Securities code: 688234 Securities abbreviation: Tianyue Advanced Announcement No.: 2024-072

Shandong Tianyue Advanced Technology Co., Ltd

Announcement on the change of the company's accounting policy

The board of directors and all directors of the company guarantee that there are no false records, misleading statements or material omissions in the content of this announcement, and assume legal responsibility for the authenticity, accuracy and completeness of its content in accordance with the law.

Important Content Notes:

The change of accounting policy does not involve retrospective adjustment of Shandong Tianyue Advanced Technology Co., Ltd. (hereinafter referred to as the "Company") in previous years, and will not have a significant impact on the total assets, total liabilities, net assets and net profit of the Company before the change of accounting policy.

On December 27, 2024, the Company held the ninth meeting of the second board of directors and the second session of the board of supervisors

At the eighth meeting, the "Proposal on the Company's Change of Accounting Policy" was deliberated and passed.

The relevant information is hereby announced as follows:

I. Overview of changes in accounting policies

(1) Reasons for changes in accounting policies

On August 1, 2023, the Ministry of Finance published the Interim Provisions on the Accounting Treatment of Enterprise Data Resources

(Cai Kuai [2023] No. 11) (hereinafter referred to as the "Interim Provisions on Data Resources"), which is related to enterprise data resources

The accounting treatment is regulated, which will be implemented from January 1, 2024.

On 25 October 2023, the Ministry of Finance (MOF) promulgated the Interpretation No. 17 of Accounting Standards for Business Enterprises (Cai Kuai [2023])

No. 21, hereinafter referred to as "Interpretation No. 17"), stipulates the accounting treatment of "the division of current liabilities and non-current liabilities" and "disclosure of supplier financing arrangements". The regulations will come into force on January 1, 2024.

In March 2024, the Ministry of Finance issued the Compilation of Guidance on the Application of Accounting Standards for Business Enterprises (2024) to ensure that:

The accounting treatment of such warranty expenses is regulated.

At the same time, in order to further improve the company's management level, optimize cost accounting, and accurately reflect the company's operating performance,

On October 1, 2024, the company will go live to implement the SAP ERP system and invoice the company's raw materials

The method was changed from "month-end weighted average method" to "moving weighted average method". This change in accounting policy

Effective October 1, 2024.

(2) The accounting policies adopted by the company before the change

Prior to the change of accounting policy, the Company implemented the Accounting Standards for Business Enterprises - Basic Standards of the Ministry of Finance and various specific accounting standards, the application guide of accounting standards for business enterprises, the interpretation announcement of accounting standards for business enterprises and other relevant regulations.

(3) The accounting policies adopted by the company after the change

After the change of accounting policies, the company will implement the relevant provisions such as the Interim Provisions on Data Resources, the Interpretation No. 17 of the Standards, the Compilation of the Application Guide of Accounting Standards for Business Enterprises (2024) issued by the Ministry of Finance, and the "Moving Weighted Average Method", the valuation method issued by the company's raw materials. In addition to the above-mentioned policy changes, the other unchanged parts are still implemented in accordance with the "Accounting Standards for Business Enterprises - Basic Standards" and various specific accounting standards, the application guide of accounting standards for business enterprises, the interpretation announcement of accounting standards for business enterprises and other relevant provisions issued by the Ministry of Finance in the previous period.

(4) The main content of the change in accounting policies

1. The valuation method of the company's raw materials is changed from "month-end weighted average method" to "moving weighted average method".

2. Interpretation No. 17 of the Guidelines stipulates that:

2.1 Classification of current liabilities and non-current liabilities

If an enterprise does not have the substantive right to defer the settlement of liabilities to more than one year after the balance sheet date at the balance sheet date, the liabilities should be classified as current liabilities.

For liabilities arising from a corporate loan arrangement, the right of an enterprise to defer the settlement of liabilities beyond one year after the balance sheet date may depend on whether the enterprise has complied with the conditions set out in the loan arrangement (hereinafter referred to as the "contractual conditions"), and in determining whether it has a substantial right to defer the repayment of debts, it should only consider the contractual conditions to be followed on or before the balance sheet date, and should not consider the contractual conditions that the enterprise should follow after the balance sheet date.

When dividing the liquidity of liabilities, the liquidation of liabilities refers to the release of liabilities by the transfer of cash, other economic resources (such as goods or services) or the enterprise's own equity instruments to the counterparty. If the terms of the liabilities cause the enterprise to be repaid by the delivery of its own equity instruments at the option of the counterparty, if the enterprise classifies the above options as equity instruments and recognizes them separately as equity components of composite financial instruments in accordance with the provisions of Accounting Standard for Business Enterprises No. 37 - Presentation of Financial Instruments, the provision does not affect the liquidity division of the liability.

