Annual Report 2023
Company Code: 603163 Company Abbreviation : Acter Group
Acter Technology Integration Group Co., Ltd.
Annual Report 2023
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Annual Report 2023
Important Notices
I. The Board of Directors, Supervisory Committee, Directors, Supervisors and Senior Management of
the Company guarantee the truthfulness, accuracy and completeness of the contents of the annual
report, and assume individual and joint legal liabilities for any false records, misleading statements or
material omissions.
II. All Directors of the Company attended the Board meeting.
III. ShineWing Certified Public Accountants LLP has issued a standard unreserved audit report for
the Company.
IV. Liang Jinli, the person in charge of the Company, Chen Zhihao, the person in charge of accounting
work, 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 adopted
by resolution of the Board of Directors
The 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 the
end of 2023, totaling RMB 80,000,000.00 (inclusive of tax), with no stock dividend or capitalization, and
the 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-looking
statements in this report do not constitute substantial commitments of the Company to investors, and
investors are advised to pay attention to investment risks.
VII. Whether there is non-operational appropriation of funds by controlling shareholders and other
related parties
No
VIII. Whether there is any violation of the required decision-making procedures for the provision of
external guarantees
No
IX. Whether more than half of the directors are unable to guarantee the truthfulness, accuracy and
completeness of the annual report disclosed by the Company
No
X. Significant Risk Warning
For details, please refer to the possible risks mentioned in “Section III: Management Discussion and Analysis
VI、Discussion and Analysis of the Future Development of the Company (IV) Possible Risks”.
XI. Others
□ Applicable √ N/A
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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
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
Catalog of Documents person in charge of the accounting organization (accounting supervisor).
Available for Inspection 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.
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Section I Definitions
I.Definitions
In this report, unless the context otherwise requires, the following terms shall have the meanings set out
below:
Definitions of commonly used terms
Company, the Company, Acter
refer to Acter Technology Integration Group Co., Ltd.
Group, Suzhou Acter
Sheng Huei (Suzhou) Engineering Co., Ltd., the
Sheng Huei Limited refers to
predecessor of the Company
Sheng Huei International Co., Ltd., a direct controlling
Sheng Huei International refers to
shareholder of the Company
Acter Co., Ltd., an indirect controlling shareholder of the
Acter (Taiwan) refers to
Company
Suzhou Songhuei Business Management Consulting
Suzhou Songhuei refers to Partnership (Limited Partnership), an employee
shareholding platform of the Company
Suzhou Shengzhan Business Management Consulting
Suzhou Shengzhan refers to 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
refer to Acter Technology Singapore Pte. Ltd.
(Singapore)
Acter (Indonesia), Sheng Huei
refer to Pt. Acter Technology Indonesia
(Indonesia)
Acter (Malaysia), Sheng Huei
refer to Acter Technology Malaysia Sdn. Bhd.
(Malaysia)
Acter (Thailand), Sheng Huei
refer to Acter Technology Company Limited
(Thailand)
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.
Suzhou Winmax Technology Corp. It used to be called
Winmax (Suzhou) refers to
Suzhou Guanbo Controlling Technology Co., Ltd.
Novatech (Singapore) refers to Novatech Engineering & Construction Pte. Ltd.
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Rayzher Industrial refers to Rayzher Industrial Co., Ltd.
Smic Manufacturing (Shaoxing) Co., LTD
SMIC refers to
Lankao Yufu Precision Technology Co., Ltd.,
Futaihua Industrial (Shenzhen) Co., Ltd.,
Shanghai Foxconn Co., Ltd.,
Yecheng Optoelectronics (Wuxi) Co., Ltd.
Foxconn Technology Group refers to
.,
Interface Optoelectronics (SZ) Co., Ltd.
,
Interface Technology (Chengdu) Co., Ltd.
Siliconware Technology (Suzhou) Limited
Siliconware Technology refers to
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 of Acter Technology Integration
Articles of Association refers to
Group Co., Ltd.
General Meeting of Shareholders of Acter Technology
General Meeting refers to
Integration Group Co., Ltd.
The Board of Directors of Acter Technology Integration
Board of Directors refers to
Group Co., Ltd.
Supervisory Committee of Acter Technology Integration
Supervisory Committee refers to
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
Renminbi/Chinese Yuan, RMB Ten Thousand Yuan, RMB
Million/100, RMB refer to
One Hundred Million Yuan
Million*100
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,
Clean Room refers to
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.
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
Cleanliness refers to
designated volume of air. Elevated dust levels are linked to
reduced cleanliness, whereas low dust content signifies
high cleanliness.
the business of combining software, hardware and
System Integration refers to communication technology to solve information processing
problems for users. The separated parts of the integration
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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.
the connection from the main system piping to the process
Hook-up refers to equipment. Scope includes electricity, water supply and
drainage pipes, process piping, exhaust systems, etc.
a semiconductor manufacturing process in which a
number of transistors, resistors, capacitors, and other
IC Semiconductor refers to components are fabricated on a small monocrystalline
silicon wafer and assembled into a complete electronic
circuit using multi-layer wiring or tunnel wiring.
the shell in which a semiconductor integrated circuit chip is
mounted, which not only plays the role of placing, fixing,
Package refers to 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.
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
Electronics Industry refers to 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.
Building Information Modeling in short, which is a new
tool for architecture, engineering and civil engineering, and
BIM refers to
is a computer-aided design tool based on three-dimensional
graphics, object orientation and architecture.
Printed Circuit Board in short, which is an important
electronic component, the support body of electronic
PCB refers to
components, and the carrier for the electrical
interconnection of electronic components.
the general contracting entrusted by the owner, in
accordance with the contract for the whole process of
EPCO refers to
design, procurement, construction, operation and other
integration of engineering construction projects.
Good Manufacturing Practice in short, a system for
GMP refers to ensuring the continuous production of pharmaceutical
products at a specified quality.
Section II Company Profile and Key Financial Indicators
I. 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
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Legal Representative Liang Jinli
II. Contact Information
Secretary of the Board of Directors Securities Representative
Name Chen Zhihao Gao Jiejie
No. 189, Shilin Road, Xushuguan No. 189, Shilin Road, Xushuguan
Address Economic Development Zone, Suzhou Hi- Economic Development Zone, Suzhou Hi-
Tech Zone, Jiangsu Province, China Tech Zone, Jiangsu Province, China
Tel. 0512-85186368 0512-85186368
Fax 0512-87773169 0512-87773169
E-Mail acter.china@acter.com.cn 603163@acter.com.cn
III. Basic Information
No. 189, Shilin Road, Xushuguan Economic
Registered Address Development Zone, Suzhou Hi-Tech Zone, Jiangsu
Province, China
Historical Changes in Registered Address N/A
No. 189, Shilin Road, Xushuguan Economic
Business Address Development Zone, Suzhou Hi-Tech Zone, Jiangsu
Province, China
Zip Code of the Business Address 215151, Suzhou
Company’s Website www.acter.com.cn
E-mail acter.china@acter.com.cn
IV. Place for Information Disclosure and Deposit
China Securities Journal: https://www.cs.com.cn/
Name and website of the media for Shanghai Securities News: https://www.cnstock.com/
information disclosure in annual report STCN: http://www.stcn.com/
Securities Daily: http://www.zqrb.cn/
Website of the stock exchange for
www.sse.com.cn
publishing annual reports
Office of the Board of Directors of Acter Group, No. 189,
Deposit place of annual report Shilin Road, Xuushuguan Economic Development Zone,
Suzhou Hi-Tech Zone, Jiangsu Province, China
V. Profile of Company Stock
Profile of Company Stock
Stock Exchange of Stock Short Name
Stock Type Stock Short Name Stock Code
Shares Listed Before Change
Shanghai Stock
A-share Acter Group 603163 N/A
Exchange
VI. Other Information
Name of Firm ShineWing Certified Public Accountants LLP
Accounting Firm 8/F, Block A, Fuhua Mansion, No. 8
engaged by the Business Address Chaoyangmen North Street, Dongcheng
Company (domestic) District, Beijing, China
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Name of the Signatory
Liu Yuehua, Hou Shoufeng
Accountants
Name of Sponsor Soochow Securities Co., Ltd.
Sponsoring
organization Office Address No. 5 Xingyang Street, Suzhou Industrial Park
performing Name of Signatory Sponsor
continuous Xia Jianyang, Zhang Boxiong
Representative
supervision during the Period of Continuous
reporting period October 13, 2022 to December 31, 2024
Supervision
VII. Key Accounting Data and Financial Indicators for the Previous Three Years
(I) Key Accounting Data
Unit: Yuan Currency: RMB
Yoy change
(%)
Key Accounting Data 2023 2022 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 138,590,474.42 122,867,982.79 12.80 123,603,770.26
companies
Net profit attributable to
shareholders of the listed
company after
136,061,341.30 113,463,515.78 19.92 123,839,170.02
extraordinary gains and
losses
Net cash flows from
133,522,931.23 161,089,465.80 -17.11 -64,818,199.36
operating activities
Yoy change
End of 2023 End of 2022 End of 2021
(%)
Net assets attributable
to shareholders of listed 1,082,257,514.27 1,009,348,273.61 7.22 423,289,612.23
companies
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 1.36 1.40 -2.86 1.65
(yuan/share)
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 13.42 19.56 Decrease of 6.14% 33.65
Average return on net assets (%)
Explanations on key accounting data and financial indicators of the Company for the previous three years
as 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 approved
at the Sixth Meeting of the Second Session of the Board of Directors and the Fifth Meeting of the Second
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Session of the Supervisory Committee of the Company held on April 7, 2023 and the Annual General
Meeting of the Company held on April 28, 2023, based on the total share capital of 80,000,000 shares prior
to the implementation of the equity distribution, the Company transferred 2.5 shares for every 10 shares to
all shareholders by way of capitalization of capital reserve, resulting in a total of 20,000,000 shares. After
this capitalization, the total share capital of the Company became 100,000,000 shares. The equity distribution
was completed during the reporting period. In order to ensure the comparability of accounting indicators, the
basic earnings per share for 2022 and 2021 have been recalculated and presented based on the changed
number 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 between
the financial reports disclosed in accordance with international accounting standards and those
disclosed in accordance with China accounting standards
□ Applicable √ N/A
(II) Difference in net profit and net assets attributable to shareholders of the listed company between
the financial reports disclosed in accordance with overseas accounting standards and those
disclosed 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 Q3 Q4
Q2
(January- (July- (October-
(April-June)
March) September) 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 36,223,388.39 40,844,180.88 37,061,523.72 24,461,381.43
companies
Net profit after extraordinary
gains and losses attributable to
shareholders of listed 34,320,192.92 41,129,128.30 36,239,469.39 24,372,550.69
companies
Net cash flows from operating
-32,077,131.59 73,739,081.78 -99,323,932.35 191,184,913.39
activities
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
Note
Amount for Amount for Amount
Non-recurring profit and loss items (If
2023 2022 for 2021
applicable)
Profits or losses on disposal of non-current
assets, including elimination of provision for 52,564.23 237,578.33 352,738.82
asset impairment
Government grants recognized in profit or loss
for the current period, except for those 3,731,552.00 3,524,827.14 174,197.46
government grants that are closely related to
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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,
117,673.57 -11,643.74
except for effective hedging business related to
the Company’s normal business operations
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
-35,000.00
receivables individually tested for impairment
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
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Non-operating revenue and expenses other -
-811,609.16 -840,019.94
than those mentioned above 785,670.35
Other profits or losses that meet the definition
9,569,293.94
of non-recurring profits or losses
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 “Interpretative
Announcement for Information Disclosure of Companies Issuing Public Securities No. 1 - Non-Recurring
Profit and Loss” and the amount is material, and if the company defines non-recurring profit and loss items
listed in “Interpretative Announcement for Information Disclosure of Companies Issuing Public Securities
No. 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
Current period Amount of impact
Item Name Opening balance Closing balance
changes 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 Conditions
In 2023, the Company continues to implement the corporate culture policy of “doing it right the first
time, doing it well every time”, consistently and wholeheartedly providing comprehensive services to every
client, 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 versatile
and professional talents. Facing the complex Chinese and international business environment, the Company
continuously optimizes internal processes, actively takes risk response measures, focuses on the quarterly
business goals conveyed by the lean meeting, and implements strategic measures with small steps and steady
progress. It diligently organizes various tasks, actively adjusts client and product structures, and lays a good
foundation for stability and improvement of competitiveness in terms of cost, quality, safety, progress, and
environmental protection.
The year of 2023 marks a year in which the Company’s research and development technology
achievements are demonstrated. During the reporting period, the Company was honored as a “high-tech
enterprise”. As of the end of 2023, the Company held 61 patents, including 9 invention patents, 52 utility
model patents, and 3 software copyrights.
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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 software
copyrights. Besides, the Company has also registered a total of 15 trademarks.
In 2023, the Company achieved steady growth in its business performance. The annual business goals
were 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 a
net profit of RMB 140 million, an increase of 13.86% year-on-year. The Company’s performance growth
was mainly due to increased demand from downstream application clients in the clean room industry, the
fruitful results of the Company’s early layout in the Southeast Asia region, continuous development of new
clients while maintaining stable relationships with existing high-quality clients, and strengthening service
innovation 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 to
external pressures, overcoming internal difficulties, and making strenuous efforts to successfully fulfill the
main objective tasks.
RMB 2,009 million
RMB 1,628 million
Operating Revenue (RMB 100 million)
Year-on-year
growth rate:
23.41% 2022 2023
RMB 140 million
RMB 123 million
Net profit (RMB 100 million)
Year-on-year
growth rate:
13.86% 2022 2023
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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 solutions
for the advanced manufacturing industry as a professional service provider. According to the classification
standards of the “National Economic Industry Classification” and the “Industry Classification Guidelines for
Listed 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 upstream
supply, midstream construction, and downstream applications. Specifically:
- Upstream involves suppliers of building materials, system equipment, and electromechanical
equipment, which directly impact the progress and completion of projects. Their prices directly affect the
industry’s costs and significantly influence the profits of industry enterprises.
- Midstream encompasses the Company’s industry, mainly including engineering survey, engineering
design, 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 semiconductor
industry 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 the
demand for clean room engineering services, which are fulfilled by industry enterprises. With the continuous
advancement of industrial technology, downstream industries constantly raise their requirements for clean
rooms, thereby pushing industry enterprises to continually research and develop new technologies, and apply
new construction techniques to adapt to the changing market demand.
The Company focuses on the integrated engineering of clean room systems in the advanced
manufacturing industry, with the “Engineering, Procurement, Construction, and Operation (EPCO)”. It can
provide clean workshop construction planning, design suggestions, equipment configuration, clean room
environmental system integration engineering, and maintenance services, belonging to the midstream
construction industry of the clean room industry chain.
Cleanroom Industry Chain Diagram
Upstream Supply Midstream Downstream
Construction Applications
IC Semiconductor
Building
Engineering Survey
Materials/Hardware
Optoelectronic Panels
Fire Protection/Control Precision
Equipment Manufacturing
Engineering Design Biopharmaceuticals
Air
conditioning/Purification
Equipment Food & Chemicals
Electromechanical/Lighting Engineering Aerospace
Equipment, etc. Construction
New Energy, etc.
(II) Development Overview of Clean Room Industry
The development of the clean room industry in China began in the 1960s, drawing on the early
technology of the former Soviet Union, mainly used in national defense, aerospace, atomic energy, and
scientific research, and later gradually expanded to the control of environmental conditions in industries such
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as precision machinery, non-ferrous metal purification in metallurgical systems, and pulling monocrystalline
silicon.
The clean room industry in China experienced vigorous development from the 1970s to the 1990s. In
1977, the first high-level biological clean room was established, and since the 1980s, the construction of
biological 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 after
the announcement of China’s GMP certification in 1982, leading to a significant increase in the demand for
clean room construction in the pharmaceutical industry. The construction of clean rooms for medical
facilities such as aseptic operating rooms also rapidly expanded. After the reform and opening up, the
introduction of foreign-funded enterprises led to the widespread application of higher-level air cleaning
technologies in various fields.
From the 1990s to the present, China’s technological level has been developing vigorously. The global
transfer of production capacity in precision electronics such as semiconductors and new displays has
accelerated towards China, greatly increasing the market demand and technological research and
development level of the clean room industry as a result of advances in the research and development of
pharmaceuticals and biotechnology. This has effectively driven the rapid development of China’s clean room
industry. In order to achieve the strategic goal of “carbon neutrality,” China will reduce carbon emissions
through energy substitution, energy conservation, and efficiency improvement. According to data from the
National Energy Administration, it is expected that during the “14th Five-Year Plan” period, China’s average
annual increase in newly installed photovoltaic capacity will be between 70-90GW. As an important part of
the construction of solar cell production plants, the demand for the construction of clean rooms will continue
to 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 macroeconomic
situation, industry policy regulation, and downstream industry investment conditions, and therefore show a
certain cyclical characteristic. The main downstream industries of the clean room engineering industry are
strategic emerging industries such as the electronics industry. In order to narrow the gap with developed
countries and promote the development of intelligent manufacturing, information technology, and other
industries in China, a number of policies have been formulated in China in recent years to promote the
development of related industries. This has also led to a relatively stable and sustained development market
trend in the clean room engineering industry.
The “Outline of the Fourteenth Five-Year Plan for National Economic and Social Development and
the Long-Range Objectives Through the Year 2035 of the People’s Republic of China” clearly states the
cultivation of advanced manufacturing clusters, promoting the innovative development of industries such as
integrated circuits, aerospace, pharmaceuticals, and medical devices. It focuses on strategic emerging
industries 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 marine
equipment. Industrial policies not only promote the development of industries such as semiconductors and
integrated circuits but also drive the development of the upstream industry, the clean room engineering
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industry. The continuous expansion of the scale of downstream industries, the ongoing process of
localization substitution, the rise of new fields such as new energy and automotive electronics, and the
gradual improvement in the quality of life of the population have provided good development opportunities
for the clean room industry, with rapid construction of new production lines for downstream industry
products.
(IV) Industry Position of the Company
Currently, the competition in the Chinese clean room market is intense, with a larger number of
business groups, but a smaller number of enterprises are capable of undertaking high-level clean room
system integration solutions. Enterprises with the strength to undertake clean room engineering projects are
gradually gaining a stable market share in the high-end segment. Our focus lies on clean room engineering
projects for high-tech plants in the electronic industry such as IC semiconductors and precision
manufacturing. The investment in high-tech plants in the high-end electronic industry is substantial, with
high requirements for clean room stability. To mitigate investment risks, lower costs, and ensure product
yield, 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 clean
rooms for the entire semiconductor industry chain, possessing strong brand influence in enhancing client
product 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 improving
the stability and reliability of clean room engineering projects.
For the past twenty years, our Company has been focused on the integration and engineering of
advanced manufacturing clean room systems. We have undertaken clean room projects for leading
companies in various industries, including Siliconware Technology, Sanan Integrated, ASE, Foxconn
Technology Group, Wistron Info Comm, SMIC, Nexchip, and Wafer Works. In 2023, we were honored with
multiple 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 market
share in the high-end clean room engineering field, enjoying a strong reputation and market influence within
the industry, and possess a high industry standing.
(V) Major Laws and Regulations of the Industry and the Impact of Industrial Policies
The current legal and regulatory framework related to the clean room system integration engineering
services provided by our Company mainly includes industry qualification management, industry business
standards, and industry quality management, as follows:
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The industrial policy support for the main downstream industries served by the Company is conducive
to the sustainable growth of the related industries, thus driving the overall market demand for clean room
engineering. In recent years, China has continuously introduced relevant policies to promote the
development 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 is
part of the construction industry, and China has been continuously introducing policies to promote the
greening and intelligent development of the construction industry, vigorously promoting the application of
BIM technology and other information technologies used in clean room construction, and policies promoting
the 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 clean
factory construction planning, design recommendations, equipment configuration, clean room environment
system integration engineering, and maintenance services.
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The Company has the qualifications of Grade I General Contractor of Electromechanical Engineering,
Grade I Specialist Contractor of Building Electromechanical Installation Engineering, Grade II Specialist
Contractor of Electronic and Intelligent Engineering, Grade II Specialist Contractor of Building Decoration
and Decoration Engineering and Grade II Specialist Contractor of Fire Fighting Facilities Engineering, which
provide a solid technical foundation and professional guarantee for the development of the business of the
Company.
The Company’s business scope includes system integration services; design and installation of
electromechanical systems, HVAC systems, aseptic systems, and building equipment management systems;
construction of air purification engineering, fire engineering, building construction engineering, interior and
exterior decoration engineering, municipal public works, and pipeline engineering, as well as providing
related technical consulting and after-sales services; research and development and manufacturing of
industrial switch power converters and components; wholesale, import, and export of similar products
produced by the company, as well as building materials, dust-free, aseptic purification equipment and related
equipment, components; type III medical device operation; type II medical device sales; metal structure
manufacturing; 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 high
requirements on process precision, process media and process environment. As a professional clean room
system integration engineering service provider, the Company’s main business is centered around the core
process 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 a
broad sense.
The clean rooms involved in the company are mainly industrial clean rooms. The clean room system
integration provided by the Company includes clean room-related air treatment system, airflow and airway
system, water treatment system, interior system, vibration damping system, static electricity control system,
electromagnetic interference control system, process system, environment inspection system, electric power
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system, fire safety system and other clean room-related systems. The clean room system integration project
is shown as follows:
Air handling systems
Pollutant detection
Air pressure control
Particle filtration
Humidity control
Cleanroom
AMC control
Temperature
System
control
Atmosphere
Integration
Engineering
Clean Room
Water treatment systems
interference control system
Airflow & Ducting System
Particle filtration
Particle filtration
Inspection System
Temperature
adjustment
Static electricity
Environmental
Acid-base
Interior Systems
control system
Electromagnetic
control
Water Compliance
Water
supply
Vibration Damping System
Electricity System Fire Safety System Other Systems
General Waste
Special
Wastewat liquids liquid
er Waste gas Specialty
Gases
Waste liquid and gas Specialty liquid and gas
Sewerage treatment system storage systems
(III) Business Model
The Company is a one-stop professional service provider of clean room system integration engineering
solutions for advanced manufacturing industries, with the ability to implement a complete industry chain
from engineering design to procurement, construction, operation and maintenance and other system
integration. During the project implementation stage, the Company purchases the required equipment and
materials in accordance with the specific project conditions and subcontracts the construction of clean room
system projects, and the Company organizes and coordinates the contracting units of each system, supervises
and guides them, and coordinates the overall progress of the project. The Company makes profits by
providing 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 searching
market information, continuous service of existing clients, and recommendation of new clients by existing
clients, 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 the
notification 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 signed
with the owner or contractor, mainly including construction materials and equipment. The procurement plan
of the Company is prepared based on the project cost budget and the requirements of the project execution
schedule, and the corresponding procurement plan is prepared and executed on a project basis. The person
in charge of the project prepares the procurement plan according to the project progress, project material
input plan, processing time requirements of customized materials, etc., and the procurement period of each
type of materials is clearly defined.
3. Engineering Contracting Mode
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In accordance with the Construction Law of the People’s Republic of China, Civil Code of the People's
Republic of China, Labor Law of the People’s Republic of China, Provisions on the Administration of the
Qualifications of Construction Enterprises and other relevant laws and regulations, as well as the project
construction contract signed with the owner, the Company will contract out the clean room construction
projects according to the specific clean room projects during the implementation stage of the clean room
project. If there are restrictive clauses or explicit provisions in the general contract, the Company shall obtain
the consent of the owner before contracting before selecting the contracting manufacturer. The Company
centrally coordinates, organizes, supervises, guides and uniformly manages the contracting units of each
system during the construction process.
The Procurement Department of the Company is responsible for maintaining the list of suppliers and
evaluating the contractors based on their qualifications, financial strength, engineering achievements and
other relevant information. When there is a demand for contracting in a construction project, the person in
charge of the project will initiate a requisition for contracting, and the Procurment Department will sign a
contract after comparing the contractors’ experience, technology, price and other factors with the approval
of the corresponding supervisor. Subsequently, the Company organizes engineers and technicians to give
technical briefings to the contractors, and conducts training, supervision and management of the contractors
in accordance with the terms of the contract, design documents and construction specifications to ensure the
normal 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 integration
technology, high-end clean room project experience and engineering management capability. After years of
technology research and development and project accumulation, the Company is able to plan the overall
solution 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 main
indexes such as cleanliness, temperature and humidity, micro-vibration, AMC, etc., and to collaborate with
the clients in upgrading the production process, optimizing the product manufacturing process and improving
the yield rate of production, etc. The core competitiveness of the Company is shown in the following. The
core 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 of
IC semiconductors, photoelectric panels and other electronic industries, which belongs to the high-end field
of the clean room engineering industry and is characterized by high level of cleanliness, large scale of
investment, wide construction area, complex system integration and high requirements for engineering
quality. Since it takes a long time of research and development and accumulation of practical experience to
acquire the construction technology required for such clean room projects, only a few enterprises in the
industry have the technical level to construct high-grade clean rooms in such fields. The Company has
undertaken many high-end clean room projects for high-tech plants in China and is a leading and well-known
enterprise in the industry.
In 2023, the Company adds 18 patents, including 7 invention patents and 11 utility model patents. The
Company has set up an engineering database for clean room engineering projects, which is a systematization
of years of engineering experience, providing strong technical and data support for the company to contract
and implement engineering projects. The Company has industry-leading computational fluid dynamics
analysis application technology and air sampling and analysis technology, which can provide clients with
pre-simulation analysis and post-sampling analysis, optimize the layout of the clean room, improve the
production process, reduce the production cost and improve the yield rate of the finished products, and
significantly improve the stability and reliability of the clean room project.
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R&D Target Achievements in the Past Three Years
In 2021, 6 intellectual
In 2023, 18 patents were
property rights were
In 2022, 18 utility model obtained, including 11
obtained, including 3
patents were obtained. utility model patents and 7
utility model patents and 3
invention patents.
software copyrights.
(II) Engineering Performance and Brand Advantage
The 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 product
yield, clients typically choose to cooperate with engineering service companies that have rich experience, a
proven track record, and industry-leading capabilities. With over 20 years of continuous development, the
Company has gained the ability to provide “Engineering, Procurement, Construction, and Operation
(EPCO)”, successfully implementing thousands of clean room-related projects and accumulating rich
construction experience.
The Company has become a professional clean room engineering service provider with strong industry
strength, 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.
Acter Integration is committed to becoming a
high-quality space shaper, impressing customers
with professional technology and attentive
service, and has won over 50 customer
recognitions.
(III) Project Management and Talent Advantages
1. Excellent management team
Excellent management personnel can do targeted research, development and innovation for clients in
different industries and have rich experience in the industry. Since its establishment, the Company has been
engaged in clean room and other system integration engineering business, and the management personnel
are professional and stable. Seventy percent of the middle management personnel are promoted from the
grassroots level, with a low staff turnover rate, which enables the Company to provide clients with long-term
and sustainable engineering services. The core management team has many years of experience in the
industry, has long been serving the global famous enterprises in the industry, and has been developing and
expanding along with the growth of the clients. They have a deep understanding and accurate knowledge of
the technical application, construction organization mode, competition pattern and future development trend
of the clean room engineering industry, and have a deep knowledge of the technical development of the
downstream client industry.
The Company attaches great importance to business management and advocates the synergistic
development of employees’ personal performance and corporate strategy. The Company carries out
construction and inspection of projects in strict accordance with the requirements of ISO9001 quality system
management, and has established a complete set of effective quality management system from supplier
selection and management, raw material quality acceptance, construction process quality control, project
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completion acceptance and project site management. Each project team of the Company organizes and
compiles 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 has
passed GB/T50430, ISO9001 quality management system certification, ISO14001 environmental
management system certification and ISO45001 occupational safety and health management system
certification, and participated in the implementation of clean rooms and other system integration projects
with good quality feedback, widely recognized by clients and unanimously praised.
people people people
people
Sales Master’ Degree
people Bachelor’s Degree
Technician
Financial Staff Associate Degree
Professio Education Below Associate
Administrative Staff
nal al Degree
Structure structure
people 258 people people
2. Scientific and reasonable education and training
In recent years, the Company has vigorously implemented the “apprenticeship system”, primarily
assigning seasoned senior employees to provide one-on-one training for new employees with rich
construction experience, aiming to pass on construction experience to new employees and help them
smoothly 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 and
regulations, financial knowledge, etc., to enhance team management skills and improve business
management skills. KPI, OKR, and skill competitions such as design and drawing skills are used to motivate
employees to understand the Company’s goals and achieve each goal in stages and tasks. The Company
opens a Magic Academy, E-Learning system, and organizes various offline trainings. Each quarter, senior
engineering personnel summarize and analyze closed cases, and monthly offline courses are conducted for
different professional systems, enabling everyone to understand the advantages and disadvantages of other
projects while strengthening their own professional abilities, thus better exerting personal initiative and
boosting operational efficiency.
Key
Performance
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%.
(IV) Advantage of stable client relationship
The investment amount in the high-tech factory buildings of the high-end electronic industry is
substantial, with high requirements for the stability of clean rooms. In order to reduce investment risks, lower
costs, and ensure product yield, owners typically choose to collaborate with experienced engineering service
companies with leading industry expertise and a proven track record. If the initial quality of the engineering
work 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. A
significant proportion of the Company’s main business revenue comes from repeat orders from existing
clients. 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. As
client investment plans are implemented, there is a gradual increase in demand for clean rooms in the factory
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construction process. The Company’s long-term efforts in establishing stable client relationships have
provided strong support for the Company’s further development.
