance ofdeferred income, the balance of deferred income shall be reduced, and the excess shall be recognized inprofit or loss for the current period; otherwise, the balance of deferred income shall be recognized in profitor loss for the current period directly.
37. Deferred tax assets/deferred tax liabilities
√ Applicable □ N/A
Deferred tax assets and deferred tax liabilities are recognized for differences between the tax bases ofassets and liabilities and their carrying amounts (temporary differences). At the balance sheet date, deferred
tax assets and liabilities are measured at the tax rates that are expected to apply in the periods when the assetsare realized or the liabilities are settled.
(1) Basis for recognizing deferred tax assets
Deferred tax assets arising from deductible temporary differences are recognized to the extent that it isprobable that taxable income will be available against which the deductible temporary differences can beutilized, and deductible losses and tax credits can be carried forward to future years. However, deferred taxassets arising from the initial recognition of assets or liabilities are not recognized if: 1) the transaction isnot a business combination; and 2) the transaction affects neither the accounting profit nor taxable incomeor deductible losses at the time of the transaction.
Deferred tax assets are recognized for deductible temporary differences associated with investments inassociates if the following conditions are met: it is probable that the temporary differences will reverse inthe foreseeable future and it is probable that taxable income will be available against which the deductibletemporary differences can be utilized in the future.
(2) Basis for recognizing deferred tax liabilities
The Company recognizes deferred tax liabilities for taxable temporary differences between current andprior periods. However, it does not include:
1) Temporary differences arising from the initial recognition of goodwill;
2) Temporary differences arising from transactions or events that are not part of a business combinationand that, at the time of their occurrence, affect neither accounting profit nor taxable income (or deductiblelosses);
3) For taxable temporary differences related to investments in subsidiaries and associates, the timing ofthe reversal of the temporary differences can be controlled and it is probable that the temporary differenceswill not be reversed in the foreseeable future.
(3) Deferred tax assets and deferred tax liabilities are stated at the net amount after offsetting when thefollowing conditions are simultaneously met
1) The enterprise has the legal right to settle current income tax assets and current income tax liabilitieson a net basis;
2) Deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authorityon the same taxable entity or on different taxable entities, but in each future period in which deferred taxassets and deferred tax liabilities of significance are reversed, the taxable entities involved intend to settlethe current income tax assets and current income tax liabilities on a net basis or to realize the assets at thesame time, The taxable entity intends to settle current income tax assets and current income tax liabilities ona net basis or acquire assets and settle liabilities simultaneously.
38. Leases
√ Applicable □ N/A
At the inception date of a contract, the Group assesses whether the contract is a lease or contains a lease.A contract is a lease or contains a lease if one of the parties to the contract transfers the right to control theuse of one or more identified assets for a period of time in exchange for consideration.
(1) Separation of Lease Contracts
When a contract contains several individual leases, the Group splits the contract and accounts for eachindividual lease separately. When a contract contains both leases and non-leases, the Group splits the leasesand non-leases, and the leases are accounted for in accordance with the leasing standards, while the non-leases are accounted for in accordance with other applicable accounting standards.
(2) Consolidation of lease contracts
Two or more contracts containing leases entered into by the Group with the same counterparty or itsaffiliates at the same or similar times shall be consolidated into one contract for accounting purposes whenone of the following conditions is met.
a. The two or more contracts are entered into for an overall business purpose and constitute a packagetransaction, the overall business purpose of which cannot be understood unless considered as a whole.
b. The amount of consideration for one of the two or more contracts is dependent on the pricing orperformance of the other contracts.
c. The right to use the asset granted by the two or more contracts together constitute a single lease.
Basis of judgment and accounting treatment for simplified treatment of short-term leases and leasesof low-value assets as a lessee
√ Applicable □ N/A
Short-term leases are leases that do not include an option to purchase and have a lease term of less than12 months. Low-value asset leases are leases with a lower value when the individual leased asset is a brandnew asset.
The Group does not recognize right-of-use assets and lease liabilities for the following short-term leasesand low-value asset leases, and the related lease payments are charged to the cost of the related assets or tocurrent profit or loss on a straight-line basis over the lease term. The Group recognizes right-of-use assetsand lease liabilities for leases other than short-term leases and leases of low-value assets.Lease classification criteria and accounting treatment as lessor
√ Applicable □ N/A
The Company classifies leases as finance leases and operating leases at the inception date of the lease.A finance lease is a lease that transfers substantially all the risks and rewards incidental to ownership of theleased asset, which may or may not ultimately be transferred. Operating leases refer to leases other thanfinance leases.
During the reporting period, the Company's leases were all operating leases, and lease payments underoperating leases were recognized as rental income using the straight-line method or other systematic andreasonable methods in each period of the lease term: initial direct costs incurred in connection with theoperating leases were capitalized and apportioned over the lease term on the same basis as the rental income,and were charged to current profit or loss; and variable lease payments relating to operating leases that werenot included in the lease payments were charged to current profit or loss when they were actually incurred.Variable lease payments relating to operating leases that are not recognized as lease receipts are recognizedin profit or loss when they are actually incurred.
39. Other significant accounting policies and accounting estimates
□ Applicable √ N/A
40. Changes in significant accounting policies and accounting estimates
(1). Changes in significant accounting policies
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Contents of and reasons for the changes in accounting policies | Name of statement items materially affected | Amount of impact |
| On November 30, 2022, the Ministry of Finance issued ASBE Interpretation No. 16 (C.K.[2022] 31, hereinafter referred to as "Interpretation No. 16"), "Accounting for Deferred Taxes on Assets and Liabilities Arising from Individual Transactions for Which the Initial Recognition Exemption Does Not Apply", which will take effect on January 1, 2023, and enterprises are allowed to implement this interpretation in advance of the year of issue; | Deferred tax assets | 1,135,468.71 |
| Deferred tax liabilities | 1,316,653.59 | |
| Undistributed profits | -177,717.08 | |
| Minority interests | -3,467.80 |
Other NotesNone
(2). Changes in significant accounting estimates
□ Applicable √ N/A
(3). Adjustments to the financial statements as of the beginning of the year of first-timeimplementation of new accounting standards or interpretations of accounting standards for the first-time implementation of new accounting standards or interpretations of accounting standards from2023 onwards
√ Applicable □ N/A
Explanation of reasons for adjusting the financial statements as of the beginning of the year of initialimplementationFrom January 1, 2023, the Company will implement the provisions of "ASBE Interpretation No. 16"issued by the Ministry of Finance, "Accounting for Deferred Taxes on Assets and Liabilities Arising fromIndividual Transactions for Which the Initial Recognition Exemption Does Not Apply". For lease liabilitiesand right-of-use assets recognized at the beginning of the earliest period for the presentation of financialstatements in which this Interpretation is applied for the first time, as well as projected liabilities related toabandonment obligations and the corresponding related assets, which give rise to taxable temporarydifferences and deductible temporary differences, the enterprise shall adjust the cumulative effect to openingretained earnings and other relevant financial statement items in the earliest period for which the financialstatements are presented in accordance with this Interpretation and "ASBE 18 - Income Taxes".
Consolidated Balance Sheet
Unit: Yuan Currency: RMB
| Item | December 31, 2022 | January 1, 2023 | Adjustments |
| Current assets | |||
| Monetary funds | 550,235,202.99 | 550,235,202.99 | |
| Settlement Provision | |||
| Counterparty funds | |||
| Financial assets held for trading | 122,119,888.89 | 122,119,888.89 | |
| Derivative financial assets | |||
| Bills receivable | 20,790,441.73 | 20,790,441.73 | |
| Accounts receivable | 484,443,368.28 | 484,443,368.28 | |
| Receivables financing | 729,937.36 | 729,937.36 | |
| Prepayments | 50,995,260.16 | 50,995,260.16 | |
| Premiums receivable | |||
| Reinsurance receivables | |||
| Reserve for reinsurance contracts receivable | |||
| Other receivables | 13,057,575.31 | 13,057,575.31 | |
| Of which: Interest receivable | |||
| Dividends receivable | |||
| Financial assets purchased for resale | |||
| Inventories | 66,824.45 | 66,824.45 | |
| Contract assets | 389,293,108.13 | 389,293,108.13 | |
| Assets held for sale | |||
| Non-current assets due within one year | |||
| Other current assets | 58,265,105.32 | 58,265,105.32 | |
| Total current assets | 1,689,996,712.62 | 1,689,996,712.62 | |
| Non-current assets: | |||
| Loans and advances issued | |||
| Debt investments | |||
| Other debt investments | |||
| Long-term receivables | |||
| Long-term equity investments | 2,314,172.96 | 2,314,172.96 | |
| Investments in other equity instruments | |||
| Other non-current financial assets | |||
| Investment properties | 713,065.68 | 713,065.68 | |
| Fixed assets | 40,095,530.47 | 40,095,530.47 | |
| Construction in progress | |||
| Producing biological assets | |||
| Oil and gas assets | |||
| Utilization rights assets | 4,672,377.60 | 4,672,377.60 | |
| Intangible assets | 7,426,847.54 | 7,426,847.54 | |
| Development expenditure | |||
| Goodwill | |||
| Long-term amortization | |||
| Deferred tax assets | 14,578,928.51 | 15,714,397.22 | 1,135,468.71 |
| Other non-current assets | 17,348,658.87 | 17,348,658.87 | |
| Total non-current assets | 87,149,581.63 | 88,285,050.34 | 1,135,468.71 |
| Total assets | 1,777,146,294.25 | 1,778,281,762.96 | 1,135,468.71 |
| Current liabilities: | |||
| Short-term borrowings | 31,249,307.82 | 31,249,307.82 | |
| Borrowings from the Central Bank | |||
| Demand for funds | |||
| Financial liabilities for trading | |||
| Derivative financial liabilities | |||
| Notes payable | |||
| Accounts payable | 589,919,678.26 | 589,919,678.26 | |
| Advance receipts | |||
| Contract liabilities | 74,584,070.11 | 74,584,070.11 | |
| Sale and buyback of financial assets | |||
| Deposit-taking and interbank deposits | |||
| Securities trading agency | |||
| Underwriting of securities | |||
| Employee remuneration payable | 39,456,513.03 | 39,456,513.03 | |
| Taxes payable | 7,330,079.22 | 7,330,079.22 | |
| Other payables | 1,611,097.74 | 1,611,097.74 | |
| Of which: Interest payable | |||
| Dividends payable | |||
| Fees and commissions payable | |||
| Sub-insurance payable | |||
| Liabilities held for sale | |||
| Non-current liabilities due within one year | 1,710,381.30 | 1,710,381.30 | |
| Other current liabilities | |||
| Total current liabilities | 745,861,127.48 | 745,861,127.48 | |
| Non-current liabilities: | |||
| Reserves for insurance contracts | |||
| Long-term borrowings | |||
| Bonds payable | |||
| Of which: Preferred stock | |||
| perpetual bonds | |||
| Lease liabilities | 3,151,902.66 | 3,151,902.66 | |
| Long-term accounts payable | |||
| Long-term employee remuneration payable | 610,379.24 | 610,379.24 | |
| Projected liabilities | 9,238,016.80 | 9,238,016.80 | |
| Deferred income | |||
| Deferred tax liabilities | 4,892,632.32 | 6,209,285.91 | 1,316,653.59 |
| Other non-current liabilities | |||
| Total non-current liabilities | 17,892,931.02 | 19,209,584.61 | 1,316,653.59 |
| Total liabilities | 763,754,058.50 | 765,070,712.09 | 1,316,653.59 |
| Owners' equity (or shareholders' equity): | |||
| Paid-in capital (or share capital) | 80,000,000.00 | 80,000,000.00 | |
| Other equity instruments | |||
| Of which: Preferred stock | |||
| Perpetual bonds | |||
| Capital surplus | 582,632,775.45 | 582,632,775.45 | |
| Less: Treasury stock | |||
| Other comprehensive income | 3,027,860.88 | 3,027,860.88 | |
| Earmarked reserves | 45,372,652.93 | 45,372,652.93 | |
| Surplus reserves | 28,443,197.81 | 28,443,197.81 | |
| Provision for general risks | |||
| Undistributed profits | 269,871,786.54 | 269,694,069.46 | -177,717.08 |
| Total owners' equity (or shareholders' equity) attributable to the parent company | 1,009,348,273.61 | 1,009,170,556.53 | -177,717.08 |
| Minority interests | 4,043,962.14 | 4,040,494.34 | -3,467.80 |
| Total owners' equity (or shareholders' equity) | 1,013,392,235.75 | 1,013,211,050.87 | -181,184.88 |
| Total liabilities and owners' equity (or shareholders' equity) | 1,777,146,294.25 | 1,778,281,762.96 | 1,135,468.71 |
Parent Company Balance Sheet
Unit: Yuan Currency: RMB
| Item | December 31, 2022 | January 1, 2023 | Adjustments |
| Current assets: | |||
| Monetary funds | 426,921,105.55 | 426,921,105.55 | |
| Financial assets for trading | 122,119,888.89 | 122,119,888.89 | |
| Derivative financial assets | |||
| Bills receivable | 3,741,507.00 | 3,741,507.00 | |
| Accounts receivable | 389,406,545.69 | 389,406,545.69 | |
| Receivables financing | 350,000.00 | 350,000.00 | |
| Prepayment | 30,190,351.40 | 30,190,351.40 | |
| Other receivables | 39,103,210.81 | 39,103,210.81 | |
| Of which: Interest receivable | |||
| Dividends receivable | |||
| Inventories | 62,842.15 | 62,842.15 | |
| Contract assets | 307,849,835.96 | 307,849,835.96 | |
| Assets held for sale | |||
| Non-current assets due within one year | |||
| Other current assets | 21,837,642.67 | 21,837,642.67 | |
| Total current assets | 1,341,582,930.12 | 1,341,582,930.12 | |
| Non-current assets: | |||
| Debt investments | |||
| Other debt investments | |||
| Long-term receivables | |||
| Long-term equity investments | 84,542,333.88 | 84,542,333.88 | |
| Investments in other equity instruments | |||
| Other non-current financial assets | |||
| Investment properties | 713,065.68 | 713,065.68 | |
| Fixed assets | 38,986,702.82 | 38,986,702.82 | |
| Construction in progress | |||
| Producing biological assets | |||
| Oil and gas assets | |||
| Utilization right assets | 2,760,402.11 | 2,760,402.11 | |
| Intangible assets | 7,379,278.80 | 7,379,278.80 | |
| Development expenditure | |||
| Goodwill | |||
| Long-term amortization | |||
| Deferred tax assets | 11,724,393.96 | 12,482,396.65 | 758,002.69 |
| Other non-current assets | 3,168,562.17 | 3,168,562.17 | |
| Total non-current assets | 149,274,739.42 | 150,032,742.11 | 758,002.69 |
| Total assets | 1,490,857,669.54 | 1,491,615,672.23 | 758,002.69 |
| Current liabilities: | |||
| Short-term borrowings | |||
| Transaction financial liabilities | |||
| Derivative financial liabilities | |||
| Notes payable | |||
| Accounts payable | 504,944,256.04 | 504,944,256.04 | |
| Receipts in advance | |||
| Contract liabilities | 38,253,734.48 | 38,253,734.48 | |
| Employee remuneration payable | 32,483,986.99 | 32,483,986.99 | |
| Taxes payable | 3,265,740.36 | 3,265,740.36 | |
| Other accounts payable | 1,278,644.31 | 1,278,644.31 | |
| Of which: Interest payable | |||
| Dividends payable | |||
| Liabilities held for sale | |||
| Non-current liabilities due within one year | 902,393.93 | 902,393.93 | |
| Other current liabilities | |||
| Total current liabilities | 581,128,756.11 | 581,128,756.11 | |
| Non-current liabilities: | |||
| Long-term loans | |||
| Bonds payable | |||
| Of which: Preferred stock | |||
| Perpetual bonds | |||
| Lease liabilities | 2,118,253.78 | 2,118,253.78 | |
| Long-term accounts payable | |||
| Long-term employee remuneration payable | |||
| Projected liabilities | 5,723,958.25 | 5,723,958.25 | |
| Deferred income | |||
| Deferred tax liabilities | 690,100.53 | 690,100.53 | |
| Other non-current liabilities | |||
| Total non-current liabilities | 7,842,212.03 | 8,532,312.56 | 690,100.53 |
| Total liabilities | 588,970,968.14 | 589,661,068.67 | 690,100.53 |
| Owners' equity (or shareholders' equity): | |||
| Paid-in capital (or share capital) | 80,000,000.00 | 80,000,000.00 | |
| Other equity instruments | |||
| Of which: Preferred stock | |||
| Perpetual bonds | |||
| Capital surplus | 584,223,330.95 | 584,223,330.95 | |
| Less: Treasury stock | |||
| Other comprehensive income | |||
| Earmarked reserves | 37,608,529.67 | 37,608,529.67 | |
| Surplus reserves | 28,443,197.81 | 28,443,197.81 | |
| Undistributed profits | 171,611,642.97 | 171,679,545.13 | 67,902.16 |
| Total owner's equity (or shareholders' equity) | 901,886,701.40 | 901,954,603.56 | 67,902.16 |
| Total liabilities and owners' equity (or shareholders' equity) | 1,490,857,669.54 | 1,491,615,672.23 | 758,002.69 |
41. Others
√ Applicable □ N/A
(1) Earmarked reserves
The Group's production safety fees, which are extracted in accordance with national regulations, arerecognized as the cost of the relevant products or current profit or loss, and at the same time are included inthe earmarked reserve. When the Group utilizes the earmarked reserve, the expenses belonging to expensesare directly deducted from the earmarked reserve. If a fixed asset is formed, it is recognized as a fixed assetwhen the relevant asset reaches its intended useable state, and the cost of forming the fixed asset is deductedfrom the earmarked reserve, and accumulated depreciation of the same amount is recognized. Nodepreciation will be provided for the fixed assets in future periods.
(2) Segment reporting
The Group determines its operating segments based on its internal organizational structure,management requirements and internal reporting system. Two or more operating segments may beconsolidated into one if they have similar economic characteristics and at the same time are identical orsimilar in terms of the nature of the individual products, the nature of the production process, the types ofclients for the products, the manner of selling the products, and the impact of laws and administrativeregulations on the products produced. The Group determines its reportable segments on the basis of operatingsegments, taking into account the principle of materiality.
In preparing segment reports, the Group measures revenue from inter-segment transactions on the basisof actual transaction prices. The accounting policies used in the preparation of segment reports are consistentwith those used in the preparation of the Group's financial statements.
VI. Taxation
1. Major types and rates of tax
Major types of taxes and tax rates
√ Applicable □ N/A
| Type of tax | Tax basis | Tax rate (%) |
| Value-added tax (VAT) | Based on the provision of technical services, sale of goods, etc. | 3.00-13.00 |
| Urban maintenance and construction tax | Levied on the taxable turnover amount | 5.00, 7.00 |
| Education surcharge | Levied on the taxable turnover amount | 3.00, 2.00 |
| Enterprise income tax | Levied on the taxable income amount | Varies by taxing entity |
| Property tax | Property tax is calculated based on the residual value of the property after deducting 30% of the original value of the property. | 1.20, 12.00 |
Disclosure of taxable entities with different corporate income tax rates
√ Applicable □ N/A
| Name of taxable entity | Income tax rate (%) |
| The Company | 15 |
| Acter Engineering Technology (Shenzhen) Co., Ltd. | 25 |
| Shenzhen Dingmao Trading Co., Ltd. | 25 |
| Acter International Limited | 16.5 |
| Acter Technology Singapore Pte., Ltd. | 17 |
| PT. Acter Technology Indonesia | 22 |
| PT Acter Integration Technology Indonesia | 22 |
| Acter Technology Malaysia Sdn. Bhd. | 24 |
| Sheng Huei Engineering Technology Company Limited | 20 |
| Acter Technology Co., Ltd. | 20 |
2. Tax incentives
√ Applicable □ N/A
On November 6, 2023, the Company obtained the Certificate of High and New Technology Enterprise(Certificate No. GR202332006213, valid for three years from 2023 to 2025) jointly issued by JiangsuProvincial Department of Science and Technology, Jiangsu Provincial Department of Finance and JiangsuProvincial Taxation Bureau of the State Administration of Taxation. During the reporting period, theCompany enjoyed a preferential enterprise income tax rate of 15% for high-tech enterprises.
