Nanjing Guobo Electronics Co., Ltd. and China Electronic Technology Finance Co., Ltd.

Ongoing Risk Assessment Report for Conducting Financial Services Business

According to the requirements of the "Notice on Regulating Business Transactions between Listed Companies and Enterprise Group Finance Companies" (Zheng Jian Fa [2022] No. 48), Nanjing Guobo Electronics Co., Ltd. (hereinafter referred to as "Guobo Electronics") passed the inspection of China Electronic Technology Finance Co., Ltd. (hereinafter referred to as "Finance Company") "Financial License", "Enterprise Legal Person Business License" and other documents, we have also reviewed the financial reports of the finance company, including the balance sheet, profit statement, cash flow statement, etc., and have continuously evaluated the business qualifications, business and risk status of the finance company, and the risk assessment is reported as follows:

Basic information of 1. finance company

China Electronic Technology Finance Co., Ltd. is a non-bank financial institution approved by the Bank of China Insurance Regulatory Commission (financial license number: L0167H211000001) and registered with the Beijing Municipal Market Supervision Administration (unified social credit code: 91110000717834993R). The supervision and management of the China Banking and Insurance Regulatory Commission.

Company: China Electronic Technology Finance Co., Ltd.

Registered Address: Floor 1, 3-8, 101, Building 2, Yard 30, Jinfu Road, Shijingshan District, Beijing

Legal Representative: Yang Zhijun

Registered capital: 5,800 million RMB

Unified social credit code: 91110000717834993R

Financial Licensee Code: L0167H211000001

Date of Establishment: December 14, 2012

Business scope (including the following local and foreign currency businesses): handle financial and financing consulting, credit verification and related consulting and agency businesses for member units; Assist member units to realize the receipt and payment of transaction funds; Handle entrusted loans between member units; Handle bill acceptance and discount to member units; Handle internal transfer settlement between member units and corresponding settlement and clearing scheme design; Absorb deposits from member units; loans to member units; engage in interbank lending; underwrite corporate bonds of member units; investment in securities; consumer credit and buyer's credit for products of member units. (Market entities independently choose business projects and carry out business activities in accordance with the law; projects that must be approved in accordance with the law shall carry out business activities in accordance with the approved content after approval by relevant departments; they shall not engage in business activities that are prohibited and restricted by the national and municipal industrial policies.)

The basic situation of the internal control of the 2. finance company.

(I) control environment

According to the requirements of corporate governance of modern financial enterprises, the financial company establishes the shareholders' meeting, the board of directors and the board of supervisors in accordance with the principle of "three separate meetings, effective control and coordinated development. The Board of Directors consists of the Strategy, Budget and Asset Management Committee, the Audit Committee, the Internal Control and Risk Management Committee, and the Nomination, Compensation and Evaluation Management Committee. The management is the executive body of the company, which is responsible for carrying out the daily operation and management of the company and accepting the supervision and management of the party organization, the board of directors and the board of supervisors. The company has set up an organizational structure in accordance with the principle of mutual checks and balances between the decision-making system, the execution system, and the supervision and feedback system. A total of 12 front, middle and back-office departments, including the treasurer department, financial service center, fund management department, investment department, fund settlement department, risk management department, comprehensive management department, human resources department, party and mass work department, finance department, information technology department, audit and discipline inspection and supervision department, have been set up.

Identification and Assessment of (II) Risk

The financial company has compiled a series of internal control systems and established a risk management system. Each department has established a risk assessment system and a project responsibility management system within its scope of responsibility, and formulated its own risk control system and standardized operation procedures according to the characteristics of each business., Operating standards and risk prevention measures, the responsibilities of various departments are separated and supervised each other, and various risks in the operation are predicted, evaluated and controlled. The financial company implements an internal audit supervision system, establishes an internal audit department responsible to the board of directors, establishes internal audit management methods and operating procedures, and conducts internal audit and supervision of the economic activities of the company and its subordinate units.