(V) Industrial diversification, geographical layout advantages
The Company has a diversified layout in IC semiconductor, optoelectronic panel, PCB, precision
manufacturing, biomedical and other industries. With stable and reliable quality of engineering services and
rich product structure, the Company’s engineering services have been recognized by many famous
enterprises and have maintained long-term cooperative relationships. In China, the Company has two
business centers in Suzhou and Shenzhen, as well as branches in Shenzhen and Xiamen, with the service
scope radiating to the Yangtze River Delta and the Pearl River Delta, and through the establishment of
marketing outlets in Hefei, Zhengzhou, Changsha, Wuhan, and Chongqing, the Company is able to directly
face the clients, quickly docking, and closely serve the downstream clients of the local advanced
manufacturing industry. Early deployment in Southeast Asia enables the Company to be more familiar with
local regulations and requirements, and rely on its rich experience in plant construction to provide good
localized services to overseas clients. With steady growth in overseas revenue in 2023, the Company has
great potential for development in the Southeast Asian market.
Wuhan
Chongqing
Suzhou
Zhengzhou
Hefei
Changsha
Shenzhen
Xiamen
V. Major Operating Conditions During the Reporting Period
The Company is committed to consistently providing good service to every client, optimizing
construction management processes, continuously improving skills and R&D capabilities, responding to
client needs with localized service layout, and achieving the transformation from solution to mass production
finished 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 development
road-map. The Company actively maintains and stabilizes business relationships with existing clients while
also laying a good foundation for the development of new clients. In 2023, the Company’s main business
revenue was RMB 2,006 million, an increase of 23.38% year-on-year.
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Based on the different types of engineering services provided, the Company’s main business revenue
in 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 installation
projects, and 0.58% from equipment sales.
Clean room system integration-related projects include clean room system integration engineering and
hook-up works. ①Clean room system integration engineering refers to clean room system-related design
and 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 control
systems, 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 as
power systems, water treatment systems, and airflow systems) for new equipment and production lines after
the 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 design
and construction precision and fault tolerance of hook-up works are relatively low. Other electromechanical
installation projects refer to non-clean room-related factory and office building electromechanical projects.
Name Revenue (RMB) Percentage
System Integration 1517 Million 75.62%
2006
Million Secondary Distribution 201 Million 10.03%
Engineering
(RMB)
Electromechanical Installation 276 Million 13.77%
Equipment Sales 12 Million 0.58%
Based on the segmentation by downstream client industries, in the main business of the Company in
2023, clients from the IC semiconductor industry accounted for 67.09%, followed by precision
manufacturing at 23.96%.
Name Revenue (RMB) Percentage
IC Semiconductor Industry 1346 Million 67.09%
2006 Precision Manufacturing Industry 481 Million 23.96%
Million
(RMB) Optoelectronics Industry 101 Million 5.06%
Others 78 Million 3.89%
According to the division of revenue regions, the main business income of the company in 2023 was
RMB 1,570 million domestically, accounting for 78.27%, and RMB 436 million internationally, accounting
for 21.73%, showing an upward trend compared to last year. This indicates an upward trend compared to the
previous year, attributed mainly to the company's strategic presence in the Southeast Asian market. The
Company initiated its operational bases in Vietnam in 2007, expanded to Malaysia in 2011, established a
subsidiary in Indonesia in 2013, and initiated strategic deployment in Thailand in 2019. With the localization
of 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 investment
in Southeast Asia, the Company is optimistic about the future growth space of overseas performance.
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Name Revenue (RMB) Percentage
2006
Domestic 1570 Million 78.27%
Million
(RMB)
Overseas 436 Million 21.73%
(I) Main Business Analysis
1. Analysis of changes in relevant accounts in the income statement and cash flow statement
Unit: Yuan Currency: RMB
Number of current Number of same
Account Change (%)
period period last year
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 133,522,931.23 161,089,465.80 -17.11
activities
Net cash flows from investing 106,839,659.13 -126,308,081.06 N/A
activities
Net cash flows from financing -75,002,375.36 365,160,792.84 -120.54
activities
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 290,286.73 2,027,897.54 -85.69
currency statements
Other comprehensive income
attributable to minority 79,151.41 84,748.55 -6.60
shareholders, net of taxes
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Annual Report 2023
Explanation for the changes in finance costs: Finance costs decreased by 190.64% compared with the
previous period, which was attributable to the higher interest income from bank wealth management in the
current 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 development
investment 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 flows
from investing activities compared with the previous period was due to the higher amount of structured
deposits recovered in the current period;
Explanation for the changes in net cash flows from financing activities: Net cash flows from financing
activities decreased by 120.54% compared with the previous period, which was attributable to the higher
amount of dividend payment in the current period and the receipt of large amount of fund-raising in the
previous period;
Explanation for the changes in investment income: Investment income was higher than that of the previous
period, which was mainly due to the higher income from the purchase of structured finance in the current
period;
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 large
margin compared with the previous period, mainly due to the decrease in bad debts provided for in the current
period 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 losses
on assets as compared with that of the previous period was attributable to the higher amount of reversal of
single provision in the previous period;
Explanation for the changes in gain on disposal of assets: The decrease of 52.81% in gain on disposal of
assets as compared with that of the previous period was attributable to the higher gain on disposal of vehicles
in 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-term
unpaid amount in the previous period;
Explanation for the changes in minority interests: Minority interests increased by 875.37% compared with
the previous period, which was due to the substantial increase in net profit attributable to minority interests
in 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 due
to 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 profit
sources 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
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due to the fact that the Company expanded new clients and undertook projects of higher amount in the current
period; at the same time, the rapid growth of the overseas business in the current period led to a further
increase in profitability in the current period.
(1). Main business by industry, product, region and sales pattern
Unit: Yuan Currency: RMB
Main business by industry
Gross
Yoy change in Yoy change in Yoy change in
Operating Profit
By Industry Operating Cost operating operating costs gross profit margin
Revenue Rate
revenue (%) (%) (%)
(%)
IC
1,345,947,194.70 1,203,919,098.11 10.55 54.35 66.52 Decrease of 6.54%
Semiconductor
Precision
480,697,188.05 392,693.935.54 18.31 17.91 8.34 Increase of 7.22%
Manufacturing
Optoelectronics 101,391,692.37 80,642,910.19 20.46 -64.07 -67.39 Increase of 8.10%
Decrease of
Others 78,023,584.38 61,470,990.91 21.21 21.95 47.70
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
Gross
Yoy change in Yoy change in Yoy change in
Operating Profit
By Product Operating Cost operating operating costs gross profit margin
Revenue Rate
revenue (%) (%) (%)
(%)
Clean room Decreased of
1,718,207,574.41 1,497,267,444.29 12.86 9.21 12.22
engineering 2.33%
Of which:
System 1,516,916.425.65 1,324,585,896.16 12.68 9.84 13.10 Decrease of 2.52%
integration
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
276,230,223.29 232,095.004.42 15.98 761.16 783.62 Decrease of 2.13%
installation
works
Decrease of
Equipment sales 11,621,861.80 9,364,486.04 19.42 -43.33 -32.62
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
Gross
Yoy change in Yoy change in Yoy change in
Operating Profit
By Region Operating Cost operating operating costs gross profit margin
Revenue Rate
revenue (%) (%) (%)
(%)
China 1,570,222,066.57 1,387,939,755.27 11.61 16.89 23.06 Decrease of 4.43%
Of which: East
801,380,310.95 686,106.791.33 14.38 -9.64 -9.23 Decrease of 0.39%
China
Decrease of
Central China 351,672,073.28 326,136.350.31 7.26 137.60 228.66
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%
Decrease of
Other Areas 20,591,529.74 17,896,222.29 13.09 -8.42 31.73
26.49%
Overseas 435,837,592.93 350,787,179.48 19.51 54.28 42.27 Increase of 6.79%
Of which:
301,368,854.86 238,845.934.40 20.75 58.02 40.60 Increase of 9.83%
Vietnam
Indonesia 13,789,617.99 10,147,679.18 26.41 -67.17 -68.51 Increase of 3.13%
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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 mode
The reasons for the substantial increase in revenue and cost of main business by industry, product and
region were mainly due to the new orders signed during the period and the higher contract amount, which
led 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 new
clients 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
Percentage
Percentag of total Percentage
Explanation
Cost e of total Amount for the costs for the change
By Amount for the
Compositio cost for same period of same period from same
Industry current period
n Item the current the previous year of the period last
period (%) previous year (%)
year (%)
Equipment
and 975,046,287.01 56.08 812,667,645.72 59.04 19.98
materials
Building Labor
Construc subcontracti 648,595,269.15 37.30 462,360,128.70 33.59 40.28 Note 1
tion ng
Labor cost 75,883,841.01 4.36 60,640,452.42 4.41 25.14
Other
39,201,537.58 2.26 38,728,323.98 2.81 1.22
expenses
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 analysis
Note 1: Represents a significant increase in labor subcontracting due to the large volume of work executed
during the period.
(5). Changes in the scope of consolidation due to changes in the equity interests of major
subsidiaries during the reporting period
□ Applicable √ N/A
(6). Significant changes or adjustments in the Company’s business, products or services during the
reporting period
□ Applicable √ N/A
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Annual Report 2023
(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 total
annual sales; of which the sales of related parties among the sales of the top five clients amounted to RMB
0 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 clients
among 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 135.2609 million, accounting for 10.58% of the
total annual purchase amount; among them, the purchase amount of related parties among the top five
suppliers is RMB 0 million, accounting for 0% of the total annual purchase amount.
Proportion of annual
No. Top 5 Suppliers Procurement amount (RMB Million/100)
procurement amount (%)
1 Supplier 1 3,500.16 2.74
2 Supplier 2 2,764.38 2.16
3 Supplier 3 2,591.22 2.03
4 Supplier 4 2,569.69 2.01
5 Supplier 5 2,100.64 1.64
Total 13,526.09 10.58
The proportion of purchases from a single supplier exceeding 50% of the total amount, the existence of new
suppliers among the top 5 suppliers, or heavy reliance on a small number of suppliers during the reporting
period.
□ Applicable √ N/A
Other Notes
None
3. Expenses
√ Applicable □ N/A
2023 2022 Percentage of change
in the current period
Item Percentage Percentage over the same period
Amount
Amount (RMB) of operating of operating of the previous year
(RMB)
revenue (%) revenue (%) (%)
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Annual Report 2023
Selling
7,954,281.67 0.40 6,301,894.42 0.39 26.22
expenses
Administrativ
59,193,009.85 2.95 60,147,184.98 3.69 -1.59
e expenses
R&D
25,121,209.62 1.25 19,101,658.87 1.17 31.51
expenses
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
7.97
of employees of the Company (%)
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
13
old)
40-50 years old (including 40 years old, not including 50 years
4
old)
50-60 years old (including 50 years old, not including 60 years
1
old)
60 and above 0
(3). Description of situation
□ Applicable √ N/A
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Annual Report 2023
(4). Reasons for significant changes in the composition of R&D personnel and impact on the
Company's future development
□ Applicable √ N/A
5. Cash flow
√ Applicable □ N/A
Amount of the same
Amount of the current
Account period of the previous Percentage change (%)
period (RMB)
year (RMB)
Net cash flows from
133,522,931.23 161,089,465.80 -17.11
operating activities
Net cash flows from
106,839,659.13 -126,308,081.06 -184.59
investing activities
Net cash flows from
-75,002,375.36 365,160,792.84 -120.54
financing activities
Net increase in cash
167,656,624.74 400,390,070.99 -58.13
and cash equivalents
(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
Percenta Percentag Percentage
ge of e of total change in the
total assets at amount at the
Closing
assets at Closing the end of end of the Descript
Item Name balance of the
the end balance of the the period over ion
current period
of the previous period previous the end of the
period period previous
(%) (%) period (%)
Currency 722,496,330.3
37.94 550,235,202.99 30.96 31.31 Note 1
funds 8
Financial
assets for 122,119,888.89 6.87 -100.00 Note 2
trading
Bills
43,157,918.28 2.27 20,790,441.73 1.17 107.59 Note 3
receivable
Accounts 396,889,272.2
20.84 484,443,368.28 27.26 -18.07
receivable 6
Receivables
3,572,953.18 0.19 729,937.36 0.04 389.49 Note 4
financing
Prepayments 89,024,613.33 4.67 50,995,260.16 2.87 74.57 Note 5
Other
13,378,598.48 0.70 13,057,575.31 0.73 2.46
receivables
Inventory 66,824.45 -100.00 Note 6
424,897,205.6
Contract assets 22.31 389,293,108.13 21.91 9.15
0
Other current
97,604,166.69 5.13 58,265,105.32 3.28 67.52 Note 7
assets
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Annual Report 2023
Percenta Percentag Percentage
ge of e of total change in the
total assets at amount at the
Closing
assets at Closing the end of end of the Descript
Item Name balance of the
the end balance of the the period over ion
current period
of the previous period previous the end of the
period period previous
(%) (%) period (%)
Long-term
equity 2,332,022.40 0.12 2,314,172.96 0.13 0.77
investments
Investment
598,758.96 0.03 713,065.68 0.04 -16.03
real estate
Fixed Assets 38,895,511.08 2.04 40,095,530.47 2.26 -2.99
Construction
13,103,863.94 0.69 0 N/A Note 8
in progress
Intangible
7,244,475.94 0.38 7,426,847.54 0.42 -2.46
assets
Utilization
3,840,232.40 0.20 4,672,377.60 0.26 -17.81
right assets
Deferred tax
12,482,616.81 0.66 14,578,928.51 0.82 -14.38
assets
Other non-
34,843,950.71 1.83 17,348,658.87 0.98 100.85 Note 9
current assets
Short-term
31,249,307.82 1.76 -100.00 Note 10
loans
Accounts 629,857,317.3
33.07 589,919,678.26 33.19 6.77
payable 3
Salaries
payable to 47,459,670.87 2.49 39,456,513.03 2.22 20.28
employees
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
73,351,891.04 3.85 74,584,070.11 4.20 -1.65
liabilities
Non-current
liabilities due
1,748,003.79 0.09 1,710,381.30 0.10 2.20
within one
year
Lease
2,150,631.55 0.11 3,151,902.66 0.18 -31.77 Note 12
liabilities
Projected
11,292,847.91 0.59 9,238,016.80 0.52 22.24
liabilities
Long-term
employee
632,325.46 0.03 610,379.24 0.03 3.60
remuneration
payable
Deferred tax
14,496,782.15 0.76 4,892,632.32 0.28 196.30 Note 13
liabilities
100,000,000.0
Equity 5.25 80,000,000.00 4.50 25.00
0
562,632,775.4
Capital surplus 29.54 582,632,775.45 32.78 -3.43
5
Other
comprehensive 3,318,147.61 0.17 3,027,860.88 0.17 9.59
income
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Annual Report 2023
Percenta Percentag Percentage
ge of e of total change in the
total assets at amount at the
Closing
assets at Closing the end of end of the Descript
Item Name balance of the
the end balance of the the period over ion
current period
of the previous period previous the end of the
period period previous
(%) (%) period (%)
Earmarked
44,578,849.52 2.34 45,372,652.93 2.55 -1.75
reserves
Surplus
39,501,301.38 2.07 28,443,197.81 1.60 38.88 Note 14
reserves
Undistributed 332,226,440.3
17.45 269,871,786.54 15.19 23.11
profits 1
Minority
7,707,548.39 0.40 4,043,962.14 0.23 90.59 Note 15
interests
Other Notes
Note 1: The increase of 31.31% in money funds as compared with that of the previous period was due to the
redemption 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 was
due 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 the
higher 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 the
receipt 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 large
amount of prepayment for materials and equipment in advance for the new projects undertaken in the current
period;
Note 6: Inventory decreased by 100% compared with the previous period, which was caused by the fact that
all the remaining inventory in the current period was fully utilized in the projects, and there was no balance
at the end of the period;
Note 7: Other current assets increased by 67.52% compared with the previous period due to the increase of
prepayment 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 by
the newly purchased office space of Wuhan and Hefei branches and the company's workshop renovation
project in the current period;
Note 9: Other non-current assets increased by 100.85% compared with the previous period, which was due
to the substantial increase of the unexpired warranty over one year compared with the same period of the
previous year;
Note 10: Short-term borrowings decreased by 100% compared with the previous period, which was due to
the 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 due
to 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 the
expiration 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 mainly
due to the increase of overseas net profit in the current period and the high amount of deferred tax arising
from profit distribution;
Note 14: Surplus reserve increased by 38.88% compared with the previous period, which was due to the
increase in net profit for the current period compared with the previous period and the increase in the amount
of surplus reserve;
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Annual Report 2023
Note 15: Minority interests increased by 90.59% compared with the previous period, which was due to the
significant 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 the
total 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
Carrying amount at the end of the
Item Reason for restriction
period
Mainly deposited as guarantee deposits
Currency funds 12,499,607.35 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 and
Analysis”, “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 Housing Infrastructure Specialized Architectural
Others Total
industry construction projects engineering decoration
Number of
491 19 39 549
projects
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
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Annual Report 2023
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
Housing
Segmentation by Infrastructu Specialized Building
constructio Others Total
industry re projects engineering decoration
n
Number of projects 1 395 3 22 421
Total amount
1,128.44 391,324.43 1,406.61 5,040.77 398,900.25
(untaxed)
√ 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
Cumulativ Progre
Project
e ss of
progre
Percent recoveries payme
Project Recognize Cumulativ ss in
Business age of as at the nts in
Project Amount d income e line
Mode Durati comple end of the line
Name (untaxed) for the recognize with
on tion period with
period d income expect
(including expect
ations
tax) ations
Constructio 78.32
Project 1 33,164.86 580 22,085.28 25,973.81 25,227.80 Yes Yes
n Contract %
Constructio 67.02
Project II 38,305.70 491 25,671.44 25,671.44 18,441.34 Yes Yes
n Contract %
Other Notes
√ Applicable □ N/A
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Annual Report 2023
1. As it involves commercial secrets and sensitive information of the Company, the cost inputs for the
current period and cumulative cost inputs are not disclosed;
2. As the transaction relating to Project 1 involves confidentiality-related provisions and for the
consideration 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 the
Company disclosed on the website of the Shanghai Stock Exchange on March 10, 2023 under the
announcement number of 2023-005, and the difference in the contract amount is for the additional works to
be incurred in the subsequent period;
3. As the transactions relating to Project 2 involve confidentiality-related clauses, and due to
considerations of commercial secrets and strategic development, the specific project information of the
counter-party will not be disclosed. For details of the relevant announcement, please refer to the Company’s
announcement on the website of the Shanghai Stock Exchange dated August 1, 2023 under the
announcement number 2023-032, and the difference in the contract amount is for the additional works arising
thereafter.
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 (before
tax). Among them, the amount of projects for which contracts have been signed but construction has not yet
commenced is RMB 0 million, and the amount of uncompleted portion of projects under construction is
RMB 1,319.4146 million (before tax).
Other Notes
□ Applicable √ N/A
6. Other Notes
□ Applicable √ N/A
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Annual Report 2023
(V) Analysis of investment status
Overall 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
Gain or loss on
Accumulated fair Impairment Amount
Asset Beginning of the fair value Purchase during Amount at end
value changes provision for sold/redeemed Other changes
category period changes during the period of period
recognized in equity the period during the period
the period
Structured
122,119,888.89 -119,888.89 225,000,000.00 347,000,000.00 0.00
deposits
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
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Annual Report 2023
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
Sharehol
Main Registered Total Assets Net assets Net profit
Company name ding ratio
business capital (yuan) (yuan) (yuan)
(%)
Acter Development
Engineering of onshore -
RMB 35.2967 56,361,008.2
Technology clean room 100.00 76,384,006.2 8,183,626.9
million 2
(Shenzhen) Co., engineering 4 9
Ltd. business
Purchase and
Shenzhen
sale of RMB 5 86,704,391.4 54,883,916.5 8,961,679.2
Dingmao Trading 100.00
domestic million 4 3 4
Co., Ltd.
equipment
Acter Oversea
HK$25.32739 44,712,312.3 23,035,494.8
International investment 100.00 830,977.68
7 million 1 5
Limited platform
Acter Technology Overseas
S$3.37585 16,483,155.8 16,365,630.3
Singapore Pte., Investment 100.00 -172,029.20
million 0 7
Ltd. Platform
Sheng Huei
Engineering US$3.5 194,043,856. 91,624,738.4 41,682,402.
100.00
Technology million 06 0 73
Company Limited
PT. Acter
Rp 10,100 29,961,907.3 21,211,040.1 1,959,545.9
Technology Development 100.00
million 5 4 3
Indonesia of oversea
Acter Technology clean room -
RM 2.6
Malaysia Sdn. engineering 100.00 8,184,340.44 -714,256.11 1,044,253.2
million
Bhd business 8
Acter Technology Baht 30 46,947,278.8 27,068,731.1 12,676,965.
88.38
Co., Ltd million 7 8 47
PT Acter
Integration Rp 50,050
67.00 5,546,972.90 5,338,188.97 -591,849.42
Technology million
Indonesia
Net profit from individual subsidiaries had an impact of 10% or more on the Company’s net profit
Revenue from main business and profit from main business:
Unit: Yuan Currency: RMB
Revenue from main Profit from main
Company name
business business
Sheng Huei Engineering Technology Company
298,027,836.06 59,278,380.51
Limited
(VIII) Structured entities controlled by the Company
□ Applicable √ N/A
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Annual Report 2023
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 industry
In recent years, China has attached great importance to the semiconductor industry, and the “Outline
for Promoting the Development of the National Integrated Circuit Industry”, “Made in China 2025”, “13th
Five-Year Plan for the Development of National Strategic Emerging Industries”, “Several Policies for
Promoting the Development of the Integrated Circuit Industry and the Software Industry in a New Era with
High Quality”, and the “Fourteenth Five-Year” Plan and a number of favorable semiconductor localization
policies have been introduced intensively, with the semiconductor market scale continues to expand, the
relevant enterprises to build factories and expand production boom, driven by the rapid construction of clean
room plant.
Semiconductor industry is one of the most widely used high-end clean room applications, along with
cloud computing, Internet of Things, big data, 5G and other new-generation information technology
applications, as well as data centers, drones and other industrial development drive, the global semiconductor
industry 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 42
projects in 2024, with wafer sizes ranging from 300mm to 100mm. Wafer processing plant belongs to the
semiconductor industry chain in the middle, its booming development will inevitably drive the industry chain
upstream IC design and downstream packaging and testing expansion demand continues to intensify. From
the announcement of Chinese semiconductor wafer foundry factories such as SMIC and Nexchip, it can be
seen that the Chinese semiconductor industry is still actively laying out the production expansion boom
continues to promote IC semiconductor and other high-end electronics manufacturing industry is the main
field of the clean room project.
According to the relevant data, the global cleanroom technology market size was US$ 3,900 million in
2022 and is expected to reach around US$ 6,960 million by 2032, with a projected compound annual growth
rate of 5.97% during the 2023-2032 forecast period. Additionally, data from Zhiyan Consulting indicates
that 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, which
is an essential part of high-end manufacturing industry such as electronics industry. The development of
advanced manufacturing industry is largely affected by the quality and level of clean room, and the
development of related industries will undoubtedly promote the growth of the scale of clean room
engineering. With different application fields, the focus of clean technology is also different. With the
expansion of market space and the evolution of specialization of technical needs, the clean room engineering
industry shows a trend of further specialization.
In the electronics industry, the production program of specific precision electronic manufacturing
usually requires factories to maintain 24-hour uninterrupted production, and clients have high requirements
for the stability and reliability of clean rooms, which put forward higher requirements for the technical level
38 / 250
Annual Report 2023
and comprehensive management level of clean room engineering companies. Since it takes a long time to
acquire the construction technology required for such clean room projects, only a few companies in the
industry have the technical level to construct high-grade clean rooms in these fields. In order to minimize
investment risks, reduce costs, and ensure product yields, owners usually choose to cooperate with
engineering 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 rich
experience in factory construction to provide services for them.
The clean room industry is characterized by a large number of participants and intense competition in
the low-end segment, with a fragmented market structure. In contrast, high-end clean rooms have stringent
cleanliness requirements, and the investment scale of individual projects is generally larger. The cleanliness
of the factory directly affects product yield, so project owners place greater emphasis on the historical project
experience of the contractors. The bidding process is typically dominated by invitation-based tenders. As a
provider of integrated clean room system solutions, the Company has undertaken numerous high-end clean
room projects for high-tech manufacturing facilities in China, placing it at the forefront of the industry. It is
one 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 of
Vietnam’s nine key national industries. The Vietnamese media quoted Linda Tan, Chairman of the Southeast
Asian Semiconductor Industry Association, as saying that the Vietnamese semiconductor market is expected
to grow by 6.12% in the period from 2022 to 2027; Southeast Asian countries represented by Singapore and
Malaysia are already an important link in the global semiconductor industry chain. Compared with Singapore
and Malaysia, which are at the forefront of the chip industry in Southeast Asia, Thailand, which is a regional
automobile manufacturing center, focuses on building an automotive semiconductor industry chain.
Various countries have implemented a range of policies to support industrial development. A review of
industry policies in Southeast Asian nations reveals the following:
The semiconductor companies’ investments in establishing manufacturing facilities in Southeast Asia
will objectively promote the further development of the local industry. However, Southeast Asia also faces
challenges in terms of power supply, technical workforce, and upstream and downstream industrial chain
support. 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 Southeast
Asian region, and have begun to seize the overseas market through measures such as establishing subsidiaries
and 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 the
long-term planning of infrastructure construction in the main business regions, and combined with its own
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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 to
the possibility that the Chinese macroeconomic policies may be moderately adjusted in the future according
to the Chinese and foreign economic situation, regional and industrial development and characteristics, the
Company does not rule out the possibility of adjusting its business development goals based on the actual
operating 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 the
support, and green energy conservation as the direction, to form independent innovation and R&D
capabilities, achieve sustainable corporate development, and grow into a leading international provider of
clean 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 of
the industry, national policy drive, business development planning and corporate governance, the Company
will 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. At
present, the construction of the R&D center project has officially begun, and the construction progress will
continue to be pushed forward in 2024. After the completion of the project, the Company will actively carry
out various research and development work to help clients shorten the construction period, save operating
costs, and improve the yield rate of products.
The driving force for future growth and acquisition of better market share is mainly reflected in the
following 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 the
Company’s future growth.
2. Through horizontal integration and vertical division of labor in the industrial chain, we will seize the
core 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 and
talents to join Acter, and expand business development channels in different industries.
4. Steady business growth in Vietnam, Thailand and Indonesia, and accelerate the continuous expansion
of Malaysia market, and there is still room for growth of overseas revenue in 2024 compared with that in
2023.
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 “green
planning, green procurement, and green engineering methods”, and applies green engineering technologies
to help enterprises achieve carbon neutrality. We have introduced the concept of ESG development and the
concept of energy-saving server room.
6. Continuously increase the development of the Chinese market: the Company has now built a total of
eight molecular companies, including Shenzhen, Xiamen, Hefei, Zhengzhou, Wuhan, Chongqing, and
consolidate and establish the regional centers in East China, South China and Southeast Asia, while
collecting, 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 the
scope of business regions, strengthening the allocation of resources, and promoting the sustainable
development 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, strengthen
resource allocation and promote the sustainable growth of core business.
7. Strengthening brand building: more and more clients take the initiative to invite tenders to the
company, and the brand building of Acter as “quality space creator” has achieved results. Next, the company
will further promote the Company’s brand through high-quality engineering quality and service, show the
Company’s brand image to clients in all aspects, penetrate the brand concept, and strengthen the brand
recognition. The Company will further realize the promotion of the Company’s brand through high-quality
projects and services, show the Company’s brand image to clients in all directions, penetrate the brand
concept, strengthen the brand cognition and enhance the brand value.
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8. Increase R&D investment: the Company will be recognized as a high-tech enterprise in 2023, and it
is expected to maintain more than 3% R&D investment in 2024. The Company will further improve the
organizational structure of technology R&D, enrich the team of talent in technology R&D, improve the
performance evaluation system for encouraging independent innovation, and put the R&D management
methods and R&D incentive system into practice, so as to provide comprehensive R&D institutional
guarantee for technological innovation. Integrate drawing and resources with BIM to produce value
engineering and improve net profit; accelerate progress and improve project quality with “assembly
installation”.
9. Strengthen human resource development: human resource is the core driving force of the Company’s
development, and it is the Company’s long-term planning and goal of human resource management to
reasonably allocate, integrate and develop human resources, and establish a perfect human resource
mechanism, so as to make the best use of them and bring their potentials into full play. Combined with the
Company’s future business development plan, we will enhance the Company’s overall human resource level
in the following aspects:
(1) Strengthen the continuing education of the employees, upgrade the qualification certificates of the
employees, increase the qualification of the existing employees in construction, environment and other
related practice, establish relevant incentive system to encourage colleagues, upgrade the number of
employees with middle and senior titles, and encourage the on-the-job continuing learning of the serving
colleagues.
(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 “Reserve
Cadre 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 positive
expectations and concerns, we can form a succession of excellent cadres and a core reserve of manpower to
meet 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 a
strong correlation with the macroeconomic development cycle, and the fluctuation of the economic growth
rate and macro economy will directly affect the operation and development of the entire downstream
industries, 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’s
business 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 a
steady development stage. With the entry of various types of social capital into the clean room industry, the
number of enterprises in the industry is increasing year by year, and the market competition is relatively
fierce. 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 enterprises
in the industry that possesses the first-class qualification of general contracting for electromechanical
engineering and the first-class qualification of specialized contracting for architectural electromechanical
installation, and ranks upstream in the industry in terms of business performance, business level, market
brand and management level, and has a certain degree of popularity in the industry. With the increasing
number 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 and
process, 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%, with
certain fluctuation compared with the same period of last year. The fluctuation of gross profit margin is
mainly related to the intensity of competition, and factors such as cost control, technology level, project site
management 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 further
measures to enhance its core competitiveness, the Company may face the risk of fluctuation in gross profit
margin.