3. Others
□ Applicable √ N/A
VII. Notes to the Consolidated Financial Statements
1. Currency funds
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Cash on hand | 1,054,977.35 | 2,510,187.35 |
| Bank deposits | 708,941,745.68 | 539,829,910.94 |
| Other currency funds | 12,499,607.35 | 7,895,104.70 |
| Deposits with finance companies | ||
| Total | 722,496,330.38 | 550,235,202.99 |
| Of which: Total amount deposited abroad | 75,264,850.68 | 79,294,798.84 |
Other NotesCash on hand contains RMB 1,044,790.00 in digital form.Of which: Total amount deposited abroad
| Item | Balance at the end of the year | Balance at the beginning of the year |
| Total amount deposited abroad | 75,264,850.68 | 79,294,798.84 |
| Total | 75,264,850.68 | 79,294,798.84 |
Of which: Currency funds whose use is restricted
| Item | Balance at the end of the year | Balance at the beginning of the year |
| Guarantee deposits | 12,499,607.35 | 7,895,104.70 |
| Total | 12,499,607.35 | 7,895,104.70 |
2. Trading financial assets
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance | Reasons and justifications for designation |
| Financial assets at fair value through profit or loss | 122,119,888.89 | / | |
| Of which: | |||
| Structured deposits | 122,119,888.89 | / | |
| Financial assets at fair value through profit or loss | |||
| Of which: | |||
| Total | 122,119,888.89 | / |
Other Notes:
□ Applicable √ N/A
3. Derivative financial assets
□ Applicable √ N/A
4. Bills receivable
(1). Classification of bills receivable
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Bank acceptance bills | 7,877,956.66 | 20,790,441.73 |
| Commercial acceptance | 36,371,094.45 | |
| Less: Provision for bad debts | 1,091,132.83 | |
| Total | 43,157,918.28 | 20,790,441.73 |
(2). Bills receivable pledged by the Company at the end of the period
□ Applicable √ N/A
(3). Bills receivable endorsed or discounted by the Company at the end of the period and not yet dueat the balance sheet date
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Amount derecognized at the end of the period | Amount not derecognized at the end of the period |
| Bank acceptance bills | 35,385,000.00 | |
| Commercial acceptances | ||
| Total | 35,385,000.00 |
(4). Disclosure by bad debt accrual method
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Category | Closing balance | Opening balance | ||||||||
| Book balance | Provision for bad debts | Carrying amount | Book balance | Provision for bad debts | Carrying amount | |||||
| Amount | Proportion (%) | Amount | Provision (%) | Amount | Proportion (%) | Amount | Provision (%) | |||
| Provision for bad debts by individual item | ||||||||||
| Of which: | ||||||||||
| Provision for bad | 44,249,051.11 | 100.00 | 1,091,132.83 | 2.47 | 43,157,918.28 | 20,790,441.73 | 100.00 | 20,790,441.73 | ||
| debts by portfolio | ||||||||||
| Of which: | ||||||||||
| 1 . Portfolio 1 | 36,371,094.45 | 82.20 | 1,091,132.83 | 3.00 | 35,279,961.62 | |||||
| 2 . Portfolio 2 | 7,877,956.66 | 17.80 | 7,877,956.66 | 20,790,441.73 | 100.00 | 20,790,441.73 | ||||
| Total | 44,249,051.11 | 100.00 | 1,091,132.83 | 2.47 | 43,157,918.28 | 20,790,441.73 | 100.00 | 20,790,441.73 | ||
Individual provision for bad-debt reserves:
□ Applicable √ N/A
Provision for bad debts by portfolio:
√ Applicable □ N/A
Items provided for by portfolio: Commercial acceptances
Unit: Yuan Currency: RMB
| Name | Closing balance | ||
| Bills receivable | Provision for bad debts | Provision ratio (%) | |
| Within 1 year | 36,371,094.45 | 1,091,132.83 | 3.00 |
| Total | 36,371,094.45 | 1,091,132.83 | 3.00 |
Explanation of provision for bad debts by portfolio
□ Applicable √ N/A
Provision for bad debts is made on a portfolio basis:
√ Applicable □ N/A
Items provided for by portfolio: Bank acceptance bills
Unit: Yuan Currency: RMB
| Name | Closing balance | ||
| Bills receivable | Provision for bad debts | Provision ratio (%) | |
| Within 1 year | 7,877,956.66 | ||
| Total | 7,877,956.66 | ||
Explanation of provision for bad debts by portfolio
□ Applicable √ N/A
Provision for bad debts based on the general model of expected credit losses
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Provision for bad debts | Phase I | Phase II | Phase III | Total |
| Expected credit losses for the next 12 months | Expected credit losses for the entire duration (no credit impairment) | Expected credit losses for the entire duration (credit impairment incurred) | ||
| Balance at January 1, 2023 | ||||
| Balance at January 1, 2023 in the current period |
| --Reversed to Phase II | ||||
| --Reversed to Phase III | ||||
| --Reversed to Phase II | ||||
| --Reversed to Phase I | ||||
| Provision during the period | 1,091,132.83 | 1,091,132.83 | ||
| Reversal during the period | ||||
| Write-offs during the period | ||||
| Cancellations during the period | ||||
| Other changes | ||||
| Balance at December 31, 2023 | 1,091,132.83 | 1,091,132.83 |
The basis for the classification of each stage and the percentage of provision for bad debts are shown inthis section V.12. Bills receivableExplanation of significant changes in the book balance of bills receivable for which changes in theallowance for losses occurred during the period:
□ Applicable √ N/A
(5). Provision for bad debts
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Category | Opening balance | Change during the period | Closing balance | |||
| Provision | Recovery or reversal | Write-offs or cancellations | Other changes | |||
| Commercial acceptances | 1,091,132.83 | 1,091,132.83 | ||||
| Total | 1,091,132.83 | 1,091,132.83 | ||||
Of which the amount of bad debt provision recovered or reversed during the period is significant:
□ Applicable √ N/A
Other Notes:
None
(6). Actual write-off of bills receivable during the period
□ Applicable √ N/A
Write-off bills receivable of which significant:
□ Applicable √ N/A
Description of bills receivable written off:
□ Applicable √ N/A
Other Notes:
□ Applicable √ N/A
5. Accounts receivable
(1). Disclosure by ageing
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Ageing | Closing book balance | Opening book balance |
| Within 1 year | ||
| Of which: Within 1 year | ||
| 1-6 months (including 6 months) | 338,478,217.57 | 451,698,928.45 |
| 6 months to 1 year (including 1 year) | 34,754,229.34 | 19,393,631.72 |
| Subtotal within 1 year | 373,232,446.91 | 471,092,560.17 |
| 1 to 2 years | 13,065,254.41 | 12,552,067.19 |
| 2 to 3 years | 21,927,201.89 | 21,111,026.57 |
| 3 to 4 years | 14,496,556.70 | 11,730,732.71 |
| 4 to 5 years | 8,927,092.98 | |
| More than 5 years | 650,753.62 | 650,753.62 |
| Total | 432,299,306.51 | 517,137,140.26 |
(2). Disclosure by bad debt accrual method
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Category | Closing balance | Opening balance | ||||||||
| Book balance | Provision for bad debts | Carrying amount | Book balance | Provision for bad debts | Carrying amount | |||||
| Amount | Proportion (%) | Amount | Provision (%) | Amount | Proportion (%) | Amount | Provision (%) | |||
| Provision for bad debts by individual item | 10,994,167.99 | 2.54 | 10,994,167.99 | 100.00 | 0 | 11,576,692.27 | 2.24 | 11,576,692.27 | 100.00 | |
| Of which: | ||||||||||
| Provision for bad debts by portfolio | 421,305,138.52 | 97.46 | 24,415,866.26 | 5.80 | 396,889,272.26 | 505,560,447.99 | 97.76 | 21,117,079.71 | 4.18 | 484,443,368.28 |
| Of which: | ||||||||||
| Total | 432,299,306.51 | 100.00 | 35,410,034.25 | / | 396,889,272.26 | 517,137,140.26 | 100.00 | 32,693,771.98 | / | 484,443,368.28 |
Individual provision for bad-debt reserves:
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Name | Closing balance | |||
| Carrying amount | Provision for bad debts | Provision (%) | Reason for provision | |
| Qinghua Group Xinjiang Coal Chemical Industry Co., Ltd. | 6,570,214.37 | 6,570,214.37 | 100.00 | Debtor's financial difficulties |
| Suzhou Mingqiao Municipal Engineering Co., Ltd. | 2,158,200.00 | 2,158,200.00 | 100.00 | Debtor bankruptcy |
| Fujian Fuchen Technology Co., Ltd. | 1,615,000.00 | 1,615,000.00 | 100.00 | Debtor's financial difficulties |
| Suzhou Hyperion Geocrystal Co., Ltd. | 650,753.62 | 650,753.62 | 100.00 | Debtor's bankruptcy, payment is expected to be difficult to recover |
| Total | 10,994,167.99 | 10,994,167.99 | 100.00 | / |
Explanation of bad debt provision by individual item:
□ Applicable √ N/A
Provision for bad debts by portfolio:
√ Applicable □ N/A
Items provided for by portfolio: Ageing portfolio
Unit: Yuan Currency: RMB
| Name | Closing balance | ||
| Accounts receivable | Provision for bad debts | Provision ratio (%) | |
| 1-6 months (including 6 months) | 338,478,217.57 | 10,154,346.63 | 3.00 |
| 6 months to 1 year (including 1 year) | 34,754,229.34 | 1,737,711.47 | 5.00 |
| 1-2 years (including 2 years) | 13,065,254.41 | 1,306,525.44 | 10.00 |
| 2-3 years (including 3 years) | 21,927,201.89 | 4,385,440.38 | 20.00 |
| 3-4 years (including 4 years) | 12,107,819.70 | 6,053,909.85 | 50.00 |
| 4-5 years (including 5 years) | 972,415.61 | 777,932.49 | 80.00 |
| Total | 421,305,138.52 | 24,415,866.26 | |
Explanation of provision for bad debts by portfolio:
□ Applicable √ N/A
Provision for bad debts based on the general model of expected credit losses
□ Applicable √ N/A
The basis for the classification of each stage and the percentage of provision for bad debts are shown inthis section V. 13. Accounts receivableExplanation of significant changes in the book balance of accounts receivable for which changes in theallowance for losses occurred during the period:
□ Applicable √ N/A
(3). Provision for bad debts
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Category | Opening balance | Change during the period | Closing balance | |||
| Provision | Recovered or reversed | Write-offs or cancellations | Other changes | |||
| Provision for bad debts | 32,693,771.98 | 2,711,649.69 | 4,612.58 | 35,410,034.25 | ||
| Total | 32,693,771.98 | 2,711,649.69 | 4,612.58 | 35,410,034.25 |
Of which the amount of bad debt provision recovered or reversed during the period is significant:
□ Applicable √ N/A
Other Notes:
None
(4). Accounts receivable actually written off during the period
□ Applicable √ N/A
Significant accounts receivable written off among them
□ Applicable √ N/A
Description of accounts receivable written off:
□ Applicable √ N/A
(5). Accounts receivable and contract assets with top five closing balances summarized by partyowed to the Company
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Unit Name | Closing balance of accounts receivable | Closing balance of contract assets | Closing balance of accounts receivable and contract assets | Percentage of combined accounts receivable and contract assets closing balance (%) | Closing balance of provision for bad debts |
| Client 1 | 35,204,113.72 | 55,230,371.74 | 90,434,485.46 | 10.51 | 1,332,275.27 |
| Client 2 | 64,025,641.40 | 7,614,263.45 | 71,639,904.85 | 8.33 | 3,520,635.64 |
| Client 3 | 60,617,976.68 | 10,161,956.75 | 70,779,933.43 | 8.23 | 1,987,558.51 |
| Client 4 | 69,801,621.75 | 69,801,621.75 | 8.11 | 355,720.96 | |
| Client 5 | 3,732,285.60 | 62,663,590.03 | 66,395,875.63 | 7.72 | 752,682.98 |
| Total | 163,580,017.40 | 205,471,803.72 | 369,051,821.12 | 42.90 | 7,948,873.36 |
Other NotesNoneOther Notes:
□ Applicable √ N/A
6. Contract assets
(1). Status of contract assets
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Provision for bad debts | Carrying amount | Book balance | Provision for bad debts | Carrying amount | |
| Unexpired warranty deposits | 17,784,023.33 | 997,257.82 | 16,786,765.51 | 33,157,769.56 | 2,953,903.77 | 30,203,865.79 |
| Completed unliquidated assets arising from construction contracts | 410,161,246.32 | 2,050,806.23 | 408,110,440.09 | 360,893,710.88 | 1,804,468.54 | 359,089,242.34 |
| Total | 427,945,269.65 | 3,048,064.05 | 424,897,205.60 | 394,051,480.44 | 4,758,372.31 | 389,293,108.13 |
(2). Amounts and reasons for significant changes in carrying amount during the reporting period
□ Applicable √ N/A
(3). Disclosure by bad debt accrual method
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Category | Closing balance | Opening balance | ||||||||
| Book balance | Provision for bad debts | Carrying amount | Book balance | Provision for bad debts | Carrying amount | |||||
| Amount | Proportion (%) | Amount | Provision (%) | Amount | Proportion (%) | Amount | Provision (%) | |||
| Provision for bad debts by individual item | ||||||||||
| Of which: | ||||||||||
| Provision for bad debts by portfolio | 427,945,269.65 | 100.00 | 3,048,064.05 | 0.71 | 424,897,205.60 | 394,051,480.44 | 100.00 | 4,758,372.31 | 1.21 | 389,293,108.13 |
| Of which: | ||||||||||
| Outstanding warranty deposits | 17,784,023.33 | 4.16 | 997,257.82 | 5.61 | 16,786,765.51 | 33,157,769.56 | 8.41 | 2,953,903.77 | 8.91 | 30,203,865.79 |
| Completed unliquidated assets resulting from construction contracts | 410,161,246.32 | 95.84 | 2,050,806.23 | 0.50 | 408,110,440.09 | 360,893,710.88 | 91.59 | 1,804,468.54 | 0.50 | 359,089,242.34 |
| Total | 427,945,269.65 | 100.00 | 3,048,064.05 | / | 424,897,205.60 | 394,051,480.44 | 100.00 | 4,758,372.31 | / | 389,293,108.13 |
Individual provision for bad-debt reserves:
□ Applicable √ N/A
Explanation of individual provision for bad-debt reserves:
□ Applicable √ N/A
Provision for bad debts by portfolio:
√ Applicable □ N/A
Items provided for by portfolio: Provision by portfolio
Unit: Yuan Currency: RMB
| Name | Closing balance | ||
| Contract assets | Provision for bad debts | Provision ratio (%) | |
| Unexpired warranty deposits | 17,784,023.33 | 997,257.82 | 5.61 |
| Completed and unliquidated assets arising from construction contracts | 410,161,246.32 | 2,050,806.23 | 0.50 |
| Total | 427,945,269.65 | 3,048,064.05 | |
Explanation of provision for bad debts by portfolio
□ Applicable √ N/A
Provision for bad debts based on the general model of expected credit losses
□ Applicable √ N/A
The basis for the classification of each stage and the percentage of provision for bad debts are shown in thisSection V.17. Contract assetsExplanation of significant changes in the book balance of contract assets for which changes in the provisionfor losses occurred during the period:
□ Applicable √ N/A
(4). Provision for bad debts on contract assets during the period
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Provision for the current period | Recovered or reversed during the period | Write-off/cancellation during the period | Reason |
| Provision for bad debts | -1,710,308.26 | |||
| Total | -1,710,308.26 | / |
Of which the amount of bad debt provision recovered or reversed during the period is significant:
□ Applicable √ N/A
Other Notes:
None
(5). Contract assets actually written off during the period
□ Applicable √ N/A
Significant contract assets written off
□ Applicable √ N/A
Description of contract assets written off:
□ Applicable √ N/A
Other Notes:
□ Applicable √ N/A
7. Receivables financing
(1). Classification of receivables financing
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Bank acceptance bills | 3,572,953.18 | 729,937.36 |
| Total | 3,572,953.18 | 729,937.36 |
(2). Receivable financing pledged by the Company at the end of the period
□ Applicable √ N/A
(3). Receivable financing endorsed or discounted by the Company at the end of the period and notyet due at the balance sheet date
□ Applicable √ N/A
(4). Disclosure by bad debt accrual method
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Category | Closing balance | Opening balance | ||||||||
| Book balance | Provision for bad debts | Carrying amount | Book balance | Provision for bad debts | Carrying amount | |||||
| Amount | Proportion (%) | Amount | Provision (%) | Amount | Proportion (%) | Amount | Provision (%) | |||
| Provision for bad debts by individual item | ||||||||||
| of which: | ||||||||||
| Provision for bad debts by group | ||||||||||
| Of which: | ||||||||||
| Portfolio 2 | 3,572,953.18 | 3,572,953.18 | 729,937.36 | 729,937.36 | ||||||
| Total | 3,572,953.18 | / | / | 3,572,953.18 | 729,937.36 | / | / | 729,937.36 | ||
Individual provision for bad-debt reserves:
□ Applicable √ N/A
Explanation of provision for bad debts by individual item:
□ Applicable √ N/A
Provision for bad debts by portfolio:
□ Applicable √ N/A
Provision for bad debts based on general model of expected credit losses.
□ Applicable √ N/A
Basis of classification of each stage and percentage of bad debt provisioningNoneDescription of significant changes in the book balance of receivables financing for which changes in theallowance for losses occurred during the period:
□ Applicable √ N/A
(5). Provision for bad debts
□ Applicable √ N/A
Of which the amount of bad debt provision recovered or reversed during the period is significant:
□ Applicable √ N/A
Other Notes:
None
(6). Receivables financing actually written off during the period
□ Applicable √ N/A
Write-off of receivables financing of which significant amount
□ Applicable √ N/A
Description of write-offs:
□ Applicable √ N/A
(7). Increase/decrease and change in fair value of receivables financing during the period:
□ Applicable √ N/A
(8). Other Notes:
□ Applicable √ N/A
8. Prepayments
(1). Prepayments by ageing
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Ageing | Closing balance | Opening balance | ||
| Amount | Proportion (%) | Amount | Proportion (%) | |
| Within 1 year | 88,690,301.43 | 99.62 | 50,995,260.16 | 100.00 |
| 1 to 2 years | 334,311.90 | 0.38 | ||
| 2 to 3 years | ||||
| More than 3 years | ||||
| Total | 89,024,613.33 | 100.00 | 50,995,260.16 | 100.00 |
Explanation of the reasons for the delayed settlement of prepayments aged over 1 year and with significantamount:
None
(2). Prepayments with the top five closing balances grouped by prepayment recipients
√ Applicable □ N/A
| Name of organization | Closing balance | Percentage of total closing balance of prepayments (%) |
| Supplier 1 | 23,403,311.09 | 26.29 |
| Supplier 2 | 8,460,761.10 | 9.50 |
| Supplier 3 | 3,400,000.00 | 3.82 |
| Supplier 4 | 2,486,153.59 | 2.79 |
| Supplier 5 | 2,226,000.00 | 2.50 |
| Total | 39,976,225.78 | 44.90 |
Other notesNoneOther notes
□ Applicable √ N/A
9. Other receivables
Item presentation
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Interest receivable | ||
| Dividends receivable | ||
| Other receivables | 13,378,598.48 | 13,057,575.31 |
| Total | 13,378,598.48 | 13,057,575.31 |
Other Notes:
□ Applicable √ N/A
Interest receivable
(1). Classification of interest receivable
□ Applicable √ N/A
(2). Significant overdue interest
□ Applicable √ N/A
(3). Disclosure by bad debt provision method
□ Applicable √ N/A
Individual provision for bad-debt reserves:
□ Applicable √ N/A
Explanation of individual provision for bad-debt reserves:
□ Applicable √ N/A
Provision for bad debts by portfolio:
□ Applicable √ N/A
(4). Provision for bad debts based on general model of expected credit losses.
□ Applicable √ N/A
The basis of classification of each stage and the percentage of provision for bad debts are shown in thisSection V. 15. Other receivables
Explanation of significant changes in the book balance of interest receivables for which changes in theallowance for losses occurred during the period:
□ Applicable √ N/A
(5). Provision for bad debts
□ Applicable √ N/A
Of which the amount of bad debt provision recovered or reversed during the period is significant:
□ Applicable √ N/A
Other Notes:
None
(6). Actual write-off of interest receivable during the period
□ Applicable √ N/A
Write-off of significant interest receivables
□ Applicable √ N/A
Description of write-offs:
□ Applicable √ N/A
Other Notes:
□ Applicable √ N/A
Dividends receivable
(1). Dividends receivable
□ Applicable √ N/A
(2). Significant dividends receivable with an age of more than 1 year
□ Applicable √ N/A
(3). Disclosure by bad debt accrual method
□ Applicable √ N/A
Individual provision for bad-debt reserves:
□ Applicable √ N/A
Explanation of individual provision for bad-debt reserves:
□ Applicable √ N/A
Provision for bad debts by portfolio:
□ Applicable √ N/A
(4). Provision for bad debts based on general model of expected credit losses.