2.2 Disclosure of Supplier Financing Arrangements

Interpretation No. 17 requires companies to aggregate information related to supplier financing arrangements when making note disclosures, so as to help users of statements assess the impact of these arrangements on their liabilities, cash flows and liquidity exposure. The impact of supplier financing arrangements should also be considered when identifying and disclosing liquidity risk information. The disclosure requirement only applies to supplier financing arrangements. A supplier financing arrangement is a transaction in which one or more financing providers provide funds to pay the business its amounts due to its suppliers, with the agreement that the business will repay the financing provider on or after the day the payment is received by its suppliers, in accordance with the terms and conditions of the arrangement. The vendor financing arrangement extended the business compared to the original payment due date

or the payment period of the enterprise's suppliers has been advanced. The interpretation is effective from January 1, 2024

As of the implementation of the provisions, enterprises are not required to disclose the information required by the provisions in the interim report for the first time in implementing the provisions.

3. The Interim Provisions on the Accounting Treatment of Enterprise Data Resources are used for data resources that are recognized as intangible assets or inventories and other asset categories in accordance with the relevant provisions of the Accounting Standards for Business Enterprises, as well as the relevant accounting treatment of data resources legally owned or controlled by the enterprise that are expected to bring economic benefits to the enterprise, but do not meet the conditions for asset recognition and are not recognized, and put forward specific requirements for the disclosure of data resources.

4. The Compilation of Guidelines for the Application of Accounting Standards for Business Enterprises (2024) stipulates that the warranty expenses shall be included in the operating costs.

After this change in accounting policies, the Company will implement the relevant provisions of accounting policies such as Standard Interpretation No. 17. The other unchanged parts are still implemented in accordance with the "Accounting Standards for Business Enterprises - Basic Standards" and various specific accounting standards, guidance on the application of accounting standards for business enterprises, interpretation announcements of accounting standards for business enterprises and other relevant provisions issued by the Ministry of Finance in the previous period.

(5) The time of change in accounting policies

1. The pricing method for the company's raw materials will be implemented from October 1, 2024.

2. Interpretation No. 17 of the Guidelines will come into force on January 1, 2024.

3. The Interim Provisions on Accounting Treatment Related to Enterprise Data Resources will come into force on January 1, 2024.

4. The Compilation of Guidelines for the Application of Accounting Standards for Business Enterprises (2024) will come into force on January 1, 2024.

2. The impact of this accounting policy change on the company

According to the provisions of Accounting Standard for Business Enterprises No. 28 - Accounting Policies, Changes in Accounting Estimates and Correction of Errors, the changes in accounting policies caused by the company's online implementation of the SAP system will be applied in the future, so there will be no retrospective adjustment of the accounting statements of previous years.

This change in accounting policy is due to the company's online implementation of SAP ERP system and the company's implementation of the company's financial department

The changes required by the Interim Provisions on Accounting Treatment Related to Enterprise Data Resources, Interpretation No. 17 of Accounting Standards for Business Enterprises, and Compilation of Application Guidelines for Accounting Standards for Business Enterprises (2024) can objectively and fairly reflect the company's financial position and operating results, and comply with the provisions of relevant laws and regulations and the actual situation of the company.

This change will not have a substantial impact on the accounting results, nor will it have a substantial impact on the company's total assets, total liabilities, net assets and net profit, and there is no harm to the interests of the company and all shareholders.

3. Explanation of special opinions

(1) Opinions of the Board of Supervisors

The Board of Supervisors believes that the company's accounting policy change is due to the company's online implementation of the SAP ERP system and

The changes made by the Company in accordance with the requirements of the Interim Provisions on the Accounting Treatment of Enterprise Data Resources, the Interpretation of Accounting Standards for Business Enterprises No. 17 and the Compilation of the Application Guide to Accounting Standards for Business Enterprises (2024) issued by the Ministry of Finance are in line with the Accounting Standards for Business Enterprises and related regulations, in line with the actual situation of the Company, and the implementation of the new accounting policies can objectively and fairly reflect the Company's financial position and operating results, provide more reliable and accurate accounting information, and effectively reflect the principle of accounting prudence, which is in line with the interests of the Company and all shareholders. The decision-making procedures for this change of accounting policy are in accordance with the relevant laws, regulations and the Articles of Association, and there is no harm to the interests of the company and minority shareholders.

(2) The opinion of the Audit Committee

The Audit Committee believes that the change in the company's accounting policy is due to the company's online implementation of the SAP ERP system

In accordance with the requirements of the Interim Provisions on Accounting Treatment Related to Enterprise Data Resources, the Interpretation of Accounting Standards for Business Enterprises No. 17 and the Compilation of Application Guidelines for Accounting Standards for Business Enterprises (2024) issued by the Ministry of Finance, the changed accounting policies comply with the relevant regulations of the Ministry of Finance and do not harm the interests of the Company and all shareholders, especially small and medium-sized shareholders. The changed accounting policy can more objectively and fairly reflect the company's financial position and operating results, which is conducive to providing investors with more reliable and accurate accounting information; This change

There will be no material impact on the financial statements. The procedures for the change of accounting policies are in accordance with the relevant laws, regulations and the Articles of Association. We unanimously agreed to this change in accounting policy and submitted it to the Board for consideration.

The announcement is hereby made.

Shandong Tianyue Advanced Technology Co., Ltd

board of directors

December 28, 2024