Zhitong Finance App News, China Shipbuilding Emergency Response (300527.SZ) announced that on December 20, 2023, the company received the “Decision of the Hubei Securities Regulatory Bureau on Issuing Warning Letter Measures against China Shipbuilding Heavy Industry Group Emergency Warning and Rescue Equipment Co., Ltd., Tang Yong, Wang Xiaofeng, and Li Yingchang” issued by the Hubei Regulatory Bureau of the China Securities Regulatory Commission on December 20, 2023. The details are as follows:

China Shipbuilding Industry Group Emergency Warning and Rescue Equipment Co., Ltd., Tang Yong, Wang Xiaofeng, Li Yingchang: During the on-site inspection, our bureau discovered that China Shipbuilding Heavy Industry Group Emergency Warning and Rescue Equipment Co., Ltd. (hereinafter referred to as China Shipbuilding Emergency Response or Company) had the following irregularities: (1) In terms of financial accounting 1. Revenue recognition was inaccurate. The company signed 8 sets of emergency equipment product sales contracts in 2021, only 2 sets were inspected and delivered in 2022, and 6 sets did not obtain acceptance documents. The company all confirmed revenue in 2022; the company signed sales contracts for multiple batches of emergency equipment in 2021, and some of these products were only delivered in 2023, and the company all confirmed revenue in 2022. 2. Bad debt calculation is inaccurate. The company did not take individual charges for some of the receivables in accordance with the company's evaluation resolution; the company misclassified some receivables, and classified the receivables receivable within 1 year to 1-2 years for bad debt calculation. (2) Information disclosure aspects 1. Dealings between related parties have failed to comply with review procedures and information disclosure obligations. Hubei Xingzhou Industrial Co., Ltd. (hereinafter referred to as Xingzhou Industrial) is a wholly-owned subsidiary of China Shipbuilding Industry Group Wuhan Shipbuilding Industry Co., Ltd., the second largest shareholder of the company. The company had 18 million yuan in other payments due to Xingzhou Industrial in June 2022, and the company did not disclose the funding situation as a related transaction to carry out review procedures and information; China Shipbuilding Heavy Industry Group Emergency Technology Co., Ltd. (hereinafter referred to as Emergency Technology) is a holding subsidiary of the company's controlling shareholder. The company holds 42.3% of its shares. Since the establishment of Emergency Technology, the company has been paying social security expenses for its employees, and Emergency Technology has repaid the payment amount in September 2023. 2. The accounting policy for individual accruals of accounts receivable was not disclosed. In calculating bad accounts receivable, the company actually adopted a separate accrual method for some receivables, but the company did not disclose this situation in its 2022 annual report.

China Shipbuilding's emergency actions violate Article 4 and 12 of “Corporate Accounting Standard No. 14 - Revenue (2017 Revision)”, Article 16 (11) of the “Corporate Information Disclosure and Reporting Rules No. 15 for Publicly Issued Securities - General Provisions on Financial Reporting (2014 Revision)”, and Article 3 (1) of the “Administrative Measures on Information Disclosure of Listed Companies (2021 Revision)”. Tang Yong was the chairman at the time, Wang Xiaofeng as the then general manager and current chairman, and Li Yingchang as the chief accountant and board secretary. The relevant personnel violated the provisions of sections 4 and 51 of the “Administrative Measures on Information Disclosure of Listed Companies (2021 Revision)” (Securities Regulatory Commission Order No. 182). According to the relevant provisions of section 52 of the “Administrative Measures on Information Disclosure of Listed Companies (2021 Revision)” (Order No. 182 of the Securities Regulatory Commission), our bureau decided to take supervisory measures to issue warning letters against China Shipbuilding Emergency Response, Tang Yong, Wang Xiaofeng, and Li Yingchang, and record them in the securities and futures market integrity file. The company and relevant responsible persons should fully learn the lessons learned, strengthen the study of securities laws and regulations, strictly abide by capital market laws and regulations, prevent the recurrence of such acts, and submit a rectification report to our bureau within 30 days. Our bureau will decide to take further measures based on the next inspection situation.