Important Content Reminder
- This correction of prior period accounting errors mainly involves the need to re-confirm certain revenues for the company’s former subsidiary, Jiangsu Baoxin Smart Energy Co., Ltd. (hereinafter referred to as "Baoxin Smart Energy") for the fiscal years 2022 and 2023. The company will use the retrospective restatement method to correct this revenue, adjusting the consolidated financial statements and notes from 2022 to 2024 accordingly. The company has completed the 100% transfer of Baoxin Smart Energy in 2024 and will no longer include it in the consolidated financial statements. For details on the transfer, please refer to the announcement titled "Announcement on the Sale of 100% Equity of a Wholly-Owned Subsidiary" published by the company in the Shanghai Securities Journal, Securities Times, Securities Daily, China Securities Journal, and on the Giant Tide Information Network (www.cninfo.com.cn) (Announcement No. 2024-099). This correction of prior period accounting errors has been approved by the company's audit committee and board of directors, confirmed by the auditing agency, and is pending submission for shareholder meeting approval. Jiangsu Baoxin Technology Co., Ltd. (hereinafter referred to as "the company" or "Baoxin Technology") held the 27th meeting of the sixth board of directors on April 28, 2026, where the proposal on the correction of prior period accounting errors and retrospective adjustments was approved. This matter still requires submission for review at the company's 2025 annual general meeting. According to relevant regulations including "Enterprise Accounting Standard No. 14 - Revenue," "Enterprise Accounting Standard No. 28 - Changes in Accounting Policies, Accounting Estimates and Corrections of Errors," "Rules for Information Disclosure and Reporting of Publicly Issued Securities No. 19 - Corrections of Financial Information and Related Disclosures," and "Shenzhen Stock Exchange Listing Rules," the company has corrected accounting errors for the fiscal years 2022 and 2023, which will impact the financial statements for 2022, 2023, and 2024. The following is an explanation of the correction of prior period accounting errors:
I. Reasons for the Correction of Prior Period Accounting Errors
The company and all members of the board of directors guarantee that the content of the information disclosure is true, accurate, and complete, with no false records, misleading statements, or significant omissions.
The company, during a self-examination of litigation disputes with customers, reviewed the actual performance of contracts and related accounting treatments, and found that certain operating revenues for 2022 and 2023 needed adjustments, which will also affect the 2024 financial statements and require simultaneous adjustments. This accounting error correction has been audited, as detailed in the special verification report issued by Zhengdan Zhiyuan (Shenzhen) Accounting Firm on the same day.
II. Specifics and Impact of the Accounting Error Correction
The company has corrected the accounting errors for 2022 and 2023 using the retrospective restatement method, mainly involving the consolidated balance sheet and consolidated income statement as follows: