Stock code: 301330
SUSTAINABILITY REPORT
Website: www.zkteco.com
Phone: 0769-82618868
Address: No. 32 Pingshan Industrial Road Tangxia Town Dongguan
Guangdong ChinaCONTENTS
01 Compliance Governance: Excellent Quality Building the Foundation Ensuring Information Introduction to the Report 01 for Development 03 Security Index 125
About the Report 01 Feedback 127
Address by General Manager 03 Governance system 31 Innovation-driven 59
About ZKTeco Compliant operations 34 Product and service safety and quality 7005
Sustainable Development Protection of rights and interests of investors19 36
Data security and customer privacy protection 83
Management Commercial conduct 38 Supply chain security 93
02 Green Operations: People-oriented Safeguarding the Creating a Ecological Future 04 Harmonious Society
101
Responding to climate change 43 Protection of employee rights and interests
111
Resource management 46 Employee training and development
Environmental management Occupational health and safety 50 116
Social contribution 12101 SUSTAINABILITY REPORT 2024 02
Introduction to
the Report
About the Report
Introduction Source
This report is the second Sustainable Development Report (Environmental The data in this report is sourced from the original internal ledger company documents and
Social and Governance (ESG) Report) released by ZKTECO CO. LTD. This report audited statements of ZKTeco and some financial data is sourced from the Company's 2024
based on the principles of objectivity standardization transparency and annual report. Unless otherwise specified the monetary amounts involved in this report are
comprehensiveness provides a detailed introduction to the practical measures and measured in RMB.achievements as well as relevant information about sustainable development of
ZKTeco and its branches and subsidiaries in environmental social and governance
(ESG) in 2024.
Names
Scope For ease of expression and reading "ZKTeco" "Company" and "We" all refer to ZKTECO CO.LTD. Branches subsidiaries and special nouns can be found in the definitions.Time frame: This report period is from January 1 to December 31 2024 (hereinafter
referred to as the "reporting period"). In order to enhance the comparability of the report Terms Definitions
some content may be appropriately traced back to the reports of previous years or
contain forward-looking descriptions. Tangxia Branch Dongguan Tangxia Branch of ZKTECO CO. LTD.Organizational scope: This report is based on "ZKTECO CO. LTD." including its Xiamen ZKTeco Xiamen ZKTeco Co. Ltd.branches and subsidiaries. Unless otherwise specified the scope of this report is
consistent with the Company's annual report. Guangdong ZKTeco ZKTeco (Guangdong) Co. Ltd.Shenzhen ZKTeco Shenzhen ZKTeco Biometric Identification Technology Co. Ltd.Basis BioCV Biometrics & Computer Vision
This report is prepared in accordance with the "Shenzhen Stock Exchange Guideline
No. 17 on Self Regulation of Listed Companies - Sustainable Development Report
(Trial)" and "Shenzhen Stock Exchange Guideline No. 2 on Self Regulation of Listed
Companies - Normative Operation of Listed Companies on the Growth Enterprise Acquisition
Board". Meanwhile the preparation of this report referred to the Global Reporting
Initiative (GRI) Standards (2021 Edition) (referred to as "GRI Standards") and the This report can be viewed and downloaded on the official website of the Company
United Nations Sustainable Development Goals (SDGs). (www.zkteco.com) the website of Shenzhen Stock Exchange (www.szse.cn) and CNINFO
(www.cninfo.com.cn).03 SUSTAINABILITY REPORT 2024 04
Address by General Manager
In 2024 the global digital transformation process continues to advance and the
development of artificial intelligence (AI) technology enters a new phase. ZKTeco Technology Leadership for Intelligent Future Creation
while fostering technological innovation and driving business growth consistently ZKTeco is always committed to the mission of "AI cognition making spaces smarter and
integrates the principles of sustainable development into its corporate strategy. As a the world better" and has been deeply engaged in core areas such as smart space
leader in multimodal BioCV technology we are not only dedicated to creating a safer smart office digital identity authentication and smart business. Over the past year we
and smarter future through technological innovation but also actively fulfilling our have continuously advanced the deep integration of multimodal BioCV technology with
environmental social and governance responsibilities. We firmly believe that true AI IoT and other digital technologies. Through university-enterprise cooperation to
innovation should serve people and coexist harmoniously with the environment and society. build key laboratories and joint research on major scientific projects we have
continuously enhanced technological innovation capabilities and competitive
Governance as the Foundation Compliance for Far-Reaching advantages contributing to the high-quality development of the Company. In terms of
product quality and safety we have established a strict full-process management system
Over the past year ZKTeco has continuously improved its modern corporate governance adhering to the highest standards from R&D to service with a particular emphasis on
structure of "three boards and one layer" and optimized decision-making mechanisms data security and customer privacy protection which is the lifeline of the enterprise's
and operational processes ensuring the scientificity and effectiveness of corporate development.governance. In terms of compliance operations we have strengthened the internal
control system adhered to the compliance of related party transactions and tax
compliance and integrated compliance requirements into every aspect of business Talent-oriented Along with Responsibilities