□ Applicable √ N/A
The basis of classification of each stage and the percentage of provision for bad debts are shown in thisSection V. 15. Other receivables
Explanation of significant changes in the book balance of dividend receivables for which changes in theallowance for losses occurred during the period:
□ Applicable √ N/A
(5). Provision for bad debts
□ Applicable √ N/A
Of which the amount of bad debt provision recovered or reversed during the period is significant:
□ Applicable √ N/A
Other Notes:
None
(6). Dividends receivable actually written off during the period
□ Applicable √ N/A
Write-off of dividends receivable of which the significant ones are
□ Applicable √ N/A
Description of write-offs:
□ Applicable √ N/A
Other Notes:
□ Applicable √ N/A
Other receivables
(1). Disclosure by ageing
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Ageing | Closing book balance | Opening book balance |
| Within 1 year | ||
| Of which: Within 1 year | ||
| Within 1 year | 5,788,181.03 | 7,908,967.45 |
| Subtotal within 1 year | 5,788,181.03 | 7,908,967.45 |
| 1 to 2 years | 3,137,206.61 | 5,269,487.75 |
| 2 to 3 years | 4,906,449.40 | 305,682.15 |
| 3 to 4 years | 275,070.44 | 178,337.96 |
| 4 to 5 years | 63,105.92 | 132,205.22 |
| More than 5 years | 157,762.22 | 154,776.00 |
| Total | 14,327,775.62 | 13,949,456.53 |
(2). Breakdown by nature of payment
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Nature of payment | Closing book balance | Opening book balance |
| Guarantee and deposit | 11,538,986.51 | 11,855,149.63 |
| Reserve | 1,489,165.57 | 1,303,034.72 |
| Others | 1,299,623.54 | 791,272.18 |
| Subtotal | 14,327,775.62 | 13,949,456.53 |
| Provision for bad debts | 949,177.14 | 891,881.22 |
| Total | 13,378,598.48 | 13,057,575.31 |
(3). Provision for bad debts
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Bad Debt Provision | Phase I | Phase II | Phase III | Total |
| Expected credit losses for the next 12 months | Expected credit losses for the entire duration (no credit impairment) | Expected credit losses for the entire duration (credit impairment incurred) | ||
| Balance as of January 1, 2023 | 891,881.22 | 891,881.22 | ||
| Balance as of January 1, 2023 | ||||
| -- Ransferred to Phase II | ||||
| --Reversed to Phase III | ||||
| --Reversed to Phase II | ||||
| --Reversed to Phase I | ||||
| Provision during the period | 57,851.33 | 57,851.33 | ||
| Reversal during the period | ||||
| Write-offs during the period | ||||
| Cancellations during the period | ||||
| Other changes | -555.41 | -555.41 | ||
| Balance as of December 31, 2023 | 949,177.14 | 949,177.14 |
The basis of classification of each stage and the percentage of provision for bad debts are shown in thisSection V. Other receivables
Explanation of significant changes in the book balance of other receivables for which changes in provisionfor losses occurred during the period:
□ Applicable √ N/A
The amount of provision for bad debts for the current period and the basis adopted for assessing whetherthere is a significant increase in the credit risk of financial instruments:
□ Applicable √ N/A
(4). Provision for bad debts
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Category | Opening balance | Change during the period | Closing balance | |||
| Provision | Recovery or reversal | Write-offs or cancellations | Other changes | |||
| Provision for bad debts | 891,881.22 | 57,851.33 | -555.41 | 949,177.14 | ||
| Total | 891,881.22 | 57,851.33 | -555.41 | 949,177.14 | ||
Of which the amount of provision for bad debts reversed or recovered during the period is significant:
□ Applicable √ N/A
Other NotesNone
(5). Other receivables actually written off during the period
□ Applicable √ N/A
Significant other receivables written off during the period:
□ Applicable √ N/A
Description of other receivables written off:
□ Applicable √ N/A
(6). Other receivables with the top five closing balances grouped by party owed
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Unit Name | Closing balance | Percentage of total closing balance of other receivables (%) | Nature of amount | Ageing | Provision for bad debts Closing balance |
| Unit I | 5,585,535.63 | 38.98 | Guarantee deposits | Less than 1 year, 1-2 years, 2-3 years | 279,276.78 |
| Unit II | 1,493,000.00 | 10.42 | Guarantee deposits | Less than 1 year, 1-2 years, 2-3 years, 3-4 years | 74,650.00 |
| Unit III | 800,000.00 | 5.58 | Guarantee deposits | Within 1 year | 40,000.00 |
| Unit IV | 432,600.00 | 3.03 | Guarantee deposits | Within 1 year | 21,630.00 |
| Unit V | 400,000.00 | 2.79 | Guarantee deposits | 1-2 years | 20,000.00 |
| Unit VI | 400,000.00 | 2.79 | Guarantee deposits | Within 1 year | 20,000.00 |
| Total | 9,111,135.63 | 63.59 | / | / | 455,556.78 |
Presented in other receivables due to centralized management of funds
□ Applicable √ N/A
Other Notes:
□ Applicable √ N/A
10. Inventories
(1). Classification of inventories
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Provision for decline in value of inventories/impairment of contractual performance costs | Carrying amount | Book balance | Provision for decline in value of inventories/impairment of contractual performance costs | Carrying amount | |
| Construction materials | 66,824.45 | 66,824.45 | ||||
| Products in process | ||||||
| Inventory goods | ||||||
| Turnover materials | ||||||
| Expendable biological assets | ||||||
| Contract performance costs | ||||||
| Total | 66,824.45 | 66,824.45 | ||||
(2). Provision for decline in value of inventories and provision for impairment of contractperformance costs
□ Applicable √ N/A
Reasons for reversal or write-off of provision for decline in value of inventories during the period
□ Applicable √ N/A
Provision for decline in value of inventories by portfolio
□ Applicable √ N/A
Provisioning criteria for provision for inventory valuation by portfolio
□ Applicable √ N/A
(3). Amount of borrowing costs capitalized in the closing balance of inventories, and the criteria andbasis for calculating such capitalized costs
□ Applicable √ N/A
(4). Explanation of the amount of amortization of contract performance costs for the current period
□ Applicable √ N/A
Other Notes
□ Applicable √ N/A
11. Assets held for sale
□ Applicable √ N/A
12. Non-current assets due within one year
□ Applicable √ N/A
Debt investments due within one year
□ Applicable √ N/A
Other debt investments maturing within one year
□ Applicable √ N/A
Other non-current assets due within one yearNone
13. Other current assets
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Prepaid VAT and inputs to be deducted | 77,101,647.54 | 49,268,224.68 |
| Other taxes paid in advance | 16,755,843.81 | 5,942,658.92 |
| Amortized expenses | 2,522,667.65 | 2,458,318.52 |
| Others | 1,224,007.69 | 595,903.20 |
| Total | 97,604,166.69 | 58,265,105.32 |
Other notesNone
14. Debt Investments
(1). Debt investments
□ Applicable √ N/A
Changes in provision for impairment of debt investments during the period
□ Applicable √ N/A
(2). Significant debt investments at the end of the period
□ Applicable √ N/A
(3). Provision for impairment
□ Applicable √ N/A
The basis for classification of each stage and the percentage of provision for impairment:
NoneExplanation of significant changes in the book balance of debt investments for which changes in provisionfor losses occurred during the period:
□ Applicable √ N/A
Amount of provision for impairment for the current period and the basis adopted for assessing whetherthere is a significant increase in credit risk of financial instruments: □ Applicable √ Applicable
□ Applicable √ N/A
(4). Actual write-off of debt investments during the period
□ Applicable √ N/A
Write-off of significant debt investments
□ Applicable √ N/A
Description of write-off of debt investments:
□ Applicable √ N/A
Other Notes: □ Applicable √ N/A
□ Applicable √ N/A
15. Other debt investments
(1). Other debt investments
□ Applicable √ N/A
Changes in provision for impairment of other debt investments during the period
□ Applicable √ N/A
(2). Significant other debt investments at the end of the period
□ Applicable √ N/A
(3). Provision for impairment
□ Applicable √ N/A
The basis for classification of each stage and the percentage of provision for impairment:
None
Explanation of significant changes in the book balance of other debt investments for which changes inprovision for losses occurred during the period:
□ Applicable √ N/A
Amount of provision for impairment for the current period and the basis adopted for assessing whetherthere is a significant increase in credit risk of financial instruments: □ Applicable √ Applicable
□ Applicable √ N/A
(4). Other debt investments actually written off during the period
□ Applicable √ N/A
Write-off of significant other debt investments during the period
□ Applicable √ N/A
Write-off description of other debt investments:
□ Applicable √ N/A
Other Notes:
□ Applicable √ N/A
16. Long-term receivables
(1). Long-term receivables
□ Applicable √ N/A
(2). Disclosure by bad debt accrual method
□ Applicable √ N/A
Individual provision for bad-debt reserves:
□ Applicable √ N/A
Explanation of individual provision for bad-debt reserves:
□ Applicable √ N/A
Provision for bad debts by portfolio:
□ Applicable √ N/A
(3). Provision for bad debts based on general model of expected credit losses.
□ Applicable √ N/A
Basis of classification of each stage and percentage of provision for bad debtsNoneExplanation of significant changes in the book balance of long-term receivables for which changes in theallowance for losses occurred during the period:
□ Applicable √ N/A
Amount of provision for bad debts for the current period and the basis adopted for assessing whether thereis a significant increase in the credit risk of financial instruments: □ Applicable √ Applicable
□ Applicable √ N/A
(4). Provision for bad debts
□ Applicable √ N/A
Of which the amount of bad debt provision recovery or reversal for the current period is significant:
□ Applicable √ N/A
Other Notes:
None
(5). Long-term receivables actually written off during the period
□ Applicable √ N/A
Write-off of significant long-term receivables
□ Applicable √ N/A
Description of long-term receivables written off:
□ Applicable √ N/A
Other Notes
□ Applicable √ N/A
17. Long-term equity investments
(1). Long-term equity investments
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Invested units | Opening balance | Additions to investments | Decrease in investments | Gains and losses on investments recognized under the equity method | Other comprehensive income adjustments | Change in equity | Declaration of cash dividends or profits | Provision for impairment | Others | Closing balance | Closing balance of provision for impairment |
| I. Joint ventures | |||||||||||
| Subtotal | |||||||||||
| II. Associated enterprises | |||||||||||
| Space Engineering Co., Ltd. | 1,400,678.86 | -17,876.38 | 25,391.77 | 1,408,194.25 | |||||||
| Daejin Road (Thailand) Co., Ltd. | 455,202.28 | -6,576 .44 | 16,576.61 | 465,202.45 | |||||||
| DJR (Thailand) Co., Ltd. | 458,291.82 | -9,930.41 | 10,264.29 | 458,625.70 | |||||||
| Subtotal | 2,314,172.96 | -34,383.24 | 52,232.67 | 2,332,022.40 | |||||||
| Total | 2,314,172.96 | -34,383.24 | 52,232.67 | 2,332,022.40 | |||||||
(2). Impairment testing of long-term equity investments
□ Applicable √ N/A
18. Investments in other equity instruments
(1). Investments in other equity instruments
□ Applicable √ N/A
(2). Description of derecognition during the period
□ Applicable √ N/A
Other Notes:
□ Applicable √ N/A
19. Other non-current financial assets
□ Applicable √ N/A
Other Notes:
□ Applicable √ N/A
20. Investment properties
Measurement model of investment properties
(1). Investment properties measured at cost
Unit: Yuan Currency: RMB
| Item | House and buildings | Land use rights | Construction in progress | Total |
| I. Original carrying amount | ||||
| 1. Opening balance | 2,100,240.00 | 727,500.00 | 2,827,740.00 | |
| 2. Increase during the period | ||||
| (1) Purchases | ||||
| (2) Transfer from inventories/fixed assets/construction in progress | ||||
| (3) Increase from business combination | ||||
| 3. Decrease during the period | ||||
| (1) Disposals | ||||
| (2) Other transfers out | ||||
| 4. Closing balance | 2,100,240.00 | 727,500.00 | 2,827,740.00 | |
| II. Accumulated depreciation and accumulated amortization | ||||
| 1. Opening balance | 1,748,449.80 | 366,224.52 | 2,114,674.32 | |
| 2. Increase during the period | 94,510.80 | 19,795.92 | 114,306.72 | |
| (1) Provision or amortization | 94,510.80 | 19,795.92 | 114,306.72 | |
| 3. Decrease during the period | ||||
| (1) Disposals | ||||
| (2) Other transfers out | ||||
| 4. Closing balance | 1,842,960.60 | 386,020.44 | 2,228,981.04 | |
| III. Provision for impairment | ||||
| 1. Opening balance | ||||
| 2. Increase during the period | ||||
| (1) Provision | ||||
| 3. Decrease during the period | ||||
| (1) Disposals | ||||
| (2) Other transfers out | ||||
| 4. Closing balance | ||||
| IV. Carrying amount | ||||
| 1. Closing book balance | 257,279.40 | 341,479.56 | 598,758.96 | |
| 2. Opening book balance | 351,790.20 | 361,275.48 | 713,065.68 | |
(2). Status of investment properties for which title certificates have not been completed
□ Applicable √ N/A
(3). Impairment testing of investment properties using the cost measurement model
□ Applicable √ N/A
Other Notes
□ Applicable √ N/A
21. Fixed assets
Item presentation
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Fixed assets | 38,895,511.08 | 40,095,530.47 |
| Fixed assets liquidation | ||
| Total | 38,895,511.08 | 40,095,530.47 |
Other Notes:
□ Applicable √ N/A
Fixed assets
(1). Status of fixed assets
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Houses and buildings | Machinery and equipment | Transportation tools | Office and electronic equipment | Total |
| I. Original carrying amount: | |||||
| 1. Opening balance | 50,876,894.86 | 3,933,377.70 | 3,239,548.25 | 58,049,820.81 | |
| 2. Increase during the period | -481.64 | 1,731,906.74 | 946,719.99 | 2,678,145.09 | |
| (1) Acquisitions | 1,728,175.61 | 931,372.74 | 2,659,548.35 | ||
| (2) Transfer from construction in progress | |||||
| (3) Increase from business combination | |||||
| (4) Effect of changes in exchange rates | -481.64 | 3,731.13 | 15,347.25 | 18,596.74 | |
| 3. Decrease during the period | 470,995.17 | 131,157.31 | 602,152.48 | ||
| (1) Disposal or retirement | 470,995.17 | 131,157.31 | 602,152.48 | ||
| 4. Closing balance | 50,876,413.22 | 5,194,289.27 | 4,055,110.93 | 60,125,813.42 | |
| II. Accumulated depreciation | |||||
| 1. Opening balance | 13,010,625.62 | 2,905,711.60 | 2,037,953.12 | 17,954,290.34 | |
| 2. Increase during the period | 3,110,908.98 | 355,573.33 | 382,887.58 | 3,849,369.89 | |
| (1) Provision | 3,111,237.37 | 347,698.94 | 371,622.41 | 3,830,558.72 | |
| (2) Exchange rate changes | -328.39 | 7,874.39 | 11,265.17 | 18,811.17 | |
| 3. Decrease during the period | 447,445.45 | 125,912.44 | 573,357.89 | ||
| (1) Disposal or retirement | 447,445.45 | 125,912.44 | 573,357.89 | ||
| 4. Closing balance | 16,121,534.60 | 2,813,839.48 | 2,294,928.26 | 21,230,302.34 | |
| III. Provision for impairment | |||||
| 1. Opening balance | |||||
| 2. Increase during the period | |||||
| (1) Provision | |||||
| 3. Decrease during the period | |||||
| (1) Disposal or retirement | |||||
| 4. Closing balance | |||||
| IV.Carrying amount | |||||
| 1. Closing carrying amount | 34,754,878.62 | 2,380,449.79 | 1,760,182.67 | 38,895,511.08 | |
| 2. Opening carrying amount | 37,866,269.24 | 1,027,666.10 | 1,201,595.13 | 40,095,530.47 | |
(2). Temporarily idle fixed assets
□ Applicable √ N/A
(3). Fixed assets leased out under operating leases
□ Applicable √ N/A
(4). Fixed assets for which title certificates have not been issued
□ Applicable √ N/A
(5). Impairment test of fixed assets
□ Applicable √ N/A
Other Notes:
□ Applicable √ N/A
Liquidation of fixed assets
□ Applicable √ N/A
22. Construction in progress
Project presentation
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Project | Closing balance | Opening balance |
| Building renovation | 13,103,863.94 | |
| Project materials | ||
| Total | 13,103,863.94 |
Other Notes:
□ Applicable √ N/A
Construction in progress
(1). Status of construction in progress
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Impairment allowance | Carrying amount | Book balance | Impairment allowance | Carrying amount | |
| Building renovation | 13,103,863.94 | 13,103,863.94 | ||||
| Total | 13,103,863.94 | 13,103,863.94 | ||||
(2). Changes in significant construction-in-progress items during the period
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item name | Budgeted amount | Opening balance | Increase during the period | Amount transferred to fixed assets during the period | Other decreases during the period | Closing balance | Cumulative investment in construction as a percentage of budget (%) | Progress of construction | Accumulated interest capitalization | Of which Amount of interest capitalized for the period | Current interest capitalization rate (%) | Source of funds |
| Building renovation | 13,103,863.94 | 13,103,863.94 | ||||||||||
| Total | 13,103,863.94 | 13,103,863.94 | / | / | / | / |
(3). Provision for impairment of construction in progress for the current period
□ Applicable √ N/A
(4). Impairment test of construction in progress
□ Applicable √ N/A
Other Notes
□ Applicable √ N/A
Construction materials
(1). Construction materials
□ Applicable √ N/A
23. Productive biological assets
(1). Productive biological assets measured at cost
□ Applicable √ N/A
(2). Impairment testing of producing biological assets measured at cost
□ Applicable √ N/A
(3). Adoption of the fair value measurement model for productive biological assets
□ Applicable √ N/A
Other Notes
□ Applicable √ N/A
24. Oil and gas assets
(1) Oil and gas assets
□ Applicable √ N/A
(2) Impairment testing of oil and gas assets
□ Applicable √ N/A
Other Notes:
None
25. Right-of-use assets
(1) Right-of-use assets
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Lease of buildings | Means of transportation | Total |
| I. Original carrying amount | |||
| 1. Opening balance | 3,060,288.15 | 3,832,970.27 | 6,893,258.42 |
| 2. Increase during the period | 689,649.57 | 766,626.42 | 1,456,275.99 |
| (1) Leased-in | 908,625.63 | 766,626.42 | 1,675,252.05 |
| (2) Effect of exchange rate changes | -218,976.06 | -218,976.06 | |
| 3. Decrease during the period | 1,048,619.28 | 332,268.40 | 1,380,887.68 |
| (1) Disposals | 1,048,619.28 | 332,268.40 | 1,380,887.68 |
| 4. Closing balance | 2,701,318.44 | 4,267,328.29 | 6,968,646.73 |
| II. Accumulated depreciation | |||
| 1. Opening balance | 1,148,312.66 | 1,072,568.16 | 2,220,880.82 |
| 2. Increase during the period | 1,117,792.92 | 1,050,032.47 | 2,167,825.39 |
| (1)Provision expenses | 1,109,254.39 | 1,050,032.47 | 2,159,286.86 |
| (2) Effect of exchange rate changes | 8,538.53 | 8,538.53 | |
| 3. Decrease during the period | 953,568.24 | 306,723.64 | 1,260,291.88 |
| (1) Disposal | 953,568.24 | 306,723.64 | 1,260,291.88 |
| 4. Closing balance | 1,312,537.34 | 1,815,876.99 | 3,128,414.33 |
| III. Provision for impairment | |||
| 1. Opening balance | |||
| 2. Increase during the period | |||
| (1)Provision | |||
| 3. Decrease during the period | |||
| (1)Disposal | |||
| 4. Closing balance | |||
| IV.Carrying amount | |||
| 1. Closing carrying amount | 1,388,781.10 | 2,451,451.30 | 3,840,232.40 |
| 2. Opening carrying amount | 1,911,975.49 | 2,760,402.11 | 4,672,377.60 |
26. Intangible assets
(1). Intangible assets
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Land use right | Patents | Non-patented technology | Computer Software | Total |
| I. Original carrying amount | |||||
| 1. Opening balance | 8,240,016.48 | 3,295,603.49 | 11,535,619.97 | ||
| 2. Increase during the period | 232,329.31 | 232,329.31 | |||
| (1) Acquisition | 232,901.11 | 232,901.11 | |||
| (2) Internal R&D | |||||
| (3) Increase in business combination | |||||
| (4) Effect of exchange rate changes | -571.80 | -571.80 | |||
| 3. Decrease during the period | 420,501.75 | 420,501.75 | |||
| (1) Disposal | 420,501.75 | 420,501.75 | |||
| 4. Closing balance | 8,240,016.48 | 3,107,431.05 | 11,347,447.53 | ||
| II. Accumulated amortization | |||||
| 1. Opening balance | 1,977,603.83 | 2,131,168.60 | 4,108,772.43 | ||
| 2. Increase during the period | 164,800.32 | 201,973.94 | 366,774.26 | ||
| (1) Provision | 164,800.32 | 202,337.39 | 367,137.71 | ||
| (2) Effect of exchange rate changes | -363.45 | -363.45 | |||
| 3. Decrease during the period Amount | 372,575.10 | 372,575.10 | |||
| (1) Disposal | 372,575.10 | 372,575.10 | |||
| 4. Closing balance | 2,142,404.15 | 1,960,567.44 | 4,102,971.59 | ||
| III. Provision for impairment | |||||
| 1. Opening balance | |||||
| 2. Increase during the period | |||||
| (1) Provision | |||||
| 3. Decrease during the period | |||||
| (1) Disposal | |||||
| 4. Closing balance | |||||
| IV.Carrying amount | |||||
| 1. Closing carrying amount | 6,097,612.33 | 1,146,863.61 | 7,244,475.94 | ||
| 2. Opening carrying amount | 6,262,412.65 | 1,164,434.89 | 7,426,847.54 |
The proportion of intangible assets formed through in-house R&D to the balance of intangible assets at theend of the period was 0
(2). Land use rights for which title certificates have not been issued
□ Applicable √ N/A
(3). Impairment testing of intangible assets
□ Applicable √ N/A
Other Notes:
□ Applicable √ N/A
27. Goodwill
(1). Original carrying amount of goodwill
□ Applicable √ N/A
(2). Provision for impairment of goodwill
□ Applicable √ N/A
(3). Information about the asset group or portfolio of asset groups in which goodwill is located
□ Applicable √ N/A
Changes in the asset group or portfolio of asset groups
□ Applicable √ N/A
Other Notes
□ Applicable √ N/A
(4). Specific method of determining recoverable amount
Recoverable amount is determined as the net fair value less disposal costs.