4. Risk of higher concentration of clients
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Annual Report 2023
During the reporting period, the sales of the top five clients of the company amounted to RMB 889.0282
million, accounting for 44.25% of the total annual sales, with a high concentration of clients. It is mainly due
to the fact that the company has high reputation and good word of mouth, and mainly undertakes key projects
and large-scale projects in the industry, and the amount of individual projects is large. clean room
engineering 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, such
as the Company’s market development strategy does not meet the market changes or does not meet the needs
of clients, the Company’s existence can not be sustained, stable development of new clients and maintain
the 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-tech
manufacturing projects since its inception. After years of development, the Company has accumulated
substantial 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 also
posed greater challenges to the Company’s risk control and asset management capabilities. If the Company’s
management structure and capabilities cannot keep up with the needs of its sustained development, and its
asset management ability fails to be correspondingly enhanced, it will constrain the Company’s development
pace 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 with
the Guidelines due to non-application of the provisions of the Guidelines or for special reasons such
as 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 the
requirements of the Company Law, the Securities Law, relevant laws and regulations of the Shanghai Stock
Exchange and the actual situation of the Company. The shareholders’ general meeting, the Board of Directors
and the Supervisory Committee of the Company have clear division of powers and responsibilities and each
of them performs its own duties, and the decision-making is independent, efficient and transparent. The
Board of Directors of the Company has set up specialized committees such as the Remuneration and
Assessment Committee, the Audit Committee, the Nomination Committee and the Strategy Committee to
further improve the corporate governance structure of the Company. Details of the corporate governance of
the Company are as follows:
(I) The Company and its controlling shareholders: The controlling shareholders of the Company
exercise their rights and obligations in accordance with the law, and effectively fulfill their obligations of
good faith to the Company and other shareholders. The Company and the controlling shareholder are
completely independent in five aspects, namely, business, assets, personnel, organization and finance, and
the 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 the
provisions 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 the
shareholders’ meeting. The Company engages lawyers to issue legal opinions on the legality of the
shareholders’ meeting, ensuring the equal status of all shareholders, especially minority shareholders, fully
exercising 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, the
Articles of Association, the Rules of Procedure for the Board of Directors, and other regulations. This
includes organizing and implementing the resolutions of the shareholders’ meeting, deciding on the
Company’s business plans and investment plans, formulating the Company’s annual financial budget, final
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Annual Report 2023
accounts, and profit distribution plans, drafting major acquisition plans, and appointing or dismissing the
Company’s general manager and other senior management personnel. All directors faithfully and diligently
perform their duties, actively participate in the decision-making of the Company’s major matters, and
actively 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 them
to play their normal role.
(IV) The Supervisory Committee exercises its powers and functions in strict accordance with the
Company Law, the Articles of Association and the Rules of Procedure for the Board of Directors, and
performs its supervisory functions diligently and conscientiously, including the effective supervision of the
fulfillment of duties by the Directors and senior management as well as the operation of the Company in
accordance with the law.
(V) The company strictly follows the requirements of the Information Disclosure Management System
and the Registration Management System for Insiders by implementing measures such as insider registration
and external information reporting registration. This strengthens the management of insiders, standardizes
the review process for external information reporting, clarifies the obligations and responsibilities of relevant
personnel to maintain the confidentiality of undisclosed information, and enhances the Company’s
awareness of information disclosure. This effectively avoids the occurrence of violations in information
disclosure. Meanwhile, the Company strengthens communication and interaction with investors, and pays
attention to maintaining investor relations.
Whether there is any material difference between the corporate governance and the laws, administrative
regulations and CSRC’s regulations on the governance of listed companies; if there is such a material
difference, the reasons shall be explained.
□ Applicable √ N/A
II. Specific measures taken by the controlling shareholders and actual controllers of the Company to
ensure the independence of the Company in terms of assets, personnel, finances, organization and
business, as well as the solutions, work progress and follow-up plans in case of the company’s
independence being affected.
□ Applicable √ N/A
Controlling shareholders, actual controllers and other parties controlled by them engaged in business that are
same as or similar to the company, peer competition and impact of significant changes in peer competition
on the company, solutions adopted, working progress and subsequent solution plans
□ Applicable √ N/A
III. General Meeting of Shareholders
Index of
searches on Date of
Session of the Date of designated publication
Resolutions
meeting meeting websites where of
resolutions are resolutions
published
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
2022 Annual
www.sse.com April 29, of the Annual Report for the Year 2022
General April 28, 2023
.cn 2023 4. Proposal on the Financial Settlement
Meeting 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
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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
1. Proposal on the Reappointment of the
Accounting Firm
The First 2. Proposal on the Absorption and Merger
Extraordinary of the Wholly-owned Subsidiary
August 29, www.sse.com.c August 30,
General 3. Proposal on the Change of Registered
2023 n 2023
Meeting of Capital, Revision of the Articles of
2023 Association, and Handling of the
Industrial and Commercial Registration
Change
Preferred shareholders whose voting rights have been restored requested an extraordinary general
meeting□ Applicable √ N/A
Explanation of general meetings
√ Applicable □ N/A
During the reporting period, the Company held 2 general meetings of shareholders, and the above meetings
complied with the relevant laws and regulations and the Articles of Association in respect of the convening
method, proceedings, voting method and contents of resolutions.
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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
Increas Total amount of pre- Whether
Sharehol
Shareholdi e/decre tax remuneration remuneration
dings at Reasons for
ngs at the ase in received from the was received
Appointment Expiration date the end increase or
Name Position Gender Age beginning shares Company during the from related
date of appointment of the decrease
of the year during reporting period parties of the
year
the year (RMB Million/100) Company
Liang Jinli Chairman Male 62 July 1, 2019 July 1, 2025 0 0 0 Unchanged 48.57 Yes
Vice Chairman,
Chen
Secretary of the Male 58 July 1, 2019 July 1, 2025 0 0 0 Unchanged 111.66 No
Zhihao
Board
Director,
Zhu Qihua General Male 51 July 1, 2019 July 1, 2025 0 0 0 Unchanged 108.85 No
Manager
Su
Director Male 48 July 1, 2019 July 1, 2025 0 0 0 Unchanged 49.02 No
Yuzhou
Independent
Shi Kang Male 59 July 31, 2020 July 1, 2025 0 0 0 Unchanged 8.00 No
Director
Wu Independent
Male 53 July 1, 2019 July 1, 2025 0 0 0 Unchanged 8.00 No
Weihua Director
Independent
Gu Hailan Female 52 July 1, 2019 July 1, 2025 0 0 0 Unchanged 8.00 No
Director
Chairwoman of
Huang
the Supervisory Female 48 July 1, 2019 July 1, 2025 0 0 0 Unchanged 36.85 No
Yaping
Board
Liao
Supervisor Male 47 July 1, 2019 July 1, 2025 0 0 0 Unchanged 58.40 No
Chongyou
Wang Yu Supervisor Female 43 July 1, 2019 July 1, 2025 0 0 0 Unchanged 35.22 No
Xiao Chief Financial
Female 55 July 1, 2019 July 1, 2025 0 0 0 Unchanged 37.61 No
Jingxia Officer
Total / / / / / / 0 0 / 510.18 /
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Annual Report 2023
Name Main Working Experience
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;
Liang Jinli 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.
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
Chen Zhihao 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.
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
Zhu Qihua 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.
Born in May 1976, with Chinese nationality of Taiwan, no permanent residence in foreign countries, bachelor’s degree, senior engineer. He was an
Su Yuzhou 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.
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
Shi Kang
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
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Annual Report 2023
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.
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’
Wu Weihua 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.
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
Gu Hailan 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.
Born in February 1976, with Chinese nationality of Taiwan, permanent residency in the United States and has a graduate degree. She was the Accounts
Huang Receivable Specialist of McAllister, the Finance Specialist of Texas Instruments Incorporated, the Finance Manager of Acter (Shenzhen), and the Manager
Yaping 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.
Born in May 1977, with Chinese nationality of Taiwan, no permanent residency in foreign countries and college degree. He was an engineer of Ming
Liao Sheng Electromechanical Co., Ltd. and the Head of Engineering Department of SILPORT Technologies Inc. and the Manager of Engineering Department
Chongyou 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.
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
Wang Yu
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.
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
Xiao Jingxia 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
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Annual Report 2023
(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
Position held in the shareholders’ Date of commencement of term
Name of the incumbent Name of shareholder unit Date of termination
organization of office
Chief Executive Officer and Chairman of
Liang Jinli Acter (Taiwan) August 1993
the Board
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
None
shareholders’ organizations
2. Employment in other organizations
√ Applicable □ N/A
Date of commencement of
Name of incumbent Name of other units Positions held in other units Date of termination
term of office
New Point (Seychelles) Director March 2008
Director, Chief Executive
Enrich (Taiwan) June 2014
Officer
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
Liang Jinli 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
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Annual Report 2023
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
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
Chen Zhihao
Acter (Singapore) Director October 2018
Space (Thailand) Director October 2019
Lantia Innovation Co., Ltd. Director September 2015
Indonesia Joint Venture Director April 2023
Acter (Shenzhen) Director, General Manager January 2018
Shenzhen Dingmao Director, General Manager January 2018
Zhu Qihua
Acter (Hong Kong) Director July 2019
Sheng Huei (Vietnam) Supervisor December 2018
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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
Acter (Shenzhen) Supervisor October 2018
Huang Yaping
Shenzhen Dingmao Supervisor October 2018
Suzhou Yumanchang Food Technology
Xiao Jingxia Supervisor October 2021 April 2023
Co., Ltd.
Secretary of the Board of
Jiaxing Hechang Elevator Control
Gu Hailan Directors and Chief Financial November 2022
Technology Co., Ltd.
Officer
President, General Manager and
Jiangsu University Press Co., Ltd. May 2017 December 2023
Executive Director
Jiangsu University Asset Management
Director May 2017 December 2023
Shi Kang Co., Ltd.
Logistics Department of Jiangsu
Grade 5 Staff January 2024
University (Logistics Group)
Suzhou University of Science and
Lecturer July 1993
Technology
Jiangsu Lantern Law Firm Lawyer December 2004
Small and Medium-sized Enterprises
Wu Weihua Committee of Jiangsu Federation of Deputy Secretary General October 2018
Industry and Commerce
Suzhou Bankruptcy Administrators
Vice President June 2019
Association
Suzhou Lawyers Association Director February 2016
Description of positions held in
None
other organizations
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(III) Remuneration of directors, supervisors and senior management personnel
√ Applicable □ N/A
With reference to the remuneration level of the Company’s industry and the region, and taking into account the
Decision-making procedures for remuneration of Company’s actual operating conditions and job responsibilities, the Company shall draw up a plan and implement it
Directors, Supervisors and senior management after consideration and approval by the Board of Directors and the general meeting of shareholders. Among them,
personnel 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 Yes
remuneration?
Details of the recommendations made by the
Remuneration and Evaluation Committee or the
On April 7, 2023, the Remuneration and Evaluation Committee considered and approved the “Proposal on the
special meeting of independent directors in respect
Remuneration Plan for Senior Management for the Year 2023”.
of 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
Basis for determining the remuneration of senior management who are in receipt of remuneration from the Company shall be determined on the basis of the
Directors, Supervisors and senior management Company's overall remuneration policy, salary standards, the specific executive positions held by the individuals in
personnel 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, The actual payment of the remuneration of Directors, Supervisors and senior management was made on time in
Supervisors and senior management personnel 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 RMB 5.1018 million
at the end of the Reporting Period
(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
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V. Information on the Board of Directors’ meetings held during the reporting period
Session of the meeting Date of meeting Resolution of the meeting
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
The Sixth Meeting of the Second Technology Corp.
Session of the Board of April 7, 2023 14. Proposal on the Estimated Guarantee Total for the Year 2023
Directors 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
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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.
1. Proposal on the Q1 Report for 2023
Seventh Meeting of the Second
April 27, 2023 2. Proposal on Confirming that Overdue Accounts Receivable Exceeding Normal Credit for 3 Months Are
Board of Directors
Not Included in Fund Lending
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
Eighth Meeting of the Second 6. Proposal on Confirming that Overdue Accounts Receivable Exceeding Normal Credit for 3 Months Are
August 11, 2023
Board of Directors 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
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
Ninth Meeting of the Second 5. Proposal on Confirming that Overdue Accounts Receivable Exceeding Normal Credit for 3 Months Are
October 27, 2023
Board of Directors 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
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(I) Participation of Directors in the Board of Directors’ Meetings and Shareholders’ Meetings
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Participation in
Name of Independent
Participation in the Board of Directors shareholders’
Director Director or not
meetings
Whether there have Number of
Required
Attendance Attendance by Attendances been two consecutive attendances at the
attendances of Absences
in person telecommunica by proxy failures to attend in shareholders'
Board meetings
tion person 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
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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
Important opinions and Other performance
Date of meeting Contents of meetings
recommendations of duties
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 Considered and
April 7, 2023 None
Consolidated Financial Statements approved
11. Proposal on the Application for Comprehensive Credit Limit from Financial Institutions
for the Year 2023
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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
1. Proposal on the Q1 Report for 2023
Considered and
April 27, 2023 2. Proposal on Confirming that Overdue Accounts Receivable Exceeding Normal Credit for 3 None
approved
Months Are Not Included in Fund Lending
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
Considered and
August 11, 2023 6. Proposal on Confirming that Overdue Accounts Receivable Exceeding Normal Credit for 3 None
approved
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
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
Considered and
October 27, 2023 6. Proposal on the Outbound Investment None
approved
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
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(III) The Nomination Committee held one meeting during the reporting period
Important opinions and
Date of meeting Contents of the meeting Other performance of duties
recommendations
1. Proposal to Review the Qualifications of the Current
October 27, 2023 Considered and approved None
Independent Directors of the Company
(IV) The Remuneration and Evaluation Committee held one meeting during the reporting period
Important opinions and
Date of meeting Content of the meeting Other performance of duties
recommendations
1. Proposal on the Remuneration Plan for Senior Management
April 7, 2023 Considered and approved None
for the Year 2023
(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
1. Proposal on the Business Plan for the Year 2023
April 7, 2023 2. Proposal to Request the Board of Directors to Approve the Considered and approved None
Establishment of the Joint Venture Company for External Investment
1. Proposal on the Absorption and Merger of the Wholly-Owned
August 11, 2023 Considered and approved None
Subsidiary
1. Proposal on the Expected Trading Volume of Financial Derivative
October 27, 2023 Products Considered and approved None
2. Proposal on the Outbound Investment
(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
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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
1
subsidiaries
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
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Annual Report 2023
The Company’s remuneration system closely follows the principles of prioritizing efficiency, taking into account fairness and incentives. Internally, it reflects the value
differences of different levels, grades and positions according to the differences in responsibilities, abilities and performance achievements; externally, it conducts annual
market 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 core
competitive 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 develop
in a systematic training program, such as new employee training, on-the-job training, and self-study, etc., to strengthen employees’ professional skills, improve work efficiency
and 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 and
employees, and offers online or physical courses to achieve the goals of cultural inheritance, strengthening the management qualities of all levels of management, and
developing the strength of talents. In addition to setting up mandatory courses to assist employees in improving their work performance, employees can also participate in
various 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 Listed
Companies No. 3 - Cash Dividends for Listed Companies” and other relevant regulations, the Company has formulated the cash dividend policy, and the decision-making
procedures and mechanisms relating to profit distribution matters are clearly stipulated in the Articles of Association of the Company. As considered and approved at the
Twelfth 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 share
capital 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 RMB
8 (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 dividend
to 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 distribution
plan is in compliance with the provisions of the Articles of Association and the requirements of the resolution of the shareholders’ meeting. This profit distribution proposal
has 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.
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(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
√ Yes □ No
shareholders’ general meeting
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
√ Yes □ No
their legitimate rights and interests are adequately protected
(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 proposal
for 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 its
utilization
□ 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
138,590,474.42
consolidated statement for the year of dividend distribution
Ratio to net profit attributable to ordinary shareholders of the listed company in the
57.72
consolidated statement (%)
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
57.72
the listed company in the consolidated statement (%)
XI. Status of the Company’s share incentive scheme, employee shareholding plan or other employee incentives and their impacts
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Annual Report 2023
(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 progress
Equity 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
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Annual Report 2023
√ 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 relevant
provisions 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 “Subsidiary
Management 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 the
Company in a timely, accurate, truthful and complete manner in strict accordance with the provisions of the Company’s “Information Disclosure Management System”, and
there 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 standard
unqualified 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 March
30, 2024 on the website of Shanghai Stock Exchange (www.sse.com.cn).
Whether to disclose the internal control audit report: Yes
Type 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 Companies
In 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
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Annual Report 2023
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 environmental
protection 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
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
Type of carbon reduction measures (e.g., use of clean energy for
relevant departments, controls sewage and noise emissions, reduces construction dust and
power generation, use of carbon reduction technologies in
construction waste, saves energy and reduces consumption, rationally utilizes resources and energy,
production processes, R&D and production of new products that
and prevents or reduces pollution to the environment; it also cooperates with suppliers and
contribute to carbon reduction, etc.)
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 Safety
Management Manual, Safety and Civilized Construction Management Procedures and Energy Saving and Consumption Reduction Control Procedures in strict accordance
with the requirements of GB/T24001-2016/IS014001:2015. The environmental management involved in the construction of electromechanical installation works, fire-fighting
works and architectural works within the scope of qualification is evaluated by an external certification organization, and the company has obtained ISO14001 certification.
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Annual Report 2023
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 of
Shanghai 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, extensively
participated 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 on
employees to join the volunteer team, and invested resources in multiple public welfare and charity areas such as earthquake relief, education assistance, and assistance to
vulnerable 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 other
toys 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 ceremony
at Wuhan University of Science and Technology, with a total of 20 students receiving scholarships. In order to effectively improve the current lack of modern teaching
equipment in schools in Tibetan areas and enhance the overall teaching quality of schools, the Company donated computers to Xueyu Civilization Charity School to help the
school 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 society
with practical actions, take the initiative to assume the social responsibilities bestowed upon enterprises in the new era, and achieve high-quality and sustainable development
of the enterprise through hard work.
III. Consolidating and Expanding the Results of Poverty Alleviation, Rural Revitalization and Other Specifics
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□ 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 commitments
during the reporting period or continuing into the reporting period
√ Applicable □ N/A
Whether If not fulfilled
If not
there is a Timely in time,
Commit fulfilled in
deadline and strict specify the
Background of Type of ment Date of time, next
Commitment party for Commitment period complianc reasons for
commitments commitment Content Commitment steps shall be
fulfillmen e incomplete
indicated.
t fulfillment.
Commitments
Restriction on Sale Sheng Huei International, October 13, 2022 to
relating to the Note 1 June 22, 2021 Yes Yes N/A N/A
of Shares Acter (Taiwan) October 12, 2025
IPO
Commitments
Restriction on Sale Suzhou Songhuei, Suzhou October 13, 2022 to
relating to the Note 2 June 22, 2021 Yes Yes N/A N/A
of Shares Shengzhan October 12, 2023
IPO
Liang Jinli, Chen Zhihao, Zhu
Commitments October 13, 2022 to
Restriction on Sale Qihua, Su Yuzhou, Huang
relating to the Note 3 June 22, 2021 Yes October 12, 2023 Yes N/A N/A
of Shares Yaping, Liao Chongyou,
IPO Yes
Wang Yu, Xiao Jingxia
Commitments
Resolution of Sheng Huei International,
relating to the Note 4 June 22, 2021 No Long-term Yes N/A N/A
competition Acter (Taiwan)
IPO
Acter Group, Sheng Huei
Commitments
International, Acter (Taiwan),
relating to the Others Note 5 June 22, 2021 No Long-term Yes N/A N/A
directors and senior
IPO
management of the Company
Commitments Acter Group, Sheng Huei
October 13, 2022 to
relating to the Others International, Acter (Taiwan), Note 6 June 22, 2021 Yes Yes N/A N/A
October 12, 2025
IPO directors (excluding
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Annual Report 2023
independent directors) and
senior management
Acter Group, Sheng Huei
International, Acter (Taiwan),
Commitments
directors, supervisors, senior
relating to the June 22, 2021 Yes
Others management, Suzhou Note 7 No Long-term N/A N/A
IPO
SongHuei, Suzhou
ShengZhan
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 public
offering 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 the
closing 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 first
trading 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 the
Company, 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 total
number 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. In
case 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 in
accordance with the relevant provisions of the Shanghai Stock Exchange. The methods of share reduction include centralized bidding transactions, block trading, transfer by
agreement 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 Shareholdings
by Shareholders, Directors, Supervisors and Senior Management of Listed Companies of the Shanghai Stock Exchange, Rules for Listing of Stocks of the Shanghai Stock
Exchange and other relevant laws, regulations and standardized documents. If the CSRC and the Shanghai Stock Exchange issue other regulations before the Company reduces
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 shareholding in the
Company 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 ("proceeds
from 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 and
apply 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:
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(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 indirectly
by 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 such
reduction 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 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 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 the
Company, 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 indirectly
held 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 after
they 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, Certain
Provisions on Reduction of Shareholdings by Shareholders, Directors and Supervisors of Listed Companies, Implementing Rules for the Reduction of Shareholdings by
Shareholders, Directors, Supervisors and Senior Management of Listed Companies of the Shanghai Stock Exchange, Rules for the Listing of Stocks on the Shanghai Stock
Exchange and other relevant laws, regulations and standardized documents. If the CSRC and the Shanghai Stock Exchange have any other regulations before the Company
reduces 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 shareholding
in 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 to
the 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 and
may 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 the
proceeds 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, Liao
Chongyou, 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 that
were 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 the
closing 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 trading
day 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 transfer
or 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 repurchase
such 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 issue
price 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 Shanghai
Stock 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 office
before 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
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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 not
transfer 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 Provisions
on 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 other
relevant 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 violation
of 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 the
remaining 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 the
Company 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 Same
Industry" 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 have
not 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 outside
the 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 or
has 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, take
a 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 Company
and 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 business
which may compete or may compete with the business operated by the Company and its subsidiaries, the Company will immediately notify the Company and provide such
business 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 assets
or 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 avoid
competing 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 the
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 the Company's expanded
main products or main business, the Company and other enterprises controlled by the Company at that time guarantee to withdraw from the competition with the Company
in 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.
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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 shareholder
of 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 above
undertakings 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 have
not 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 same
business 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 or
potentially 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 of
China, 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 that
compete or potentially compete with the business operated by the Company and its subsidiaries. We will not directly or indirectly hold, acquire, merge with or acquire
enterprises 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 of
China 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 Company
will 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 the
Company and its subsidiaries can acquire the business involved on a priority basis under the same terms and conditions. The Company will immediately notify the Company
to 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 the
assets 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 by
the 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's
expanded main products or main business, the Company and other enterprises controlled by the Company at that time guarantee that they will withdraw from the competition
in accordance with the following methods The Company and other enterprises controlled by the Company at that time undertake to withdraw from competition with the
Company 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 controlling
shareholder 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 above
undertakings in accordance with the law.
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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 Huei
International, 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 commitments
and 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 and
causes 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 Company
undertake 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 the
remuneration 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 (if
I 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 be
announced 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 be
willing 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 regulatory
provisions 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 supplementary
undertakings 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 measures
to 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 such
commitments 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 be
punished or take relevant management measures in accordance with the relevant regulations and rules formulated or issued by the CSRC and the Shanghai Stock Exchange
and 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 has
conducted 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 diluted
immediate 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 will
improve the remuneration and incentive mechanism, introduce outstanding talents in the market and maximize the motivation of its employees to tap the creativity and
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potential power of the Company's employees. Through the above measures, the Company will comprehensively improve the operational efficiency, reduce costs and enhance
the 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 special
account 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 exclusive
use 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 "Proceeds
Management System", and will actively cooperate with the regulatory banks and sponsoring organizations in the inspection and supervision of the use of proceeds, so as to
ensure 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 the
Company's business capacity and profitability, and is conducive to the Company's sustainable and rapid development. Prior to the availability of the proceeds, the Issuer
intends 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 the
projects 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 return
mechanism. Upon completion of the Offering, the Company will, in accordance with the provisions of laws and regulations and the Draft Articles of Association, actively
promote 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 lower
than 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 the
Reform 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 considered
and passed the Proposal of Stabilizing the Share Price of Acter Technology Integration Group Co., Ltd.''.
(I) Effective period of the Plan
The 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's
audited 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 net
asset 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 if
the 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 measures
to 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 the
commitments shall be deemed to be completed and the announced stock price stabilization plan shall cease to be implemented:
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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 the
closing 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, the
said 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 measures
in 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 content
of 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 approval
by 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 of
the 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 to
the 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 than
the 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 net
asset 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 the
method 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 regulatory
authorities.
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 implement
the 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 than
10% 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 the
share 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 above
criteria are exceeded, the relevant share price stabilization measures will not be continued in the current year. However, in the event that circumstances requiring the activation
of 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 the
above 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 is
rejected 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 specific
implementation 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 consecutive
trading 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 the
obligation 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 accordance
with 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 provisions
of 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
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regulations. Three trading days after the Company discloses the plan to increase its shareholding in accordance with the plan, the Company shall commence the implementation
of 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 methods
approved 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 most
recent 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 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 no longer meets the
conditions 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 the
Company, 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 controlling
shareholder 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 used
to 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 Company
on 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 price
stabilization measures will not be continued in the current year. However, in the event that circumstances requiring the activation of 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 the above principles. In the event that the share
price 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 as
part 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 triggering
the 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's
announcement 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 recent
period 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 to
increase 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 3
trading 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 the
plan 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 the
relevant 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 implementation
of 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 transactions
to 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 the
closing 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 measures
to 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 Company
may 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 measures
several times within a fiscal year, the directors (excluding independent directors) and senior management of the Company will continue to implement the above share price
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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% of
the 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 amount
of 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 the
period 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 be
continued in the current year. However, in the event that circumstances requiring the activation of price stabilization measures continue to arise in the following year, the
share 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 senior
management 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 the
share 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 to
take 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 in
the 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 when
the 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 the
Unit 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 price
stabilization 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 to
take 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 laws
and 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 the
general 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 social
supervision. Unless otherwise specifically constrained, if the Company fails to fully and effectively fulfill the undertakings made in the course of its IPO and listing, the
Company 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 interests
due 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 the
obligations under the commitments. The above changes shall be submitted to the shareholders' general meeting for consideration, and the Company will provide shareholders
with 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 the
original ones, the relevant commitments shall comply with the prevailing laws, regulations and the Articles of Association of the Company, and the Company undertakes to
accept the following constraints until the fulfillment of the commitments or the implementation of the corresponding remedial measures is completed:
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Annual Report 2023
(1) Publicly explain the specific reasons and apologize to the shareholders and public investors in the general meeting of shareholders and the disclosure media designated
by 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 to
fulfill 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 make
changes 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 new
commitments (the relevant commitments shall comply with the laws, regulations, articles of association and fulfill the relevant approval procedures) and shall be subject to
the 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 designated
by 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 to
protect 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 controlling
shareholder 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 take
the 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 undertakes
to 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 the
amount 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 the
relevant 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), the
income 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 losses
are 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 compensation
according 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 unable
to 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 beyond
my 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 take
the 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 them
on schedule;
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Annual Report 2023
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' meeting
when 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 unfulfilled
commitments;
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 Company
and used exclusively for the fulfillment of the commitments or compensation until I have fulfilled my commitments or compensated for the losses incurred by the Company
and 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 relevant
laws 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 to
safeguard 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's
IPO 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 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 the
amount 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 the
relevant 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), the
income 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 of
obtaining 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 losses
to the Company or other investors according to the law.
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Annual Report 2023
(II) If there is a profit forecast for the Company's assets or projects and the reporting period is still
in the profit forecast period, the Company shall make a statement on whether the assets or projects
have 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 parties
during 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 Audit
Report" of the Accounting Firm
□ Applicable √ N/A
V. Explanation of the Company's analysis of the reasons for and impact of changes in accounting
policies, accounting estimates or correction of material accounting errors
(I) Explanation of the Company's analysis of the reasons for and impact of changes in accounting
policies and accounting estimates
√ Applicable □ N/A
Unit: Yuan
Name of statement items Amount of
Contents and reasons for changes in accounting policies
materially affected impact
On November 30, 2022, the Ministry of Finance ("MOF") Deferred tax assets 1,135,468.71
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 Deferred tax liabilities 1,316,653.59
Assets and Liabilities Arising from Individual Transactions
to which the Initial Recognition Exemption Doesn't Apply"
has been implemented since January 1, 2023, allowing Undistributed profits -177,717.08
enterprises to implement it in advance from the year of
issuance.
Minority interests -3,467.80
(II) Explanation of the Company's analysis of the reasons for and impact of the correction of
significant 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
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Annual Report 2023
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
Liu Yuehua, Hou Shoufeng
accounting firm
Cumulative years of audit service of the certified public
2
accountants of the domestic accounting firms
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
ShineWing Certified Public Accountants LLP 188,679.25
firm
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 First
Extraordinary General Meeting of Shareholders of the Company held on August 29, 2023, the Company
considered and passed the "Resolution on the Re-appointment of Accounting Firm", and agreed to re-appoint
ShineWing Certified Public Accountants LLP as the auditing organization of the Company's annual financial
report 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 the
previous 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
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Annual Report 2023
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 actual
controllers 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 subsequent
implementation
□ Applicable √ N/A
2. Matters disclosed in the interim announcement but with progress or changes in subsequent
implementation
√ Applicable □ N/A
On April 7, 2023, the Company held the Sixth Meeting of the Second Session of the Board of Directors and
the Fifth Meeting of the Second Session of the Board of Supervisors to consider and approve the ''Resolution
on the Confirmation of Daily Related Transactions of the Company for the Year 2022 and the Estimation of
Daily RelatedTransactions for the Year 2023'' respectively. As at the end of the reporting period, the daily
related transactions between the Company and the proposed connected persons are as follows, and have not
exceeded the projected amounts:
Estimated amount Actual amount in
Category of related
Related party for 2023 (RMB 2023 (RMB
transactions
Million/100) Million/100)
Rental of buildings to Suzhou Winmax Technology
350 330.09
related parties Corp.