operations. Meanwhile we attach great importance to the protection of rights and Over the past year ZKTeco has continuously improved the system for protection of
interests of investors. By improving the information disclosure mechanism employee rights and interests creating an equal and inclusive growth environment for
strengthening investor communication and maintaining a stable shareholder return every employee from fair recruitment to salary and benefits from democratic
policy we effectively safeguard the rights and interests of investors. In terms of business management to career development. We particularly emphasize the protection of
conduct standards we adhere to the principle of honest operation strictly enforce anti- women's rights and occupational health and safety making the workplace a home where
commercial bribery anti-corruption and anti-unfair competition policies and employees can work with peace of mind. Meanwhile we actively fulfill social
incorporate integrity and compliance requirements throughout the business process. responsibilities conducting charitable donations and public welfare activities
globally promoting sustainable community development through diverse volunteer actions
Green Empowerment for Sustainable Ecosystem and assisting the healthy growth of the next generation.ZKTeco integrates the concept of green and low-carbon into the very core of its Looking forward to 2025 ZKTeco will continue to deepen technological R&D optimize
business development. We understand that addressing climate change and the corporate governance system promote green and low-carbon operations and
practicing sustainable development is not only a responsibility but also an inevitable actively fulfill social responsibilities. We are filled with confidence and eagerly
choice for the future. Over the past year we have continuously optimized the resource anticipate collaborating closely with partners from diverse sectors to collectively forge a
management system enhanced operational efficiency and reduced environmental future that is empowered by technology and guided by responsibility enriching the lives
footprints through energy conservation and consumption reduction water resource of more individuals through the warmth of innovation.recycling and green material management. In the R&D process we adhere to green
design concepts promoting the low-carbonization of the entire product life cycle. In daily General Manager Jin Hairong
operations we promote green office practices to reduce resource waste. Meanwhile
we strictly fulfill environmental compliance obligations strengthen pollutant emission
control improve waste management mechanisms and build a solid environmental
safety defense line through measures such as emergency drills for hazardous chemical
leaks.05 SUSTAINABILITY REPORT 2024 06
About ZKTeco
About Us
Company profile In light of the rapid advancements characterizing the intelligent era the Company has officially unveiled its new mission and vision with its robust AI cognitive technology serving as the core
driving force. Based on this the Company comprehensively upgraded its business system and
ZKTECO CO. LTD. (stock code: 301330) was established in 2007 and listed on the Shenzhen built four strategic sectors: smart space smart office digital identity authentication and smart
Stock Exchange in 2022. The Company is headquartered in Dongguan City Guangdong Province. business. This significant initiative marks the official commencement of the Company's new
As an internationally recognized innovative enterprise the Company has consistently committed journey to redefine its value system. It will continuously explore the realm of intelligence
itself to the domains of smart space smart office digital identity authentication and smart striving to create enhanced value for customers and set new trends within the industry.business. We provide advanced smart terminals industry-specific application software and In addition in response to the growing market demands for smart homes and elderly care the
platforms equipped with object detection as well as identity recognition and verification Company is actively expanding into these sectors by leveraging its technological expertise
capabilities tailored for relevant sectors. and marketing service capabilities. This strategic initiative aims to transition its business
towards greater intelligence scenario-based solutions and global outreach.07 SUSTAINABILITY REPORT 2024 08
Business introduction
Smart space
The smart space business segment leverages AI cognitive space
computing technology and multi-dimensional perception capabilities
to transcend the limitations of traditional entrance and exit
management. This innovation enables comprehensive awareness and
intelligent enhancement of people vehicles objects and the
environment. For applications in enterprise parks office buildings
educational institutions healthcare facilities and communities we
provide solutions for traffic optimization energy management data
analytics and autonomous spatial decision-making.Smart office
In the smart office segment the Company is dedicated to enhancing
work efficiency and enjoyment. This business segment which focuses
on multimodal BioCV technology and IoT perception encompasses
various scenarios including attendance tracking visitor management
meetings and consumption monitoring. It offers intelligent solutions
for time management security oversight and operational
optimization tailored for enterprise and institutional clients. This
segment integrates AI-driven intelligent agents with cloud technology to
develop advanced time management solutions and establish a
comprehensive smart office ecosystem.Digital identity authentication
The Company's digital identity authentication business seamlessly
