Annual Report 2023 1 / 250 Company Code: 603163 Company Abbreviation : Acter Group Acter Technology Integration Group Co., Ltd. Annual Report 2023 Annual Report 2023 2 / 250 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 Annual Report 2023 3 / 250 Table of Contents Section I Definitions ................................................................................................................................... 4 Section II Company Profile and Key Financial Indicators .................................................................... 6 Section III Management Discussion and Analysis ................................................................................ 11 Section IV Corporate Governance ......................................................................................................... 42 Section V Environmental and Social Responsibility............................................................................. 64 Section VI Important Events .................................................................................................................. 66 Section VII Changes in Shares and Information about Shareholders ................................................ 87 Section VIII Relevant Information of Preferred Stock ........................................................................ 96 Section IX Relevant Information of Bonds ............................................................................................ 97 Section X Financial Reporting ................................................................................................................ 97 Catalog of Documents Available for Inspection The full text and abstract of this annual report signed by the current legal representative and sealed by the Company; Financial statements containing the signatures and seals of the person in charge of the company, the person in charge of accounting work, and the person in charge of the accounting organization (accounting supervisor). The original audit report containing the seal of the accounting firm and the signature and seal of the certified public accountant; The originals of all the Company’s documents and announcements publicly disclosed in the newspapers designated by the CSRC during the reporting period. Annual Report 2023 4 / 250 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 Group, Suzhou Acter refer to Acter Technology Integration Group Co., Ltd. Sheng Huei Limited refers to Sh