□ Applicable √ N/A
The recoverable amount is determined by the present value of estimated future cash flows.
□ Applicable √ N/A
Reasons for the differences between the aforementioned information and the information used in theimpairment test in previous years or external information that is obviously inconsistent
□ Applicable √ N/A
Reasons for differences between the information used in the Company's impairment tests in previous yearsand the actual situation in the current year that are clearly inconsistent with each other
□ Applicable √ N/A
(5). Performance commitments and corresponding goodwill impairment
Performance commitments existed at the time of the formation of goodwill and the reporting period or theprevious period of the reporting period was within the performance commitment period.
□ Applicable √ N/A
Other Notes
□ Applicable √ N/A
28. Long-term amortized expenses
□ Applicable √ N/A
29. Deferred tax assets/deferred tax liabilities
(1). Deferred tax assets not offset
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance | ||
| Deductible temporary differences | Deferred tax assets | Deductible temporary differences | Deferred tax assets | |
| Impairment of inventories and contract assets | 3,000,261.88 | 496,879.59 | 4,758,372.31 | 1,175,996.87 |
| Provision for bad debts | 34,632,148.22 | 5,400,864.80 | 34,172,067.71 | 8,495,456.50 |
| Temporary estimates payable | 22,714,306.71 | 3,609,868.30 | 8,417,815.53 | 2,005,783.48 |
| Projected liabilities | 9,958,724.77 | 1,684,113.93 | 9,238,016.80 | 2,257,312.81 |
| Other | 7,837,194.08 | 1,290,890.19 | 2,688,636.11 | 1,779,847.56 |
| Total | 78,142,635.66 | 12,482,616.81 | 59,274,908.46 | 15,714,397.22 |
(2). Deferred tax liabilities without offset
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance | ||
| Taxable temporary differences | Deferred tax liabilities | Taxable temporary differences | Deferred tax liabilities | |
| Withholding tax on available-for-distribution dividends from foreign subsidiaries (10%) | 105,783,050.10 | 10,578,305.01 | 48,926,323.23 | 4,892,632.32 |
| Impact of right-of-use assets | 3,622,303.82 | 601,888.20 | 5,266,614.36 | 1,316,653.59 |
| Others | 16,582,944.76 | 3,316,588.94 | ||
| Total | 125,988,298.68 | 14,496,782.15 | 54,192,937.59 | 6,209,285.91 |
(3). Deferred tax assets or liabilities presented at net amount after offsetting
□ Applicable √ N/A
(4). Details of unrecognized deferred tax assets
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Deductible loss | 7,336,823.06 | 5,528,691.16 |
| Provision for bad debts | 3,964,844.58 | 3,126.73 |
| Others | 1,471,221.79 | |
| Total | 12,772,889.43 | 5,531,817.89 |
(5). The deductible losses for which no deferred tax assets have been recognized will expire in thefollowing years
□ Applicable √ N/A
Other Notes:
√ Applicable □ N/A
Details of unrecognized deferred tax liabilities
Unit: Yuan Currency: RMB
| Item | Balance at the end of the year | Balance at the beginning of the year |
| Effect of right-of-use assets | 44,373.87 | |
| Total | 44,373.87 |
30. Other non-current assets
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Warranty receivables | 35,990,599.29 | 1,146,648.58 | 34,843,950.71 | 17,938,200.11 | 589,541.24 | 17,348,658.87 |
| Total | 35,990,599.29 | 1,146,648.58 | 34,843,950.71 | 17,938,200.11 | 589,541.24 | 17,348,658.87 |
Other Notes: None
31. Assets with restricted ownership or right to use
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | End of period | Beginning of the period | ||||||
| Book balance | Carrying amount | Type of restriction | Restricted | Book balance | Carrying amount | Type of restriction | Restricted | |
| Currency funds | 12,499,607.35 | 12,499,607.35 | Other | Margin Restricted | 7,895,104.70 | 7,895,104.70 | Others | Margin Restricted |
| Bills receivable | ||||||||
| Inventories | ||||||||
| Fixed assets | ||||||||
| Intangible assets | ||||||||
| Total | 12,499,607.35 | 12,499,607.35 | / | / | 7,895,104.70 | 7,895,104.70 | / | / |
Other Notes: None
32. Short-term loans
(1). Classification of short-term loans
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Pledged loans | ||
| Mortgage loans | ||
| Guarantee | ||
| Credit loans | 31,249,307.82 | |
| Total | 31,249,307.82 |
Note on classification of short-term borrowings:
As at December 31, 2022, the credit borrowings were from the Group's subsidiary, Acter(Thailand), which obtained a loan of RMB 6,042,660.00 from Mega Bank, with a term of December 14,2022 to June 12, 2023, and an interest rate of 3.34%; from the Group's subsidiary, Acter (Hong Kong),which obtained a loan of RMB 11,143,360.00 from Standard Chartered Bank, with a term of December5, 2022 to March 31, 2023, with a borrowing rate of 5.71%; a loan of RMB 13,929,200.00 obtainedfrom Taishin Bank by Acter (Hong Kong), a subsidiary of the Group, with a borrowing period fromNovember 25, 2022 to February 24, 2023, with a borrowing rate of 5.93%; and interest payable on theborrowings of RMB 134,087.82.
(2). Overdue short-term loans
□ Applicable √ N/A
Significant overdue short-term loans are summarized as follows:
□ Applicable √ N/A
Other Notes
□ Applicable √ N/A
33. Financial liabilities held for trading
□ Applicable √ N/A
Other Notes:
□ Applicable √ N/A
34. Derivative financial liabilities
□ Applicable √ N/A
35. Notes payable
(1). Presentation of notes payable
□ Applicable √ N/A
36. Accounts payable
(1). Presentation of accounts payable
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Project payment | 363,178,797.70 | 358,206,456.14 |
| Retention money | 266,678,519.63 | 231,347,025.54 |
| Other | 366,196.58 | |
| Total | 629,857,317.33 | 589,919,678.26 |
(2). Significant accounts payable aged over 1 year or overdue
□ Applicable √ N/A
Other notes
□ Applicable √ N/A
37. Receipts in advance
(1). Presentation of accounts receivable in advance
□ Applicable √ N/A
(2). Significant receipts in advance with an age of more than 1 year
□ Applicable √ N/A
(3). Amounts and reasons for significant changes in carrying amount during the reporting period
□ Applicable √ N/A
Other Notes
□ Applicable √ N/A
38. Contract liabilities
(1). Contract liabilities
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Settled uncompleted works | 73,351,891.04 | 74,584,070.11 |
| Total | 73,351,891.04 | 74,584,070.11 |
(2). Significant contract liabilities aged over 1 year
□ Applicable √ N/A
(3). Amounts and reasons for significant changes in carrying amount during the reporting period
□ Applicable √ N/A
Other Notes:
□ Applicable √ N/A
39. Remuneration payable to employees
(1). Presentation of remuneration payable to employees
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Opening balance | Increase during the period | Decrease during the period | Exchange rate change | Closing balance |
| I. Short-term remuneration | 39,456,513 .03 | 130,512,56 8.47 | 122,546,19 6.01 | 36,785.38 | 47,459,670 .87 |
| II. Post-employment benefits - defined contribution plan | 7,784,980. 74 | 7,784,980. 74 | |||
| III. Severance benefits | |||||
| IV. Other benefits due within one year | |||||
| Total | 39,456,513 .03 | 138,297,54 9.21 | 130,331,17 6.75 | 36,785.38 | 47,459,670 .87 |
(2). Presentation of short-term remuneration
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Opening balance | Increase during the period | Decrease during the period | Exchange rate change | Closing balance |
| I. Salaries, bonuses, allowances and subsidies | 39,274,134.14 | 118,821,168.83 | 110,868,746.33 | 36,785.38 | 47,263,342.02 |
| II. Employee benefit expenses | 3,945,749.79 | 3,945,749.79 | |||
| Social insurance premiums | 3,291,802.84 | 3,291,802.84 | |||
| Of which: Medical insurance premiums | 2,822,875.14 | 2,822,875.14 | |||
| Workers' remuneration insurance premiums | 186,691.33 | 186,691.33 | |||
| Maternity insurance premiums | 282,236.37 | 282,236.37 | |||
| IV. Housing provident fund | 3,274,142.08 | 3,274,142.08 | |||
| V. Labor Union Funds and Employee Education Funds | 182,378.89 | 1,179,704.93 | 1,165,754.97 | 196,328.85 | |
| VI. Short-term compensated absences | |||||
| VII. Short-term profit-sharing plan | |||||
| Total | 39,456,513.03 | 130,512,568.47 | 122,546,196.01 | 36,785.38 | 47,459,670.87 |
(3). Presentation of defined contribution plan
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Opening balance | Increase during the period | Decrease during the period | Closing balance |
| 1. Basic pension insurance | 7,439,902.65 | 7,439,902.65 | ||
| 2. Unemployment insurance premiums | 345,078.09 | 345,078.09 | ||
| 3. Contributions to enterprise annuities | ||||
| Total | 7,784,980.74 | 7,784,980.74 |
Other Notes:
□ Applicable √ N/A
40. Taxes payable
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Value-added tax | 270,840.93 | 1,119,487.19 |
| Consumption tax |
| Business tax | ||
| Enterprise income tax | 6,389,822.94 | 4,562,991.40 |
| Individual income tax | 655,878.76 | 460,166.81 |
| Urban maintenance and construction tax | ||
| Land use tax and property tax | 267,327.15 | 88,658.49 |
| Stamp duty | 228,144.04 | 415,197.13 |
| Other | 168,735.21 | 683,578.20 |
| Total | 7,980,749.03 | 7,330,079.22 |
Other Notes:
None
41. Other payables
(1). Item presentation
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Interest payable | ||
| Dividend payable | ||
| Other payables | 25,427,208.65 | 1,611,097.74 |
| Total | 25,427,208.65 | 1,611,097.74 |
Other Notes:
□ Applicable √ N/A
(2). Interest payable
Presented by category
□ Applicable √ N/A
Significant overdue interest payable:
□ Applicable √ N/A
Other Notes:
□ Applicable √ N/A
(3). Dividends payable
Classification
□ Applicable √ N/A
(4). Other payables
Other payables by nature
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Current account | 22,861,444.25 | |
| Intermediary service fee | 1,958,733.39 | 1,225,440.51 |
| Provisions and deposits | 48,370.56 | 94,815.84 |
| Others | 558,660.45 | 290,841.39 |
| Total | 25,427,208.65 | 1,611,097.74 |
Significant other payables aged over 1 year or overdue
□ Applicable √ N/A
Other Notes:
□ Applicable √ N/A
42. Liabilities held for sale
□ Applicable √ N/A
43. Non-current liabilities due within 1 year
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Long-term loans due within 1 year | ||
| Bonds payable due within 1 year | ||
| Long-term payables due within 1 year | ||
| Lease liabilities due within 1 year | 1,748,003.79 | 1,710,381.30 |
| Total | 1,748,003.79 | 1,710,381.30 |
Other Notes:
None
44. Other current liabilities
Other current liabilities
□ Applicable √ N/A
Increase or decrease in short-term bonds payable:
□ Applicable √ N/A
Other Notes:
□ Applicable √ N/A
45. Long-term loans
(1). Classification of long-term loans
□ Applicable √ N/A
Other Notes:
□ Applicable √ N/A
46. Bonds payable
(1). Bonds payable
□ Applicable √ N/A
(2). Details of bonds payable: (excluding other financial instruments such as preferred stock andperpetual bonds classified as financial liabilities)
□ Applicable √ N/A
(3). Description of convertible corporate bonds
□ Applicable √ N/A
Accounting treatment and judgmental basis for conversion
□ Applicable √ N/A
(4). Description of other financial instruments classified as financial liabilitiesBasic information on other financial instruments such as preferred stock and perpetual bonds issued at theend of the period
□ Applicable √ N/A
Statement of changes in preferred stock, perpetual bonds and other financial instruments issued andoutstanding at the end of the period
□ Applicable √ N/A
Explanation of the basis for classifying other financial instruments as financial liabilities:
□ Applicable √ N/A
Other Notes:
□ Applicable √ N/A
47. Lease liabilities
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Lease liabilities | 2,150,631.55 | 3,151,902.66 |
| Total | 2,150,631.55 | 3,151,902.66 |
Other Notes: None
48. Long-term accounts payable
Item presentation
□ Applicable √ N/A
Other Notes:
□ Applicable √ N/A
Long-term accounts payable
(1). Presentation of long-term payables by nature of payment
□ Applicable √ N/A
Specialized payables
(1). Specialized payables by nature of payment
□ Applicable √ N/A
49. Long-term employee remuneration payable
√ Applicable □ N/A
(1). Table of long-term employee remuneration payable
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| I. Post-employment benefits - net liability for defined benefit plans | 632,325.46 | 610,379.24 |
| II. Termination benefits | ||
| III. Other long-term benefits | ||
| Total | 632,325.46 | 610,379.24 |
(2). Changes in defined benefit plans
Present value of defined benefit plan obligations:
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Amount in the current period | Amount in the prior period |
| I. Opening balance | 610,379.24 | 612,161.00 |
| II. Defined benefit costs recognized in profit or loss for the period | ||
| 1. Current service cost | ||
| 2. Past service costs | ||
| 3. Settlement gain (loss expressed as "-") | ||
| 4. Net interest | ||
| Defined benefit cost charged to other comprehensive income | ||
| 1. Actuarial gain (loss expressed as "-") | ||
| IV. Other changes | 21,946.22 | -1,781.76 |
| 1.Consideration paid upon settlement | ||
| 2.Benefits paid | ||
| 3.Translation differences on foreign currency statements | 21,946.22 | -1,781.76 |
| V. Closing balance | 632,325.46 | 610,379.24 |
Plan assets:
□ Applicable √ N/A
Net liabilities (net assets) of defined benefit plans
□ Applicable √ N/A
Description of the content of the defined benefit plan and the risks associated with it, the impact on thecompany's future cash flows, timing and uncertainty:
□ Applicable √ N/A
Description of significant actuarial assumptions and sensitivity analysis results for defined benefit plans
□ Applicable √ N/A
Other Notes:
□ Applicable √ N/A
50. Projected liabilities
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Opening balance | Closing balance | Reason |
| Guarantees provided to external parties | |||
| Pending litigation |
| Product quality guarantee | 9,067,741.80 | 11,090,966.30 | Provision for quality costs related to the possibility of quality problems during the warranty period of the project |
| Restructuring obligations | |||
| Loss-making contracts pending execution | 170,275.00 | 201,881.61 | |
| Returns payable | |||
| Other | |||
| Total | 9,238,016.80 | 11,292,847.91 | / |
Other notes, including notes on significant assumptions, estimates related to significant projected liabilities:
None
51. Deferred income
Deferred income
□ Applicable √ N/A
Other Notes:
□ Applicable √ N/A
52. Other non-current liabilities
□ Applicable √ N/A
53. Share capital
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Opening balance | Increase/decrease of the current change (+, -) | Closing balance | |||||
| Issue of new shares | Sent Shares | Conversion | Others | Subtotal | |||
| Total number of shares | 80,000,000.00 | 20,000,000.00 | 20,000,000.00 | 100,000,000.00 | |||
Other Notes:
Pursuant to the resolution of the 2022 annual general meeting held on April 28, 2023, the Companypaid a cash dividend of RMB 0.8125 per share (inclusive of tax) to all shareholders on the basis of the totalshare capital of 80,000,000.00 shares as at June 14, 2023, and transferred 0.25 shares to all shareholders byway of capital reserve to increase the share capital by a total of 20,000,000.00 shares with par value of RMB1 per share, increasing the share capital by RMB 20,000,000.00 in total.
54. Other equity instruments
(1). Basic information on other financial instruments such as preferred stock and perpetual bondsissued and outstanding at the end of the period
□ Applicable √ N/A
(2). Statement of changes in preferred stock, perpetual bonds and other financial instruments issuedand outstanding at the end of the period
□ Applicable √ N/A
Changes in other equity instruments during the period, explanation of the reasons for such changes, and thebasis for related accounting treatment:
□ Applicable √ N/A
Other Notes:
□ Applicable √ N/A
55. Capital surplus
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Opening balance | Increase during the period | Decrease during the period | Closing balance |
| Capital premium (equity premium) | 550,250,969.12 | 20,000,000.00 | 530,250,969.12 | |
| Other capital surplus | 32,381,806.33 | 32,381,806.33 | ||
| Total | 582,632,775.45 | 20,000,000.00 | 562,632,775.45 |
Other notes, including the increase or decrease of changes during the period and the reasons for the changes:
None
56. Treasury stock
□ Applicable √ N/A
57. Other comprehensive income
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Opening balance | Amount in the current period | Closing balance | |||||
| Current income tax incurred before | Less: Transfer to profit or loss for the period from prior period to other comprehensive income | Less: Prior period charge to other comprehensive income Current period transfer to retained earnings | Less: Income tax expense | Attributable to parent company after tax | Attributable to minority shareholders after tax | |||
| I.Other comprehensive income not reclassifiable to profit or loss | -151,009.79 | -151,009.79 | ||||||
| Of which: Remeasurement of changes in defined benefit plans | -151,009.79 | -151,009.79 | ||||||
| Other comprehensive income not transferable to profit or loss under the equity method | ||||||||
| Changes in fair value of investments in other equity instruments | ||||||||
| Changes in fair value of the enterprise's own credit risk | ||||||||
| II.Other comprehensive income to be reclassified to profit or loss | 3,178,870.67 | 290,286.73 | 290,286.73 | 3,469,157.40 | ||||
| Of which: Other comprehensive income available for transfer to profit or loss under the equity method | ||||||||
| Changes in fair value of other debt investments | ||||||||
| Amounts reclassified from financial assets to other comprehensive income | ||||||||
| Provision for credit impairment of other debt investments | ||||||||
| Cash flow hedge reserve | ||||||||
| Difference in translation of foreign currency financial statements | 3,178,870.67 | 290,286.73 | 290,286.73 | 3,469,157.40 | ||||
| Other comprehensive income | 3,027,860.88 | 290,286.73 | 290,286.73 | 3,318,147.61 |
Other notes, including adjustments to the effective portion of cash flow hedge gains and losses transferredto the initial recognized amount of the hedged item:
None
58. Earmarked reserves
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Opening balance | Increase during the period | Decrease during the period | Closing balance |
| Safety production fee | 45,372,652.93 | 793,803.41 | 44,578,849.52 | |
| Total | 45,372,652.93 | 793,803.41 | 44,578,849.52 |
Other notes, including changes during the period and the reasons for such changes:
None
59. Surplus reserves
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Opening balance | Increase during the period | Decrease during the period | Closing balance |
| Legal surplus reserves | 28,443,197.81 | 11,058,103.57 | 39,501,301.38 | |
| Discretionary surplus reserves | ||||
| Reserve Fund | ||||
| Enterprise Development Fund | ||||
| Others | ||||
| Total | 28,443,197.81 | 11,058,103.57 | 39,501,301.38 |
Explanation of surplus reserves, including the increase or decrease during the period and the reasons for thechange:
None
60. Undistributed profits
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Current period | Previous period |
| Undistributed profit at the end of the previous period before adjustment | 269,871,786.54 | 185,764,628.31 |
| Total undistributed profits at the beginning of the period before adjustment (increase +, decrease -) | -177,717.08 | |
| Undistributed profit at the beginning of the period after adjustment | 269,694,069.46 | 185,764,628.31 |
| Add: Net profit attributable to owners of the parent company for the period | 138,590,474.42 | 122,867,982.79 |
| Less: Withdrawal of legal surplus reserves | 11,058,103.57 | 8,760,824.56 |
| Withdrawal of discretionary surplus reserves | ||
| Provision for general risk | ||
| Dividends payable on ordinary shares | 65,000,000.00 | 30,000,000.00 |
| Dividends on ordinary shares transferred to capital | ||
| Undistributed profit at the end of the period | 332,226,440.31 | 269,871,786.54 |
Adjustment of the breakdown of undistributed profit at the beginning of the period:
1. Due to the retrospective adjustment of the ASBE and its related new regulations, the impact on theundistributed profit at the beginning of the period was RMB 0.