NOVA TECH
Acceptance of rental
ENGINEERING & 10 3.86
housing from related parties
CONSTRUCTION PTE.
Total 360.00 333.95
For details of the relevant matters, please refer to the ''Proposal on the Confirmation of Routine Related
Transactions 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 subsequent
implementation
□ Applicable √ N/A
2. Matters that have been disclosed in the interim announcement but with progress or changes in
subsequent implementation
□ Applicable √ N/A
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Annual Report 2023
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 be
disclosed.
□ 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 change
in subsequent implementation
□ Applicable √ N/A
2. Matters that have been disclosed in the interim announcement but with progress or change in
subsequent 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 subsequent
implementation
□ Applicable √ N/A
2. Matters that have been disclosed in the interim announcement but with progress or changes in
subsequent 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 connected
relationship, 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
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Annual Report 2023
(II) Guarantees
√ Applicable □ N/A
Unit: Yuan Currency. RMB
External guarantees of the Company (excluding guarantees to subsidiaries)
Relations Date of Whether the Whether
Guarant Amount Guarante Guarantee Type of Collat Guarantee
Guaranto hip with guarantee guarantee the Amount Counter- Relation
eed of e starting expiration guarante eral (if for related
r the listed (date of has been guarantee overdue guarantee ship
party guarantee date date e any) parties
company agreement) fulfilled is overdue
Total amount of guarantees incurred during the reporting period (excluding
0
guarantees to subsidiaries)
Total guarantee balance at the end of the reporting period (A) (excluding
0
guarantees to subsidiaries)
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
0
parties (C)
Amount of debt guarantees provided directly or indirectly for guaranteed objects
0
with asset-liability ratio exceeding 70% (D)
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
82 / 250
Annual Report 2023
(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
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Annual Report 2023
(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
Total
Cumulative total Cumulative
Sour amount
Of which: amount of progress of Percentage
ce of Time of Adjusted total Amount of
Total amount Amount of Net proceeds Total committed proceeds inputs as at of current
fund arrival of committed invested procee
of fund- over- after issue investment of invested as of the the end of the year's input
- the fund- investment of during the ds
raising raised expenses proceeds end of the reporting amount (%)
raisi raising proceeds (1) year (4) from
funds reporting period period (%) (5) = (4)/(1)
ng change
(2) (3)=(2)/(1)
of use
Septembe 545,000,000. 485,347,160.3 311,140,820.
IPO 485,347,160.34 485,347,160.34 458,213,767.30 94.41% 64.11% /
r 29, 2022 00 4 87
84 / 250
Annual Report 2023
(II) Details of the fund-raising projects
√ Applicable □ N/A
Unit: Million/100 Yuan
Cumula
Has there
Accumul tive
Specifi been a
ated total input
Total Date Whether c Benefit significan
Invol Time amount progres Benefit
Wheth commit Adjust Amo project the reasons s t change
ving of of issue s as of s Amo
Proje er to ted ed total unt reaches progress why realize in the
inves Procee fundrai proceeds the end Clos realize unt
ct use invest invest inves intende of inputs inputs d or feasibility
Item name tmen ds sing invested of the ed or d of
natur over- ment of ment of ted d is in line did not R&D of the
t Source funds as of the reportin not during savi
e raised project procee this useable with the progres results project,
chan in end of the g the ngs
funds fund- ds(1) year conditio planned s as of the and if so,
ge place reporting period year
raising n schedule planne project please
period (2) (%) )
d provide
) (3)
details
=(2)/(1)
Supplement
al Clean
Room
Septem 29.7
Project O& 43,764. 43,764. 100.51
No IPO ber 29, No 03.2 43,988.47 / Yes Yes / N/A N/A No /
Supporting M 42 42 %
2022 5
Working
Capital
Project
R&D
Septem
Center 2,539.5 2,539.5 117. January
R&D No IPO ber 29, No 230.64 9.08 % No Yes / N/A N/A No /
Constructio 0 0 37 2025
2022
n Project
Marketing
and Service Septem
O& 2,230.8 2,230.8 1,29 71.8 October
Network No IPO ber 29, No 1,602.26 No Yes / N/A N/A No /
M 0 0 3.47 2% 2024
Constructio 2022
n Project
85 / 250
Annual Report 2023
(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
Effective Consideration Whether the maximum balance for
Considered by the Cash management balance at the
Amount of Proceeds Used for Start Date Ending date the period exceeds the authorized
Board of Directors end of the reporting period
Cash Management 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 Notes
None
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
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Annual Report 2023
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
Conversio
Issue
Bo n of
of
Propor nus shares Number of Proport
new Others Subtotal
Number tion sha from shares ion (%)
share
(%) res provident
s
fund
I.
60,000,00 15,000,00 -
Restricted 75.00 4,997,250 64,997,250 65.00
0 0 10,002,750
shares
1. Shares
held by
the state
2. Shares
held by
state-
owned
corporatio
ns
3. Other
-
domestic 8,002,200 10.00 2,000,550 -8,002,200 0
10,002,750
shares
Of which:
shares
held by
-
domestic 8,002,200 10.00 2,000,550 -8,002,200 0
10,002,750
non-state
legal
persons
Shares
held by
domestic
natural
persons
4.
51,997,80 12,999,45 12,999,45
Overseas 65.00 64,997,250 65.00
0 0 0
shares
Of which:
shares
held by 51,997,80 12,999,45 12,999,45
65.00 64,997,250 65.00
overseas 0 0 0
legal
persons
Shares
held by
overseas
natural
persons
II.
20,000,00 15,002,75
Unlimited 25.00 5,000,000 10,002,750 35,002,750 35.00
0 0
shares in
87 / 250
Annual Report 2023
circulatio
n
1. RMB
20,000,00 15,002,75
common 25.00 5,000,000 10,002,750 35,002,750 35.00
0 0
shares
2. Domest
ic listed
foreign
shares
3. Overse
as listed
foreign
shares
4. Others
III. Total
80,000,00 20,000,00 20,000,00
number of 100.00 100,000,000 100.00
0 0 0
shares
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 Meeting
of the Second Session of the Supervisory Committee on April 7, 2023 and the Annual General Meeting of
2022 on April 28, 2023 respectively, and considered and passed the Proposal on the Profit Distribution Plan
of the Company for the Year 2022. Based on the total share capital of 80,000,000 shares before the
implementation of the profit distribution and capitalization plan, the Company will transfer 2.5 shares for
every 10 shares to all shareholders, and after the transfer of 20,000,000 shares, the total share capital of the
Company will be 100,000,000 shares. For details, please refer to "Announcement on Implementation of 2022
Annual 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 per
share for the last year and the last period (if any)
√ Applicable □ N/A
The same period of the
Major financial indicators Current reporting period
previous year
Basic earnings per share (yuan/share) 1.39 1.51
Net assets per share attributable to shareholders of
10.82 12.42
listed companies (yuan/share)
According to the "Proposal on the Profit Distribution Plan for the Year 2022" considered and approved at
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 General
Meeting of the Company for the year 2022 held on April 28, 2023, the Company shall transfer 2.5 shares for
every 10 shares to all shareholders by way of capitalization of capital reserve on the basis of the total share
capital of 80,000,000 shares prior to the implementation of the equity distribution, with the total number of
shares to be transferred by way of capitalization of capital reserve to be increased by a total of 20,000,000
shares. After this capitalization, the total share capital of the Company became 100,000,000 shares. The
equity distribution was completed during the reporting period. In order to ensure the comparability of
accounting indicators, the basic earnings per share for the year 2022 has been recalculated and presented on
the basis of the changed number of shares.
4. Other disclosures deemed necessary by the Company or required by securities regulatory
authorities
□ Applicable √ N/A
(II) Changes in restricted shares
√ Applicable □ N/A
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Annual Report 2023
Unit: Shares
Number of
Number of shares Increase in Number of
Reason Date of
restricted released the number of restricted
for release of
Name of shareholder shares at the from restricted shares at the
restrictio restricted
beginning of restricted shares during end of the
n shares
the year sale during the year year
the year
SHENG HUEI
October
INTERNATIONAL 51,997,800 12,999,450 64,997,250 IPO
13, 2025
CO. LTD.
Suzhou Songhuei
Enterprise
Management October
6,498,000 8,122,500 1,624,500 IPO
Consulting 13, 2023
Partnership (Limited
Partnership)
Suzhou Shengzhan
Enterprise
Management October
1,504,200 1,880,250 376,050 IPO
Consulting 13, 2023
Partnership (Limited
Partnership)
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 during
the subsistence period, please explain separately)
□ Applicable √ N/A
(II) Changes in the total number of shares and shareholder structure of the Company and changes
in 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 approved
at 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 General
Meeting of the Company for the year 2022 held on April 28, 2023, the Company shall, on the basis of the
total share capital of 80,000,000 shares prior to the implementation of the distribution of the Company's
share capital, increase 2.5 shares for every 10 shares by way of capitalization of capital reserve to all
shareholders, totaling 20,000,000 shares. After this capitalization, the total share capital of the company
became 100,000,000 shares. Before the implementation of this equity distribution, Sheng Huei International
held 51.9978 million shares with a shareholding ratio of 65.00%, Suzhou Songhuei held 6.498 million shares
with a shareholding ratio of 8.12%, and Suzhou Shengzhan held 1.5042 million shares with a shareholding
ratio 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 total
liabilities amounted to RMB 765.0707 million, with an asset-liability ratio of 43.02%; at the end of the
reporting 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
89 / 250
Annual Report 2023
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 9,715
(households)
Total number of preferred stockholders with voting
rights restored as of the end of the reporting period N/A
(households)
Total number of preferred stockholders with voting
rights restored at the end of the month preceding the N/A
annual report disclosure date (households)
(II) Shareholdings of top ten shareholders and top ten outstanding shareholders (or shareholders
with 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)
Pledged,
Number of
Increase/decr Number of marked or Nature
shares held
Name of shareholders ease during shares held at Proport frozen of
under limited
(full name) the reporting the end of the ion (%) Shareh sharehol
selling Num
period period olding ders
conditions ber
Status
SHENG HUEI Overseas
INTERNATIONAL 12,999,450 64,997,250 65.00 64,997,250 None 0 legal
CO. LTD. person
Suzhou Songhuei
Enterprise
Management 1,624,500 8,122,500 8.12 0 None 0 Other
Consulting Partnership
(Limited Partnership)
Suzhou Shengzhan
Enterprise
Management 376,050 1,880,250 1.88 0 None 0 Other
Consulting Partnership
(Limited Partnership)
Ping An Asset - ICBC
- Ping An Asset Ruyi
581,125 581,125 0.58 0 None 0 Other
No. 15 Asset
Management Product
Domesti
Huang Junfeng 460,600 460,600 0.46 0 None 0 c natural
person
Domesti
Zhu Zexin 390,900 390,900 0.39 0 None 0 c natural
person
Industrial and
Commercial Bank of
China Limited - CITIC
Prudential Multi-
325,800 325,800 0.33 0 None 0 Other
Strategy Flexible
Allocation Mixed
Securities Investment
Fund (LOF)
90 / 250
Annual Report 2023
Tian An Life Insurance
Company Limited -
300,000 300,000 0.30 0 None 0 Other
Ping An Asset Multi-
Asset Portfolio
Domesti
Zhu Zejia 287,800 287,800 0.29 0 None 0 c natural
person
Domesti
Kelsang Rinzin 112,525 257,525 0.26 0 None 0 c natural
person
Shareholdings of the top ten shareholders with unlimited sales conditions
Number of shares held in Type and number of shares
Name of shareholders circulation with unlimited Number of
selling conditions Type
shares
Suzhou Songhuei Enterprise
Renminbi ordinary
Management Consulting Partnership 8,122,500 8,122,500
shares
(Limited Partnership)
Suzhou Shengzhan Enterprise
Renminbi ordinary
Management Consulting Partnership 1,880,250 1,880,250
shares
(Limited Partnership)
Ping An Assets - ICBC - Ping An
Renminbi ordinary
Assets Ruyi No. 15 Asset 581,125 581,125
shares
Management Product
Renminbi ordinary
Huang Junfeng 460,600 460,600
shares
Renminbi ordinary
Zhu Zexin 390,900 390,900
shares
Industrial and Commercial Bank of
China Limited - CITIC-Prudential
Renminbi ordinary
Multi-Strategy Flexible Allocation
325,800 shares 325,800
Mixed Securities Investment Fund
(LOF)
Tian An Life Insurance Company
Renminbi ordinary
Limited - Ping An Asset Multi-Asset 300,000 300,000
shares
Portfolio
Renminbi ordinary
Zhu Zejia 287,800 287,800
shares
Renminbi ordinary
Kelsang Rinchen 257,525 257,525
shares
Renminbi ordinary
Zhu Xuewen 240,950 240,950
shares
Description of buyback special
accounts among the top ten None
shareholders
Explanation of the above
shareholders' proxy voting rights,
None
entrusted voting rights and waiver of
voting rights
Description of the above shareholders'
None
affiliation or concerted action
Description of preferred stockholders
whose voting rights have been
None
restored and the number of shares they
hold
Participation of the top ten shareholders in lending of shares in the transfer and financing business
91 / 250
Annual Report 2023
□ 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
Number of shares held in shareholders'
Number of shares lent on
New/withdra transfer and not yet returned ordinary accounts and credit accounts
Name of and outstanding shares lent on transfer at
wn during at the end of the period
shareholders (full the end of the period
the reporting
name)
period Proportio
Total Quantity Total Quantity Proportion (%)
n (%)
Bank of China -E-
Funds Positive
Withdrawal N/A N/A 0 0.00
Growth Securities
Investment Fund
Sun Qinghua Withdrawal N/A N/A 0 0.00
Shao Jialin Withdrawal N/A N/A 0 0.00
CITIC Securities
Withdrawal N/A N/A 200,351 0.20
Co., Ltd.
Guotai Junan
Securities Co., Withdrawal N/A N/A 77,161 0.08
Ltd.
Everbright
Securities Co., Withdrawal N/A N/A 47,604 0.05
Ltd.
Ping An Asset -
ICBC - Ping An
Asset Ruyi No. 15
New N/A N/A 581,125 0.58
Asset
Management
Product
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
New N/A N/A 325,800 0.33
Flexible
Allocation Mixed
Securities
Investment Fund
(LOF)
Tian An Life
Insurance
Company Limited
New N/A N/A 300,000 0.30
- Ping An Asset
Multi-Asset
Portfolio
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 of
limited selling
√ Applicable □ N/A
92 / 250
Annual Report 2023
Unit: shares
Listing and trading of shares subject to
selling restrictions
Name of Number of shares
Number of new
restricted subject to selling Restricted
No. Time of availability shares available
shareholders restrictions shares
for listing and trading for listing and
trading
Lock-up of
SHENG HUEI shares for 36
INTERNATION 64,997,250 October 13, 2025 0 months from
1
AL CO. LTD. the date of
listing
Description of the
relationship or concerted
None
action of the above
shareholders
(III) Strategic investors or general corporations becoming top 10 shareholders as a result of placing
of new shares
□ Applicable √ N/A
IV. Controlling shareholders and actual controllers
(I) Controlling shareholders
1 Legal person
√ Applicable □ N/A
Name of the Company: SHENG HUEI INTERNATIONAL CO. LTD.
Person in charge of the organization or legal Liang Jinli
representative
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 None
reporting period
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 the
controlling shareholders
√ Applicable □ N/A
93 / 250
Annual Report 2023
Acter Co., Ltd.
Acter Technology
Integration Group
Acter Technology Acter Engineering
Integration Group Technology Shenzhen Dingmao
Co., Ltd. Shenzhen (Shenzhen) Co., Trading Co., Ltd.
Branch Ltd.
Acter Technology Acter Engineering
Integration Group Technology
Co., Ltd. Hefei (Shenzhen) Co.,
Branch Ltd. Xiamen
Branch
Acter Technology
Integration Group
Co., Ltd.
Zhengzhou Branch
Acter Technology
Integration Group
Co., Ltd. Wuhan
Branch
(II) Situation of actual controllers
1 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 actual
controller
□ Applicable √ N/A
6 Control of the Company by the actual controller through trust or other asset management
methods
□ 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 and
persons acting in concert with them to the number of shares held by them reaches more than
80%.
94 / 250
Annual Report 2023
□ 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
95 / 250
Annual Report 2023
Section VIII Preferred Stock
□ Applicable √ N/A
96 / 250
Annual Report 2023
Section IX Relevant Information of Bonds
I. 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 Reporting
I. Audit Report
√ Applicable □ N/A
Audit Report
XYZH/2024SUAA1B0017
Acter 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 company
balance sheets as of December 31, 2023, the consolidated and parent company income statements, the
consolidated and parent company cash flow statements, and the consolidated and parent company
statements of changes in stockholders' equity for the year ended December 31, 2023, and the related
notes to the financial statements.
In our opinion, the accompanying financial statements present fairly, in all material respects, the
consolidated and parent company financial position of Acter Group as of December 31, 2023 and the
consolidated 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 on
Auditing for Certified Public Accountants. Our responsibilities under those standards are further
described 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 of
the People's Republic of China, we are independent of Acter Group and have fulfilled our other
responsibilities with respect to professional ethics. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our audit opinion.
III. Key Audit Matters
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Annual Report 2023
Key audit matters are matters that, in our professional judgment, are of most significance to the
audit of the financial statements. These matters are dealt with in the context of the audit of the financial
statements as a whole and the formation of an audit opinion, and we do not express an opinion on these
matters 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 The audit procedures related to the evaluation of revenue
clean room projects, and the revenue from recognition of construction contracts mainly include the
construction contracts in FY2023 following procedures:
amounted to RMB 1,994,437,797.70, (1) Understanding and evaluating the design and operating
accounting for 99.28% of the operating effectiveness of key internal controls over financial
revenue in the consolidated income reporting related to revenue recognition for construction
statement. contracts;
Starting from January 1, 2020, Acter (2) Selecting the construction contracts signed between
Group will implement “ASBE No. Acter Group and its clients, examining the main terms of
14,"Revenue (Revised)”. Acter Group the contracts and evaluating whether the accounting
evaluated the terms of the contracts and policies of Acter Group for revenue recognition are in
business arrangements and concluded that compliance with the requirements of the Accounting
construction contracts are performance Standards for Business Enterprises (ASBE);
obligations to be fulfilled within a certain (3) Selecting construction contracts and examining the
period of time, and recognized revenue basis for the estimated total cost of the contracts and the
based on the progress of performance related cost budget information. If there is any adjustment
over the period of time in which the to the estimated total cost of the contract, check whether
construction contracts are performed. The the adjustment to the estimated total cost has been
progress of performance is determined approved and inquire the management about the reasons
based on the proportion of actual contract and basis for the adjustment to evaluate whether the
costs incurred by Acter Group to the estimation made by the management is reasonable and
based on sufficient information;
estimated total contract costs.
(4) Selecting contract costs actually incurred during the
Management of Acter Group is required
reporting period and checking relevant supporting
to make reasonable judgments regarding
documents such as procurement contracts, purchase orders,
the progress of completion or
material receipts, requisition ratios, invoices, etc. to
performance of construction contracts.
evaluate the authenticity and accuracy of the actual
During the course of execution of the construction costs;
contracts, Acter Group is required to
(5) Contract costs incurred around the balance sheet date
continually evaluate and make
are selected and reconciled to the relevant supporting
adjustments to the contract amounts and
documents, including purchase contracts, purchase orders,
estimated total contract costs, which
material receipts, requisition ratios, invoices, and other
involves the exercise of significant
relevant supporting documents, in order to evaluate
management judgments.
98 / 250
Annual Report 2023
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 whether the relevant contract costs are recorded in the
construction contracts as a key audit appropriate accounting period;
matter because revenue is one of the key (6) Selecting construction contracts that have not been
performance indicators of Acter Group, completed at the end of the reporting period, reviewing the
there is an inherent risk that Acter Group accuracy of the calculation of the percentage of completion
may manipulate revenue to meet certain or progress of performance, and recalculating the
objectives or expectations, and revenue cumulative revenue recognized and the revenue to be
recognition for construction contracts recognized in the current period, and reconciling them with
involves significant management the financial records;
judgment. (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 The audit procedures related to the evaluation of the
accounts receivable in the consolidated balance bad debt provision for accounts receivable included
sheet of Acter Group was RMB the following procedures:
99 / 250
Annual Report 2023
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 (1) Understanding and evaluating the design and
debts was RMB 35,410,034.25. Based on the operating effectiveness of Acter Group’s key internal
expected credit loss rate of accounts controls over financial reporting related to credit risk
receivable, the management measured the bad control, collection and provisioning for bad debts;
debt provision for accounts receivable at an (2) Evaluating whether the accounting policy for bad
amount equivalent to the expected credit losses debt provision of Acter Group for the reporting period
over the life of the accounts receivable. complies with the requirements of enterprise
accounting standards;
The expected credit loss rate takes into account
(3) Evaluating the appropriateness of the aging of
the age of the accounts receivable, historical
accounts receivable by selecting items from the
payments, current market conditions and
accounts receivable aging table, reviewing relevant
forward-looking information, and this
supporting documents, and taking into account the
assessment involves significant management
information on the credit periods granted by Acter
judgment and estimates. 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 the
other information. Other information includes the information covered in the 2023 annual report of
Acter Group, but excludes the financial statements and our audit report.
100 / 250
Annual Report 2023
Our audit opinion on the financial statements does not cover the other information, and we do not
express 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 other
information 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 in
the course of the audit.
Based on the work we have performed, if we determine that other information is materially
misstated, 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, in
accordance with the provisions of the Ind AS, and for designing, implementing and maintaining internal
control necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing Acter Group's
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
applying 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 whole
are free from material misstatement, whether due to fraud or error, and to issue an audit report
containing an audit opinion. Reasonable assurance is a high level of assurance, but it does not guarantee
that an audit performed in accordance with auditing standards will always detect a material
misstatement when it exists. Misstatements may result from fraud or error and are generally considered
to be material if it is reasonable to expect that the misstatements, individually or in the aggregate, could
affect 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 in
accordance with auditing standards. We also perform the following tasks:
(1) Identifying and assessing the risks of material misstatement of the financial statements due to
fraud or error, design and perform audit procedures to address those risks, and obtaining sufficient
appropriate audit evidence as a basis for an audit opinion. The risk of not detecting a material
misstatement due to fraud is higher than the risk of not detecting a material misstatement due to error
because fraud may involve collusion, forgery, willful omission, misrepresentation, or overriding
internal controls.
101 / 250
Annual Report 2023
(2) Obtaining an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of internal control.
(3) Evaluating the appropriateness of accounting policies selected and the reasonableness of
accounting estimates and related disclosures made by management.
(4) Expressing a conclusion on the appropriateness of management's use of the going concern
assumption. At the same time, based on the audit evidence obtained, we conclude whether there is a
material uncertainty regarding the matters or circumstances that may cast significant doubt on the ability
of Acter Group to continue as a going concern. If we conclude that a material uncertainty exists, auditing
standards require that we draw the attention of users of the financial statements to the relevant
disclosures in our audit report; if the disclosures are not sufficient, we shall express an unqualified
opinion. 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 to
evaluate whether the financial statements present fairly the related transactions and events.
(6) Obtaining sufficient and appropriate audit evidence about the financial information of the
entities or business activities of Acter Group to express an opinion on the financial statements. We are
responsible for directing, supervising and performing the audit of the Group and accept full
responsibility for the audit opinion.
We communicate with governance on matters such as the scope, timing and significant findings of
the 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 to
independence and communicate with governance all relationships and other matters that could
reasonably be perceived to affect our independence, as well as related safeguards.
From the matters communicated with governance, we determined which matters were most
significant 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 prohibited
by law or regulation or, in rare circumstances, we determine that a matter shall not be communicated in
the audit report if it is reasonably foreseeable that the adverse consequences of communicating the
matter would outweigh the benefits to the public interest.
ShineWing Certified Public Accountants LLP Certified Public Accountants, China:
(Project Partner)
Certified Public Accountant, China:
102 / 250
Annual Report 2023
Beijing, China March 29, 2024
103 / 250
Annual Report 2023
II. Financial Statements
Consolidated Balance Sheet
December 31, 2023
Prepared 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
104 / 250
Annual Report 2023
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
105 / 250
Annual Report 2023
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 1,082,257,514.27 1,009,348,273.61
to the parent company
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' 1,904,362,490.44 1,777,146,294.25
equity)
Person in charge of the Company: Liang Jinli
Person in charge of Accounting: Chen Zhihao
Person of Accounting Organization: Xiao Jingxia
106 / 250
Annual Report 2023
Parent Company Balance Sheet
December 31, 2023 Prepared by: Acter Technology Integration
Group 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
107 / 250
Annual Report 2023
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 Jinli
Person in charge of Accounting: Chen Zhihao
Person in charge of Accounting Organization: Xiao Jingxia
108 / 250
Annual Report 2023
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
109 / 250
Annual Report 2023
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 138,590,474.42 122,867,982.79
loss denoted by "-")
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 290,286.73 2,027,897.54
company, net of taxes
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 79,151.41 84,748.55
of taxes
VII. Total comprehensive income 140,433,280.13 125,131,685.45
(I) Total comprehensive income
attributable to owners of the parent 138,880,761.15 124,895,880.33
company
110 / 250
Annual Report 2023
(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 net
profit realized by the party to be merged before the merger was RMB 0. The net profit realized by the
party 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
111 / 250
Annual Report 2023
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
112 / 250
Annual Report 2023
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 Jinli
Person in charge of Accounting: Chen Zhihao
Person in charge of Accounting organization: Xiao Jingxia
113 / 250
Annual Report 2023
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
114 / 250
Annual Report 2023
Cash received from investment income 1,809,868.77
Net cash received from the disposal of
fixed assets, intangible assets and other 28,000.00 273,005.91
long-term assets
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 16,998,209.64 4,783,339.58
assets and other long-term assets
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 Accounting
Organization: Xiao Jingxia
115 / 250
Annual Report 2023
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 20,000.00 88,000.00
and other long-term assets
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- 15,334,338.59 3,625,785.24
term assets
Cash paid for investment 225,000,000.00 122,000,000.00
Net cash paid for acquisition of
subsidiaries and other operating 4,242,955.45
units
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:
116 / 250
Annual Report 2023
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 65,000,000.00 31,177,990.13
repayment
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 7,753.07 125,339.27
equivalents
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 Accounting
Organization: Xiao Jingxia
117 / 250
Annual Report 2023
Consolidated Statement of Changes in Owners' Equity
January-December 2023
Unit: Yuan Currency: RMB
Year 2023
Owners' equity attributable to the parent company
Other equity
Less:
Item Paid-in instruments General
Capital Treasu Other Earmarked Surplus Undistributed Undistribu Minority interests Total equity
capital (or Preferr risk Subtotal
Perpetu Oth surplus ry comprehensive reserves reserves profits ted profit
equity) ed allowance
al debt er stock income
stock
I. Closing balance
80,000,00 582,632,775. 45,372,652.9
of the previous 3,027,860.88 28,443,197.81 269,871,786.54 1,009,348,273.61 4,043,962.14 1,013,392,235.75
0.00 45 3
year
Add: change in
-177,717.08 -177,717.08 -3,467.80 -181,184.88
accounting policy
Correction of
prior-period errors
Others
II. Opening
80,000,00 582,632,775. 45,372,652.9
balance for the 3,027,860.88 28,443,197.81 269,694,069.46 1,009,170,556.53 4,040,494.34 1,013,211,050.87
0.00 45 3
year
III. -
20,000,00
Increases/decrease 20,000,000.0 290,286.73 -793,803.41 11,058,103.57 62,532,370.85 73,086,957.74 3,667,054.05 76,754,011.79
0.00
s during the period 0
Amount (Decrease
denoted by " - ")
(I) Total
comprehensive 290,286.73 138,590,474.42 138,880,761.15 1,552,518.98 140,433,280.13
income
(II) Owners' inputs
and capital 2,114,535.07 2,114,535.07
reduction
1. Ordinary shares
2,114,535.07 2,114,535.07
invested by owners
2. Contribution of
capital by holders
of other equity
instruments
3. Share-based
payments
recognized in
owners' equity
4. Others
(III) Profit - - -
- - - - - - - - 11,058,103.57 - - -
distribution 76,058,103.57 65,000,000.00 65,000,000.00
1. Withdrawal of
11,058,103.57 -11,058,103.57
surplus reserves
2. Provision for
general risks
118 / 250
Annual Report 2023
3. Distribution to
owners (or -65,000,000.00 -65,000,000.00 -65,000,000.00
shareholders)
4. Others
(IV) Internal -
20,000,00
transfer of 20,000,000.0
0.00
ownership interest 0
1. Capitalization of
-
capital surplus to 20,000,00
20,000,000.0
capital (or share 0.00
0
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
-793,803.41 -793,803.41 -793,803.41
reserves
1. Withdrawal
during the period
2. Used during the
793,803.41 793,803.41 793,803.41
period
(VI) Others
IV. Closing
100,000,0 562,632,775. 44,578,849.5
balance of the - - - - 3,318,147.61 39,501,301.38 - 332,226,440.31 - 1,082,257,514.27 7,707,548.39 1,089,965,062.66
00.00 45 2
period
119 / 250
Annual Report 2023
Year 2022
Equity attributable to owners of the parent company
Other equity instruments Less: General
Paid-in Treasu Other risk Undistribu
Preferre Perpetua Othe Minority Total owners'
capital (or ry comprehensiv Earmarked Surplus allowan Undistributed ted profit
d stock l debt r Capital surplus Subtotal interests equity
share capital) stock e income reserves reserves ce profits
I. Closing balance
60,000,000.0 3,808,157.0
of the previous 110,110,859.85 999,963.34 46,731,787.48 19,682,373.25 185,764,628.31 423,289,612.23 427,097,769.25
0 2
year
Add: change in
accounting policy
Correction of
prior-period errors
Others
II. Opening
60,000,000.0 3,808,157.0
balance for the 110,110,859.85 999,963.34 46,731,787.48 19,682,373.25 185,764,628.31 423,289,612.23 427,097,769.25
0 2
year
III.