(III) control activities

1. Credit business management

The object of the financial company's loan is limited to the member units of China Electronics Technology Group Co., Ltd. According to the different characteristics of various businesses, the financial company has formulated the "Comprehensive Credit Management Measures", "Credit Business Guarantee Management Measures", "Working Capital Loan Management Measures", "Fixed Asset Loan Management Measures", "Domestic M & A Loan Management Measures", "Commercial Bill Business Management Measures" and "Post-loan Management Implementation Rules" and other systems and implementation rules have standardized various business operation procedures.

The financial company has made unified and clear regulations on different credit guarantee processes and management requirements such as guarantee guarantee, mortgage guarantee, pledge guarantee and deposit, and follows the principles of equality, voluntariness, fairness and good faith in handling guarantees; commercial bill acceptance and discount business are handled in accordance with the principles of "unified credit, separation of examination and loan, hierarchical examination and approval, and clear responsibilities and rights.

2. Money management?

The financial company strictly abides by the rules and regulations of the China Banking and Insurance Regulatory Commission, the People's Bank of China and other relevant regulatory authorities, and formulates the "Fund Management Measures", "Financial Interbank Credit Management Measures", "Bank Account Management Measures" and other basic systems related to fund management, as well as the "Interbank Funding Business Management Measures", "Interbank Market Debt Pledged Repurchase Management Measures" and other business management measures, clear capital-related business capital principles, decision-making process, operating norms and other requirements, strictly regulate the financial company's fund management.

The company's fund management adheres to the principles of planning, unity, safety, liquidity and efficiency. Planning refers to the planned management of the company's fund raising and use. Unity refers to the unified management and dispatch of funds according to the company's fund plan. Safety refers to ensuring the safety of deposit, settlement and delivery of funds. Liquidity refers to timely meeting the company's reasonable demand for funds and using living funds, reasonable allocation; efficiency means that colleges and universities standardize the operation of funds, reduce the cost of capital, and actively strive for reasonable economic benefits for the company.

3. Investment Business Management

The finance company has formulated investment business management systems such as the Measures for the Administration of Investment in Financial Securities, the Measures for the Administration of Investment in Public Funds and the Measures for the Administration of Bond Business. The investment business mainly includes bond fund investment, high-grade bond investment and government bond reverse repurchase business. The securities investment business of finance companies follows the following principles:

(1) The principle of standardizing operation and preventing risks. The development of securities investment business should strictly abide by relevant laws, regulations, and system regulations, follow the requirements of "checks and balances, independence, and timeliness", and carefully select and standardize operations.

(2) the principle of teamwork and division of labor. Emphasize the overall sense of cooperation of the investment team, and at the same time clarify the main person in charge of each securities investment business, responsible for research and coordination in the business area, and make investment recommendations.

4. Settlement business

The finance company has formulated the "Administrative Measures for Settlement Accounts", "Administrative Measures for Deposit Business", "Administrative Measures for Settlement Business" and other relevant systems and operating rules for fund settlement business, which clearly stipulate the fund transfer transactions such as the purchase and sale of commodities and the transfer of funds by member units. Finance companies carry out settlement business in accordance with the following principles: abide by credit, performance payment; Whose money into whose account, who controls; The company does not advance money; Access is free and confidential for customers; Deposit before use, not overdraft.

5. Information Systems Management

The finance company has formulated the Measures for the Management of Information System Construction, the Measures for the Management of Information System Operation and Maintenance, and the Measures for the Management of Information System Operation and Maintenance.

"Outsourcing Service Management Measures" and other systems, standardize the construction and management of core business systems, clarify system operation and maintenance procedures and responsibilities, reduce technology outsourcing risks, ensure safe, stable and efficient operation of the system, and make the system better serve and enterprise production Operation and management. The financial company's core business systems are developed and delivered by outsourced vendors, who provide follow-up software service support. As of the release of the report, the financial company's core business system is operating normally, and cooperation with outsourcing vendors is stable.

6. Audit audit management.

The finance company has formulated the "Audit Management Measures", "Internal Control Evaluation Management Measures" and other internal control audit related systems, improved the internal audit system, clarified the responsibilities and authority of internal audit, and standardized internal audit work. The objectives of internal audit are: to promote the implementation of relevant national economic and financial laws and regulations, guidelines and policies, regulations of regulatory agencies, regulations of group companies and internal systems of the company; to promote the company to establish and continuously improve effective risk management, internal control compliance and corporate governance structure; to urge relevant audit objects to perform their duties effectively and jointly achieve the company's strategic objectives.