2. Due to the change of accounting policy, it affected the undistributed profit at the beginning of the periodby RMB 177,717.08.
3. Due to the correction of significant accounting errors, the impact on the undistributed profit at thebeginning of the period was RMB 0.
4. Due to the change of the scope of consolidation caused by the same control, the impact on the undistributedprofit at the beginning of the period is RMB 0.
5. Other adjustments affecting the undistributed profit at the beginning of the period by RMB 0.
61. Operating revenues and operating costs
(1). Operating revenue and operating costs
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Amount in the current period | Amount in the prior period | ||
| Revenue | Cost | Revenue | Cost | |
| Main businesses | 2,006,059,659.50 | 1,738,726,934.75 | 1,625,862,604.38 | 1,376,414,118.45 |
| Other businesses | 2,865,336.18 | 114,306.72 | 2,032,516.11 | 114,306.72 |
| Total | 2,008,924,995.68 | 1,738,841,241.47 | 1,627,895,120.49 | 1,376,528,425.17 |
(2). Breakdown information of operating revenues and operating costs
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Contract classification | The Group | Total | ||
| Operating revenue | Operating costs | Operating revenue | Operating costs | |
| Commodity Type | ||||
| Clean room engineering | 1,718,207,574.41 | 1,497,267,444.29 | 1,718,207,574.41 | 1,497,267,444.29 |
| Other mechanical and electrical installation works | 276,230,223.29 | 232,095,004.42 | 276,230,223.29 | 232,095,004.42 |
| Equipment sales | 11,621,861.80 | 9,364,486.04 | 11,621,861.80 | 9,364,486.04 |
| Other business | 2,865,336.18 | 114,306.72 | 2,865,336.18 | 114,306.72 |
| By region of operation | ||||
| Domestic | 1,573,087,402.75 | 1,388,054,061.99 | 1,573,087,402.75 | 1,388,054,061.99 |
| Overseas | 435,837,592.93 | 350,787,179.48 | 435,837,592.93 | 350,787,179.48 |
| Type of market or client | ||||
| IC Semiconductor Industry | 1,345,947,194.70 | 1,203,919,098.11 | 1,345,947,194.70 | 1,203,919,098.11 |
| Precision manufacturing industry | 480,697,188.05 | 392,693,935.54 | 480,697,188.05 | 392,693,935.54 |
| Photoelectricity industry | 101,391,692.37 | 80,642,910.19 | 101,391,692.37 | 80,642,910.19 |
| Other industries | 78,023,584.38 | 61,470,990.91 | 78,023,584.38 | 61,470,990.91 |
| Other business | 2,865,336.18 | 114,306.72 | 2,865,336.18 | 114,306.72 |
| Contract type | ||||
| Sale of goods | 11,621,861.80 | 9,370,142.00 | 11,621,861.80 | 9,370,142.00 |
| Construction contracts | 1,994,437,797.70 | 1,729,356,792.75 | 1,994,437,797.70 | 1,729,356,792.75 |
| Other business | 2,865,336.18 | 114,306.72 | 2,865,336.18 | 114,306.72 |
| Classification by timing of merchandise transfers | ||||
| Revenue recognized at a certain point in time | 11,621,861.80 | 9,370,142.00 | 11,621,861.80 | 9,370,142.00 |
| Revenue recognized at a certain point in time | 1,997,303,133.88 | 1,729,471,099.47 | 1,997,303,133.88 | 1,729,471,099.47 |
| By contract term | ||||
| By sales channel | ||||
| Total | 2,008,924,995.68 | 1,738,841,241.47 | 2,008,924,995.68 | 1,738,841,241.47 |
Other notes
□ Applicable √ N/A
(3). Explanation of performance obligations
□ Applicable √ N/A
(4). Description of apportionment to remaining performance obligations
□ Applicable √ N/A
(5). Significant contract changes or significant transaction price adjustments
□ Applicable √ N/A
Other Notes:
None
62. Taxes and surcharges
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Amount in the current period | Amount in the prior period |
| Consumption tax | ||
| Business tax | ||
| City maintenance and construction tax | 1,644,807.62 | 1,296,253.31 |
| Education surcharge | 1,199,761.07 | 933,379.33 |
| Property tax | 659,319.31 | 581,245.38 |
| Land use tax | 26,056.03 | 25,967.04 |
| Stamp duty | 816,261.14 | 915,988.41 |
| Other | 24,334.01 | 47,217.65 |
| Total | 4,370,539.18 | 3,800,051.12 |
Other Notes:
None
63. Selling expenses
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Amount in the current period | Amount in the prior period |
| Employee remuneration | 6,176,464.47 | 5,431,574.82 |
| Business entertainment expenses | 784,591.27 | 303,643.60 |
| Depreciation and amortization | 77,044.96 | 87,886.96 |
| Other | 916,180.97 | 478,789.04 |
| Total | 7,954,281.67 | 6,301,894.42 |
Other Notes: None
64. Administrative expenses
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Amount in the current period | Amount in the prior period |
| Labor cost | 36,457,080.17 | 32,473,068.89 |
| Depreciation and amortization | 5,913,688.95 | 5,759,046.88 |
| Professional service fees | 4,964,367.06 | 5,273,900.72 |
| Travel expenses | 2,753,337.27 | 2,147,532.00 |
| Socialization expenses | 1,567,248.12 | 2,326,758.86 |
| Rental expenses | 903,690.44 | 645,800.74 |
| Office expenses | 362,790.44 | 332,943.04 |
| Share-based payment | 4,697,878.72 | |
| Others | 6,270,807.40 | 6,490,255.13 |
| Total | 59,193,009.85 | 60,147,184.98 |
Other Notes:
None
65. Research and development expenses
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Amount in the current period | Amount in the prior period |
| Labor cost | 14,071,064.42 | 10,198,979.02 |
| Material costs | 6,423,694.04 | 7,788,398.97 |
| Rental expenses | 290,827.94 | 225,077.63 |
| Depreciation and amortization | 153,397.80 | 119,197.95 |
| Other | 4,182,225.42 | 770,005.30 |
| Total | 25,121,209.62 | 19,101,658.87 |
Other Notes:
None
66. Finance costs
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Amount in the current period | Amount in the prior period |
| Interest expenses | 1,154,128.08 | 3,508,752.46 |
| Interest expense on lease liabilities | 206,792.88 | 184,254.10 |
| Less: Interest income | 6,309,355.80 | 1,787,232.96 |
| Add: Exchange loss (Less: gain) | -1,151,419.83 | 3,878,779.32 |
| Handling fee | 569,525.35 | 316,625.03 |
| Total | -5,530,329.32 | 6,101,177.95 |
Other Notes:
None
67. Other gains
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Classification by nature | Amount in the current period | Amount in the prior period |
| Government grants related to income | 3,731,552.00 | 3,524,827.14 |
| Total | 3,731,552.00 | 3,524,827.14 |
Other Notes:
None
68. Investment income
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Amount in the current period | Amount in the prior period |
| Income from long-term equity investments accounted for by the equity method | -334,383.24 | -87,072.51 |
| Investment income from disposal of long-term equity investments | ||
| Investment income during the holding period of financial assets for trading | ||
| Dividend income from other equity instruments during the holding period | ||
| Interest income earned on debt investments during the holding period | ||
| Interest income earned on other debt investments during the holding period | ||
| Investment income from disposal of financial assets held for trading | ||
| Investment income from disposal of other equity instruments | ||
| Investment income from disposal of debt investments | ||
| Investment income from disposal of other debt investments | ||
| Gain on debt restructuring | ||
| Gain on financial management | 1,996,177.68 | -12,256.43 |
| Total | 1,661,794.44 | -99,328.94 |
Other Notes:
None
69. Net open hedge gains
□ Applicable √ N/A
70. Gain on fair value changes
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Sources of gains from changes in fair value | Amount in the current period | Amount in the prior period |
| Financial assets held for trading | ||
| Of which: Gains from changes in fair value of derivative financial instruments | ||
| Financial liabilities for trading | ||
| Investment properties at fair value | ||
| Financial assets at fair value through profit or loss | -119,888.89 | 119,888.89 |
| Investment banking | -14,471.75 | |
| Total | -119,888.89 | 105,417.14 |
Other Notes: None
71. Credit impairment loss
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Amount in the current period | Amount in the prior period |
| Bad debt loss on bills receivable | 1,091,132.83 | |
| Bad debt loss on accounts receivable | 2,711,649.69 | 5,971,203.20 |
| Bad debt loss on other receivables | 57,851.33 | -165,726.35 |
| Impairment loss on debt investments | ||
| Impairment loss on other debt investments | ||
| Bad debt loss on long-term receivables | ||
| Impairment losses related to financial guarantees | ||
| Total | 3,860,633.85 | 5,805,476.85 |
Other Notes:
None
72. Impairment loss on assets
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Amount in the current period | Amount in the prior period |
| I. Impairment losses on contract assets | -1,705,623.60 | -4,974,523.57 |
| II.Impairment loss on inventories and contract performance cost | ||
| III.Impairment loss on long-term equity investments | ||
| IV.Impairment loss on investment properties | ||
| V.Impairment loss on fixed assets | ||
| VI.Impairment loss on construction materials | ||
| VII.Impairment loss on construction in progress | ||
| VIII.Impairment loss on productive biological assets | ||
| IX.Impairment loss on oil and gas assets | ||
| X.Impairment loss on intangible assets | ||
| XI.Impairment loss on goodwill | ||
| XII.Others | ||
| Impairment losses on other non-current assets | 557,144.69 | -1,004,046.84 |
| Total | -1,148,478.91 | -5,978,570.41 |
Other Notes:
None
73. Gain on disposal of assets
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Amount in the current period | Amount in the prior period |
| Gain on disposal of assets | 116,542.37 | 246,990.20 |
| Total | 116,542.37 | 246,990.20 |
Other Notes:
None
74. Non-operating revenue
Non-operating revenue
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Amount in the current period | Amount in the prior period | Amounts included in non-recurring gains and losses for the period |
| Total gain on disposal of non-current assets | |||
| Of which: Gain on disposal of fixed assets |
| Gain on disposal of intangible assets | |||
| Gain on exchange of non-monetary assets | |||
| Acceptance of donations | |||
| Government grants | |||
| Other | 14,361.33 | 75,601.66 | 14,361.33 |
| Total | 14,361.33 | 75,601.66 | 14,361.33 |
Other Notes:
□ Applicable √ N/A
75. Non-operating Expenses
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Amount in the current period | Amount in the prior period | Amounts included in non-recurring gains and losses for the period |
| Total loss on disposal of non-current assets | 63,978.14 | 9,411.87 | 63,978.14 |
| Of which: Loss on disposal of fixed assets | 63,978.14 | 9,411.87 | 63,978.14 |
| Loss on disposal of intangible assets | |||
| Loss on exchange of non-monetary assets | |||
| Foreign donations | 194,000.00 | 242,000.00 | 194,000.00 |
| Fines | 447,813.63 | 11,845.89 | 447,813.63 |
| Late Payment | 67,596.92 | 12,705.55 | 67,596.92 |
| Worker's remuneration | 458,500.00 | ||
| Others | 116,559.94 | 190,570.16 | 116,559.94 |
| Total | 889,948.63 | 925,033.47 | 889,948.63 |
Other Notes:
None
76. Income tax expense
(1). Schedule of income tax expense
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Amount in the current period | Amount in the prior period |
| Current income tax expense | 28,873,073.81 | 36,304,685.61 |
| Deferred tax expense | 11,840,385.09 | -307,429.70 |
| Total | 40,713,458.90 | 35,997,255.91 |
(2). Process of adjusting accounting profit and income tax expense
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Amount in the current period |
| Total profit | 180,777,300.89 |
| Income tax expense at statutory/applicable rates | 27,116,595.13 |
| Effect of different tax rates applied by subsidiaries | 3,994,328.62 |
| Effect of adjustments to prior periods' income tax | |
| Effect of non-taxable income | |
| Effect of non-deductible costs, expenses and losses | 3,533,749.83 |
| Effect of deductible losses on utilization of unrecognized deferred tax assets in prior period | |
| Effect of deductible temporary differences or deductible losses for which no deferred tax assets were recognized in the current period | 3,651,581.09 |
| Effect of tax rate differences on recognition of deferred tax assets and liabilities | 4,716,918.45 |
| Effect of additional deduction for research and development expenses | -3,357,544.72 |
| Withholding tax on available-for-distribution dividends of the Group's overseas subsidiaries | 1,057,830.50 |
| Income tax expense | 40,713,458.90 |
Other Notes:
□ Applicable √ N/A
77. Other comprehensive income
□ Applicable √ N/A
78. Cash flow statement items
(1). Cash related to operating activities
Other cash received relating to operating activities
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Amount in the current period | Amount in the prior period |
| Interest income on deposits | 6,309,355.80 | 1,787,232.96 |
| Recovery of currency funds with restricted use | 5,087,379.03 | 22,236,928.63 |
| Government subsidies | 3,731,552.00 | 3,524,827.14 |
| Rental income | 3,058,218.60 | 2,156,882.40 |
| Guarantee and deposit | 83,586.99 | 4,664,854.82 |
| Others | 290,371.68 | 65,941.17 |
| Total | 18,560,464.10 | 34,436,667.12 |
Description of other cash received related to operating activities:
NoneOther cash paid relating to operating activities
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Amount in the current period | Amount in the prior period |
| Transportation expenses, travel expenses, rental expenses, utilities, labor expenses, etc. paid | 15,159,502.69 | 17,098,345.14 |
| Transfers to currency funds with restricted use | 9,691,881.68 | 16,902,922.17 |
| Material consumption | 7,262,832.36 | 7,928,025.62 |
| Intermediary expenses | 5,801,003.15 | 5,875,804.33 |
| Late payment, fine, remuneration | 515,410.55 | 483,051.44 |
| Others | 5,536,582.02 | 1,355,833.11 |
| Total | 43,967,212.45 | 49,643,981.81 |
Description of other cash paid related to operating activities:
None
(2). Cash related to investing activities
Significant cash received related to investing activities
□ Applicable √ N/A
Significant cash paid in connection with investing activities
□ Applicable √ N/A
Other cash received related to investing activities
□ Applicable √ N/A
Other cash paid in relation to investment activities
□ Applicable √ N/A
(3). Cash related to financing activities
Other cash received relating to financing activities
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Amount in the current period | Amount in the prior period |
| Loan from Sheng Huei International | 22,605,625.00 | |
| Total | 22,605,625.00 |
Description of other cash received related to financing activities:
None
Other cash paid relating to financing activities
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Amount in the current period | Amount in the prior period |
| Payment of lease rent for right-of-use assets | 2,180,273.09 | 2,874,865.02 |
| Payment of listing fees | 19,997,010.06 | |
| Total | 2,180,273.09 | 22,871,875.08 |
Description of other cash paid related to financing activities:
NoneChanges in liabilities arising from financing activities
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Opening balance | Increase during the period | Decrease during the period | Closing balance | ||
| Cash movements | Non-cash movements | Cash movements | Non-cash movements | |||
| Minority interests | 4,040,494.34 | 2,114,535.07 | 1,552,518.98 | 7,707,548.39 | ||
| Short-term loans | 31,249,307.82 | 6,388,838.45 | 198,942.18 | 37,837,088.45 | ||
| Lease liabilities | ||||||
| Other payables - loans from related parties outside the consolidation | 22,605,625.00 | 255,819.25 | 22,861,444.25 | |||
| Interest payable | 1,094,012.34 | 1,094,012.34 | ||||
| Other payables - Dividend distribution | 65,000,000.00 | 65,000,000.00 | ||||
| Lease liabilities | 4,862,283.96 | 1,216,624.47 | 2,180,273.09 | 3,898,635.34 | ||
| Total | 40,152,086.12 | 31,108,998.52 | 69,317,917.22 | 106,111,373.88 | 34,467,627.98 | |
(4). Notes to the presentation of cash flows on a net basis
□ Applicable √ N/A
(5). Significant activities and financial effects that do not involve current cash receipts anddisbursements but affect the enterprise's financial position or may affect the enterprise's cashflows in the future
□ Applicable √ N/A
79. Supplementary information on cash flow statement
(1). Supplementary information on cash flow statement
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Supplementary information | Amount in the current period | Amoun in the prior period |
| 1. Reconciliation of net profit to cash flows from operating activities: | ||
| Net profit | 140,063,841.99 | 123,019,039.36 |
| Add: Provision for impairment of assets | -1,148,478.91 | -5,978,570.41 |
| Credit impairment loss | 3,860,633.85 | 5,805,476.85 |
| Accumulated depreciation of investment properties | 114,306.72 | 114,306.72 |
| Depreciation of fixed assets, depletion of oil and gas assets, depreciation of biological assets | 3,830,558.72 | 3,330,083.92 |
| Amortization of right-of-use assets | 2,159,286.86 | 2,330,203.36 |
| Amortization of intangible assets | 367,137.71 | 393,598.63 |
| Amortization of long-term amortized expenses | ||
| Loss on disposal of property, plant and equipment, intangible assets and other long-lived assets (Gain is recognized by "-" sign) | -116,542.37 | -246,990.20 |
| Loss on retirement of fixed assets (Gain is recognized by "-" sign) | 63,978.14 | 9,411.87 |
| Loss on change in fair value (Gain is recognized by "-" sign) | 119,888.89 | -105,417.14 |
| Finance costs (Gain is recognized by "-" sign) | 209,501.12 | 7,346,819.64 |
| Loss on investment (Gain is recognized by "-" sign) | -1,661,794.44 | 99,328.94 |
| Decrease in deferred tax assets (Increase is recognized by " - " sign) | 3,231,780.41 | -1,196,736.66 |
| Increase in deferred tax liabilities (Decrease is recognized by " - " sign) | 8,287,496.24 | 936,591.25 |
| Decrease in inventories (Increase is recognized by " - " sign) | 66,824.45 | 5,099,555.63 |
| Decrease in operating receivables (Increase is recognized by " - " sign) | -75,532,714.83 | -95,644,227.73 |
| Increase in operating payables (Decrease is recognized by " - " sign) | 50,401,030.09 | 109,961,371.05 |
| Increase in production safety expenses | -793,803.41 | -1,359,134.55 |
| Share-based payment | 7,174,755.27 | |
| Other | ||
| Net cash flows from operating activities | 133,522,931.23 | 161,089,465.80 |
| 2. Significant investing and financing activities not involving cash receipts and payments: | ||
| Conversion of debt to capital | ||
| Convertible corporate bonds due within one year | ||
| Finance lease to fixed assets | ||
| 3. Net change in cash and cash equivalents: | ||
| Closing balance of cash | 709,996,723.03 | 542,340,098.29 |
| Less: Opening balance of cash | 542,340,098.29 | 141,950,027.30 |
| Add: Closing balance of cash equivalents | ||
| Less: Opening balance of cash equivalents | ||
| Net increase in cash and cash equivalents | 167,656,624.74 | 400,390,070.99 |
(2). Net cash paid for acquisition of subsidiaries during the period
□ Applicable √ N/A
(3). Net cash received from disposal of subsidiaries during the period
□ Applicable √ N/A
(4). Composition of cash and cash equivalents
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| I. Cash | 709,996,723.03 | 542,340,098.29 |
| Of which: Cash on hand | 1,054,977.35 | 2,510,187.35 |
| Bank deposits readily available for payment | 708,941,745.68 | 539,829,910.94 |
| Other currency funds available for payment | ||
| Amounts on deposit with central banks available for payment | ||
| Due from banks | ||
| Call loan to banks | ||
| II. Cash equivalents | ||
| Of which: Investments in bonds due within three months | ||
| III.Cash and cash equivalents at the end of the period | 709,996,723.03 | 542,340,098.29 |
| Of which: Restricted cash and cash equivalents used by the parent company or subsidiaries within the group | 12,499,607.35 | 7,895,104.70 |
(5). Cash and cash equivalents with restricted scope of use but still presented as cash and cashequivalents
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Amount for the period | Reason |
| Currency funds | 12,499,607.35 | The Group's other monetary funds represent security deposits, which are mainly deposited for the purpose of the Group's application to banks for the issuance of letters of guarantee. |
| Total | 12,499,607.35 | / |
(6). Monetary funds not classified as cash and cash equivalents
□ Applicable √ N/A
Other Notes:
□ Applicable √ N/A
80. Notes to the Statement of Changes in Owners' Equity
Items such as the name of the "Other" item and the amount of adjustments made to the closing balance ofthe previous year are explained:
□ Applicable √ N/A
81. Monetary items in foreign currency
(1). Monetary items in foreign currencies
√ Applicable □ N/A
Unit: Yuan
| Item | Closing balance in foreign currency | Exchange rate | Closing balance in RMB |
| Currency Funds | - | - | |
| Of which: Vietnamese Dong | 133,212,465,684.93 | 0.000292 | 38,898,039.98 |
| US Dollar | 3,748,545.73 | 7.082700 | 26,549,824.82 |
| Indonesian Rupiah | 8,743,199,002.17 | 0.000461 | 4,030,614.74 |
| Thai Baht | 76,517,131.11 | 0.207361 | 15,866,668.82 |
| Singapore Dollar | 203,132.53 | 5.377200 | 1,092,284.24 |
| Malaysian Ringgit | 2,481,240.08 | 1.541545 | 3,824,943.24 |
| Accounts Receivable | - | - | |
| Of which: Vietnamese Dong | 65,794,772,773.97 | 0.000292 | 19,212,073.65 |
| Thai Baht | 15,281,627.16 | 0.207361 | 3,168,813.49 |
| Indonesian Rupiah | 22,101,919,045.55 | 0.000461 | 10,188,984.68 |
| US Dollar | 86,277.44 | 7.082700 | 611,077.22 |
| RM | 4,624,048.87 | 1.541545 | 7,128,179.42 |
| Other Receivables | - | - | |
| Of which: Vietnamese Dong | 1,575,591,873.25 | 0.000292 | 460,072.83 |
| Thai Baht | 1,569,680.05 | 0.207361 | 325,490.42 |
| Indonesian Rupiah | 395,075,731.69 | 0.000461 | 182,129.91 |
| Malaysian Ringgit | 43,250.01 | 1.541545 | 66,671.83 |
| Accounts Payable | - | - | |
| Of which: US Dollar | 2,620,213.69 | 7.082700 | 18,558,187.52 |
| Vietnamese Dong | 109,890,106,665.00 | 0.000292 | 32,087,911.15 |
| Thai Baht | 43,079,267.95 | 0.207361 | 8,932,960.08 |
| Indonesian Rupiah | 6,562,729,319.00 | 0.000461 | 3,025,418.22 |
| Malaysian Ringgit | 125,035.53 | 1.541545 | 192,747.90 |
| Other payables | - | - | |
| Of which: Vietnamese Dong | 1,662,008,804.00 | 0.000292 | 485,306.57 |
| US Dollar | 2,520,904.35 | 7.082700 | 17,854,809.24 |
| Singapore Dollar | 13,065.05 | 5.377200 | 70,253.39 |
| Malaysian Ringgit | 3,270,210.72 | 1.541545 | 5,041,176.98 |
| Thai Baht | 170,399.98 | 0.207361 | 35,334.31 |
| Indonesian Rupiah | 3,979,000.00 | 0.000461 | 1,834.32 |
Other Notes:
None
(2). Description of overseas operating entities, including, for significant overseas operating entities,disclosure of the principal place of business outside the country, the local currency of accountand the basis of selection, and disclosure of the reasons for changes in the local currency ofaccount
√ Applicable □ N/A
As at December 31, 2023, the Group's overseas operating entities:
The Group and its domestic subsidiaries maintain their accounts in Chinese Yuan (RMB); ActerInternational Limited is accounted for in United States dollars; Acter Technology Singapore Pte., Ltdis denominated in Singapore dollars; PT. Acter Technology Indonesia and PT Acter IntegrationTechnology Indonesia (the "Indonesian Joint Venture") are denominated in Indonesian Rupiah; ActerTechnology Malaysia Sdn. Bhd is denominated in Malaysian Ringgit; Sheng Huei EngineeringTechnology Company Limited is denominated in Vietnamese Dong; and Acter Technology Co., Ltd.maintains its accounts in Thai Baht. The Group and its subsidiaries selected the local currency ofaccounts on the basis of the currencies in which the major business receipts and expenditures aredenominated and settled. Some subsidiaries of the Group have adopted currencies other than theCompany's local currency as the local currency, and the foreign currency financial statements of thesesubsidiaries have been translated in accordance with "Section V. 9. Translation of Foreign CurrencyOperations and Foreign Currency Statements" of this section in the preparation of these financialstatements.