Increases/decrease
20,000,000.0
s during the period 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
0
(Decrease denoted
by " - ")
(I) Total
comprehensive 2,027,897.54 122,867,982.79 124,895,880.33 235,805.12 125,131,685.45
income
(II) Owners' inputs
20,000,000.0
and capital 472,521,915.60 492,521,915.60 492,521,915.60
0
reduction
1. Ordinary shares 20,000,000.0
465,347,160.33 485,347,160.33 485,347,160.33
invested by owners 0
2. Contribution of
capital by holders
of other equity
instruments
3. Share-based
payments
7,174,755.27 7,174,755.27 7,174,755.27
recognized in
owners' equity
4. Others
(III) Profit
8,760,824.56 -38,760,824.56 -30,000,000.00 -30,000,000.00
distribution
1. Withdrawal of
8,760,824.56 -8,760,824.56
surplus reserves
2. Provision for
general risks
3. Distribution to
owners (or -30,000,000.00 -30,000,000.00 -30,000,000.00
shareholders)
4. Others
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Annual Report 2023
(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
-1,359,134.55 -1,359,134.55 -1,359,134.55
reserves
1. Withdrawal
during the period
2． Used during
1,359,134.55 1,359,134.55 1,359,134.55
the period
(VI) Others
IV. Closing
80,000,000.0 1,009,348,273.6 4,043,962.1 1,013,392,235.7
balance of the 582,632,775.45 3,027,860.88 45,372,652.93 28,443,197.81 269,871,786.54
0 1 4 5
period
Person in charge of the Company: Liang Jinli Person in charge of Accounting: Chen Zhihao Person in charge of Accounting
Organization: Xiao Jingxia
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Annual Report 2023
Statement of changes in equity of the parent company
January-December 2023
Unit: Yuan Currency: RMB
Item Year 2023
Paid-in capital Other equity instruments Other
Less: Treasury Earmarked Surplus Undistributed Total owners'
(or share Capital surplus comprehensive
Preferred stock Perpetual debt Others stock reserves reserves earnings equity
capital) income
I. Balance at the end of the previous
80,000,000.00 584,223,330.95 37,608,529.67 28,443,197.81 171,611,642.97 901,886,701.40
year
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
-65,000,000.00 -65,000,000.00
shareholders)
3. Other -
(IV) Internal transfer of owners' equity 20,000,000.00 -20,000,000.00
1. Transfer of capital surplus to capital
20,000,000.00 -20,000,000.00
(or share capital)
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
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Annual Report 2023
Year 2022
Paid-in capital Other equity instruments Other
Less: Treasury Earmarked Surplus Undistributed Total owners'
Item (or share Capital surplus comprehensive
Preferred stock Perpetual debt Other stock reserves reserves earnings equity
capital) income
I. Balance at the end of the previous
60,000,000.00 111,774,134.07 38,967,664.22 19,682,373.25 122,764,221.97 353,188,393.51
year
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
20,000,000.00 472,449,196.88 492,449,196.88
reduction
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
7,102,036.55 7,102,036.55
payments recognized in owners' equity
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
-30,000,000.00 -30,000,000.00
shareholders)
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 Accounting
Organization: Xiao Jingxia
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Annual Report 2023
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 in
Suzhou City, Jiangsu Province. At the time of its establishment, the Company's initial registered capital
was US$0.45 million. After a series of capital increase, as at December 31, 2017, the registered capital
of Sheng Huei Limited was US$7.98 million, and the sole shareholder of Sheng Huei Limited is SHENG
HUEI INTERNATIONAL CO., Ltd.
In January 2018, Sheng Huei International increased the capital of Sheng Huei Limited, and the
registered capital was increased from US$7.98 million to US$9.03 million. In May 2018, Acter Group
entered into an equity transfer agreement with Suzhou Songhuei Enterprise Management Consulting
Partnership (Limited Partnership) (“Suzhou Songhuei”) and Suzhou Shengzhan Enterprise
Management Consulting Partnership (Limited Partnership) (“Suzhou Shengzhan”). Pursuant to the
agreement, Acter Group agreed to transfer the corresponding registered capital of Sheng Huei Limited
of US$0.977918 million and US$0.226403 million held by Sheng Huei Limited to Suzhou Songhuei
and Suzhou Shengzhan at RMB 14,282,400.00 and RMB 3,306,600.00 respectively. After the
completion of the above transactions, the registered capital of Sheng Huei Limited is US$9.03 million
and the equity structure is as follows:
Amount of investment Shareholding
No. Shareholder
(USD Million/100) 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, agreeing
to change the whole of Sheng Huei Limited into a joint stock limited company and renamed as “Acter
Technology Integration Group Co., Ltd.”. All the investors converted the net assets of Sheng Huei
Limited as of April 30, 2019 into 60,000,000 shares with par value of RMB 1 each. The shareholding
structure after the overall change is as follows:
Share capital Shareholding
No. Shareholder
(RMB) 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 20,000,000.00
shares by CSRC (“Official Reply to the Approval of the IPO of Acter Technology Integration Group
Co., 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 TWENTY
MILLION YUAN ONLY).
The shareholding structure after the overall change is as follows:
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Annual Report 2023
Share capital Shareholding
No. Shareholders
(RMB) ratio (%)
1 Sheng Huei International 51,997,800.00 64.9973
RMB ordinary shares (A shares)
2 20,000,000.00 25.0000
shareholders
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 Company
paid a cash dividend of RMB 0.8125 per share (inclusive of tax) to all shareholders on the basis of the
total share capital of 80,000,000.00 shares as at June 14, 2023, and transferred 0.25 shares to all
shareholders by way of capital reserve to increase the share capital by a total of 20,000,000.00 shares
with 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:
Share capital Shareholding
No. Shareholder
(RMB) ratio (%)
1 Sheng Huei International 64,997,250.00 64.9973
RMB ordinary shares (A shares)
2 25,000,000.00 25.0000
shareholders
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 is
Acter Co., Ltd. (Acter (Taiwan)) The Company's business term is from September 3, 2003 to an
indefinite period.
Scope of Business: Engaged in system integration services; design and related equipment
installation of mechanical and electrical systems, HVAC systems, aseptic systems, and building
equipment management systems: construction of air purification engineering, fire engineering, building
construction engineering, interior and exterior decoration engineering, municipal public works, pipeline
engineering, and provision of related technical consultation and after-sales service; research and
development 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 quotas
and license management, applications shall be handled according to relevant national regulations).
Category III medical device business; Category II medical device sales; manufacturing of metal
structures; manufacturing of building decoration, plumbing parts, and other metal products for
construction (the project shall be carried out only after approval by relevant authorities in accordance
with the law).
Licensed Projects: Construction engineering design; intelligent building system design (the
specific business projects shall be subject to the approval results, and only after approval by relevant
authorities 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, 2024
by resolution.
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IV. Basis of Preparation of the Financial Statements
1. Basis of preparation
The financial statements of the Company are prepared in accordance with the "Accounting
Standards for Business Enterprises" issued by the Ministry of Finance (hereinafter collectively referred
to as the "ASBE") and its application guidance, interpretations, and other relevant regulations, as well
as the disclosure requirements of the China Securities Regulatory Commission's (hereinafter
collectively referred to as the "CSRC") "General Provisions of Financial Reports - No. 15 - Rules on
the Information Disclosure of Companies Issuing Securities" (Revised in 2023), based on the actual
transactions and events.
2. Going concern
√ Applicable □ N/A
The Group evaluated its ability to continue as a going concern for the twelve months ended
December 31, 2023, and found no matters or circumstances that cast significant doubt on its ability to
continue as a going concern. The financial statements are presented on a going concern basis.
V. Significant Accounting Policies and Accounting Estimates
Specific accounting policies and accounting estimates
√ Applicable □ N/A
The preparation of financial statements requires the management of the Group to make estimates
and 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 management
continually evaluates its judgment regarding critical assumptions and uncertainties involved in making
estimates. The effects of changes in accounting estimates are recognized in the period in which the
estimate is changed and in future periods.
The following accounting estimates and critical assumptions have a significant risk of causing a
material 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 over
a period of time. The recognition of revenue and profit from construction depends on the Group's
estimation of the outcome of the contract and the progress of performance. If the actual amount of total
revenues and total costs incurred is higher or lower than management's estimates, it will affect the
amount 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 impairment
of financial instruments. The application of the expected credit loss model requires significant
judgments and estimates that take into account all reasonable and supportable information, including
forward-looking information. In making such judgments and estimates, the Group extrapolates the
expected changes in the credit risk of debtors based on historical repayment data and factors such as
economic policies, macroeconomic indicators and industry risks. Therefore, the amount of provision
for impairment of receivables and contract assets may change in accordance with the changes in the
above estimates, and the adjustments to the provision for impairment of receivables and contract assets
will 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. The
recoverable amount of property, plant and equipment and investment properties is the higher of the
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Annual Report 2023
present value of estimated future cash flows and the fair value of the assets less costs of disposal, which
requires the use of accounting estimates.
If management revises the gross margins used in the calculation of future cash flows for asset
groups and portfolios of asset groups and the revised gross margins are lower than the currently used
gross margins, the Group is required to increase the provision for impairment for property, plant and
equipment and investment properties.
If the pre-tax discount rate used for discounting cash flows is revised by the management and the
revised pre-tax discount rate is higher than the current rate, the Group is required to make additional
provision 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's
estimate, the Group cannot reverse the provision for impairment of fixed assets and investment
properties.
(4) Useful lives of fixed assets and investment properties
The Group reviews the estimated useful lives of fixed assets and investment properties at least
annually at the end of each year. The estimated useful lives are determined by the management based
on historical experience of similar assets, reference to estimates generally used in the industry and
expected technological updates. Depreciation and amortization expenses for future periods are adjusted
accordingly 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 from
business combinations and transactions or events directly attributable to owners' equity (including other
comprehensive income).
Current income tax is the expected income tax payable calculated on the basis of the taxable
income for the year at the rates specified in the tax law, plus adjustments to prior years' income tax
payable. At the balance sheet date, if the Group has a legal right to settle on a net basis and intends to
settle on a net basis, or to acquire assets and settle liabilities simultaneously, current income tax assets
and current income tax liabilities are shown net of tax. Deferred tax assets and deferred tax liabilities
are recognized for deductible temporary differences and taxable temporary differences, respectively. A
temporary difference is the difference between the carrying amount of an asset or liability and its tax
basis, including deductible losses and tax credits that can be carried forward to future years. Deferred
tax assets are recognized to the extent that it is probable that taxable income will be available against
which the deductible temporary differences can be utilized. Deferred tax is not recognized for temporary
differences arising from transactions that are not part of a business combination and that at the time of
the transaction affect neither the accounting profit nor taxable income (or deductible losses). At the
balance sheet date, the Group measures the carrying amount of deferred tax assets and liabilities based
on the expected manner of recovering or settling those assets and liabilities, in accordance with enacted
tax laws, at the tax rates that are expected to apply to the period when the assets are recovered or the
liabilities 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 not
that sufficient taxable income will not be available to allow the benefit of the deferred tax assets to be
realized in future periods. When it is more likely than not that sufficient taxable income will be available
to 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 following
conditions are met:
A taxable entity has a legal right to settle current income tax assets and current income tax liabilities
on a net basis;
Deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax
authority on the same taxable entity or on different taxable entities, provided that in each future period
in which significant deferred tax assets and liabilities reverse, the taxable entity intends to settle the
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Annual Report 2023
current tax assets and liabilities on a net basis, or to realize the assets and settle the liabilities
simultaneously.
1. Statement of Compliance with ASBE
The financial statements prepared by the Company comply with the requirements of the ASBE and
give a true and complete account of the Company's financial position, results of operations, changes in
shareholders' 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 of
assets 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 local
currency of account; Acter Technology Singapore Pte. Ltd ("Acter (Singapore)") is denominated in
Singapore dollars; PT Acter Technology Indonesia ("Acter (Indonesia)") and PT Acter Integration
Technology Indonesia ("Indonesia Joint Venture") are denominated in Indonesian Rupiah; Acter
Technology Malaysia Sdn. Bhd ("Acter (Malaysia)") is denominated in Malaysian Ringgit and Sheng Huei
Engineering 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 Group
and its subsidiaries have selected the local currency of accounts based on the currency of valuation and
settlement of major business receipts and expenditures. Some subsidiaries of the Group have adopted
currencies other than the Group's local currency as their local currency, and the foreign currency financial
statements of these subsidiaries have been translated in accordance with this Section V.10 in the preparation
of 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 Individual amount exceeding RMB 3 million
than one year
Important prepaid accounts with an age of more Individual amount exceeding RMB 1 million
than one year
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 the
same control are measured at the carrying amount of the party being consolidated in the consolidated
statements of the party ultimately in control at the date of consolidation. The difference between the carrying
amount of net assets acquired and the carrying amount of the consideration paid for the merger is adjusted
to capital surplus; if the capital surplus is not sufficient to cover the difference, it is adjusted to retained
earnings.
(2) Business combination not under common control
A business combination under non-identical control occurs when the parties involved in the
combination 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 combination
not under common control are measured at fair value at the acquisition date. The cost of consolidation is the
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Annual Report 2023
sum of the fair values of cash or non-cash assets paid, liabilities issued or assumed, and equity securities
issued by the Group at the date of acquisition for the purpose of obtaining control over the acquiree, as well
as all directly related expenses incurred in the business combination (for business combinations effected in
stages through multiple transactions, the cost of consolidation is the sum of the costs of each individual
transaction). 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 net
assets, the fair value of the identifiable assets, liabilities and contingent liabilities acquired in the combination
as well as the fair value of the non-cash assets or equity securities issued as consideration for the combination
are first reviewed. If, after the review, the cost of consolidation is still less than the fair value of the net
identifiable assets of the acquiree, the difference is recognized as non-operating revenue in the current period
of 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 basis
of control, which includes the Company and all subsidiaries controlled by the Company (including
enterprises, divisible parts of invested entities and structured entities controlled by enterprises, etc.). The
Group determines control on the basis of the Group's power over an investee, the Group's ability to earn
variable returns from participating in the investee's activities, and the Group's ability to exercise its power
over the investee to affect the amount of the investee's returns.
In the preparation of consolidated financial statements, if the subsidiaries adopt accounting policies or
accounting periods that are different from those of the Company, the subsidiaries' financial statements shall
be 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 and
its subsidiaries and between subsidiaries are eliminated on consolidation. The share of ownership interest of
subsidiaries that is not attributable to the parent company and the share of net profit or loss, other
comprehensive income and total comprehensive income that is attributable to minority interests are presented
in the consolidated financial statements under the headings of "Minority interests, minority interests in profit
or loss, other comprehensive income attributable to minorities and total comprehensive income attributable
to minorities", respectively.
The results of operations and cash flows of subsidiaries acquired in a business combination under the
same control are included in the consolidated financial statements from the beginning of the period in which
the combination occurs. In preparing the comparative consolidated financial statements, adjustments are
made to the relevant items in the prior year's financial statements, and the consolidated entity is deemed to
have 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 operations
and 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 on
the basis of the fair value of each identifiable asset, liability and contingent liability determined at the date
of 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 operation
refers to a joint arrangement in which the parties to the arrangement are entitled to the assets and bear the
liabilities related to the arrangement. A joint venture is a joint arrangement in which the joint venturers have
rights only to the net assets of the arrangement.
For joint ventures, the Group recognizes assets held and liabilities assumed individually or in proportion
to the assets held and liabilities assumed by the Group as a joint venturer, and recognizes revenues and
expenses individually or in proportion to the relevant agreements. When a joint venture enters into a
transaction for the purchase or sale of an asset that does not constitute part of the business, only the portion
of the gain or loss arising from the transaction that is attributable to the other participants in the joint venture
is recognized.
9. Criteria for determining cash and cash equivalents
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Cash equivalents are investments held by an enterprise that have a short maturity (generally maturing
within three months from the date of purchase), are highly liquid, are readily convertible to known amounts
of 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 date
of the transaction. At the balance sheet date, foreign currency monetary items are translated into RMB using
the spot exchange rate at the balance sheet date, and the resulting translation differences are recognized
directly in profit or loss for the current period, except for exchange differences arising from special loans in
foreign 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 fair
value that are denominated in foreign currencies are translated using spot exchange rates at the date when
the fair value is determined, and the difference between the translated amount in the local currency of the
account 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 from
investors in foreign currencies is translated using the spot exchange rate on the date when the transaction
occurs, and the difference in the translated amount between the invested capital in foreign currencies and the
corresponding 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 the
balance sheet date; owners' equity items, except for "undistributed profits", are translated at the spot
exchange rate at the time of occurrence of the business; and income and expenses in the income statement
are translated at the spot exchange rate at the date of occurrence of the transaction. Translation differences
arising from the above translations are recognized in other comprehensive income. Cash flows in foreign
currencies are translated using the spot exchange rate on the date of cash flows. The effect of exchange rate
changes 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 financial
instrument contract.
The effective interest method is a method of calculating the amortized cost of a financial asset or a
financial 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 the
expected life of the financial asset or financial liability to the book balance of the financial asset or the
amortized cost of the financial liability. In determining the effective interest rate, the expected cash flows
are estimated by taking into account all contractual terms of the financial assets or liabilities (e.g. early
repayment, 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 the
financial asset or the financial liability, less the principal repaid, plus or minus the cumulative amortization
using the effective interest rate method to amortize the difference between the initial recognized amount and
the 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 of
the 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 bills
receivable arising from the sale of goods or provision of services, etc., which do not contain significant
financing components or do not take into account the financing components that are not more than one year
old, which are measured initially at the transaction price.
For financial assets at fair value through profit or loss, transaction costs are recognized directly in profit
or loss, while transaction costs related to other types of financial assets are recognized in their initial
recognition amounts.
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Subsequent measurement of financial assets depends on their classification. All affected financial assets
are 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 asset
stipulate that the only cash flows to be generated at a specific date will be payments of principal and interest
based on the amount of principal outstanding, and the business model for managing the financial asset is to
collect the contractual cash flows. The Group recognizes interest income on these financial assets using the
effective interest method, partially measured at amortized cost, bills receivable, accounts receivable, other
receivables, 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 or
derecognition 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 effective
interest rate, except in the following cases.
a. For financial assets acquired or originated that are impaired, the Group determines interest income
on the basis of the amortized cost of the financial assets and the effective interest rate adjusted for
creditworthiness from the initial recognition of the financial assets.
b. For financial assets acquired or originated without credit impairment that become impaired in a
subsequent period, the Group determines interest income in the subsequent period based on the amortized
cost of the financial assets and the effective interest rate. If, in a subsequent period, the credit risk of a
financial instrument has improved and the financial instrument is no longer impaired, the Group calculates
interest 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 specific
date will consist solely of payments of principal and interest based on the outstanding principal amount, and
the business model for managing the financial asset is based on the objective of collecting the contractual
cash flows as well as the objective of selling the financial asset, the Group classifies the financial asset as a
financial 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, impairment
losses and exchange differences, which are recognized in profit or loss. When the financial assets are
derecognized, the cumulative gain or loss previously recognized in other comprehensive income is
transferred from other comprehensive income and recognized in profit or loss.
Notes and accounts receivable at fair value through other comprehensive income are presented as
receivables financing, and other financial assets are presented as other debt investments, of which. Other
debt investments maturing within one year from the balance sheet date are presented as non-current assets
with maturity of less than one year, and other debt investments with original maturity of less than one year
are 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 equity
instruments as financial assets at fair value through other comprehensive income on an individual financial
asset basis.
Changes in the fair value of such financial assets are recognized in other comprehensive income and no
provision for impairment is required. Upon derecognition of the financial assets, the cumulative gain or loss
previously recognized in other comprehensive income is transferred from other comprehensive income to
retained earnings.
The Group recognizes dividend income and recognizes it in profit or loss when the Group's right to
receive dividends has been established, it is probable that the economic benefits associated with the dividends
will flow to the Group and the amount of dividends can be measured reliably during the period in which the
Group holds the investment in the equity instrument. The Group reports such financial assets under
investments in other equity instruments.
Investments in equity instruments are classified as financial assets at fair value through profit or loss if
they meet one of the following conditions: the financial asset is acquired principally for the purpose of selling
in the near future; it is part of a centrally managed portfolio of identifiable financial assets at initial
recognition, and there is objective evidence that a pattern of short-term profit-taking actually exists in the
near future; and It is a derivative (except for derivatives that meet the definition of a financial guarantee
contract and are designated as effective hedging instruments).
4) Financial assets classified at fair value through profit or loss
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Financial assets that do not meet the criteria for classification as financial assets at amortized cost or at
fair value through other comprehensive income and are not designated as at fair value through other
comprehensive 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 gains
or losses arising from changes in fair value, as well as dividend and interest income related to these financial
assets in profit or loss for the current period.
The Group reports these financial assets under the items of trading financial assets and other non-current
financial 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 fair
value through profit or loss on an individual basis in order to eliminate or significantly reduce accounting
mismatches.
If a hybrid contract contains one or more embedded derivatives and the host contract is not one of the
above financial assets, the Group may designate the entire contract as a financial instrument at fair value
through 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, little
analysis 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 amount
close 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 gains
or losses arising from changes in fair value, as well as dividend and interest income related to these financial
assets in profit or loss.
The Group reports such financial assets under the items of trading financial assets and other non-current
financial 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 equity
instrument upon initial recognition based on the contractual terms of the financial instrument issued and the
economic substance reflected therein rather than in legal form only, taking into account the definitions of
financial liabilities and equity instruments. Financial liabilities are classified on initial recognition as
financial liabilities at fair value through profit or loss, other financial liabilities and derivatives designated
as effective hedging instruments.
Financial liabilities are measured at fair value on initial recognition. For financial liabilities at fair value
through profit or loss, transaction costs are recognized directly in profit or loss; for other types of financial
liabilities, 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 through
profit or loss on initial recognition.
Financial liabilities are classified as trading liabilities if they meet one of the following conditions: they
are assumed principally for the purpose of selling or repurchasing in the near future; they are part of a
centrally managed portfolio of identifiable financial instruments and there is objective evidence that the
enterprise has recently adopted a short-term profit-taking model; they are derivatives, except for those
designated as effective hedging instruments and those subject to financial guarantee contracts. Financial
liabilities held for trading (including derivatives that are financial liabilities) are subsequently measured at
fair value, with all changes in fair value recognized in profit or loss, except for those related to hedge
accounting.
At initial recognition, in order to provide more relevant accounting information, the Group irrevocably
designates financial liabilities as financial liabilities at fair value through profit or loss if they meet one of
the following conditions:
a. Eliminating or significantly reducing accounting mismatches.
b. Managing and evaluating the performance of a portfolio of financial liabilities or a portfolio of
financial assets and financial liabilities on a fair value basis in accordance with an enterprise risk
management or investment strategy as set out in a formal written document, and reporting to key
management personnel within the enterprise on this basis.
The Group subsequently measures such financial liabilities at fair value, with changes in fair value
recognized in profit or loss, except for changes in fair value arising from changes in the Group's own credit
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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 fair
value changes in other comprehensive income caused by changes in the Group's own credit risk would result
in 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 liabilities
measured at amortized cost, which are subsequently measured at amortized cost using the effective interest
method, with gains or losses arising from derecognition or amortization recognized in profit or loss for the
current 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 for
derecognition 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 loan
commitments 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 money
to the holder of the contract who suffers a loss when a specified debtor fails to make payments when due in
accordance with the terms of the original or modified debt instrument. Financial guarantee contracts that are
not financial liabilities designated as at fair value through profit or loss are measured at the higher of the
amount of the allowance for losses and the amount initially recognized net of accumulated amortization over
the 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 of
the 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 of
financial assets.
2) Conditions for derecognition of financial liabilities
A financial liability (or a portion of a financial liability) is derecognized when the present obligation of
the financial liability (or the portion of the financial liability) has been discharged. If the Group enters into
an 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 original
financial liability, or the contractual terms of the original financial liability (or a portion thereof) are
substantially modified, the original financial liability is derecognized and a new financial liability is
recognized 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 amount
of the financial liability as a whole according to the proportion that the fair value of the continuing portion
and the derecognized portion of the financial liability bears to the fair value of the financial liability as a
whole at the date of buyback. The difference between the carrying amount allocated to the derecognized
portion and the consideration paid (including non-cash assets transferred or liabilities assumed) shall be
recognized 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 asset
when 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 financial
asset is derecognized and the rights and obligations arising from or retained in the transfer are separately
recognized 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 asset
are retained (i.e., in cases other than those in 1) and 2)), the financial asset is recognized and treated as
follows, 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 and
obligations 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 the
extent of its continuing involvement in the transferred financial asset, and the related liability is recognized
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accordingly. The extent to which the Group continues to be involved in the transferred financial asset is the
extent 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 of
financial assets, the principle of substance over form is applied.
The Company distinguishes between transfers of financial assets as a whole and partial transfers of
financial assets:
1) If the transfer of financial assets as a whole meets the conditions for derecognition, the difference
between 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 the
derecognized portion of the cumulative change in the fair value of the transferred financial asset that is
recognized in other comprehensive income (the transferred financial asset is a financial asset at fair value
through 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 the
derecognized part and the derecognized part (in which case, the retained service asset shall be regarded as a
part of the derecognized financial asset) in accordance with their respective relative fair values at the date of
transfer, and the difference between the following amounts is recognized in the profit or loss for the current
period:
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 to
the derecognized portion of the cumulative changes in fair value previously recognized in other
comprehensive income (involving transfers of financial assets at fair value through other comprehensive
income).
and
If the transfer of a financial asset does not meet the conditions for derecognition, the financial asset
continues 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 determined
using quoted prices in an active market, unless there is a period of restriction on the sale of the financial
asset. The fair value of a financial asset that is subject to a sales restriction on the asset itself is determined
based on quoted prices in an active market, less the amount of compensation that a market participant would
require to assume the risk of not being able to sell the financial asset in the open market within a specified
period of time. Quoted prices in active markets include quoted prices for the relevant assets or liabilities that
are readily and regularly available from exchanges, dealers, brokers, industry groups, pricing agencies or
regulatory bodies, etc., and that are representative of actual and regularly occurring market transactions on
an arm's length basis.
The fair value of financial assets or liabilities that are initially acquired or derived from financial assets
or 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 determined
using valuation techniques. In valuing financial assets or financial liabilities, the Group uses valuation
techniques that are appropriate in the circumstances and supported by sufficient available data and other
information, and selects inputs that are consistent with the characteristics of the assets or liabilities that would
be considered by a market participant in a transaction for the relevant assets or liabilities, giving priority to
the use of relevant observable inputs where possible. Unobservable inputs are used where relevant observable
inputs 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 assets
classified as at fair value through other comprehensive income, lease receivables, contract assets, loan
commitments that are not financial liabilities at fair value through profit or loss, financial liabilities that are
not financial liabilities at fair value through profit or loss, and financial guarantee contracts that do not meet
the conditions for derecognition due to the transfer of financial assets or financial liabilities arising from
continued involvement in the transferred financial assets, based on expected credit losses and recognizes a
loss provision.
Expected credit losses are the weighted average of credit losses on financial instruments that are
weighted by the risk of default. Credit loss is the difference between all contractual cash flows receivable
and all cash flows expected to be received by the Group under the contract, discounted at the original
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effective interest rate, i.e. the present value of all cash shortfalls. Financial assets purchased or originated by
the 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 Income
Standards, the Group applies a simplified measurement approach and measures the allowance for losses as
an 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 expected
credit losses over the life of the asset since initial recognition is recognized as a loss allowance at the balance
sheet date. At each balance sheet date, the amount of the change in expected credit losses for the entire
duration of the asset is recognized as an impairment loss or gain in profit or loss. Even if the expected credit
losses determined at that balance sheet date are less than the amount of expected credit losses reflected in
the estimated cash flows at the time of initial recognition, the favorable change in expected credit losses is
recognized as an impairment gain.
For financial assets other than the above simplified measurement method and purchased or originated
financial assets that have been impaired, the Group assesses at each balance sheet date whether the credit
risk of the relevant financial instruments has increased significantly since the initial recognition, and
measures the allowance for losses, recognizes expected credit losses and the changes in expected credit losses
in accordance with the following scenarios:
1) If the credit risk of the financial instrument has not increased significantly since initial recognition
and is in the first stage, the allowance for losses is measured at an amount equal to the expected credit losses
of the financial instrument in the next 12 months, and interest income is calculated on the basis of the book
balance and the effective interest rate.
2) If the credit risk of the financial instrument has increased significantly since initial recognition but
credit impairment has not yet occurred, in the second stage, the Group measures the allowance for losses at
an amount equal to the expected credit losses for the entire duration of the financial instrument and calculates
interest 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 Group
measures the allowance for credit losses at an amount equal to the expected credit losses over the life of the
financial 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 an
impairment loss or gain in profit or loss. The allowance for credit losses is offset against the carrying amount
of the financial asset, except for financial assets classified as at fair value through other comprehensive
income. For financial assets classified as at fair value through other comprehensive income, the Group
recognizes the allowance for credit losses in other comprehensive income, which does not reduce the
carrying 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 equal
to the expected credit losses over the entire life of the financial instrument, but at the current balance sheet
date 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 expected
credit losses over the next 12 months at the current balance sheet date. The reversal of the resulting loss
provision is recognized as an impairment loss.