Overall evaluation of (IV) internal control

By establishing an organizational structure with reasonable division of labor, clear responsibilities and clear reporting relationships, the finance company clarifies the responsibilities and obligations of the internal control management executive, construction and supervisory bodies to ensure clear internal control management responsibilities and clear authority to ensure the effective operation of the internal control system. At present, the finance company has established 184 systems in 13 categories, forming a set of scientific, reasonable, effective and applicable internal control system to complete the full coverage of the company's various businesses and management, and ensure that the company has activities and management, and there are systems where there are management, and strict implementation of systems where there are systems.

Operation Management and Risk Management of 3. Finance Company

(I) Operation

As of December 31, 2022, the total assets of the finance company were 108.655 billion yuan, and the owner's equity

For 11.102 billion yuan; In 2022, the finance company realized operating income of 2.475 billion yuan and net profit of 13.02 yuan.

Billions of dollars.

(II) management

Since its establishment, the Finance Company has regulated its operations and strengthened its internal management in strict accordance with the the People's Republic of China Company Law, the the People's Republic of China Banking Supervision and Administration Law, the Measures for the Administration of Enterprise Group Finance Companies, the Enterprise Accounting Standards and the relevant national financial laws and regulations and the articles of association of the Finance Company.

(III) regulatory indicators

According to the newly revised Measures for the Administration of Enterprise Group Finance Companies (effective from November 13, 2022),

The financial company's regulatory indicators are in line with the requirements, as shown in the table below:

Table: Table of main risk indicators of financial companies.

Indicator Name Regulatory Limit December 31, 2022 Indicator Value

Capital adequacy ratio ≥ 10% 18.54

Liquidity ratio ≥ 25% 72.22%

Sum of loan balance/deposit balance and paid-in capital ≤ 80 per cent 33.27 per cent

Total non-group liabilities/net capital ≤ 100 0.00%

Note acceptance balance/total assets ≤ 15 per cent 4.70 per cent

Bill acceptance balanceAmount/interbank balance ≤ 300 per cent 16.35 per cent

Sum of bill acceptance and rediscount/net capital ≤ 100 59.45%

Acceptance margin deposits/total deposits ≤ 10 per cent 0.29 per cent

Total investment/net capital ≤ 70 per cent 54.93 per cent

Net fixed assets/net capital ≤ 20 per cent 2.32 per cent

4. the deposit and loan situation of Guobo Electronics in the finance company.

Due to the consideration of financial control and transaction rationality, Guobo Electronics and Finance Company limit the transaction amount of deposit services for both parties as follows. During the validity period of financial services, the daily maximum deposit balance (including accrued interest) deposited by Guobo Electronics to Finance Company shall not be higher than 50% (inclusive) of the owner's equity in the consolidated statement of Guobo Electronics in the previous year.

During the validity period of financial services, the recyclable comprehensive credit line agreed between Guobo Electronics and the finance company shall not exceed RMB 500 million for purposes including, but not limited to, loans, bill acceptance, bill discounting, and insurance.

letters, letters of credit and other business.

As of December 31, 2022, Guobo Electronics had a loan balance of $0 billion in Finance

The balance of the company's deposit is 1,041.1926 million yuan.

5. Risk Assessment Comments

Based on the above analysis and judgment, Guobo Electronics believes that the financial company has a legal and effective "financial license" and "business license of enterprise legal person", and has not found that the financial company violates the provisions of the measures for the administration of enterprise group financial companies promulgated by the China Banking and Insurance Regulatory Commission. The financial company is in good operating condition, all businesses can be carried out in strict accordance with the internal control system and process, and the internal control system is relatively perfect and effective; all regulatory indicators are in line with the requirements of regulatory agencies; business operations are legal and compliant, and the management system is healthy.

All, the risk management is effective, and the risk control system of funds, credit, investment, inspection and information management related to the financial statements has not found any major defects.

The risks of related deposits, loans and other financial business between Guobo Electronics and finance companies can be controlled.