| Name of overseas operating entities | Principal place of business | Currency of accounts | Basis of selection of local currency |
| PT.Acter Technology Indonesia | Indonesia | Indonesian Rupiah | Businesses are mainly denominated and settled in this currency. |
| PT Acter Integration Technology Indonesia | Indonesia | Indonesian Rupiah | Businesses are mainly denominated and settled in this currency. |
| Sheng Huei Engineering Technology Company Limited | Vietnam | Vietnamese dong | Businesses are mainly denominated and settled in this currency. |
| Acter Technology Co.,Ltd | Thailand | Thai Baht | Businesses are mainly denominated and settled in this currency. |
| Acter International Limited | Hong Kong | US Dollar | Businesses are mainly denominated and settled in this currency. |
| Acter Technology Malaysia Sdn.Bhd. | Malaysia | Malaysian Ringgit | Businesses are mainly denominated and settled in this currency. |
82. Leasing
(1) As lessee
√ Applicable □ N/A
Variable lease payments not included in the measurement of lease liabilities
□ Applicable √ N/A
Lease expenses for short-term leases or low-value assets with simplified treatment
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Amount |
| Short-term lease | 6,490,670.16 |
Sale and leaseback transactions and basis of judgment
□ Applicable √ N/A
Total cash outflows related to leasing 8,670,943.25 (Unit: Yuan Currency: RMB)
(2) As lessor
Operating leases as lessor
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Lease income | Of which: Income related to variable lease payments not included in lease receipts |
| Leasing of buildings | 2,865,336.18 | |
| Total | 2,865,336.18 |
Finance lease as lessor
□ Applicable √ N/A
Reconciliation of undiscounted lease receipts to net investment in leases
□ Applicable √ N/A
Undiscounted lease receipts for the next five years
□ Applicable √ N/A
(3) Recognition of gain or loss on sales under finance leases as a manufacturer or distributor
□ Applicable √ N/A
Other NotesNone
83. Others
□ Applicable √ N/A
VIII. Research and development expenditures
(1). Presented by nature of expenses
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Amount in current period | Amount in prior period |
| Labor cost | 14,071,064.42 | 10,198,979.02 |
| Rental expenses | 290,827.94 | 225,077.63 |
| Depreciation and amortization | 153,397.80 | 119,197.95 |
| Other | 10,605,919.46 | 8,558,404.27 |
| Total | 25,121,209.62 | 19,101,658.87 |
| Of which: Expensed R&D expenditures | 25,121,209.62 | 19,101,658.87 |
| Capitalized R&D expenditures |
Other Notes:
None
(2). Development expenditures on R&D projects eligible for capitalization
□ Applicable √ N/A
Significant capitalized R&D projects
□ Applicable √ N/A
Provision for impairment of development expenditure
□ Applicable √ N/A
Other NotesNone
(3). Significant outsourced research and development projects
□ Applicable √ N/A
IX. Changes in the scope of consolidation
1. Business combination not under the same control
□ Applicable √ N/A
2. Business combination under the same control
□ Applicable √ N/A
3. Reverse buyback
□ Applicable √ N/A
4. Disposal of subsidiaries
Whether there is any transaction or matter of losing control of subsidiaries during the period
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Name of subsidiary | Point of loss of control | Disposal price at the point of loss of control | Disposal ratio at point of loss of control (%) | Disposal method at the point of loss of control | Basis for judging the point of loss of control | Difference between the disposal price and the share of net assets of the subsidiary at the level of the consolidated financial statements corresponding to the disposal of the investment | Proportion of remaining equity at date of loss of control (%) | Carrying amount of the remaining equity interest at the date of loss of control at the level of the consolidated financial statements | Fair value of the remaining equity interest at the date of loss of control at the level of the consolidated financial statements | Gains or losses arising from the remeasurement of the remaining equity at fair value | Method of determining the fair value of the remaining equity interest at the level of the consolidated financial statements at the date of loss of control and key assumptions | Amount of other comprehensive income related to equity investments in atomic companies transferred to investment profit or loss or retained earnings |
| Jiang Su Dian Ze Construction Engineering Co.,Ltd. | November 14, 2023 | 0 | 100 | Cancellation | Notification of cancellation by the Administrative Approval Authority | 0 | 0 | 0 | 0 | -300,000 | N/A | 0 |
Other Notes:
□ Applicable √ N/A
Disposal of investments in subsidiaries through multiple transactions and loss of control during the period?
□ Applicable √ N/A
Other Notes:
□ Applicable √ N/A
5. Changes in the scope of consolidation due to other reasons
Description of changes in the scope of consolidation due to other reasons (e.g. establishment of new subsidiaries, liquidation of subsidiaries, etc.) and the relatedcircumstances:
√ Applicable □ N/A
In 2023, the Company and PT Candra Bangun Persada jointly established PT Acter Integration Technology Indonesia ("Indonesia Joint Venture"), in which theCompany holds 67.00% of the shares, which is included in the scope of consolidation from the date of establishment. The Company holds 67.00% of the shares of PT ActerIntegration Technology Indonesia.
6. Others
□ Applicable √ N/A
X. Interests in other entities
1. Interests in subsidiaries
(1). Composition of the enterprise group
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Name of Subsidiary | Principal place of business | Registered capital | Place of registration | Nature of business | Shareholding ratio (%) | Acquisition method | |
| Direct | Indirect | ||||||
| Acter Engineering Technology (Shenzhen) Co., Ltd. | Shenzhen | 35,296,744.20 | Shenzhen | Mechanical and Electrical Engineering | 100.00 | Business combination under the same control | |
| Shenzhen Dingmao Trading Co., Ltd. | Shenzhen | 5,000,000.00 | Shenzhen | Trade | 100.00 | Establishment | |
| Acter International Limited | Hong Kong, China | 22,600,257.00 | Hong Kong, China | Investment | 100.00 | Business combination under the same control | |
| Acter Technology Singapore Pte.,Ltd. | Singapore | 17,263,062.56 | Singapore | Investment | 100.00 | Business combination under the same control | |
| PT. Acter Technology Indonesia | Indonesia | 5,277,279.17 | Indonesia | Mechanical and Electrical Engineering | 100.00 | Business combination under the same control | |
| Acter Technology Malaysia Sdn. Bhd. | Malaysia | 4,767,037.26 | Malaysia | Mechanical and Electrical Engineering | 100.00 | Business combination under the same control | |
| Sheng Huei Engineering Technology Company Limited | Vietnam | 24,074,949.49 | Vietnam | Mechanical and Electrical Engineering | 100.00 | Business combination under the same control | |
| Acter Technology Co., Ltd. | Thailand | 6,519,000.00 | Thailand | Mechanical and Electrical Engineering | 88.38 | Business combination not under the same control | |
| PT ACTER INTEGRATION TECHNOLOGY INDONESIA | Indonesia | 6,022,059.87 | Indonesia | Mechanical and Electrical Engineering | 67.00 | Establishment | |
A statement that the percentage of shareholding in a subsidiary is different from the percentage of votingrights:
None
Basis for holding half or less of the voting rights but still controlling the investee, and holding more thanhalf of the voting rights but not controlling the investee:
NoneFor significant structured subjects included in the scope of consolidation, the basis of control:
None
Basis for determining whether the company is an agent or principal:
NoneOther Notes:
None
(2). Significant non-wholly owned subsidiaries
□ Applicable √ N/A
(3). Key financial information of significant non-wholly owned subsidiaries
□ Applicable √ N/A
(4). Significant restrictions on the use of enterprise group assets and settlement of enterprise groupliabilities
□ Applicable √ N/A
(5). Financial or other support provided to structured subjects included in the scope of theconsolidated financial statements
□ Applicable √ N/A
Other Notes:
□ Applicable √ N/A
2. Transactions in which the share of ownership interest in a subsidiary changes and the subsidiaryis still controlled
□ Applicable √ N/A
3. Interests in joint ventures or associates
□ Applicable √ N/A
4. Significant joint operations
□ Applicable √ N/A
5. Interests in structured entities not included in the scope of the consolidated financial statementsDescription of structured entities not included in the scope of the consolidated financial statements:
□ Applicable √ N/A
6. Others
□ Applicable √ N/A
XI. Government grants
1. Government grants recognized at the end of the reporting period based on receivable amounts
□ Applicable √ N/A
Reasons for not receiving the estimated amount of government grants at the expected point in time
□ Applicable √ N/A
2. Liability items related to government grants
□ Applicable √ N/A
3. Government grants recognized as current profit or loss
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Type | Amount in the current period | Amount in the prior period |
| Revenue-related | 3,731,552.00 | 3,524,827.14 |
| Total | 3,731,552.00 | 3,524,827.14 |
Other Notes:
| Category | Amount in the current year | Presentation items | Amount recognized in profit or loss | Revenue-related/asset-related |
| Listing incentives | 3,500,000.00 | Other gains | 3,500,000.00 | Revenue-related |
| Subsidies for stabilizing jobs | 127,432.24 | Other gains | 127,432.24 | Revenue-related |
| Incentive for enterprise research and development expenses | 44,790.00 | Other gains | 44,790.00 | Revenue-related |
| Refund of withholding tax/personal tax refund | 37,829.76 | Other gains | 37,829.76 | Revenue-related |
| Subsidy for Job Expansion | 21,500.00 | Other gains | 21,500.00 | Revenue-related |
| Total | 3,731,552.00 | 3,731,552.00 |
XII. Risks Related to Financial Instruments
1. Risks of financial instruments
√ Applicable □ N/A
The Group's major financial instruments include bills receivable, short-term loans, receivables andpayables, etc. For details of each financial instrument, please refer to the relevant item in Note 6. The risksassociated with these financial instruments and the risk management policies adopted by the Group tominimize these risks are described below. The Group's management manages and monitors these exposuresto ensure that the above risks are controlled within limits.
1. Risk management objectives and policies
The Group engages in risk management with the objective of striking an appropriate balance betweenrisk and return, minimizing the negative impact of risks on the Group's operating results and maximizing theinterests of shareholders and other equity investors. Based on this risk management objective, the basicstrategy of the Group's risk management is to identify and analyze the various risks faced by the Group, toestablish an appropriate risk tolerance threshold and to manage the risks, and to monitor the various risks ina timely and reliable manner in order to control the risks within a limited scope.
(1) Market risk
1) Exchange rate risk
The Group's exposure to exchange rate risk is mainly related to U.S. Dollars, Vietnamese Dong, ThaiBaht, and Indonesian Rupiah. Except for several subsidiaries of the Group that make purchases and sales inU.S. Dollars, the Group's other major business activities are denominated in RMB. As at December 31, 2023,the Group's assets and liabilities were denominated in RMB, except for the U.S. dollars, Vietnamese dong,Thai Baht and Indonesian Rupiah in respect of the assets and liabilities described in the table below. Theexchange rate risk arising from these assets and liabilities in U.S. Dollars, Vietnamese dong, Thai Baht andIndonesian Rupiah balances may have an impact on the Group's results of operations.
| Items | Closing balance |
| Currency Funds - U.S. Dollars | 3,748,545.73 |
| Currency Funds - Indonesian Rupiah | 8,743,199,002.17 |
| Currency Funds - Thai Baht | 76,517,131.11 |
| Currency Funds - Singapore Dollar | 203,132.53 |
| Currency Funds - Malaysian Ringgit | 2,481,240.08 |
| Accounts Receivable - Vietnamese Dong | 65,794,772,773.97 |
| Accounts Receivable - Thai Baht | 15,281,627.16 |
| Accounts Receivable - Indonesian Rupiah | 22,101,919,045.55 |
| Accounts Receivable - U.S. Dollars | 86,277.44 |
| Accounts Receivable - Malaysian Ringgit | 4,624,048.87 |
| Other Payables - Vietnamese Dong | 1,662,008,804.00 |
| Other Payables - U.S. Dollars | 2,520,904.35 |
| Other Payables - Singapore Dollars | 13,065.05 |
| Other Payables - Malaysian Ringgit | 3,270,210.72 |
| Other Payables - Thai Baht | 170,399.98 |
| Other Payables - Indonesian Rupiah | 3,979,000.00 |
| Accounts Payable - U.S. Dollars | 2,620,213.69 |
| Accounts Payable - Vietnamese Dong | 109,890,106,665.00 |
| Accounts Payable - Thai Baht | 43,079,267.95 |
| Accounts Payable - Indonesian Rupiah | 6,562,729,319.00 |
| Accounts Payable - Malaysian Ringgit | 125,035.53 |
| Other Receivables - Vietnamese Dong | 1,575,591,873.25 |
| Other Receivables - Thai Baht | 1,569,680.05 |
| Other Receivables - Indonesian Rupiah | 395,075,731.69 |
| Other Receivables - Malaysian Ringgit | 43,250.01 |
2) Interest Rate Risk
The Group's interest rate risk arises from interest-bearing debts such as bank borrowings and bondspayable. Financial liabilities with fixed interest rates expose the Group to fair value interest rate risk. TheGroup determines the relative proportion of fixed interest rates based on the prevailing market conditions.The Group's risk of changes in fair value of financial instruments due to changes in interest rates is mainlyrelated to fixed-rate bank borrowings. For fixed rate borrowings, the Group's objective is to maintain itsfloating interest rate. The Group is not highly sensitive to interest rate fluctuations and has no significantinterest rate risk.
(2) Credit risk
Credit risk is the risk that one party to a financial instrument will fail to fulfill its obligations, resultingin a financial loss to the other party. The Group's credit risk mainly arises from currency funds, receivablesand contract assets. The management continuously monitors these credit risk exposures.
The Group's monetary funds other than cash are mainly deposited with creditworthy financialinstitutions, which management believes do not have significant credit risk and are not expected to incurlosses to the Group as a result of default by the counterparties.
The Group's maximum exposure to credit risk is the carrying amount of each financial asset in thebalance sheet. The Group has not provided any other guarantees that may expose the Group to credit risk.
The Group's credit risk from accounts receivable and contract assets is primarily driven by thecharacteristics of each individual client, rather than the industry or country or region in which the client is
located. Consequently, significant concentrations of credit risk arise mainly from the existence of significantaccounts receivable and contract assets of the Group in respect of individual clients. As at December 31,2023, the accounts receivable and contract assets of the Group's top five clients accounted for 42.90% (2022:
46.80%) of the Group's total accounts receivable and contract assets.
In respect of accounts receivable, the Group has formulated a credit policy based on the actual situationand conducts credit assessment on clients to determine the credit amount and credit period. The creditassessment is mainly based on the client's financial position, external ratings and bank credit history (wherepossible). The receivables are generally due within 30 to 120 days from the date of billing. Under normalcircumstances, the Group does not require clients to provide collateral.
(3) Liquidity risk
Liquidity risk is the risk of shortage of funds when the Group fulfills its obligations to settle by deliveryof cash or other financial assets. The Company and its subsidiaries are responsible for their own cashmanagement, including the short-term investment of cash surpluses and the raising of loans to meetanticipated cash requirements (subject to the approval of the Group's Board of Directors if borrowings arein excess of certain pre-determined authorization limits). It is the Group's policy to regularly monitor short-term and long-term liquidity requirements and compliance with borrowing agreements to ensure thatadequate cash reserves are maintained and that commitments are obtained from major financial institutionsto provide sufficient standby funds to meet short-term and longer-term liquidity requirements.
In order to control this risk, the Group regularly monitors the short-term and long-term liquidityrequirements and compliance with the provisions of the borrowing agreements to ensure that sufficient cashreserves are maintained, and has obtained commitments from major financial institutions to providesufficient standby funds to meet short-term and longer-term liquidity requirements.