1) Significant increase in credit risk
The Group uses available reasonable and reliable forward-looking information to determine whether
there has been a significant increase in the credit risk of a financial instrument since initial recognition by
comparing 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 instruments
by considering the date on which the Group became a party to the irrevocable commitment as the initial
recognition date.
The Group considers the following factors when assessing whether there has been a significant increase
in 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 the
debt, or in the quality of guarantees or credit enhancements provided by third parties, which is expected to
reduce the debtor's financial incentive to repay the debtor within the contractual timeframe or affect the
probability of default; and
d. Whether there has been a significant change in the debtor's expected performance and repayment
behavior
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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 instrument
since initial recognition. A financial instrument is considered to have low credit risk if the risk of default is
low, the borrower's ability to meet its contractual cash flow obligations in the short term is high, and the
borrower's ability to meet its contractual cash flow obligations may not necessarily be reduced by
unfavorable 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 future
cash flows of the financial asset occur. Evidence that a financial asset is impaired includes observable
information 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 otherwise
because 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 events
and 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 information
about past events, current conditions and forecasts of future economic conditions.
The Group categorizes financial instruments into different portfolios based on common credit risk
characteristics. The common credit risk characteristics adopted by the Group include: ageing portfolio,
construction bidding deposit, receivables within the scope of consolidation, etc. The individual evaluation
criteria and portfolio credit risk characteristics of related financial instruments are described in the
accounting policies of related financial instruments. The individual evaluation criteria and portfolio credit
risk characteristics of the related financial instruments are described in the accounting policies of the related
financial instruments.
The Group determines the expected credit losses of related financial instruments in accordance with the
following methods.
a. For financial assets, credit losses represent the present value of the difference between the contractual
cash 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 contractual
cash 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 the
amount the Group expects to pay to the holder of the contract in respect of credit losses incurred by the
holder of the contract, less the amount the Group expects to collect from the holder of the contract, the debtor
or any other party.
d. For financial assets that are impaired at the balance sheet date but not purchased or originated, the
credit loss is the difference between the book balance of the financial asset and the present value of the
estimated future cash flows discounted at the original effective interest rate.
The Group's method of measuring expected credit losses on financial instruments reflects factors such
as: an unbiased, probability-weighted average amount determined by evaluating a range of possible
outcomes; the time value of money; and reasonable and substantiated information about past events, current
conditions, and projections of future economic conditions that is available at the balance sheet date without
undue 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 financial
asset 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
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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 after
offsetting.
1) The Group has a legal right to offset the recognized amounts and the legal right is currently
enforceable; and
2) The Group intends to settle the net amount, or to realize the financial asset and settle the financial
liability 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 Group
always 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 in
profit or loss for the current period.
For details of the Group's method of determining expected credit losses on bills receivable and its
accounting 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 level
of individual instruments, the Group classifies bills receivable into certain portfolios based on credit risk
characteristics with reference to historical credit loss experience, current conditions and judgment of future
economic conditions, and calculates expected credit losses on a portfolio basis. The basis for determining
the portfolio is as follows:
Portfolio name Basis for determining portfolios Method of calculation
The risk characteristics of
commercial acceptances are Expected credit losses are
Commercial acceptances
substantially the same as those of accrued by reference to
(portfolio 1)
accounts receivable for similar accounts receivable.
contracts.
The acceptors have high credit Expected credit losses are
ratings, no historical defaults, very measured based on historical
low risk of credit loss, and strong credit loss experience,
Bank acceptance portfolio ability to fulfill their obligations to current conditions and
(portfolio 2) pay contractual cash flows in the expectations of future
short term. economic conditions.
Ageing method for recognizing a portfolio of credit risk characteristics based on the age of the
accounts.
√ Applicable □ N/A
For commercial paper receivables, the expected credit loss accrual method is based on the bad debt
policy for accounts receivable, and the aging point of commercial paper receivables is retroactively adjusted
to 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 and
recognizes expected credit losses for that item.
13. Accounts receivable
√ Applicable □ N/A
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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 and
accounting 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 risk
profile portfolio
√ Applicable □ N/A
The Group provides for expected credit losses on an individual basis for accounts receivable with
significantly different credit risks from those of the portfolio. The Group determines credit losses separately
for receivables for which sufficient evidence of expected credit losses can be assessed at a reasonable cost
at the level of individual instruments.
When sufficient evidence of expected credit losses cannot be assessed at a reasonable cost for an
individual instrument, the Group divides accounts receivable into portfolios based on credit risk
characteristics by reference to historical credit loss experience, current conditions and judgment of future
economic conditions, and calculates expected credit losses on the basis of the portfolios. The basis for
determining the portfolios is as follows:
Segmentation of portfolio by credit risk characteristics based on
Risk portfolio
ageing of receivables
Portfolio of related transactions The relationship between the receivable and the counterparty is
within the scope of consolidation 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
Unless there is evidence of impairment, no provision for bad
within the scope of consolidation
debts is generally made.
(portfolio 2)
Calculation of ageing method for recognizing credit risk characteristics based on the age of the
portfolio
√ Applicable □ N/A
The Group combines accounts receivable classified as risky portfolios with similar credit risk
characteristics (aging) and estimates the percentage of bad debt provision for such accounts receivable based
on all reasonable and supportable information, including forward-looking information.
The following is a table comparing the aging of the accounts receivable - credit risk characteristics
portfolio with the expected credit loss rate over the entire life of the portfolio:
Expected credit loss rate of accounts receivable
Ageing
(%)
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
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Determination of bad debt provisioning according to individual items Individual item provisioning
judgment criteria
√ Applicable □ N/A
If there is objective evidence that a receivable is impaired, the Group makes a separate provision for
bad 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 with
the underlying lending arrangements and for which the Company's business model for managing such
financial assets is to collect the contractual cash flows with the objective of both collection and sale, the
Group classifies them as accounts receivable financing, which are measured at fair value with changes
recognized in other comprehensive income. Interest income, impairment losses and exchange differences
recognized 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. Upon
derecognition, the cumulative gain or loss previously recognized in other comprehensive income is
removed from other comprehensive income and recognized in profit or loss.
Categories of portfolios and basis of determination of bad debt provisioning according to credit risk
characteristic portfolios
√ Applicable □ N/A
For details of the Group's method of determining expected credit losses on receivables financing and
accounting 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 by
referring to the historical credit loss experience, taking into account the current situation and the forecast
of the future economic situation, through the default risk exposure and the expected credit loss rate for the
entire 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 following
circumstances:
① For financial assets with no significant increase in credit risk since initial recognition, the Group
measures 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 Group
measures the allowance for losses at an amount equal to the expected credit losses over the entire life of
the financial instrument;
③ For purchased or originated financial assets that are impaired, the Group measures the allowance
for 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 the
basis of determination
√ Applicable □ N/A
For other receivables, the Group is unable to obtain sufficient evidence of significant increase in credit
risk at a reasonable cost at the level of individual instruments, and it is feasible to assess whether there is a
significant increase in credit risk on a portfolio basis. Therefore, the Group groups other receivables
according to the type of financial instruments, credit risk ratings, initial recognition dates, and remaining
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contractual maturities as the common risk characteristics and considers them on a portfolio basis. The Group
assesses whether there is a significant increase in credit risk.
To measure expected credit losses on a portfolio basis, the Group groups the expected credit loss
accrual percentage according to the corresponding ageing credit risk characteristics.
Basis of portfolio determination
The ageing of other receivables is used as the credit risk
Risk portfolio
characteristic to classify the portfolio.
Portfolio of related transactions
The credit risk characteristics of other receivables are based on the
within the scope of
relationship between the receivables and the counterparties.
consolidation
Portfolio of risk-free receivables
The credit risk characteristics of other receivables are based on the
such as social security
nature of the receivables.
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
Unless there is evidence of impairment, no provision for bad debts is
such as social security
generally made.
receivables
Portfolio of related transactions
Unless there is evidence of impairment, no provision for bad debts is
within the scope of
generally made.
consolidation
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 risk
characteristics (ageing) and estimates the percentage of bad debt provision for such other receivables based
on 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 according
to the nature of the business.
For other receivables secured by mortgage, the original value less the recoverable value of the collateral
is recognized as the risk exposure for credit losses.
16. Inventories
√ Applicable □ N/A
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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, less
estimated costs to be incurred to completion, estimated selling expenses and related taxes. The net realizable
value of inventories held for the purpose of executing sales or service contracts is calculated on the basis of
the contract price.
Categories and basis for determining the provision for decline in value of inventories based on
portfolios, 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, taking
into account the purpose of holding the inventories, the impact of events after the balance sheet date, and
other factors.
① The net realizable value of inventories held for sale, such as finished goods, merchandise and
materials for sale, is determined as the estimated selling price of the inventories in the ordinary course of
production and operation, less estimated selling expenses and related taxes. The net realizable value of
inventories held for the purpose of executing sales contracts or labor contracts is measured at the contract
price; if the quantity of inventories held exceeds the quantity ordered under the sales contract, the net
realizable value of the excess quantity is measured at the normal selling price. The net realizable value of
materials for sale is measured at market price.
② The net realizable value of inventories of materials requiring processing is determined in the normal
course of production and operation by the estimated selling price of finished goods produced, less estimated
costs to be incurred until completion, estimated selling expenses, and related taxes. If the net realizable value
of finished goods produced from the materials is higher than the cost, the materials are measured at cost; if
the decrease in the price of the materials indicates that the net realizable value of the finished goods is lower
than the cost, the materials are measured at the net realizable value, and a provision for decline in value of
inventories is made for the difference.
③ Provision for decline in value of inventories is generally made on the basis of individual inventory
items; for large quantities of inventories with low unit prices, provision is made on the basis of categories of
inventories.
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 of
inventories, 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 inventories
for 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 a
client and which depends on factors other than the passage of time. If the Group sells two clearly
distinguishable commodities to a client and has the right to receive payment because one of the commodities
has 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 are
described in detail in this Section V.11. (6) Impairment of financial instruments.
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Categories of portfolios and basis of determination of bad debt provision according to portfolios of
credit risk characteristics
√ Applicable □ N/A
The Group classifies contract assets into portfolios based on credit risk characteristics by reference to
historical credit loss experience, current conditions and judgment of future economic conditions, and
calculates expected credit losses on the basis of the portfolios. The basis for determining the portfolios is as
follows:
Portfolio name basis for determining
Portfolio name Provision method
portfolios
The risk characteristics of outstanding Provision for expected
Outstanding guarantee warranties are substantially the same as credit losses is made by
deposits (portfolio 1) those of accounts receivable for similar reference to accounts
contracts. receivable.
Completed unsettled assets resulting
from construction contracts do not result Expected credit losses are
in true accounts receivable; therefore, the measured by reference to
Completed unsettled assets expected credit loss rate for completed historical credit loss
arising from construction unsettled assets is generally no higher experience, taking into
contracts (portfolio 2) than the expected credit loss rate for account current conditions
accounts receivable within one year, and and expectations of future
0.5% is used as the expected credit loss economic conditions.
rate for the contracted assets
Aging calculation method for recognizing credit risk characteristics based on the age of the
accounts.
√ Applicable □ N/A
For details, please refer to Section V.13. Accounts receivable
Determination of bad debt provisioning according to individual items Individual provisioning
judgment 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 as
held 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 been
disposed of or classified as held for sale if one of the following conditions is met: (1) the component
represents a separate principal business or a separate principal operating region; (2) the component is part
of 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 from
continuing operations and the profit or loss from discontinued operations, respectively, on a net after-tax
basis. Gains and losses related to discontinued operations shall be reported as discontinued operations, and
the discontinued operations gains and losses shall be reported for the entire reporting period, not only for
the reporting period after it is recognized as discontinued operations.
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19. Long-term equity investments
√ Applicable □ N/A
The Group's long-term equity investments are mainly investments in subsidiaries, investments in
associates and investments in joint ventures.
The Group judges joint control on the basis that all participants or a portfolio of participants collectively
control the arrangement and that the policies governing the activities of the arrangement must be agreed
upon by those participants who collectively control the arrangement.
The Group is generally considered to have significant influence over an investee when it owns, directly
or indirectly through subsidiaries, more than 20% but less than 50% of the investee's voting rights. If the
Group owns less than 20% of the voting power of an investee, it is necessary to consider the facts and
circumstances 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 engaging
in significant transactions with the investee, or dispatching management personnel to the investee, or
providing key technological information to the investee, etc., and determine that the Group has significant
influence on the investee.
The investee is a subsidiary of the Group if the investor exercises control over the investee. Long-term
equity investments acquired through a business combination under the same control are initially recognized
at cost based on the share of the carrying amount of the net assets of the party being consolidated in the
consolidated statements of the party ultimately in control at the date of consolidation. If the carrying amount
of the net assets of the party being consolidated is negative at the date of consolidation, the cost of long-term
equity investment is determined as zero.
Long-term equity investments acquired through a business combination not under common control are
recognized 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 price
paid; the cost of long-term equity investments acquired by issuance of equity securities is based on the fair
value of the equity securities issued; and the cost of long-term equity investments invested by investors is
based 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 in
joint 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 increased
by the fair value of additional investment and related transaction costs incurred when additional investment
is made. Cash dividends or profits declared by the investee are recognized as investment income at the
amount to which they are attributable.
The carrying amount of long-term equity investments accounted for under the equity method shall be
increased or decreased accordingly to the changes in the ownership interest of the investee. In recognizing
the share of net profit or loss of an investee, the fair value of the identifiable assets of the investee at the time
of investment acquisition is used as the basis for recognizing the net profit of the investee in accordance with
the Group's accounting policies and accounting periods, after offsetting the portion of gains or losses on
internal transactions with associates and joint ventures that are attributable to the investor based on the
Group'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 actual
acquisition price is recognized as investment income. For long-term equity investments accounted for under
the equity method, other comprehensive income accounted for under the equity method shall be accounted
for on the same basis as the direct disposal of the related assets or liabilities by the investee upon termination
of the equity method, and any changes in the equity of the investee due to changes in the equity of the
investee other than net profit or loss, other comprehensive income and profit distribution shall be fully
transferred to current investment income upon termination of the equity method. The entire amount shall be
transferred 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 portion
of the equity investment, the remaining equity interest after disposal shall be accounted for in accordance
with 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 date
of 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 accounted
for on the same basis as the direct disposal of the related assets or liabilities by the investee and carried
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forward on a pro rata basis upon the termination of the adoption of the equity method, and all other changes
in 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 pro
rata basis for the current period.
If the investee loses control of a portion of the long-term equity investment due to disposal, and the
remaining equity interest after disposal is capable of exercising joint control or significant influence over
the investee, it shall be accounted for under the equity method instead, and the difference between the
carrying amount of the equity interest disposed of and the disposal consideration shall be recognized in
investment income, and the remaining equity interest shall be adjusted as if it were equity-method accounted
for from the time of acquisition; if the remaining equity interest after disposal is not capable of exercising
joint control or significant influence over the investee, it shall be accounted for under the equity method
instead. If the remaining equity interest after disposal cannot exercise joint control or significant influence
over the investee, the accounting shall be conducted in accordance with the relevant provisions of the
Guidelines on Recognition and Measurement of Financial Instruments, and the difference between the
carrying amount of the equity interest disposed of and the consideration for disposal shall be recognized as
investment income, while the difference between the fair value of the remaining equity interest at the date
of 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 method
The Group classifies real estate held to earn rentals or for capital appreciation, or both, as investment
property. The Group uses the cost model to measure investment properties. The Group depreciates the cost
of investment properties, net of estimated net salvage value and accumulated impairment allowances, over
their useful lives using the average annualized method. For details of the impairment test method and the
method of making provision for impairment, please refer to Section V.11. (6) Impairment of financial
instruments. The useful lives, residual values and annual depreciation rates for each type of investment
properties were as follows.
Annual
Depreciable life Estimated
No. Category depreciation rate
(years) salvage value (%)
(%)
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 the
production of goods, provision of services, leasing or business management, and with a useful life of more
than one year.
Fixed assets are recognized when it is probable that the economic benefits associated with them will
flow 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
Depreciable life Annual
Category Depreciation method Residual value rate
(years) depreciation rate
Buildings Average life method 10-20 5%-10% 4.50%-9.50%
Transportation
Average life method 4 5% 23.75%
equipment
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Office and
electronic Average age method 3 5% 31.67%
equipment
The Group depreciates all fixed assets, except for fully depreciated fixed assets that are still in use and
land 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 before
the asset is constructed and brought to its intended state of use. This includes construction costs, the original
cost of machinery and equipment, other necessary expenses incurred to bring the construction in progress to
its intended state of use, as well as borrowing costs incurred before the asset reaches its intended state of use
for borrowing specifically for the project, and borrowing costs incurred for general borrowing used for the
project. The Group transfers construction in progress to property, plant and equipment when the project has
been installed or constructed to its intended state of use. Fixed assets that have reached the intended state of
use but for which final accounts have not yet been finalized are transferred to fixed assets from the date they
reach the intended state of use at their estimated value based on the project budget, construction cost or
actual cost of the project, and depreciation is provided for in accordance with the Group's policy on
depreciation of fixed assets, and after final accounts have been finalized the original provisional value is
adjusted according to the actual cost, but the amount of depreciation provided for is not adjusted. The original
provisional 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 directly
attributable to the assets eligible for capitalization shall be capitalized to the cost of the relevant assets when
the 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 have
begun.
Other borrowing interests, discounts or premiums and exchange differences are recognized in profit or
loss in the period in which they are incurred.
The capitalization of borrowing costs is suspended when there is an abnormal interruption in the
construction 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 reached
their intended use or saleable condition; any subsequent borrowing costs are recognized as expenses in the
period 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 eligible
for capitalization, the capitalized amount of interest expense on the special loan shall be determined by the
actual interest expense incurred on the special loan during the period less the interest income from depositing
the 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 for
capitalization, the amount of interest to be capitalized on general borrowings shall be calculated by
multiplying the weighted average amount of cumulative asset expenditures in excess of the portion of
special-purpose borrowings by the capitalization rate of the general borrowings used to calculate the amount
of interest to be capitalized on general borrowings. The capitalization rate is based on the weighted average
interest rate of general borrowings.
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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 review
procedure
√ Applicable □ N/A
Intangible assets, including land use rights and software, are measured at cost and amortized equally
over 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 the
purchase price of land and buildings between land use rights and buildings, all of them are recognized as
fixed assets.
(2) Computer software
Acquired computer software is capitalized on the basis of the costs incurred to acquire and put into use
the specific software. The related costs are amortized on a straight-line basis over the estimated useful lives
of 2 to 10 years. Costs related to the maintenance of computer software programs are recognized as expenses
as 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 are
reviewed and appropriately adjusted at the end of each year. The Group considers intangible assets for which
the duration of future economic benefits is not foreseeable as intangible assets with indefinite useful lives
and does not amortize such intangible assets. As at the end of the reporting period, the Group had no
intangible assets with indefinite useful lives. Expenditures on the Group's internal research and development
projects 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 amount
is 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, construction
in progress, right-of-use assets and intangible assets with finite useful lives at each balance sheet date, and
performs impairment tests when there are indications of impairment. Goodwill and intangible assets with
indefinite useful lives are tested for impairment at the end of each year, regardless of whether there is any
indication of impairment.
The recoverable amount is determined as the higher of the asset's fair value less costs of disposal and
the present value of the asset's estimated future cash flows. The Group estimates the recoverable amount of
an asset on an individual basis; if it is difficult to estimate the recoverable amount of an individual asset, the
recoverable 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 are
independent 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 Group
writes down its carrying amount to its recoverable amount, and the amount of the write-down is recognized
in 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 a
business 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
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the relevant asset groups. The relevant asset group or portfolio of asset groups is one that can benefit from
the 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, the
recoverable amount is calculated, and the corresponding impairment loss is recognized. If the recoverable
amount is lower than the carrying amount, the amount of the impairment loss shall first be offset against the
carrying amount of the goodwill allocated to the asset group or portfolio of assets, and then against the
carrying amount of the other assets proportionally according to the proportion of the carrying amount of the
other 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 difference
is 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 in
the current and future periods with an amortization period of more than one year.Long-term amortization
expenses These expenses are amortized equally over the period of benefit. If a long-term amortized expense
item does not benefit a future accounting period, the amortized value of the item that has not been amortized
is 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 received
or receivable from clients. If the client has paid the contractual consideration or the Group has obtained the
unconditional 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 payment
made 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 and
termination 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 is
recognized as a liability and charged to current profit or loss or the cost of the relevant assets according to
the 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 obligations
assumed by the Company. Contributions to a defined contribution plan are recognized as a liability at the
balance sheet date on the basis of contributions made to a separate entity in exchange for services rendered
by employees during the accounting period, and are recognized in profit or loss or at the cost of the related
assets, 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
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31. Projected liabilities
√ Applicable □ N/A
The Group recognizes a projected liability when the obligation relating to the contingency is a present
obligation incurred by the Group, it is probable that the performance of the obligation will result in an outflow
of economic benefits to the Group, and the amount can be measured reliably. A projected liability is initially
measured at the best estimate of the expenditure required to settle the present obligation. Where the effect of
the time value of money is material, the projected liability is determined on the basis of the discounted
amount of the expected future cash flows. In determining the best estimate, the Group considers a portfolio
of 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 that
range is equal, the best estimate is determined at the midpoint of the range; in other cases, the best estimate
is treated as follows:
- Where the contingency relates to a single item, it is determined on the basis of the most probable
amount to be incurred.
- Where a contingency relates to more than one item, it is determined on the basis of various possible
outcomes and related probabilities.
The Group reviews the carrying amount of the estimated liability at the balance sheet date and adjusts
the 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 a
liability 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 by
employees and are measured at the fair value of the equity instruments granted to employees at the grant
date. Options may be exercised only upon completion of services or fulfillment of specified performance
conditions during the waiting period. During the waiting period, based on the best estimate of the number of
equity instruments that can be exercised, the services acquired during the period are recognized in the related
costs or expenses at the fair value of the equity instruments on the grant date, and the capital surplus is
increased accordingly.
2) Cash-settled share-based payment
The stock appreciation rights plan is a cash-settled share-based payment, which is measured at the fair
value 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 performance
conditions during the waiting period. At each balance sheet date during the waiting period, based on the best
estimate of the feasibility of the rights, the services acquired during the period are recognized as a cost or
expense at the amount of the fair value of the liabilities assumed by the Company, and the liabilities are
increased accordingly. The fair value of the liability is remeasured at each balance sheet date until the
liability 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 the
conditions 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 option
pricing 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 to
become 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
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If the modification of a share-based payment plan increases the fair value of the equity instruments
granted, the increase in services received shall be recognized accordingly to the increase in the fair value of
the 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 received
accordingly.
If the conditions for exercising rights are modified in a way that is favorable to the employee, such as
shortening the waiting period or changing or eliminating performance conditions (instead of market
conditions), the company takes the modified conditions into account when dealing with the conditions for
exercising rights.
If the terms and conditions are modified in a manner that reduces the total fair value of the share-based
payment or is otherwise unfavorable to the employee, the services received continue to be accounted for as
if 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 instruments
are treated as accelerated exercise, and the remaining amount to be recognized during the waiting period is
immediately recognized in profit or loss, and capital surplus is recognized. If the employees or other parties
can choose to meet the non-optional conditions but fail to do so within the waiting period, the cancellation
is 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 of
business
√ 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 - Construction
Contracts" ("Previous Revenue Standard") issued in 2006. From January 1, 2020, the Group has
implemented the new revenue standards. Revenue is the total inflow of economic benefits arising from the
Group's ordinary activities that results in an increase in shareholders' equity and does not relate to the
contribution 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 to
each individual performance obligation on the basis of the relative proportion of the individual selling price
of the goods or services promised under each individual performance obligation at the inception date of the
contract, and measures revenue on the basis of the transaction price allocated to each individual performance
obligation. For contracts with quality assurance clauses, the Group analyzes the nature of the warranty
provided and treats the warranty as a separate performance obligation if the warranty provides a separate
service from guaranteeing to the client that the goods sold meet the established standards. Otherwise, the
Group 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 for
the transfer of goods or services to the client, excluding amounts received on behalf of third parties. The
Group recognizes a transaction price that does not exceed the amount by which it is more likely than not that
a material reversal of the cumulative revenue recognized will not occur when the related uncertainty is
removed. Amounts expected to be returned to clients are recognized as a liability for returns and are not
included 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 the
same time as the Group's performance;
- The client is able to control the goods under construction in the course of the Group's performance;
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- The goods produced in the course of the Group's performance have a non-substitutable use and the
Group is entitled to receive payment for the cumulative portion of performance completed to date throughout
the term of the contract.
The Group recognizes revenue on the basis of the progress of performance over a period of time for
performance obligations that are to be fulfilled within that period. When the progress of performance is not
reasonably determinable, the Group recognizes revenue on the basis of the amount of costs incurred until
the progress of performance is reasonably determinable, provided that the costs incurred by the Group are
expected to be reimbursed.
For performance obligations fulfilled at a certain point in time, the Group recognizes revenue at the
point in time when the client obtains control of the related goods or services. In determining whether a client
has 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 the
client;
- 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 the
parties to the contract separately under the following circumstances:
- If a contract change adds clearly distinguishable goods and contract prices, and the new contract price
reflects the separate selling price of the new goods, the changed part of the contract is accounted for as a
separate contract;
- If a contract change does not fall into the above category, and if the goods transferred or services
provided 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 and
the 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 distinction
between goods transferred or services provided and goods not transferred or services not provided at the date
of the contract change, the changed portion of the contract is accounted for as an integral part of the original
contract, and the resulting impact on the recognized revenue is adjusted to current revenue at the date of the
contract change.
The right to receive consideration for goods or services that the Group has transferred to a client (and
which is dependent on factors other than the passage of time) is recognized as a contract asset, which is
impaired on the basis of expected credit losses. The Group's unconditional right to receive consideration
from clients, which is dependent only on the passage of time, is presented as receivables. The Group's
obligations to transfer goods or services to clients for which the Group has received or shall receive
consideration 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 the
purchaser 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 terminates
the contract, the Group is entitled to receive an amount that compensates it for the costs incurred and a
reasonable profit for the portion of the performance that has been performed to date. Accordingly, the Group
recognizes revenues and costs associated with the construction of the works over time. The Group determines
the progress of performance based on the proportion of the cumulative actual contract costs incurred to the
estimated total contract costs and recognizes revenue in accordance with the progress of performance. If
revenue 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 different
revenue recognition and measurement methods
□ Applicable √ N/A
35. Contract costs
□ Applicable √ N/A
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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. If
the government grants are non-monetary assets, they are measured at fair value; if the fair value cannot be
reliably 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 otherwise
forming long-term assets are classified as asset-related government grants. Asset-related government grants
are recognized as deferred income and recognized in profit or loss in a reasonable and systematic manner
over the useful lives of the related assets. Government grants that are measured at nominal amounts are
recognized directly in profit or loss. If an asset is sold, transferred, retired or destroyed before the end of its
useful life, the unallocated balance of the deferred income is transferred to profit or loss in the period in
which 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 are
recognized as deferred income and recognized in profit or loss in the period in which the costs or losses are
recognized;
For the purpose of compensating the Group for the related costs or losses already incurred, they are
recognized directly in profit or loss for the current period.
Government grants that contain both asset-related and revenue-related components are accounted for
separately; if it is difficult to distinguish between the two, they are categorized as revenue-related
government grants as a whole.
Government grants related to the Group's daily activities are recognized in other income in accordance
with the substance of the economic operations. Government grants that are not related to the Group's daily
activities 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 bank
provides loans to the Group at a preferential interest rate, the actual amount of the loan received shall be
regarded as the recorded value of the loan, and the related borrowing costs shall be calculated on the basis
of 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 be
adjusted if the carrying amount of the assets is reduced upon initial recognition; if there is a balance of
deferred income, the balance of deferred income shall be reduced, and the excess shall be recognized in
profit or loss for the current period; otherwise, the balance of deferred income shall be recognized in profit
or 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 of
assets and liabilities and their carrying amounts (temporary differences). At the balance sheet date, deferred
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tax assets and liabilities are measured at the tax rates that are expected to apply in the periods when the assets
are 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 is
probable that taxable income will be available against which the deductible temporary differences can be
utilized, and deductible losses and tax credits can be carried forward to future years. However, deferred tax
assets arising from the initial recognition of assets or liabilities are not recognized if: 1) the transaction is
not a business combination; and 2) the transaction affects neither the accounting profit nor taxable income
or deductible losses at the time of the transaction.
Deferred tax assets are recognized for deductible temporary differences associated with investments in
associates if the following conditions are met: it is probable that the temporary differences will reverse in
the foreseeable future and it is probable that taxable income will be available against which the deductible
temporary 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 and
prior 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 combination
and that, at the time of their occurrence, affect neither accounting profit nor taxable income (or deductible
losses);
3) For taxable temporary differences related to investments in subsidiaries and associates, the timing of
the reversal of the temporary differences can be controlled and it is probable that the temporary differences
will not be reversed in the foreseeable future.
(3) Deferred tax assets and deferred tax liabilities are stated at the net amount after offsetting when the
following conditions are simultaneously met
1) The enterprise has the legal right to settle current income tax assets and current income tax liabilities
on a net basis;
2) Deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority
on the same taxable entity or on different taxable entities, but in each future period in which deferred tax
assets and deferred tax liabilities of significance are reversed, the taxable entities involved intend to settle
the current income tax assets and current income tax liabilities on a net basis or to realize the assets at the
same time, The taxable entity intends to settle current income tax assets and current income tax liabilities on
a 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 the
use 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 each
individual lease separately. When a contract contains both leases and non-leases, the Group splits the leases
and 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 its
affiliates at the same or similar times shall be consolidated into one contract for accounting purposes when
one of the following conditions is met.
a. The two or more contracts are entered into for an overall business purpose and constitute a package
transaction, 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 or
performance of the other contracts.
c. The right to use the asset granted by the two or more contracts together constitute a single lease.
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Basis of judgment and accounting treatment for simplified treatment of short-term leases and leases
of 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 than
12 months. Low-value asset leases are leases with a lower value when the individual leased asset is a brand
new asset.
The Group does not recognize right-of-use assets and lease liabilities for the following short-term leases
and low-value asset leases, and the related lease payments are charged to the cost of the related assets or to
current profit or loss on a straight-line basis over the lease term. The Group recognizes right-of-use assets
and 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 the
leased asset, which may or may not ultimately be transferred. Operating leases refer to leases other than
finance leases.
During the reporting period, the Company's leases were all operating leases, and lease payments under
operating leases were recognized as rental income using the straight-line method or other systematic and
reasonable methods in each period of the lease term: initial direct costs incurred in connection with the
operating 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 were
not 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 recognized
in 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 Name of statement items Amount of impact
changes in accounting policies materially affected
On November 30, 2022, the
Ministry of Finance issued ASBE Deferred tax assets 1,135,468.71
Interpretation No. 16 (C.K.[2022]
31, hereinafter referred to as
"Interpretation No. 16"), Deferred tax liabilities 1,316,653.59
"Accounting for Deferred Taxes
on Assets and Liabilities Arising
from Individual Transactions for Undistributed profits -177,717.08
Which the Initial Recognition
Exemption Does Not Apply",
which will take effect on January
1, 2023, and enterprises are Minority interests -3,467.80
allowed to implement this
interpretation in advance of the
year of issue;
Other Notes
None
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Annual Report 2023
(2). Changes in significant accounting estimates
□ Applicable √ N/A
(3). Adjustments to the financial statements as of the beginning of the year of first-time
implementation of new accounting standards or interpretations of accounting standards for the first-
time implementation of new accounting standards or interpretations of accounting standards from
2023 onwards
√ Applicable □ N/A
Explanation of reasons for adjusting the financial statements as of the beginning of the year of initial
implementation
From 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 from
Individual Transactions for Which the Initial Recognition Exemption Does Not Apply". For lease liabilities
and right-of-use assets recognized at the beginning of the earliest period for the presentation of financial
statements in which this Interpretation is applied for the first time, as well as projected liabilities related to
abandonment obligations and the corresponding related assets, which give rise to taxable temporary
differences and deductible temporary differences, the enterprise shall adjust the cumulative effect to opening
retained earnings and other relevant financial statement items in the earliest period for which the financial
statements 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:
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Annual Report 2023
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
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Annual Report 2023
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 1,009,348,273.61 1,009,170,556.53 -177,717.08
to the parent company
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
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Annual Report 2023
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
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Annual Report 2023
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' 1,490,857,669.54 1,491,615,672.23 758,002.69
equity)
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Annual Report 2023
41. Others
√ Applicable □ N/A
(1) Earmarked reserves
The Group's production safety fees, which are extracted in accordance with national regulations, are
recognized as the cost of the relevant products or current profit or loss, and at the same time are included in
the earmarked reserve. When the Group utilizes the earmarked reserve, the expenses belonging to expenses
are directly deducted from the earmarked reserve. If a fixed asset is formed, it is recognized as a fixed asset
when the relevant asset reaches its intended useable state, and the cost of forming the fixed asset is deducted
from the earmarked reserve, and accumulated depreciation of the same amount is recognized. No
depreciation 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 be
consolidated into one if they have similar economic characteristics and at the same time are identical or
similar in terms of the nature of the individual products, the nature of the production process, the types of
clients for the products, the manner of selling the products, and the impact of laws and administrative
regulations on the products produced. The Group determines its reportable segments on the basis of operating
segments, taking into account the principle of materiality.
In preparing segment reports, the Group measures revenue from inter-segment transactions on the basis
of actual transaction prices. The accounting policies used in the preparation of segment reports are consistent
with 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 (%)
Based on the provision of technical services,
Value-added tax (VAT) 3.00-13.00
sale of goods, etc.
Urban maintenance and Levied on the taxable turnover amount
construction tax 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 is calculated based on the residual
Property tax value of the property after deducting 30% of 1.20, 12.00
the original value of the property.
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
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Annual Report 2023
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 Jiangsu
Provincial Department of Science and Technology, Jiangsu Provincial Department of Finance and Jiangsu
Provincial Taxation Bureau of the State Administration of Taxation. During the reporting period, the
Company 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
75,264,850.68 79,294,798.84
abroad
Other Notes
Cash on hand contains RMB 1,044,790.00 in digital form.
Of which: Total amount deposited abroad
Balance at the beginning
Item Balance at the end of the year
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
Balance at the beginning
Item Balance at the end of the year
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
Reasons and
Item Closing balance Opening balance justifications for
designation
Financial assets at fair value
122,119,888.89 /
through profit or loss
Of which:
Structured deposits 122,119,888.89 /
Financial assets at fair value
through profit or loss
Of which:
160 / 250
Annual Report 2023
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 due
at the balance sheet date
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Amount derecognized at the end Amount not derecognized at the
Item
of the period 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
Closing balance Opening balance
Provisio
Provision for bad n for
Book balance Book balance
debts bad
Categ
Carrying debts Carrying
ory
amount A Pro amount
Propo Prov Propo
m visi
Amount rtion Amount ision Amount rtion
ou on
(%) (%) (%)
nt (%)
Provis
ion for
bad
debts
by
indivi
dual
item
Of which:
Provis
44,249,0 100.0 1,091,132.8 43,157,918. 20,790,441. 100.0 20,790,441.
ion for 2.47
51.11 0 3 28 73 0 73
bad
161 / 250
Annual Report 2023
debts
by
portfo
lio
Of which:
1
. 36,371,0 1,091,132.8 35,279,961.
82.20 3.00
Portfo 94.45 3 62
lio 1
2
. 7,877,95 7,877,956.6 20,790,441. 100.0 20,790,441.
17.80
Portfo 6.66 6 73 0 73
lio 2
44,249,0 100.0 1,091,132.8 43,157,918. 20,790,441. 100.0 20,790,441.
Total 2.47
51.11 0 3 28 73 0 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
Closing balance
Name
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
Closing balance
Name
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
Phase I Phase II Phase III
Expected credit
Expected credit
losses for the losses for the
Expected credit entire duration
Provision for bad debts losses for the entire duration (credit Total
next 12 months (no credit impairment
impairment)
incurred)
Balance at January 1, 2023
Balance at January 1, 2023 in
the current period
162 / 250
Annual Report 2023
--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, 1,091,132.83 1,091,132.83
2023
The basis for the classification of each stage and the percentage of provision for bad debts are shown in
this section V.12. Bills receivable
Explanation of significant changes in the book balance of bills receivable for which changes in the
allowance for losses occurred during the period:
□ Applicable √ N/A
(5). Provision for bad debts
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Change during the period
Opening Recovery or Write-offs or Other Closing
Category Provision
balance reversal cancellations changes balance
Commercial
1,091,132.83 1,091,132.83
acceptances
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
163 / 250
Annual Report 2023
√ 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
Closing balance Opening balance
Provision for Provision for
Book balance Book balance
Categ bad debts bad debts
ory Propor Provi Propor Provi
Carrying Carrying
tion sion tion sion
amount amount
Amount (%) Amount (%) Amount (%) Amount (%)
Provisi
on for
bad
debts 10,994,16 10,994,1 100.0 11,576,69 11,576,6 100.0
by
2.54 0 2.24
7.99 67.99 0 2.27 92.27 0
individ
ual
item
Of which:
Provi
sion
for
bad 421,305,1 24,415,8 396,889,2 505,560,4 21,117,0 484,443,3
97.46 5.80 97.76 4.18
debts 38.52 66.26 72.26 47.99 79.71 68.28
by
portfo
lio
Of which:
432,299,3 35,410,0 396,889,2 517,137,1 32,693,7 484,443,3
Total 100.00 / 100.00 /
06.51 34.25 72.26 40.26 71.98 68.28
Individual provision for bad-debt reserves:
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Closing balance
Name Carrying Provision for Reason for
Provision (%)
amount bad debts provision
Qinghua Group Xinjiang Coal Debtor's financial
6,570,214.37 6,570,214.37 100.00
Chemical Industry Co., Ltd. difficulties
164 / 250
Annual Report 2023
Suzhou Mingqiao Municipal
2,158,200.00 2,158,200.00 100.00 Debtor bankruptcy
Engineering Co., Ltd.
Fujian Fuchen Technology Co., Debtor's financial
1,615,000.00 1,615,000.00 100.00
Ltd. difficulties
Debtor's
bankruptcy,
Suzhou Hyperion Geocrystal
650,753.62 650,753.62 100.00 payment is
Co., Ltd.
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
Closing balance
Name
Accounts receivable Provision for bad debts Provision ratio (%)
1-6 months (including 6
338,478,217.57 10,154,346.63 3.00
months)
6 months to 1 year (including
34,754,229.34 1,737,711.47 5.00
1 year)
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 in
this section V. 13. Accounts receivable
Explanation of significant changes in the book balance of accounts receivable for which changes in the
allowance for losses occurred during the period:
□ Applicable √ N/A
(3). Provision for bad debts
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Change during the period
Write-offs
Recovered
or Other
Category Opening balance Provision or Closing balance
cancellatio changes
reversed
ns
165 / 250
Annual Report 2023
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 party
owed to the Company
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Percentage
of
combined
accounts
Closing balance of
receivable Closing balance
Closing balance of Closing balance of accounts
Unit Name and of provision for
accounts receivable contract assets receivable and
contract bad debts
contract assets
assets
closing
balance
(%)
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 Notes
None
Other Notes:
□ Applicable √ N/A
6. Contract assets
(1). Status of contract assets
166 / 250
Annual Report 2023
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Closing balance Opening balance
Item Book Provision Carrying Book Provision Carrying
for bad for bad
balance debts amount balance debts amount
Unexpired
warranty 17,784,023.33 997,257.82 16,786,765.51 33,157,769.56 2,953,903.77 30,203,865.79
deposits
Completed
unliquidated
assets arising 410,161,246.32 2,050,806.23 408,110,440.09 360,893,710.88 1,804,468.54 359,089,242.34
from
construction
contracts
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
Closing balance Opening balance
Categor
Provision for bad Carrying Provision for bad
y Book balance Book balance
debts amount debts
Prop Carrying
Propor
Amou Provisi ortio Provisi amount
tion Amount Amount Amount
nt on (%) n on (%)
(%)
(%)
Provisi
on for
bad
debts
by
individ
ual
item
Of which:
Provisi
427,9 100.0 3,048,0 0.71 424,897, 394,051, 100. 4,758,37 1.21 389,293
on for
45,26 0 64.05 205.60 480.44 00 2.31 ,108.13
bad
9.65
debts
by
portfoli
o
Of which:
Outstan
ding
warrant 17,78
997,257 16,786,7 33,157,7 2,953,90 30,203,
y 4,023 4.16 5.61 8.41 8.91
.82 65.51 69.56 3.77 865.79
deposit .33
s
167 / 250
Annual Report 2023
Comple
ted
unliqui
dated
assets 410,16 2,050,80 408,110,4 360,893,7 1,804,468. 359,089,
resulting 1,246. 95.84
6.23
0.50
40.09 10.88
91.59
54
0.50
242.34
from 32
construct
ion
contract
s
427,94
3,048,06 424,897,2 394,051,4 100.0 4,758,372. 389,293,
Total 5,269. 100.00 / /
4.05 05.60 80.44 0 31 108.13
65
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
Closing balance
Name
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 410,161,246.32 2,050,806.23 0.50
construction contracts
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 this
Section V.17. Contract assets
Explanation of significant changes in the book balance of contract assets for which changes in the provision
for 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
Recovered or Write-
Provision for the off/cancellation
Item reversed during Reason
current period during the period
the period
Provision for bad debts -1,710,308.26
Total -1,710,308.26 /
168 / 250
Annual Report 2023
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 not
yet due at the balance sheet date
□ Applicable √ N/A
(4). Disclosure by bad debt accrual method
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Closing balance Opening balance
Provision Provision
Book balance for bad Book balance for bad
debts debts
Category Carrying Carrying
Prop Prop
Am Provis amount Am Prov amount
ortio ortio
Amount oun ion Amount oun ision
n n
t (%) t (%)
(%) (%)
Provision
for bad
debts by
individual
item
of which:
Provision
for bad
debts by
group
169 / 250
Annual Report 2023
Of which:
3,572,953
Portfolio 2 3,572,953.18 729,937.36 729,937.36
.18
3,572,953
Total / / 3,572,953.18 729,937.36 / / 729,937.36
.18
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 provisioning
None
Description of significant changes in the book balance of receivables financing for which changes in the
allowance 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
170 / 250
Annual Report 2023
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Closing balance Opening balance
Ageing
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 significant
amount:
None
(2). Prepayments with the top five closing balances grouped by prepayment recipients
√ Applicable □ N/A
Percentage of total closing
Name of organization Closing balance 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 notes
None
Other 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
171 / 250
Annual Report 2023
(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 this
Section V. 15. Other receivables
Explanation of significant changes in the book balance of interest receivables for which changes in the
allowance 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
172 / 250
Annual Report 2023
□ 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 this
Section V. 15. Other receivables
Explanation of significant changes in the book balance of dividend receivables for which changes in the
allowance 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
173 / 250
Annual Report 2023
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
Phase I Phase II Phase III
Expected credit Expected credit losses
Expected credit
Bad Debt Provision losses for the entire for the entire duration Total
losses for the
duration (no credit (credit impairment
next 12 months
impairment) incurred)
Balance as of January
891,881.22 891,881.22
1, 2023
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
57,851.33 57,851.33
period
Reversal during the
period
Write-offs during the
period
Cancellations during
the period
Other changes -555.41 -555.41
Balance as of
949,177.14 949,177.14
December 31, 2023
The basis of classification of each stage and the percentage of provision for bad debts are shown in this
Section V. Other receivables
Explanation of significant changes in the book balance of other receivables for which changes in provision
for losses occurred during the period:
□ Applicable √ N/A
174 / 250
Annual Report 2023
The amount of provision for bad debts for the current period and the basis adopted for assessing whether
there 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
Change during the period
Write-offs
Opening Recovery or or Other Closing
Category Provision
balance reversal cancellation changes balance
s
Provision for
891,881.22 57,851.33 -555.41 949,177.14
bad debts
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 Notes
None
(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
Percentage of total
Provision for
Unit closing balance of Nature of
Closing balance Ageing bad debts
Name other receivables amount
Closing balance
(%)
Less than 1
Guarantee
Unit I 5,585,535.63 38.98 year, 1-2 years, 279,276.78
deposits
2-3 years
Less than 1
Guarantee year, 1-2 years,
Unit II 1,493,000.00 10.42 74,650.00
deposits 2-3 years, 3-4
years
Guarantee
Unit III 800,000.00 5.58 Within 1 year 40,000.00
deposits
Guarantee
Unit IV 432,600.00 3.03 Within 1 year 21,630.00
deposits
Guarantee
Unit V 400,000.00 2.79 1-2 years 20,000.00
deposits
Guarantee
Unit VI 400,000.00 2.79 Within 1 year 20,000.00
deposits
Total 9,111,135.63 63.59 / / 455,556.78
Presented in other receivables due to centralized management of funds
175 / 250
Annual Report 2023
□ Applicable √ N/A
Other Notes:
□ Applicable √ N/A
10. Inventories
(1). Classification of inventories
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Closing balance Opening balance
Provision for Provision for
decline in value decline in
of value of
Item Book inventories/imp Carrying Book inventories/im Carrying
balance airment of amount balance pairment of amount
contractual contractual
performance performance
costs costs
Construction
66,824.45 66,824.45
materials
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 contract
performance 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 and
basis 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
176 / 250
Annual Report 2023
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 year
None
13. Other current assets
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Prepaid VAT and inputs to be
77,101,647.54 49,268,224.68
deducted
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 notes
None
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:
None
Explanation of significant changes in the book balance of debt investments for which changes in provision
for losses occurred during the period:
□ Applicable √ N/A
Amount of provision for impairment for the current period and the basis adopted for assessing whether
there is a significant increase in credit risk of financial instruments: □ Applicable √ Applicable
□ Applicable √ N/A
177 / 250
Annual Report 2023
(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 in
provision for losses occurred during the period:
□ Applicable √ N/A
Amount of provision for impairment for the current period and the basis adopted for assessing whether
there 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
178 / 250
Annual Report 2023
(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 debts
None
Explanation of significant changes in the book balance of long-term receivables for which changes in the
allowance 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 there
is 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
Increase/decrease during the period
179 / 250
Annual Report 2023
Gains
and
losses Other
Closin
on compr Declara
g
Additio Decre investm ehensi tion of Provisi
Chang balance
Openin ns to ase in ents ve cash on for
Investe e in Others Closing of
g invest invest recogni incom dividen impair
d units equity balance provisi
balance ments ments zed e ds or ment
on for
under adjust profits
impair
the ments
ment
equity
method
I. Joint ventures
Subtotal
II. Associated enterprises
Space
Enginee -
1,400,6 25,391 1,408,1
ring 17,876.
78.86 .77 94.25
Co., 38
Ltd.
Daejin
Road
455,20 -6,576 16,576 465,20
(Thaila
2.28 .44 .61 2.45
nd) Co.,
Ltd.
DJR
-
(Thaila 458,29 10,264 458,62
9,930.4
nd) Co., 1.82 .29 5.70
1
Ltd.
-
2,314,1 52,232 2,332,0
Subtotal 34,383.
72.96 .67 22.40
24
-
2,314,1 52,232 2,332,0
Total 34,383.
72.96 .67 22.40
24
(2). Impairment testing of long-term equity investments
□ Applicable √ N/A
180 / 250
Annual Report 2023
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
181 / 250
Annual Report 2023
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 Land use rights Construction Total
buildings in progress
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
182 / 250
Annual Report 2023
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
Machiner
Office and
Houses and y and Transportation
Item electronic Total
buildings equipme tools equipment
nt
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
183 / 250
Annual Report 2023
(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
184 / 250
Annual Report 2023
(1). Status of construction in progress
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Closing balance Opening balance
Impairme Impairme
Item Book Carrying
Book balance nt Carrying amount nt
balance amount
allowance allowance
Building
13,103,863.94 13,103,863.94
renovation
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
Amo Cumu Of
Othe lative
unt which Curr
Bu r invest Acc
transf ment Amou ent
dg Op decr Prog umu
erred in nt of inter Sou
ete eni ease ress lated
to constr intere est rce
Item d ng Increase during s of inter
fixed Closing balance uction st capit of
name a bal the period duri as a cons est
assets capita aliza fun
m anc ng percen truct capit
durin lized tion ds
ou e the tage ion aliza
g the of for rate
nt peri tion
perio budget the (%)
od
d (%) period
Buildi
ng
renova 13,103,863.94 13,103,863.94
tion
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
185 / 250
Annual Report 2023
□ 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
Means of
Item Lease of buildings Total
transportation
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 -218,976.06 -218,976.06
changes
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 8,538.53 8,538.53
changes
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
186 / 250
Annual Report 2023
26. Intangible assets
(1). Intangible assets
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Non-patented Computer
Item Land use right Patents Total
technology Software
I. Original carrying amount
1. Opening balance 8,240,016.48 3,295,603.49 11,535,619.97
2. Increase during 232,329.31 232,329.31
the period
(1) Acquisition 232,901.11 232,901.11
(2) Internal R&D
(3) Increase in
business
combination
(4) Effect of
exchange rate -571.80 -571.80
changes
3. Decrease during 420,501.75 420,501.75
the period
(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 164,800.32 201,973.94 366,774.26
the period
(1) Provision 164,800.32 202,337.39 367,137.71
(2) Effect of
exchange rate -363.45 -363.45
changes
3. Decrease during 372,575.10 372,575.10
the period Amount
(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 6,097,612.33 1,146,863.61 7,244,475.94
amount
187 / 250
Annual Report 2023
2. Opening carrying 6,262,412.65 1,164,434.89 7,426,847.54
amount
The proportion of intangible assets formed through in-house R&D to the balance of intangible assets at the
end 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 the
impairment 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 years
and 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 the
previous period of the reporting period was within the performance commitment period.
□ Applicable √ N/A
Other Notes
□ Applicable √ N/A
188 / 250
Annual Report 2023
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
Closing balance Opening balance
Deductible Deductible
Item Deferred tax Deferred tax
temporary temporary
assets assets
differences differences
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
Closing balance Opening balance
Taxable Taxable
Deferred tax Deferred tax
Item temporary temporary
liabilities liabilities
differences differences
Withholding tax on
available-for-distribution
105,783,050.10 10,578,305.01 48,926,323.23 4,892,632.32
dividends from foreign
subsidiaries (10%)
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 the
following years
□ Applicable √ N/A
189 / 250
Annual Report 2023
Other Notes:
√ Applicable □ N/A
Details of unrecognized deferred tax liabilities
Unit: Yuan Currency: RMB
Balance at the beginning of
Item Balance at the end of the year
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
Closing balance Opening balance
Provision
Item Provision
Carrying for Carrying
Book balance for Book balance
amount impairmen amount
impairment
t
Warranty
35,990,599.2 1,146,648.5 34,843,950.7 17,938,200.1 589,541.2 17,348,658.8
receivable
s 9 8 1 1 4 7
35,990,599.2 1,146,648.5 34,843,950.7 17,938,200.1 589,541.2 17,348,658.8
Total
9 8 1 1 4 7
Other Notes: None
31. Assets with restricted ownership or right to use
√ Applicable □ N/A
Unit: Yuan Currency: RMB
End of period Beginning of the period
Type Type
Rest
Item of Carrying of Restr
Book balance Carrying amount ricte Book balance
restri amount restri icted
d
ction ction
Curren Marg Marg
in Other in
cy 12,499,607.35 12,499,607.35 Other Restr 7,895,104.70 7,895,104.70 s Restr
funds icted icted
Bills
receiv
able
Invent
ories
Fixed
assets
Intang
ible
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
190 / 250
Annual Report 2023
√ 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 December
5, 2022 to March 31, 2023, with a borrowing rate of 5.71%; a loan of RMB 13,929,200.00 obtained
from Taishin Bank by Acter (Hong Kong), a subsidiary of the Group, with a borrowing period from
November 25, 2022 to February 24, 2023, with a borrowing rate of 5.93%; and interest payable on the
borrowings 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
191 / 250
Annual Report 2023
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
Increase Decrease
Opening Exchange rate Closing
Item during the during the
balance change balance
period period
I. Short-term 39,456,513 130,512,56 122,546,19 47,459,670
36,785.38
remuneration .03 8.47 6.01 .87
II. Post-employment
benefits - defined 7,784,980. 74 7,784,980. 74
contribution plan
III. Severance benefits
IV. Other benefits due
within one year
39,456,513 138,297,54 130,331,17 47,459,670
Total 36,785.38
.03 9.21 6.75 .87
192 / 250
Annual Report 2023
(2). Presentation of short-term remuneration
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Increase Decrease Exchange
Opening Closing
Item during the during the rate
balance balance
period period change
I. Salaries, bonuses,
allowances and 39,274,134.14 118,821,168.83 110,868,746.33 36,785.38 47,263,342.02
subsidies
II. Employee benefit
3,945,749.79 3,945,749.79
expenses
Social insurance
premiums 3,291,802.84 3,291,802.84
Of which: Medical
2,822,875.14 2,822,875.14
insurance premiums
Workers'
remuneration
insurance 186,691.33 186,691.33
premiums
Maternity
insurance 282,236.37 282,236.37
premiums
IV. Housing provident
3,274,142.08 3,274,142.08
fund
V. Labor Union Funds
and Employee 182,378.89 1,179,704.93 1,165,754.97 196,328.85
Education Funds
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
Increase during Decrease during
Item Opening balance Closing balance
the period the period
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
193 / 250
Annual Report 2023
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
194 / 250
Annual Report 2023
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 Opening balance
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 and
perpetual bonds classified as financial liabilities)
□ Applicable √ N/A
(3). Description of convertible corporate bonds
□ Applicable √ N/A
195 / 250
Annual Report 2023
Accounting treatment and judgmental basis for conversion
□ Applicable √ N/A
(4). Description of other financial instruments classified as financial liabilities
Basic information on other financial instruments such as preferred stock and perpetual bonds issued at the
end of the period
□ Applicable √ N/A
Statement of changes in preferred stock, perpetual bonds and other financial instruments issued and
outstanding 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
632,325.46 610,379.24
for defined benefit plans
196 / 250
Annual Report 2023
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 the
company'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
197 / 250
Annual Report 2023
Provision for quality costs
related to the possibility of
Product quality guarantee 9,067,741.80 11,090,966.30 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
Increase/decrease of the current change (+, -)
Issue
Opening balance of Sent Other
new Shar Conversion Subtotal Closing balance
s
shar es
es
Total
numbe
80,000,000.00 20,000,000.00 20,000,000.00 100,000,000.00
r of
shares
Other Notes:
Pursuant to the resolution of the 2022 annual general meeting held on April 28, 2023, the Company
paid a cash dividend of RMB 0.8125 per share (inclusive of tax) to all shareholders on the basis of the total
share capital of 80,000,000.00 shares as at June 14, 2023, and transferred 0.25 shares to all shareholders by
way of capital reserve to increase the share capital by a total of 20,000,000.00 shares with par value of RMB
1 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 bonds
issued and outstanding at the end of the period
□ Applicable √ N/A
198 / 250
Annual Report 2023
(2). Statement of changes in preferred stock, perpetual bonds and other financial instruments issued
and 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 the
basis 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 Decrease during Closing balance
the period the period
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
Amount in the current period
Less:
Less: Prior
Transfe period
r to charge Attrib
profit or to other utable
loss for compre Less: to
Current the hensive Attributable
Opening Incom minori
Item income tax period income to parent Closing balance
balance from Current e tax ty
incurred company
prior period expen shareh
before after tax
period transfer se olders
to other to after
compre retaine tax
hensive d
income earning
s
I.Other
comprehensive
income not -151,009.79 -151,009.79
reclassifiable to
profit or loss
Of which:
Remeasurement
of changes in -151,009.79 -151,009.79
defined benefit
plans
199 / 250
Annual Report 2023
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 3,178,870.67 290,286.73 290,286.73 3,469,157.40
reclassified to
profit or loss
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 3,178,870.67 290,286.73 290,286.73 3,469,157.40
financial
statements
Other
comprehensive 3,027,860.88 290,286.73 290,286.73 3,318,147.61
income
Other notes, including adjustments to the effective portion of cash flow hedge gains and losses transferred
to the initial recognized amount of the hedged item:
None
58. Earmarked reserves
√ Applicable □ N/A
200 / 250
Annual Report 2023
Unit: Yuan Currency: RMB
Item Opening balance Increase during Decrease during Closing balance
the period the period
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 Increase during Decrease during Closing balance
balance the period the period
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 the
change:
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
-177,717.08
period before adjustment (increase +, decrease -)
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 the
undistributed 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 period
by RMB 177,717.08.
3. Due to the correction of significant accounting errors, the impact on the undistributed profit at the
beginning 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 undistributed
profit 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.
201 / 250
Annual Report 2023
61. Operating revenues and operating costs
(1). Operating revenue and operating costs
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Amount in the current period Amount in the prior period
Item 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
The Group Total
Contract classification
Operating Operating
Operating costs Operating costs
revenue revenue
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
276,230,223.29 232,095,004.42 276,230,223.29 232,095,004.42
installation works
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
480,697,188.05 392,693,935.54 480,697,188.05 392,693,935.54
industry
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
11,621,861.80 9,370,142.00 11,621,861.80 9,370,142.00
point in time
202 / 250
Annual Report 2023
Revenue recognized at a certain
1,997,303,133.88 1,729,471,099.47 1,997,303,133.88 1,729,471,099.47
point in time
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
203 / 250
Annual Report 2023
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 Amount in the prior
period 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 Amount in the prior
period 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
204 / 250
Annual Report 2023
Unit: Yuan Currency: RMB
Item Amount in the current Amount in the prior
period 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 -334,383.24 -87,072.51
method
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
205 / 250
Annual Report 2023
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
-119,888.89 119,888.89
profit or loss
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
206 / 250
Annual Report 2023
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
Amounts included in
Amount in the current Amount in the prior non-recurring gains and
Item
period period losses for the period
Total gain on disposal
of non-current assets
Of which: Gain on
disposal of fixed
assets
207 / 250
Annual Report 2023
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
Amounts included in
Amount in the current Amount in the prior non-recurring gains and
Item
period period losses for the period
Total loss on
disposal of non- 63,978.14 9,411.87 63,978.14
current assets
Of which: Loss on
disposal of fixed 63,978.14 9,411.87 63,978.14
assets
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
208 / 250
Annual Report 2023
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 3,651,581.09
were recognized in the current period
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
1,057,830.50
dividends of the Group's overseas subsidiaries
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
209 / 250
Annual Report 2023
Total 18,560,464.10 34,436,667.12
Description of other cash received related to operating activities:
None
Other 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, 15,159,502.69 17,098,345.14
labor expenses, etc. paid
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
210 / 250
Annual Report 2023
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:
None
Changes in liabilities arising from financing activities
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Increase during the period Decrease during the
period
Opening Cash Non- Closing
Item Non-cash Cash
balance movement cash balance
movements movements move
s
ments
Minority 2,114,535.