As at December 31, 2023, the remaining contractual maturity of the Group's financial liabilities as atthe balance sheet date based on the undiscounted contractual cash flows, including interest at contractualinterest rates (or at the prevailing interest rate as at the reporting date in the case of floating interest rates),and the earliest date on which payments will be required are as follows:
2. Sensitivity analysis
The Group employs sensitivity analysis techniques to analyze the impact that reasonable and probablechanges in risk variables may have on current profit or loss or shareholders' equity. Since changes in any ofthe risk variables rarely occur in isolation and the correlation that exists between the variables will play asignificant role in the amount of the eventual impact of a change in one of the risk variables, the followinghas been performed assuming that the changes in each of the variables are independent. The impact on totalprofit and shareholders' equity of the appreciation/depreciation of RMB as a result of the changes in RMBagainst the US Dollar and the Vietnamese dong as at December 31, 2023 is presented in RMB at the spotexchange rate at the balance sheet date. Since the impact on total profit and shareholders' equity of financialinstruments in other currencies in the event of exchange rate changes is not material, the related sensitivityanalysis is omitted here. The Company believes that its exposure to exchange rate risk is generallymanageable.
| Items | Exchange rate changes | FY2023 | |
| Impact on net profit | Impact on shareholders' equity | ||
| Depreciation of RMB against USD | Appreciation of 5% against RMB | -462,604.74 | -462,604.74 |
| Appreciation of RMB against USD | Depreciation of 5% against RMB | 462,604.74 | 462,604.74 |
| Depreciation of RMB against Vietnamese Dong | Appreciation of 5% against RMB | -1,299,848.44 | -1,299,848.44 |
| Appreciation of RMB against Vietnamese Dong | Depreciation of 5% against RMB | 1,299,848.44 | 1,299,848.44 |
The above sensitivity analysis is based on the re-measurement of financial instruments held by theGroup that are exposed to exchange rate risk at the balance sheet date, assuming that the exchange rate atthe balance sheet date has changed during the reporting period, using the changed exchange rate.
3. Capital management
The main objectives of the Group's capital management are to ensure the Group's ability to continue asa going concern and to maintain healthy capital ratios to support business development and maximizeshareholder value.
The Group manages its capital structure and adjusts it in accordance with changes in economicconditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital
structure, the Group may adjust profit distribution to shareholders, return capital to shareholders or issuenew shares. The Group is not subject to external mandatory capital requirements. For the period January-December 2023, there have been no changes in capital management objectives, policies or procedures.The Group monitors its capital through the asset-liability ratio, which is calculated as total liabilitiesdivided by total assets. The asset-liability ratios at December 31, 2023 were as follows:
| Item | Balance at end of year | Balance at beginning of year |
| Total liabilities | 814,397,427.78 | 765,070,712.09 |
| Total assets | 1,904,362,490.44 | 1,778,281,762.96 |
| Asset-liability ratio | 42.76% | 43.02% |
2. Hedging
(1) Hedging business for risk management
□ Applicable √ N/A
Other Notes
□ Applicable √ N/A
(2) The Company conducts eligible hedging operations and applies hedge accounting.
□ Applicable √ N/A
Other notes
□ Applicable √ N/A
(3) The Company conducts hedge operations for risk management and expects to achieve the riskmanagement objectives, but does not apply hedge accounting.
□ Applicable √ N/A
Other Notes
□ Applicable √ N/A
3. Transfer of financial assets
(1) Classification of transfer methods
□ Applicable √ N/A
(2) Financial assets derecognized due to transfer
□ Applicable √ N/A
(3) Transferred financial assets that continue to be involved in the financial asset
□ Applicable √ N/A
Other Notes
□ Applicable √ N/A
XIII. Fair value disclosure
1. Closing fair value of assets and liabilities measured at fair value
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Fair value at the end of the period | |||
| Level 1 fair value measurement | Level 2 fair value measurements | Level 3 fair value measurements | Total | |
| I. Ongoing fair value measurements | ||||
| (I) Financial assets held for trading | ||||
| 1. Financial assets at fair value through profit or loss | ||||
| (1) Investments in debt instruments | ||||
| (2) Investments in equity instruments | ||||
| (3) Derivative financial assets | ||||
| 2. Financial assets designated at fair value through profit or loss | ||||
| (1) Investments in debt instruments | ||||
| (2) Investments in equity instruments | ||||
| (II) Other debt investments | ||||
| (III) Investments in other equity instruments | ||||
| (IV) Investment properties | ||||
| 1. Land use rights for lease | ||||
| 2. Buildings for lease | ||||
| 3. Land use rights held for transfer after appreciation in value | ||||
| (V) Biological assets | ||||
| 1. Expendable biological assets | ||||
| 2. Productive biological assets | ||||
| (VI) Receivables financing | 3,572,953.18 | 3,572,953.18 | ||
| Total assets measured at fair value on an ongoing basis | 3,572,953.18 | 3,572,953.18 | ||
| (VI) Financial liabilities held for trading | ||||
| 1. Financial liabilities at fair value through profit or loss | ||||
| Of which: Trading bonds issued | ||||
| Derivative financial liabilities | ||||
| Others | ||||
| 2. Financial liabilities designated at fair value through profit or loss | ||||
| Total liabilities at fair value on an ongoing basis | ||||
| II. Discontinued fair value measurements | ||||
| (I) Assets held for sale | ||||
| Total assets not continuously measured at fair value | ||||
| Total liabilities not continuously measured at fair value |
2. Basis for determining the market value of continuing and discontinued Level 1 fair valuemeasurements
□ Applicable √ N/A
3. Qualitative and quantitative information on the valuation techniques and significant parametersused for the fair value measurement items in the continuous and discontinued Level 2 fair valuehierarchy
√ Applicable □ N/A
The Group has entered into derivative financial instrument contracts with banks for foreign exchangeforward, foreign exchange option, foreign exchange swap and foreign exchange option contracts, which aremeasured using valuation techniques similar to those used for forward pricing as well as the present valueapproach. The models cover a number of market observable inputs, including the maturity period of theoption, the credit quality of the counterparty, spot and forward exchange rates and interest rate curves.
4. Continuing and discontinuing Level 3 fair value measurement items, qualitative and quantitativeinformation on valuation techniques used and significant parameters
√ Applicable □ N/A
For structured deposits, the Group uses valuation techniques to determine their fair value. The valuationmodel used is mainly a discounted cash flow model. The inputs to the valuation technique are mainly thecontractual expected rate of return.
5. Ongoing Level 3 fair value measurements, reconciliation information between opening and Closing
book balance and sensitivity analysis of unobservable parameters
□ Applicable √ N/A
6. Continuing fair value measurements, if there was a transition between levels during the period, the
reasons for the transition and the policy for determining the point of transition.
□ Applicable √ N/A
7. Changes in valuation techniques during the period and the reasons for such changes
□ Applicable √ N/A
8. Fair value of financial assets and liabilities not measured at fair value
□ Applicable √ N/A
9. Others
□ Applicable √ N/A
XIV. Related parties and related transactions
1. Parent company of the enterprise
√ Applicable □ N/A
Unit: Million/100 Yuan Currency: RMB
| Name of parent company | Place of registration | Nature of business | Registered capital | Parent company's shareholding proportion in the enterprise (%) | Proportion of voting rights of the parent company in the enterprise (%) |
| Sheng Huei International Co., Ltd. | Samoa | Investment holding company | 3.95 million dollars | 64.9973 | 64.9973 |
Description of the enterprise's parent companyNoneThe ultimate controlling party of the enterprise is Acter (Taiwan)Other Notes:
None
2. Information on subsidiaries of the Enterprise
For details of the subsidiaries of the Company, please refer to the notes
√ Applicable □ N/A
For details of the Group's subsidiaries, please refer to "IX.1. Interests in subsidiaries" in this section.
3. Joint ventures and associates of the Enterprise
Details of significant joint ventures or associates of the Company are set out in the notes.
□ Applicable √ N/A
Other joint ventures or associates with which the Company has entered into related-party transactionsduring the current period or with which the Company has entered into related-party transactions in priorperiods, resulting in balances, are as follows
□ Applicable √ N/A
Other Notes
□ Applicable √ N/A
4. Other related parties
√ Applicable □ N/A
| Name of other related parties | Relationship between other related parties and the enterprise |
| NOVA Technology Corp. | Enterprises controlled by the same ultimate controlling shareholder |
| Winmax Technology Corp. | Enterprises controlled by the same ultimate controlling shareholder |
| Suzhou Winmax Technology Corp. | Enterprises controlled by the same ultimate controlling shareholder |
| NOVATECH ENGINEERING & CONSTRUCTION PTE. LTD. | Enterprises controlled by the same ultimate controlling shareholder |
Other NotesNone
5. Related transactions
(1). Purchase and sale of goods, provision and acceptance of labor related transactionsPurchase of goods/acceptance of services
□ Applicable √ N/A
Sale of goods/provision of services
□ Applicable √ N/A
Purchase and sale of goods, provision and acceptance of services
□ Applicable √ N/A
(2). Affiliated fiduciary management/contracting and entrusted management/contracting outThe Company's fiduciary management/contracting status table:
□ Applicable √ N/A
Explanation of Affiliated Fiduciary Management/Contracting Situation
□ Applicable √ N/A
The Company's entrusted management/contracting
□ Applicable √ N/A
Management/contracting by affiliation
□ Applicable √ N/A
(3). Affiliated leasing
The Company acts as a lessor:
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Name of Lessee | Type of leased asset | Lease income recognized in the current period | Lease income recognized in the previous period |
| Winmax (Suzhou) | Housing lease | 2,590,579.03 | 1,812,710.39 |
The Company acted as the lessee:
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Name of lessor | Type of leased assets | Rental costs for short-term leases and leases of low-value assets with simplified treatment (if applicable) | Variable lease payments not included in the measurement of the lease liability (if applicable) | Rental payments | Interest expense on lease liabilities assumed | Increase in right-of-use assets | |||||
| Current period | Prior period | Current period | Prior period | Current period | Current period | Current period | Current period | Current period | Prior period | ||
| Novatech (Singapore) | Rental | 24,466.69 | 21,215.64 | ||||||||
Explanation of related leases
□ Applicable √ N/A
(4). Related guarantees
The Company as a guarantor
□ Applicable √ N/A
The Company as a guaranteed party
□ Applicable √ N/A
Explanation of related guarantees
□ Applicable √ N/A
(5). Borrowing of funds from related parties
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Related party | Borrowing amount | Starting date | Maturity date | Description |
| Borrowing | ||||
| Sheng Huei International | 17,820,267.27 | 2023-11-23 | 2024-11-22 | |
| Sheng Huei International | 5,041,176.98 | 2023-10-24 | 2024-10-23 | |
| Lending | ||||
(6). Transfer of assets and debt restructuring by related parties
□ Applicable √ N/A
(7). Remuneration of key management personnel
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Amount in the current period | Amount in the prior period |
| Remuneration of key management personnel | 5,101,745.67 | 11,915,721.03 |
| Of which: Share-based payment | 5,543,272.46 |
(8). Other related transactions
□ Applicable √ N/A
6. Unsettled receivables and payables from related parties
(1). Items receivable
□ Applicable √ N/A
(2). Items payable
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item Name | Related parties | Closing book balance | Opening book balance |
| Other payables | Singapore | 42,684.21 | 38,095.79 |
| Other payables | Sheng Huei International | 22,861,444.25 | |
| Total | 22,904,128.46 | 38,095.79 |
(3). Other items
□ Applicable √ N/A
7. Related party commitments
□ Applicable √ N/A
8. Others
√ Applicable □ N/A
(1) Payments on behalf of related parties
Unit: Yuan Currency: RMB
| Related party | Content of related transactions | Amount in the current year | Amount in the prior year |
| Winmax (Suzhou) | Payment of utilities by Suzhou Acter on behalf of Winmax (Suzhou) | 710,302.15 | 569,343.60 |
| Total | 710,302.15 | 569,343.60 |
(2) Acceptance of payment on behalf of related parties
Unit: Yuan Currency: RMB
| Related party | Content of related transactions | Amount in the current year | Amount in the prior year |
| Novatech (Singapore) | Payment of utility bills on behalf of Sheng Huei (Singapore) by Novatech (Singapore) | 14,169.08 | 12,286.34 |
| Total | 14,169.08 | 12,286.34 |
XV. Share-based payment
1. Equity instruments
□ Applicable √ N/A
Stock options or other equity instruments issued and outstanding at the end of the period
□ Applicable √ N/A
2. Equity-settled share-based payments
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Method of determining the fair value of equityinstruments at the date of grantDetermined on the basis of the appraised value oron the basis of the fair value calculated by takinginto account the Company's own circumstancesand the price-earnings ratio of the same industry
| Important parameters of the fair value of equity instruments at the date of grant | |
| Basis for determining the number of available equity instruments | At each balance sheet date during the waiting period, the Company makes its best estimate of the |
| number of vested equity instruments based on the latest available subsequent information, such as changes in the number of vested employees. | |
| Reasons for significant differences between the current period's estimate and the previous period's estimate | |
| Cumulative amount of equity-settled share-based payments recognized in capital surplus | 32,368,025.42 |
Other NotesNone
3. Cash-settled share-based payments
□ Applicable √ N/A
4. Share-based payment expenses for the period
□ Applicable √ N/A
5. Modification and termination of share-based payment
□ Applicable √ N/A
6. Other
□ Applicable √ N/A
XVI. Commitments and contingencies
1. Important commitments
□ Applicable √ N/A
2. Contingencies
(1). Important contingencies existing at the balance sheet date
√ Applicable □ N/A
| Name of guaranteed entity | Guarantee Matters | Currency | Amount | Guarantee starting date | Guarantee expiration date |
| Shenzhen Dingmao | Contractual joint and several guarantee | RMB | 1,570,700.00 | 2020-8-3 | 2023-1-31 |
| Shenzhen Dingmao | Contractual joint and several guarantee | RMB | 3,394,222.00 | 2021-1-27 | 2023-3-14 |
| Sheng Huei (Vietnam) | Contractual joint and several guarantee | RMB | 27,245,338.06 | 2020-6-19 | 2023-6-17 |
| Shenzhen Dingmao | Contractual joint and several guarantee | RMB | 565,000.00 | 2020-8-3 | 2023-7-9 |
| Suzhou Acter | Contractual joint and several guarantee | RMB | 19,900,000.00 | 2020-7-2 | 2023-10-22 |
| Suzhou Acter | Contractual joint and several guarantee | RMB | 11,300,000.00 | 2020-7-2 | 2023-10-22 |
| Suzhou Acter | Contractual Joint and Several Guarantee | RMB | 4,690,000.00 | 2021-4-12 | 2023-10-22 |
| Shenzhen Dingmao | Contractual joint and several guarantee | RMB | 610,200.00 | 2021-8-1 | 2023-12-7 |
| Sheng Huei (Vietnam) | Contractual joint and several guarantee | RMB | 125,897,195.25 | 2020-9-23 | 2024-7-10 |
| Acter (Shenzhen) | Bank financing | RMB | 40,000,000.00 | 2022-9-5 | 2024-3-31 |
| Shenzhen Dingmao | Bank financing | RMB | 45,000,000.00 | 2022-9-5 | 2024-3-31 |
| Sheng Huei (Vietnam) | Contractual joint and several guarantee | RMB | 21,076,153.89 | 2022-3-1 | 2025-6-30 |
| Sheng Huei (Vietnam) | Contractual joint and several guarantee | RMB | 17,168,854.83 | 2022-3-10 | 2025-6-30 |
| Name of guaranteed entity | Guarantee matters | Currency | Amount | Guarantee starting date | Guarantee expiration date |
| Sheng Huei (Vietnam) | Contractual Joint and Several Guarantee | RMB | 4,473,565.17 | 2021-5-7 | 2025-9-1 |
| Shenzhen Dingmao | Bank financing | RMB | 20,000,000.00 | 2023-1-16 | 2025-11-30 |
| Sheng Huei (Vietnam) | Contractual joint and several guarantee | RMB | 14,285,182.90 | 2023-1-10 | 2025-7-31 |
| Sheng Huei (Vietnam) | Contractual joint and several guarantee | RMB | 99,925,200.63 | 2023-7-7 | 2026-3-31 |
| Sheng Huei (Vietnam) | Contractual joint and several guarantee | RMB | 721,558.28 | 2023-11-13 | 2026-3-31 |
| Sheng Huei (Vietnam) | Contractual joint and several guarantee | RMB | 1,532,643.25 | 2023-11-27 | 2026-3-31 |
| Sheng Huei (Vietnam) | Contractual joint and several guarantee | RMB | 71,446,415.71 | 2020-12-7 | 2026-3-31 |
| Sheng Huei (Vietnam) | Contractual joint and several guarantee | RMB | 5,430,176.59 | 2021-5-7 | 2026-3-31 |
| Sheng Huei (Vietnam) | Contractual joint and several guarantee | RMB | 159,724,393.29 | 2023-10-12 | 2026-7-7 |
| Sheng Huei (Vietnam) | Bank financing | RMB | 14,292,800.00 | 2022-10-27 | 2023-10-26 |
| Sheng Huei (Malaysia) | Bank financing | RMB | 14,292,800.00 | 2022-10-27 | 2023-10-26 |
| Acter (Indonesia) | Bank financing | RMB | 7,146,400.00 | 2022-10-27 | 2023-10-26 |
(2). The Company has no material contingencies that need to be disclosed, which shall also be stated:
□ Applicable √ N/A
3. Others
□ Applicable √ N/A
XVII. Events after the balance sheet date
1. Important non-adjusting events
□ Applicable √ N/A
2. Profit distribution
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Profit or dividend to be distributed | 80,000,000.00 |
| Profits or dividends declared after consideration and approval | 80,000,000.00 |
Pursuant to the resolution of the Twelfth Meeting of the Second Session of the Board of Directors heldon March 29, 2024, the Group's plan for profit distribution for the year 2023 is as follows:
Based on the total share capital of 100 million shares as at the record date for dividend distribution, theCompany will distribute a cash dividend of RMB 8.00 (including tax) for every 10 shares, totaling RMB 80million (including tax);
The profit distribution plan has yet to be approved by the shareholders’ meeting.
3. Sales return
□ Applicable √ N/A
4. Description of other post-balance sheet events
□ Applicable √ N/A
XVIII. Other Important Matters
1. Correction of prior period accounting errors
(1). Retrospective restatement
□ Applicable √ N/A
(2). Future application method
□ Applicable √ N/A
2. Significant debt restructuring
□ Applicable √ N/A
3. Asset replacement
(1). Non-monetary asset exchange
□ Applicable √ N/A
(2). Other asset replacement
□ Applicable √ N/A
4. Annuity plan
□ Applicable √ N/A
5. Discontinued operations
□ Applicable √ N/A
6. Segment Information
(1). Basis for determining reportable segments and accounting policies
√ Applicable □ N/A
The Group operates as a whole and has a unified internal organizational structure, managementevaluation system and internal reporting system. The management conducts resource allocation andperformance evaluation by regularly reviewing financial information at the corporate level. The Group didnot have any separately managed operating segment during the reporting period, and therefore the Grouphas only one operating segment.
(1) Geographical information
Information on the Group's revenue from external transactions by region is set out in the table below.Revenue from external transactions is classified according to the location of the clients who constructed theprojects or purchased the products.
| Location of clients | FY 2023 | FY2022 |
| Chinese mainland | 1,573,087,402.75 | 1,345,403,207.90 |
| Southeast Asia | 435,837,592.93 | 282,491,912.59 |
| Location of clients | FY2023 | FY2022 |
| Other countries and regions | ||
| Total | 2,008,924,995.68 | 1,627,895,120.49 |
The Group's non-current assets (excluding deferred tax assets) are mainly located in Mainland China,based on the physical location of the assets (for fixed assets) and the location of the related operations (forintangible assets).