4,040,494.34 1,552,518.98 7,707,548.39
interests 07
Short-term 31,249,307.8 6,388,838
198,942.18 37,837,088.45
loans 2 .45
Lease
liabilities
Other
payables -
loans from
related 22,605,62 22,861,444.2
255,819.25
parties 5.00 5
outside the
consolidatio
n
Interest 1,094,012.34 1,094,012.34
payable
Other
payables - 65,000,000.00 65,000,000.00
Dividend
distribution
Lease 4,862,283.96 1,216,624.47 2,180,273.09 3,898,635.34
liabilities
31,108,99 34,467,627.9
Total 40,152,086.12 69,317,917.22 106,111,373.88
8.52 8
(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 and
disbursements but affect the enterprise's financial position or may affect the enterprise's cash
flows in the future
□ Applicable √ N/A
211 / 250
Annual Report 2023
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
114,306.72 114,306.72
properties
Depreciation of fixed assets, depletion of
oil and gas assets, depreciation of 3,830,558.72 3,330,083.92
biological assets
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 "- -116,542.37 -246,990.20
" sign)
Loss on retirement of fixed assets (Gain is
63,978.14 9,411.87
recognized by "-" sign)
Loss on change in fair value (Gain is
119,888.89 -105,417.14
recognized by "-" sign)
Finance costs (Gain is recognized by "-"
209,501.12 7,346,819.64
sign)
Loss on investment (Gain is recognized by
-1,661,794.44 99,328.94
"-" sign)
Decrease in deferred tax assets (Increase is
3,231,780.41 -1,196,736.66
recognized by " - " sign)
Increase in deferred tax liabilities
8,287,496.24 936,591.25
(Decrease is recognized by " - " sign)
Decrease in inventories (Increase is
66,824.45 5,099,555.63
recognized by " - " sign)
Decrease in operating receivables
-75,532,714.83 -95,644,227.73
(Increase is recognized by " - " sign)
Increase in operating payables (Decrease
50,401,030.09 109,961,371.05
is recognized by " - " sign)
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:
212 / 250
Annual Report 2023
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
12,499,607.35 7,895,104.70
company or subsidiaries within the
group
(5). Cash and cash equivalents with restricted scope of use but still presented as cash and cash
equivalents
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Item Amount for the period Reason
The Group's other monetary funds
represent security deposits, which are
Currency funds 12,499,607.35 mainly deposited for the purpose of
the Group's application to banks for
the issuance of letters of guarantee.
213 / 250
Annual Report 2023
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 of
the previous year are explained:
□ Applicable √ N/A
81. Monetary items in foreign currency
(1). Monetary items in foreign currencies
√ Applicable □ N/A
Unit: Yuan
Closing balance in Closing balance in
Item Exchange rate RMB
foreign currency
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
214 / 250
Annual Report 2023
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 account
and the basis of selection, and disclosure of the reasons for changes in the local currency of
account
√ 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); Acter
International Limited is accounted for in United States dollars; Acter Technology Singapore Pte., Ltd
is denominated in Singapore dollars; PT. Acter Technology Indonesia and PT Acter Integration
Technology Indonesia (the "Indonesian Joint Venture") are denominated in Indonesian Rupiah; Acter
Technology Malaysia Sdn. Bhd is denominated in Malaysian Ringgit; Sheng Huei Engineering
Technology 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 of
accounts on the basis of the currencies in which the major business receipts and expenditures are
denominated and settled. Some subsidiaries of the Group have adopted currencies other than the
Company's local currency as the local currency, and the foreign currency financial statements of these
subsidiaries have been translated in accordance with "Section V. 9. Translation of Foreign Currency
Operations and Foreign Currency Statements" of this section in the preparation of these financial
statements.
Name of overseas Principal place Currency of
Basis of selection of local currency
operating entities of business accounts
PT.Acter Technology Indonesian Businesses are mainly denominated
Indonesia
Indonesia Rupiah and settled in this currency.
PT Acter Integration Indonesian Businesses are mainly denominated
Indonesia
Technology Indonesia Rupiah and settled in this currency.
215 / 250
Annual Report 2023
Sheng Huei Engineering
Vietnamese Businesses are mainly denominated
Technology Company
Vietnam dong and settled in this currency.
Limited
Businesses are mainly denominated
Acter Technology Co.,Ltd Thailand Thai Baht
and settled in this currency.
Acter International Businesses are mainly denominated
Hong Kong US Dollar
Limited and settled in this currency.
Acter Technology Malaysia Malaysian Businesses are mainly denominated
Malaysia
Sdn.Bhd. Ringgit 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
Of which: Income related to variable
Item Lease income 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
216 / 250
Annual Report 2023
Other Notes
None
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 Notes
None
(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
217 / 250
Annual Report 2023
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
Method of Amount of
Difference Carrying Fair value of
determining the other
between the amount of the fair value of comprehensi
disposal price the remaining remaining Gains or losses
Disposa the remaining ve income
Disposal and the share of equity equity
Disposal l Proportion arising from equity interest related to
ratio at Basis for net assets of the interest at the interest at the
price at method of remaining the at the level of equity
Point of point of subsidiary at the
Name of judging the equity at date of loss date of loss remeasurement the investments
loss of the point at the level of the
subsidiary loss of point of loss of date of loss of control at of control at of the consolidated in atomic
control of loss of point of consolidated
control control of control the level of the level of remaining financial companies
control loss of financial
(%) (%) the the equity at fair statements at transferred to
control statements
consolidated consolidated value the date of loss investment
corresponding to
financial financial of control and profit or loss
the disposal of
key or retained
the investment statements statements
assumptions earnings
Jiang Su Notification of
Dian Ze cancellation by
Constructi November Cancell the
0 100 0 0 0 0 -300,000 N/A 0
on 14, 2023 ation Administrative
Engineerin Approval
g Co.,Ltd. Authority
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 related
circumstances:
√ Applicable □ N/A
218 / 250
Annual Report 2023
In 2023, the Company and PT Candra Bangun Persada jointly established PT Acter Integration Technology Indonesia ("Indonesia Joint Venture"), in which the
Company 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 Acter
Integration Technology Indonesia.
6. Others
□ Applicable √ N/A
219 / 250
Annual Report 2023
X. Interests in other entities
1. Interests in subsidiaries
(1). Composition of the enterprise group
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Shareholding
Place ratio (%)
Principal
Registered of Nature of Acquisitio
Name of Subsidiary place of
capital registr business Direct Indirec n method
business t
ation
Mechanic Business
Acter Engineering al and combinatio
Technology (Shenzhen) Shenzhen 35,296,744.20 Shenz Electrical 100.00 n under the
hen Engineeri
Co., Ltd. same
ng control
Shenzhen Dingmao 5,000,000.00 Shenz 100.00 Establishm
Shenzhen Trade
Trading Co., Ltd. hen ent
Business
Hong Hong combinatio
Acter International 22,600,257.00 Kong, Investmen 100.00
Kong, t n under the
Limited
China China same
control
Business
combinatio
Acter Technology
Singapore 17,263,062.56 Singap Investmen 100.00 n under the
Singapore Pte.,Ltd. ore t
same
control
Mechanic Business
al and combinatio
PT. Acter Technology
Indonesia 5,277,279.17 Indone Electrical 100.00 n under the
Indonesia sia Engineeri same
ng control
Mechanic Business
al and combinatio
Acter Technology
Malaysia 4,767,037.26 Malay Electrical 100.00 n under the
Malaysia Sdn. Bhd. sia Engineeri same
ng control
Mechanic Business
Sheng Huei Engineering al and combinatio
Technology Company Vietnam 24,074,949.49 Vietna Electrical 100.00 n under the
m Engineeri
Limited same
ng control
Mechanic Business
combinatio
Acter Technology Co., 6,519,000.00 Thaila al and 88.38
Thailand Electrical n not under
Ltd. nd Engineeri the same
ng control
PT ACTER Mechanic
al and
INTEGRATION
Indonesia 6,022,059.87 Indone Electrical 67.00 Establishm
TECHNOLOGY sia Engineeri ent
INDONESIA ng
A statement that the percentage of shareholding in a subsidiary is different from the percentage of voting
rights:
None
220 / 250
Annual Report 2023
Basis for holding half or less of the voting rights but still controlling the investee, and holding more than
half of the voting rights but not controlling the investee:
None
For 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:
None
Other 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 group
liabilities
□ Applicable √ N/A
(5). Financial or other support provided to structured subjects included in the scope of the
consolidated 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 subsidiary
is 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 statements
Description 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
221 / 250
Annual Report 2023
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:
Amount in Amount Revenue-
Presentation
Category the current recognized in related/asset-
items
year profit or loss 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
44,790.00 Other gains 44,790.00 Revenue-related
and development expenses
Refund of withholding
37,829.76 Other gains 37,829.76 Revenue-related
tax/personal tax refund
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 and
payables, etc. For details of each financial instrument, please refer to the relevant item in Note 6. The risks
associated with these financial instruments and the risk management policies adopted by the Group to
minimize these risks are described below. The Group's management manages and monitors these exposures
to 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 between
risk and return, minimizing the negative impact of risks on the Group's operating results and maximizing the
interests of shareholders and other equity investors. Based on this risk management objective, the basic
strategy of the Group's risk management is to identify and analyze the various risks faced by the Group, to
establish an appropriate risk tolerance threshold and to manage the risks, and to monitor the various risks in
a 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, Thai
Baht, and Indonesian Rupiah. Except for several subsidiaries of the Group that make purchases and sales in
U.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. The
exchange rate risk arising from these assets and liabilities in U.S. Dollars, Vietnamese dong, Thai Baht and
Indonesian Rupiah balances may have an impact on the Group's results of operations.
222 / 250
Annual Report 2023
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 bonds
payable. Financial liabilities with fixed interest rates expose the Group to fair value interest rate risk. The
Group 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 mainly
related to fixed-rate bank borrowings. For fixed rate borrowings, the Group's objective is to maintain its
floating interest rate. The Group is not highly sensitive to interest rate fluctuations and has no significant
interest rate risk.
(2) Credit risk
Credit risk is the risk that one party to a financial instrument will fail to fulfill its obligations, resulting
in a financial loss to the other party. The Group's credit risk mainly arises from currency funds, receivables
and contract assets. The management continuously monitors these credit risk exposures.
The Group's monetary funds other than cash are mainly deposited with creditworthy financial
institutions, which management believes do not have significant credit risk and are not expected to incur
losses 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 the
balance 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 the
characteristics of each individual client, rather than the industry or country or region in which the client is
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Annual Report 2023
located. Consequently, significant concentrations of credit risk arise mainly from the existence of significant
accounts 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 situation
and conducts credit assessment on clients to determine the credit amount and credit period. The credit
assessment is mainly based on the client's financial position, external ratings and bank credit history (where
possible). The receivables are generally due within 30 to 120 days from the date of billing. Under normal
circumstances, 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 delivery
of cash or other financial assets. The Company and its subsidiaries are responsible for their own cash
management, including the short-term investment of cash surpluses and the raising of loans to meet
anticipated cash requirements (subject to the approval of the Group's Board of Directors if borrowings are
in 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 that
adequate cash reserves are maintained and that commitments are obtained from major financial institutions
to 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 liquidity
requirements and compliance with the provisions of the borrowing agreements to ensure that sufficient cash
reserves are maintained, and has obtained commitments from major financial institutions to provide
sufficient 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 at
the balance sheet date based on the undiscounted contractual cash flows, including interest at contractual
interest 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 probable
changes in risk variables may have on current profit or loss or shareholders' equity. Since changes in any of
the risk variables rarely occur in isolation and the correlation that exists between the variables will play a
significant role in the amount of the eventual impact of a change in one of the risk variables, the following
has been performed assuming that the changes in each of the variables are independent. The impact on total
profit and shareholders' equity of the appreciation/depreciation of RMB as a result of the changes in RMB
against the US Dollar and the Vietnamese dong as at December 31, 2023 is presented in RMB at the spot
exchange rate at the balance sheet date. Since the impact on total profit and shareholders' equity of financial
instruments in other currencies in the event of exchange rate changes is not material, the related sensitivity
analysis is omitted here. The Company believes that its exposure to exchange rate risk is generally
manageable.
FY2023
Items Exchange rate changes Impact on net Impact on
profit shareholders' equity
Depreciation of RMB Appreciation of 5% against
-462,604.74 -462,604.74
against USD RMB
Appreciation of RMB Depreciation of 5% against
462,604.74 462,604.74
against USD RMB
Depreciation of RMB Appreciation of 5% against
-1,299,848.44 -1,299,848.44
against Vietnamese Dong RMB
Appreciation of RMB Depreciation of 5% against
1,299,848.44 1,299,848.44
against Vietnamese Dong RMB
The above sensitivity analysis is based on the re-measurement of financial instruments held by the
Group that are exposed to exchange rate risk at the balance sheet date, assuming that the exchange rate at
the 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 as
a going concern and to maintain healthy capital ratios to support business development and maximize
shareholder value.
The Group manages its capital structure and adjusts it in accordance with changes in economic
conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital
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Annual Report 2023
structure, the Group may adjust profit distribution to shareholders, return capital to shareholders or issue
new 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 liabilities
divided 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 risk
management 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
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Annual Report 2023
Unit: Yuan Currency: RMB
Fair value at the end of the period
Item Level 1 fair value Level 2 fair value Level 3 fair value
Total
measurement measurements measurements
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 3,572,953.18 3,572,953.18
basis
(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
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Annual Report 2023
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 value
measurements
□ Applicable √ N/A
3. Qualitative and quantitative information on the valuation techniques and significant parameters
used for the fair value measurement items in the continuous and discontinued Level 2 fair value
hierarchy
√ Applicable □ N/A
The Group has entered into derivative financial instrument contracts with banks for foreign exchange
forward, foreign exchange option, foreign exchange swap and foreign exchange option contracts, which are
measured using valuation techniques similar to those used for forward pricing as well as the present value
approach. The models cover a number of market observable inputs, including the maturity period of the
option, 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 quantitative
information on valuation techniques used and significant parameters
√ Applicable □ N/A
For structured deposits, the Group uses valuation techniques to determine their fair value. The valuation
model used is mainly a discounted cash flow model. The inputs to the valuation technique are mainly the
contractual 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
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Annual Report 2023
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
Parent company's Proportion of
shareholding voting rights of the
Name of parent Place of Nature of Registered
proportion in the parent company in
company registration business capital
enterprise the enterprise
(%) (%)
Sheng Huei Investment
3.95 million
International Co., Samoa holding 64.9973 64.9973
dollars
Ltd. company
Description of the enterprise's parent company
None
The 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 transactions
during the current period or with which the Company has entered into related-party transactions in prior
periods, 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 & Enterprises controlled by the same ultimate controlling
CONSTRUCTION PTE. LTD. shareholder
Other Notes
None
5. Related transactions
228 / 250
Annual Report 2023
(1). Purchase and sale of goods, provision and acceptance of labor related transactions
Purchase 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 out
The 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 Lease income recognized Lease income recognized
asset in the current period in the previous period
Winmax (Suzhou) Housing lease 2,590,579.03 1,812,710.39
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Annual Report 2023
The Company acted as the lessee:
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Rental costs for short- Variable lease
term leases and leases of payments not included Interest expense on
Increase in right-of-use
low-value assets with in the measurement of Rental payments lease liabilities
assets
Name of Type of leased simplified treatment (if the lease liability (if assumed
lessor assets applicable) applicable)
Current Current Prior Current Current Current Current Current
Prior period Prior period
period period period period period period period period
Novatech
Rental 24,466.69 21,215.64
(Singapore)
Explanation of related leases
□ Applicable √ N/A
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Annual Report 2023
(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 17,820,267.27 2023-11-23 2024-11-22
International
Sheng Huei 5,041,176.98 2023-10-24 2024-10-23
International
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 Amount in the prior period
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
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Annual Report 2023
Other payables Sheng Huei 22,861,444.25
International
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
Amount in the Amount in the
Related party Content of related transactions
current year prior year
Payment of utilities by Suzhou
Winmax (Suzhou) Acter on behalf of Winmax 710,302.15 569,343.60
(Suzhou)
Total 710,302.15 569,343.60
(2) Acceptance of payment on behalf of related parties
Unit: Yuan Currency: RMB
Amount in the Amount in the
Related party Content of related transactions
current year prior year
Payment of utility bills on
behalf of Sheng Huei 14,169.08 12,286.34
Novatech (Singapore)
(Singapore) by Novatech
(Singapore)
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
Determined on the basis of the appraised value or
Method of determining the fair value of equity on the basis of the fair value calculated by taking
instruments at the date of grant into account the Company's own circumstances
and 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 At each balance sheet date during the waiting
equity instruments period, the Company makes its best estimate of the
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Annual Report 2023
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 32,368,025.42
payments recognized in capital surplus
Other Notes
None
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 Guarantee Guarantee
guaranteed Guarantee Matters Currency Amount starting expiration
entity date date
Shenzhen Contractual joint and
RMB 1,570,700.00 2020-8-3 2023-1-31
Dingmao several guarantee
Shenzhen Contractual joint and
RMB 3,394,222.00 2021-1-27 2023-3-14
Dingmao several guarantee
Sheng Huei Contractual joint and
RMB 27,245,338.06 2020-6-19 2023-6-17
(Vietnam) several guarantee
Shenzhen Contractual joint and
RMB 565,000.00 2020-8-3 2023-7-9
Dingmao several guarantee
Contractual joint and
Suzhou Acter RMB 19,900,000.00 2020-7-2 2023-10-22
several guarantee
Contractual joint and
Suzhou Acter RMB 11,300,000.00 2020-7-2 2023-10-22
several guarantee
Contractual Joint
Suzhou Acter and Several RMB 4,690,000.00 2021-4-12 2023-10-22
Guarantee
Shenzhen Contractual joint and
RMB 610,200.00 2021-8-1 2023-12-7
Dingmao several guarantee
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Annual Report 2023
Sheng Huei Contractual joint and
RMB 125,897,195.25 2020-9-23 2024-7-10
(Vietnam) several guarantee
Acter
Bank financing RMB 40,000,000.00 2022-9-5 2024-3-31
(Shenzhen)
Shenzhen
Bank financing RMB 45,000,000.00 2022-9-5 2024-3-31
Dingmao
Sheng Huei Contractual joint and
RMB 21,076,153.89 2022-3-1 2025-6-30
(Vietnam) several guarantee
Sheng Huei Contractual joint and
RMB 17,168,854.83 2022-3-10 2025-6-30
(Vietnam) several guarantee
Name of Guarantee
Curren Guarantee
guaranteed Guarantee matters Amount starting
cy expiration date
entity date
Sheng Huei Contractual Joint and
RMB 4,473,565.17 2021-5-7 2025-9-1
(Vietnam) Several Guarantee
Shenzhen
Bank financing RMB 20,000,000.00 2023-1-16 2025-11-30
Dingmao
Sheng Huei Contractual joint and
RMB 14,285,182.90 2023-1-10 2025-7-31
(Vietnam) several guarantee
Sheng Huei Contractual joint and
RMB 99,925,200.63 2023-7-7 2026-3-31
(Vietnam) several guarantee
Sheng Huei Contractual joint and
RMB 721,558.28 2023-11-13 2026-3-31
(Vietnam) several guarantee
Sheng Huei Contractual joint and
RMB 1,532,643.25 2023-11-27 2026-3-31
(Vietnam) several guarantee
Sheng Huei Contractual joint and
RMB 71,446,415.71 2020-12-7 2026-3-31
(Vietnam) several guarantee
Sheng Huei Contractual joint and
RMB 5,430,176.59 2021-5-7 2026-3-31
(Vietnam) several guarantee
Sheng Huei Contractual joint and 159,724,393.2
RMB 2023-10-12 2026-7-7
(Vietnam) several guarantee 9
Sheng Huei
Bank financing RMB 14,292,800.00 2022-10-27 2023-10-26
(Vietnam)
Sheng Huei
Bank financing RMB 14,292,800.00 2022-10-27 2023-10-26
(Malaysia)
Acter
Bank financing RMB 7,146,400.00 2022-10-27 2023-10-26
(Indonesia)
(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
234 / 250
Annual Report 2023
Profit or dividend to be distributed 80,000,000.00
Profits or dividends declared after 80,000,000.00
consideration and approval
Pursuant to the resolution of the Twelfth Meeting of the Second Session of the Board of Directors held
on 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, the
Company will distribute a cash dividend of RMB 8.00 (including tax) for every 10 shares, totaling RMB 80
million (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
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Annual Report 2023
The Group operates as a whole and has a unified internal organizational structure, management
evaluation system and internal reporting system. The management conducts resource allocation and
performance evaluation by regularly reviewing financial information at the corporate level. The Group did
not have any separately managed operating segment during the reporting period, and therefore the Group
has 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 the
projects 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 (for
intangible 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 and
total 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
Closing book Opening book
Ageing of accounts
balance balance
Within 1 year
Of which: Within 1 year
236 / 250
Annual Report 2023
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
Closing balance Opening balance
Provision for Provision for
Book balance Book balance
Categ bad debts bad debts
ory Pro Pro Carrying Pro Carrying
Prop
Amou port Amoun visi amount Amoun visi amount
Amount ortio
nt ion t on t on
n (%)
(%) (%) (%)
Provis
ion
for
bad
9,379, 9,379,1 100. 9,961,692 9,961,6 100.
debts 2.72 2.39
167.99 67.99 00 .27 92.27 00
by
indivi
dual
item
Of which:
Provis
ion
for
334,89
bad 97. 19,778, 315,117,4 406,107,8 16,701, 389,406,5
6,443. 5.91 97.61 4.11
debts 28 999.61 44.36 54.02 308.33 45.69
97
by
portfo
lio
Of which:
344,27
29,158, 315,117,4 416,069,5 26,663, 389,406,5
Total 5,611. / / / /
167.60 44.36 46.29 000.60 45.69
96
Individual provision for bad-debt reserves:
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Name Closing balance
237 / 250
Annual Report 2023
Provision for bad Provision ratio Reason for
Book balance
debts (%) provision
Qinghua Group
Xinjiang Coal Debtor's financial
6,570,214.37 6,570,214.37 100.00
Chemical Industry difficulties
Co., Ltd.
Suzhou Mingqiao
Debtor's
Municipal 2,158,200.00 2,158,200.00 100.00
bankruptcy
Engineering Co., Ltd.
Debtor's
bankruptcy, the
Suzhou Hyperion
650,753.62 650,753.62 100.00 amount is expected
Geocrystal Co., Ltd.
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
Closing balance
Name
Accounts receivable Provision for bad debts Provision ratio (%)
1-6 months (including 6
275,587,971.19 8,267,639.26 3.00
months)
6 months to 1 year (including
22,218,436.60 1,110,921.83 5.00
1 year)
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 debts
None
Description of significant changes in the book balance of accounts receivable for which changes in the
allowance for losses occurred during the period:
238 / 250
Annual Report 2023
□ Applicable √ N/A
(3). Provision for bad debts
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Change during the period
Write-
Recover
Category Opening balance offs or Other Closing balance
Provision y or
cancella changes
reversal
tions
Provision
for bad 26,663,000.60 2,495,167.00 29,158,167.60
debts
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 Notes
None
(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 party
owed to the Company
√ Applicable □ N/A
Unit: Yuan Currency: RMB
Percentage of
Closing balance total accounts Closing
Closing balance Closing balance
of accounts receivable and balance of
Unit Name of accounts of contract
receivable and contract assets provision for
receivable assets
contract assets closing bad debts
balance (%)
Client
35,204,113.72 55,230,371.74 90,434,485.46 13.90 1,332,275.27
I
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
239 / 250
Annual Report 2023
Other Notes
None
Other 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 provisioning
None
240 / 250
Annual Report 2023
Explanation of significant changes in the book balance of interest receivables for which changes in the
allowance 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
241 / 250
Annual Report 2023
Basis of classification of each stage and percentage of provision for bad debts
None
Explanation of significant changes in the book balance of dividends receivable for which changes in the
allowance 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
Closing book Opening book
Ageing
balance 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
242 / 250
Annual Report 2023
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
Phase I Phase II Phase III
Expected
Expected credit
credit losses losses for
Provision for bad debts Expected credit Total
for the entire the entire
losses for the next
duration (no duration
12 months
credit (no credit
impairment) impairmen
t)
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
243 / 250
Annual Report 2023
Basis of classification of phases and percentage of provision for bad debts
None
Explanation of significant changes in the book balance of other receivables for which changes in the
allowance 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 whether
there 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
Change during the period
Opening Recovered Closing
Category Write-offs or Other
balance Provision or balance
cancellations changes
reversed
Provision for
748,702.53 36,880.28 785,582.81
bad debts
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 Notes
None
(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
Percentage of total Closing
Unit closing balance of Nature of balance of
Closing balance Ageing
Name other receivables receivables provision for
(%) bad debts
Borrowing and
Unit I 14,670,301.47 46.06 Within 1 year
lending
Less than 1 year,
Guarantee
Unit II 5,585,535.63 1-2 years, 2-3 279,276.78
17.53 deposits
years
244 / 250
Annual Report 2023
Salaries of
Unit III 3,077,313.14 9.66 Within 1 year
expatriates
Less than 1 year,
Guarantee
Unit IV 1,493,000.00 1-2 years, 2-3 74,650.00
4.69 deposits
years, 3-4 years
Guarantee
Unit V 800,000.00 2.51 Within 1 year 40,000.00
deposits
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
Provis
Provisi
ion
Carrying on for Carrying
Book balance for Book balance
amount impair amount
impair
ment
ment
Investments in
88,485,289.33 88,485,289.33 84,542,333.88 84,542,333.88
subsidiaries
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
Provisio Closing
Decrease n for balance of
Increase
Opening during Closing impairm provision
Invested Unit during the
balance the balance ent for for
period
period the impairme
period nt
Acter 37,527,798.9
37,527,798.95
(Shenzhen) 5
Shenzhen
5,000,000.00 5,000,000.00
Dingmao
Acter (Hong 28,651,120.4
28,651,120.44
Kong) 4
Acter 13,363,414.4
13,363,414.49
(Singapore) 9
Indonesia Joint
3,942,955.45 3,942,955.45
Venture
88,485,289.3
Total 84,542,333.88 3,942,955.45
3
245 / 250
Annual Report 2023
(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
Amount in the current Period Amount in the prior period
Item
Revenue Cost Revenue Cost
Main
busine 1,511,362,826.53 1,337,646,532.15 1,200,221,360.57 1,036,325,910.16
sses
Other
busine 4,071,314.74 1,320,285.28 5,630,460.36 3,385,164.11
ss
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
Parent Company Total
Contracts
Classification
Operating Revenue Operating Costs Operating Revenue Operating Costs
Commodity
Type
Clean room 1,464,301,397.12 1,299,051,834.63 1,464,301,397.12 1,299,051,834.63
engineering
Other
electromechani 47,050,267.61 38,587,119.64 47,050,267.61 38,587,119.64
cal installation
works
Sales of 11,161.80 7,577.88 11,161.80 7,577.88
equipment
Other 4,071,314.74 1,320,285.28 4,071,314.74 1,320,285.28
businesses
By region of
operation
246 / 250
Annual Report 2023
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 1,277,995,305.19 1,145,012,859.98 1,277,995,305.19 1,145,012,859.98
Industry
Precision
manufacturing 95,839,244.09 83,068,202.99 95,839,244.09 83,068,202.99
industry
Optoelectronic 100,628,804.88 80,152,029.38 100,628,804.88 80,152,029.38
s industry
Other 36,899,472.37 29,413,439.80 36,899,472.37 29,413,439.80
industries
Other 4,071,314.74 1,320,285.28 4,071,314.74 1,320,285.28
businesses
Contract type
Sales of goods 11,161.80 7,577.88 11,161.80 7,577.88
Provision of
construction 1,511,351,664.73 1,337,638,954.27 1,511,351,664.73 1,337,638,954.27
labor
Other 4,071,314.74 1,320,285.28 4,071,314.74 1,320,285.28
businesses
Classification
by contract
period
Revenue
recognized at a 11,161.80 7,577.88 11,161.80 7,577.88
point in time
Revenue
recognized at a 1,515,422,979.47 1,338,959,239.55 1,515,422,979.47 1,338,959,239.55
certain point in
time
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:
247 / 250
Annual Report 2023
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
-300,000.00
long-term equity investments
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
1,894,851.65
trading financial assets
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
248 / 250
Annual Report 2023
Gains and losses on disposal of non-current assets, including
52,564.23
write-off of provision for asset impairment
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
3,731,552.00
accordance with established criteria, and with a continuing
impact on the Company's profit or loss.
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
-811,609.16
above
Other profit and loss items that meet the definition of non-
recurring profit and loss
249 / 250
Annual Report 2023
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 “Interpretative
Announcement for Information Disclosure of Companies Issuing Public Securities No. 1 - Non-recurring
Profit and Loss” and the amount is significant, as well as items that are defined as recurring profit and loss
items that are listed in “Interpretative Announcement for Information Disclosure of Companies Issuing
Public 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
Earnings per share
Weighted average return
Profit for the reporting period Basic earnings Diluted earnings
on net assets (%)
per share per share
Net profit attributable to ordinary
13.67 1.39 1.39
shareholders of the Company
Net profit attributable to ordinary
shareholders of the Company after 13.42 1.36 1.36
extraordinary gains and losses
3. Differences in accounting data under Chinese and foreign accounting standards
□ Applicable √ N/A
4. Others
□ Applicable √ N/A
Chairman: Liang Jinli
Date of approval for filing by the Board of Directors: March 29, 2024
Revised information
□ Applicable √ N/A
250 / 250