(2). Financial information of reportable segments
□ Applicable √ N/A
(3). If the Company does not have any reportable segments, or cannot disclose the total assets andtotal liabilities of each reportable segment, the reasons shall be explained
□ Applicable √ N/A
(4). Other Notes
□ Applicable √ N/A
7. Other important transactions and matters affecting investors' decisions
□ Applicable √ N/A
8. Others
□ Applicable √ N/A
XIX. Notes to the Parent Company's Financial Statements
1. Accounts receivable
(1). Disclosure by ageing
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Ageing of accounts | Closing book balance | Opening book balance |
| Within 1 year | ||
| Of which: Within 1 year | ||
| 1-6 months (including 6 months) | 275,587,971.19 | 366,977,828.81 |
| 6 months to 1 year (including 1 year) | 22,218,436.60 | 9,056,844.04 |
| Subtotal within 1 year | 297,806,407.79 | 376,034,672.85 |
| 1 to 2 years | 12,215,831.57 | 10,672,297.62 |
| 2 to 3 years | 11,833,238.76 | 20,586,667.94 |
| 3 to 4 years | 14,226,750.24 | 8,125,154.26 |
| 4 to 5 years | 7,542,629.98 | |
| More than 5 years | 650,753.62 | 650,753.62 |
| Total | 344,275,611.96 | 416,069,546.29 |
(2). Disclosure by bad debt accrual method
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Category | Closing balance | Opening balance | ||||||||
| Book balance | Provision for bad debts | Carrying amount | Book balance | Provision for bad debts | Carrying amount | |||||
| Amount | Proportion (%) | Amount | Provision (%) | Amount | Proportion (%) | Amount | Provision (%) | |||
| Provision for bad debts by individual item | 9,379,167.99 | 2.72 | 9,379,167.99 | 100.00 | 9,961,692.27 | 2.39 | 9,961,692.27 | 100.00 | ||
| Of which: | ||||||||||
| Provision for bad debts by portfolio | 334,896,443.97 | 97.28 | 19,778,999.61 | 5.91 | 315,117,444.36 | 406,107,854.02 | 97.61 | 16,701,308.33 | 4.11 | 389,406,545.69 |
| Of which: | ||||||||||
| Total | 344,275,611.96 | / | 29,158,167.60 | / | 315,117,444.36 | 416,069,546.29 | / | 26,663,000.60 | / | 389,406,545.69 |
Individual provision for bad-debt reserves:
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Name | Closing balance |
| Book balance | Provision for bad debts | Provision ratio (%) | Reason for provision | |
| Qinghua Group Xinjiang Coal Chemical Industry Co., Ltd. | 6,570,214.37 | 6,570,214.37 | 100.00 | Debtor's financial difficulties |
| Suzhou Mingqiao Municipal Engineering Co., Ltd. | 2,158,200.00 | 2,158,200.00 | 100.00 | Debtor's bankruptcy |
| Suzhou Hyperion Geocrystal Co., Ltd. | 650,753.62 | 650,753.62 | 100.00 | Debtor's bankruptcy, the amount is expected to be difficult to recover |
| Total | 9,379,167.99 | 9,379,167.99 | 100.00 | /Total |
Explanation of bad debt provision by individual item:
□ Applicable √ N/A
Provision for bad debts by portfolio:
√ Applicable □ N/A
Items provided for by portfolio: Ageing portfolio
Unit: Yuan Currency: RMB
| Name | Closing balance | ||
| Accounts receivable | Provision for bad debts | Provision ratio (%) | |
| 1-6 months (including 6 months) | 275,587,971.19 | 8,267,639.26 | 3.00 |
| 6 months to 1 year (including 1 year) | 22,218,436.60 | 1,110,921.83 | 5.00 |
| Subtotal within 1 year | 297,806,407.79 | 9,378,561.09 | |
| 1 to 2 years | 12,215,831.57 | 1,221,583.16 | 10.00 |
| 2 to 3 years | 11,833,238.76 | 2,366,647.75 | 20.00 |
| 3 to 4 years | 12,068,550.24 | 6,034,275.12 | 50.00 |
| 4 to 5 years | 972,415.61 | 777,932.49 | 80.00 |
| More than 5 years | |||
| Total | 334,896,443.97 | 19,778,999.61 | |
Explanation of provision for bad debts by portfolio:
□ Applicable √ N/A
Provision for bad debts based on the general model of expected credit losses
□ Applicable √ N/A
Basis of classification of each stage and percentage of provision for bad debtsNone
Description of significant changes in the book balance of accounts receivable for which changes in theallowance for losses occurred during the period:
□ Applicable √ N/A
(3). Provision for bad debts
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Category | Opening balance | Change during the period | Closing balance | |||
| Provision | Recovery or reversal | Write-offs or cancellations | Other changes | |||
| Provision for bad debts | 26,663,000.60 | 2,495,167.00 | 29,158,167.60 | |||
| Total | 26,663,000.60 | 2,495,167.00 | 29,158,167.60 | |||
Of which the amount of provision for bad debts recovered or reversed during the period is significant:
□ Applicable √ N/A
Other NotesNone
(4). Accounts receivable actually written off during the period
□ Applicable √ N/A
Significant accounts receivable written off during the period
□ Applicable √ N/A
Description of accounts receivable written off:
□ Applicable √ N/A
(5). Accounts receivable and contract assets with top five closing balances summarized by partyowed to the Company
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Unit Name | Closing balance of accounts receivable | Closing balance of contract assets | Closing balance of accounts receivable and contract assets | Percentage of total accounts receivable and contract assets closing balance (%) | Closing balance of provision for bad debts |
| Client I | 35,204,113.72 | 55,230,371.74 | 90,434,485.46 | 13.90 | 1,332,275.27 |
| Client II | 60,617,976.68 | 10,161,956.75 | 70,779,933.43 | 10.88 | 1,854,828.60 |
| Client III | 69,801,621.75 | 69,801,621.75 | 10.73 | 355,720.96 | |
| Client IV | 49,308,641.40 | 7,107,249.70 | 56,415,891.10 | 8.67 | 1,521,133.18 |
| Client V | 11,691,023.33 | 31,917,411.40 | 43,608,434.73 | 6.71 | 587,112.75 |
| Total | 156,821,755.13 | 174,218,611.34 | 331,040,366.47 | 50.89 | 5,651,070.76 |
Other NotesNoneOther Notes:
□ Applicable √ N/A
2. Other receivables
Item presentation
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Interest receivable | ||
| Dividends receivable | ||
| Other receivables | 31,069,788.93 | 39,103,210.81 |
| Total | 31,069,788.93 | 39,103,210.81 |
Other Notes:
□ Applicable √ N/A
Interest receivable
(1). Classification of interest receivable
□ Applicable √ N/A
(2). Significant overdue interest
□ Applicable √ N/A
(3). Disclosure by bad debt accrual method
□ Applicable √ N/A
Individual provision for bad-debt reserves:
□ Applicable √ N/A
Explanation of individual provision for bad-debt reserves:
□ Applicable √ N/A
Provision for bad debts by portfolio:
□ Applicable √ N/A
(4). Provision for bad debts based on general model of expected credit losses.
□ Applicable √ N/A
Basis of classification of each stage and percentage of bad debt provisioningNone
Explanation of significant changes in the book balance of interest receivables for which changes in theallowance for losses occurred during the period:
□ Applicable √ N/A
(5). Provision for bad debts
□ Applicable √ N/A
Of which the amount of bad debt provision recovered or reversed during the period is significant:
□ Applicable √ N/A
Other Notes:
None
(6). Interest receivable actually written off during the period
□ Applicable √ N/A
Significant write-off of interest receivable
□ Applicable √ N/A
Description of write-offs:
□ Applicable √ N/A
Other Notes:
□ Applicable √ N/A
Dividends receivable
(1). Dividends receivable
□ Applicable √ N/A
(2). Significant dividends receivable with an age of more than 1 year
□ Applicable √ N/A
(3). Disclosure by bad debt accrual method
□ Applicable √ N/A
Individual provision for bad-debt reserves:
□ Applicable √ N/A
Explanation of individual provision for bad-debt reserves:
□ Applicable √ N/A
Provision for bad debts by portfolio:
□ Applicable √ N/A
(4). Provision for bad debts based on general model of expected credit losses.
□ Applicable √ N/A
Basis of classification of each stage and percentage of provision for bad debtsNone
Explanation of significant changes in the book balance of dividends receivable for which changes in theallowance for losses occurred during the period:
□ Applicable √ N/A
(5). Provision for bad debts
□ Applicable √ N/A
Of which the amount of bad debt provision recovered or reversed during the period is significant:
□ Applicable √ N/A
Other Notes:
None
(6). Dividends receivable actually written off during the period
□ Applicable √ N/A
Of which significant dividend receivable write-offs
□ Applicable √ N/A
Description of write-offs:
□ Applicable √ N/A
Other Notes:
□ Applicable √ N/A
Other receivables
(1). Disclosure by ageing
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Ageing | Closing book balance | Opening book balance |
| Within 1 year | ||
| Of which: Within 1 year | ||
| Within 1 year (including 1 year) | 23,934,949.61 | 34,273,904.03 |
| Subtotal within 1 year | 23,934,949.61 | 34,273,904.03 |
| 1 to 2 years | 2,909,712.70 | 5,154,409.31 |
| 2 to 3 years | 4,814,209.43 | 131,200.00 |
| 3 to 4 years | 126,600.00 | 127,400.00 |
| 4 to 5 years | 10,900.00 | 91,000.00 |
| More than 5 years | 59,000.00 | 74,000.00 |
| Total | 31,855,371.74 | 39,851,913.34 |
(2). Breakdown by nature of payment
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Nature of payment | Closing book balance | Opening book balance |
| Current account | 18,635,795.92 | 27,055,330.18 |
| Guarantee and deposit | 11,137,720.63 | 11,312,752.73 |
| Reserve | 1,034,400.00 | 792,900.00 |
| Other | 1,047,455.19 | 690,930.43 |
| Subtotal | 31,855,371.74 | 39,851,913.34 |
| Provision for bad debts | 785,582.81 | 748,702.53 |
| Total | 31,069,788.93 | 39,103,210.81 |
(3). Provision for bad debts
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Provision for bad debts | Phase I | Phase II | Phase III | Total |
| Expected credit losses for the next 12 months | Expected credit losses for the entire duration (no credit impairment) | Expected credit losses for the entire duration (no credit impairment) | ||
| Balance at January 1, 2023 | 748,702.53 | 748,702.53 | ||
| Balance at January 1, 2023 in the current period | ||||
| --Reversed to Phase II | ||||
| --Reversed to Phase III | ||||
| --Reversed to Phase II | ||||
| --Reversed to Phase I | ||||
| Provision during the period | 36,880.28 | 36,880.28 | ||
| Reversal during the period | ||||
| Write-offs during the period | ||||
| Cancellations during the period | ||||
| Other changes | ||||
| Balance at December 31, 2023 | 785,582.81 | 785,582.81 |
Basis of classification of phases and percentage of provision for bad debtsNone
Explanation of significant changes in the book balance of other receivables for which changes in theallowance for losses occurred during the period:
□ Applicable √ N/A
The amount of provision for bad debts for the current period and the basis adopted for assessing whetherthere is a significant increase in the credit risk of financial instruments:
□ Applicable √ N/A
(4). Provision for bad debts
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Category | Opening balance | Change during the period | Closing balance | |||
| Provision | Recovered or reversed | Write-offs or cancellations | Other changes | |||
| Provision for bad debts | 748,702.53 | 36,880.28 | 785,582.81 | |||
| Total | 748,702.53 | 36,880.28 | 785,582.81 | |||
Of which the amount of provision for bad debts reversed or recovered during the period is significant:
□ Applicable √ N/A
Other NotesNone
(5). Other receivables actually written off during the period
□ Applicable √ N/A
Significant other receivables written off during the period:
□ Applicable √ N/A
Description of other receivables written off:
□ Applicable √ N/A
(6). Other receivables with the top five closing balances grouped by party owed
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Unit Name | Closing balance | Percentage of total closing balance of other receivables (%) | Nature of receivables | Ageing | Closing balance of provision for bad debts |
| Unit I | 14,670,301.47 | 46.06 | Borrowing and lending | Within 1 year | |
| Unit II | 5,585,535.63 | 17.53 | Guarantee deposits | Less than 1 year, 1-2 years, 2-3 years | 279,276.78 |
| Unit III | 3,077,313.14 | 9.66 | Salaries of expatriates | Within 1 year | |
| Unit IV | 1,493,000.00 | 4.69 | Guarantee deposits | Less than 1 year, 1-2 years, 2-3 years, 3-4 years | 74,650.00 |
| Unit V | 800,000.00 | 2.51 | Guarantee deposits | Within 1 year | 40,000.00 |
| Total | 25,626,150.24 | 80.45 | /Total | / | 393,926.78 |
(7). Presented in other receivables due to centralized management of funds
□ Applicable √ N/A
Other Notes:
□ Applicable √ N/A
3. Long-term equity investments
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Investments in subsidiaries | 88,485,289.33 | 88,485,289.33 | 84,542,333.88 | 84,542,333.88 | ||
| Investments in associates and joint ventures | ||||||
| Total | 88,485,289.33 | 88,485,289.33 | 84,542,333.88 | 84,542,333.88 | ||
(1). Investments in subsidiaries
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Invested Unit | Opening balance | Increase during the period | Decrease during the period | Closing balance | Provision for impairment for the period | Closing balance of provision for impairment |
| Acter (Shenzhen) | 37,527,798.95 | 37,527,798.95 | ||||
| Shenzhen Dingmao | 5,000,000.00 | 5,000,000.00 | ||||
| Acter (Hong Kong) | 28,651,120.44 | 28,651,120.44 | ||||
| Acter (Singapore) | 13,363,414.49 | 13,363,414.49 | ||||
| Indonesia Joint Venture | 3,942,955.45 | 3,942,955.45 | ||||
| Total | 84,542,333.88 | 3,942,955.45 | 88,485,289.33 |
(2). Investments in associates and joint ventures
□ Applicable √ N/A
(3). Impairment testing of long-term equity investments
□ Applicable √ N/A
Other Notes:
None
4. Operating revenues and operating costs
(1). Operating revenues and operating costs
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Amount in the current Period | Amount in the prior period | ||
| Revenue | Cost | Revenue | Cost | |
| Main businesses | 1,511,362,826.53 | 1,337,646,532.15 | 1,200,221,360.57 | 1,036,325,910.16 |
| Other business | 4,071,314.74 | 1,320,285.28 | 5,630,460.36 | 3,385,164.11 |
| Total | 1,515,434,141.27 | 1,338,966,817.43 | 1,205,851,820.93 | 1,039,711,074.27 |
(2). Breakdown information of operating revenues and operating costs
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Contracts Classification | Parent Company | Total | ||
| Operating Revenue | Operating Costs | Operating Revenue | Operating Costs | |
| Commodity Type | ||||
| Clean room engineering | 1,464,301,397.12 | 1,299,051,834.63 | 1,464,301,397.12 | 1,299,051,834.63 |
| Other electromechanical installation works | 47,050,267.61 | 38,587,119.64 | 47,050,267.61 | 38,587,119.64 |
| Sales of equipment | 11,161.80 | 7,577.88 | 11,161.80 | 7,577.88 |
| Other businesses | 4,071,314.74 | 1,320,285.28 | 4,071,314.74 | 1,320,285.28 |
| By region of operation | ||||
| Domestic | 1,515,434,141.27 | 1,338,966,817.43 | 1,515,434,141.27 | 1,338,966,817.43 |
| Market or client Type | ||||
| IC Semiconductor Industry | 1,277,995,305.19 | 1,145,012,859.98 | 1,277,995,305.19 | 1,145,012,859.98 |
| Precision manufacturing industry | 95,839,244.09 | 83,068,202.99 | 95,839,244.09 | 83,068,202.99 |
| Optoelectronics industry | 100,628,804.88 | 80,152,029.38 | 100,628,804.88 | 80,152,029.38 |
| Other industries | 36,899,472.37 | 29,413,439.80 | 36,899,472.37 | 29,413,439.80 |
| Other businesses | 4,071,314.74 | 1,320,285.28 | 4,071,314.74 | 1,320,285.28 |
| Contract type | ||||
| Sales of goods | 11,161.80 | 7,577.88 | 11,161.80 | 7,577.88 |
| Provision of construction labor | 1,511,351,664.73 | 1,337,638,954.27 | 1,511,351,664.73 | 1,337,638,954.27 |
| Other businesses | 4,071,314.74 | 1,320,285.28 | 4,071,314.74 | 1,320,285.28 |
| Classification by contract period | ||||
| Revenue recognized at a point in time | 11,161.80 | 7,577.88 | 11,161.80 | 7,577.88 |
| Revenue recognized at a certain point in time | 1,515,422,979.47 | 1,338,959,239.55 | 1,515,422,979.47 | 1,338,959,239.55 |
| Total | 1,515,434,141.27 | 1,338,966,817.43 | 1,515,434,141.27 | 1,338,966,817.43 |
Other notes
□ Applicable √ N/A
(3). Explanation of performance obligations
□ Applicable √ N/A
(4). Description of apportionment to remaining performance obligations
□ Applicable √ N/A
(5). Significant contract changes or significant transaction price adjustments
□ Applicable √ N/A
Other Notes:
None
5. Investment income
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Amount in the current period | Amount in the prior period |
| Income from long-term equity investments accounted for under the cost method | ||
| Income from long-term equity investments accounted for under the equity method | ||
| Investment income from disposal of long-term equity investments | -300,000.00 | |
| Investment income from financial assets held for trading | ||
| Dividend income from other equity instruments during the holding period | ||
| Interest income from debt investments during the holding period | ||
| Interest income from other debt investments during the holding period | ||
| Investment income from disposal of trading financial assets | 1,894,851.65 | |
| Investment income from disposal of other equity instruments | ||
| Investment income from disposal of debt investments | ||
| Investment income from disposal of other debt investments | ||
| Gain on debt restructuring | ||
| Dividend payment | 17,000,000.00 | 9,000,000.00 |
| Total | 18,594,851.65 | 9,000,000.00 |
Other Notes: None
6. Others
□ Applicable √ N/A
XX. Supplementary information
1. Details of non-recurring gains and losses for the period
√ Applicable □ N/A
Unit: Yuan Currency: RMB
| Item | Amount | Description |
| Gains and losses on disposal of non-current assets, including write-off of provision for asset impairment | 52,564.23 | |
| Government grants recognized as current profit or loss, except those closely related to the Company's normal business operations, in compliance with national policies and in accordance with established criteria, and with a continuing impact on the Company's profit or loss. | 3,731,552.00 | |
| Gains and losses from changes in fair value of financial assets and liabilities held by non-financial enterprises and gains and losses from the disposal of financial assets and liabilities, except for effective hedging business related to the Company's normal business operations. | ||
| Funds occupation fees charged to non-financial enterprises recognized in profit or loss | ||
| Gains and losses on entrusted investment or asset management | ||
| Gains and losses on entrusted external loans | ||
| Losses on assets due to force majeure factors, such as natural disasters | ||
| Reversal of provision for impairment of receivables individually tested for impairment | ||
| Gain arising from the excess of the cost of investments in subsidiaries, associates and joint ventures over the fair value of the investee's identifiable net assets at the time of investment acquisition | ||
| Net profit or loss of subsidiaries from the beginning of the period to the date of consolidation arising from a business combination under the same control | ||
| Gain or loss on exchange of non-monetary assets | ||
| Gains and losses on debt restructuring | ||
| One-time costs incurred by the enterprise due to the discontinuation of the relevant business activities, such as employee relocation expenses. | ||
| One-time impact on profit or loss due to adjustments in tax, accounting and other laws and regulations. | ||
| Share-based payment expenses recognized as a result of cancellation or modification of the share incentive plan. | ||
| Gains or losses arising from changes in the fair value of employee remuneration payable after the feasible date for cash-settled share-based payments | ||
| Gains or losses from changes in the fair value of investment properties subsequently measured using the fair value model | ||
| Gains or losses from transactions at prices that are not at arm's length | ||
| Gains and losses arising from contingencies unrelated to the Company's normal business operations | ||
| Custodian fee income from entrusted operations | ||
| Non-operating revenue and expenses other than those mentioned above | -811,609.16 | |
| Other profit and loss items that meet the definition of non-recurring profit and loss |
| Less: Income tax effect | 445,099.41 | |
| Effect of minority interests (after tax) | -1,725.46 | |
| Total | 2,529,133.12 |
For non-recurring profit and loss items that the company identifies as items not listed in “InterpretativeAnnouncement for Information Disclosure of Companies Issuing Public Securities No. 1 - Non-recurringProfit and Loss” and the amount is significant, as well as items that are defined as recurring profit and lossitems that are listed in “Interpretative Announcement for Information Disclosure of Companies IssuingPublic Securities No. 1 - Non-recurring Profit and Loss”, the reasons shall be explained.
□ Applicable √ N/A
Other Notes
□ Applicable √ N/A
2. Return on net assets and earnings per share
√ Applicable □ N/A
| Profit for the reporting period | Weighted average return on net assets (%) | Earnings per share | |
| Basic earnings per share | Diluted earnings per share | ||
| Net profit attributable to ordinary shareholders of the Company | 13.67 | 1.39 | 1.39 |
| Net profit attributable to ordinary shareholders of the Company after extraordinary gains and losses | 13.42 | 1.36 | 1.36 |
3. Differences in accounting data under Chinese and foreign accounting standards
□ Applicable √ N/A
4. Others
□ Applicable √ N/A
Chairman: Liang JinliDate of approval for filing by the Board of Directors: March 29, 2024
Revised information
□ Applicable √ N/A