integrates multimodal BioCV advanced large models and
blockchain technology to establish a precise secure and user-friendly
identity authentication system laying a robust foundation of trust for the
digital world. By harnessing the distinctiveness of biometric features the
advanced deep learning capabilities of large models and the
decentralized and immutable nature of blockchain technology the
Company's digital identity authentication services can ensure both precise
identity verification and robust data security.Smart business
The Company's smart business segment propelled by multimodal
models emphasizes the integration of "AI + digital signage" within the
general retail and catering sectors. This segment supports traditional
businesses in their transition towards intelligent ecosystems. It offers IoT
infrastructure digital solutions and operational services thereby
establishing a new type of borderless retail platform that is comprehensive
scenario-inclusive and fully integrated across the supply chain. The
products and solutions of this business segment cover digital
marketing screens electronic price tags AI shelves smart shopping carts
as well as creative content intelligent customer service digital
marketing and digital stores.09 SUSTAINABILITY REPORT 2024 10
Development History
2018
2023
2007-2010 The Company released multimodal
recognition technology for visible
In 2007 ZKTeco was officially light facial recognition and 2021
ZKTeco started the digital
fingerprint recognition a series of transformation of enterprises with core established and entered the
international market. technologies for human certificate
packages such as SAP and ERP
Joining hands with Amazon
verification and international systems officially launched and put Cloud Technology to initiate
1998-2002 into operation. At the same time the 2011-2012 versions of license plate recognition digital transformation of
algorithms in Thailand. Company actively built a digital enterprises the Company has ecosystem that integrates upstream and
The founding team has successively Introduced finger vein algorithms 2016 been awarded the A&S 2022 Top downstream and cross industry
launched independently developed and hybrid biometrics algorithms. 2019 50 Global Security Companies integration established an ecological
fingerprint recognition algorithms Upgraded versions of visible light facial (12th place) and the A&S 2022 innovation fund accelerated product
and embedded fingerprint 2013-2014 recognition algorithms and multimodal The Company upgraded multimodal AIOT Global Top 50. incubation and assisted in the
recognition systems. recognition algorithms were released. BioCV algorithm; honored as one of construction of the digital industry
Simultaneously the team has Launched the multimodal palm the top ten access control brands in 2022 ecosystem.researched the application of facial recognition algorithm. 2017 China's public safety product
recognition algorithms and industry. On August 17 2022 ZKTeco
fingerprint recognition technology 2015 The intelligent license plate recognition was listed on the ChiNext Market
in identity cards. system intelligent visual perception system 2020 of Shenzhen Stock Exchange.
2024
The Company was awarded the
Visible light facial recognition and fingerprint capture device have passed
international certification. Introduced institutional investors 2022 Top 50 Global Security The NGTeco sub-brand was launched algorithms and palm recognition such as Walden International and Companies (12th place) by asmag in 2024. The Company was awarded
2003-2006 algorithms were released and Oriental Fortune Capital. Studied a and the 2022 AIOT Global Top the 2024 Top 50 Global Security time and safety management series of epidemic prevention 50. Companies (15th place) by asmag and
platforms such as Baiaoruida were technologies and released epidemic the "Top 50 Innovation" in 2024
In 2003 the founding team launched. prevention products. Released the Global Industry Digital Innovation
launched algorithms successfully multimodal palm fingerprint and Ranking by asmag.facial recognition and subsequently face hybrid recognition technology.continuously upgraded the
embedded fingerprint development
platform and facial recognition
algorithms.Early stages of entrepreneurship Biometrics device manufacturer Provider of biometric solutions Pioneer of multimodal "computer vision and biometrics" (BioCV)
(From 1998 to 2006) (From 2007 to 2012) (From 2012 to 2018) (From 2019 to now)
The Company was officially established (2007).11 SUSTAINABILITY REPORT 2024 12
Corporate culture
Core Values Responsibility
Responsibility is an important indicator for
ZKTeco to measure the spiritual quality of every
AI cognition makes spaces individual and it will also run through our mutual
smarter and the world better. A global leader in smart space evolution services commitments to society customers partners
employees shareholders and other stakeholders
in social relationships.Integrity
Integrity and honesty are the most important
and common values guiding the self-
discipline of enterprise civilization upheld by
ZKTeco and are the cornerstone of all virtues.Integrity means being able to adhere to the right
Our Mission Our Vision path and have the courage to admit mistakes. Seeking truthIntegrity also means we must adhere to our beliefs.The significance of seeking truth lies in being
down-to-earth and pragmatic in one's career. The
basic connotation of seeking truth is to respect
science and pursue truth. Fundamentally speaking
seeking truth is to start from reality boldly
Excellence adhere to truth and science and fearlessly correct
errors.ZKTeco thinks excellence as becoming a
Our Purpose world-class enterprise innovating and serving as a
world-class enterprise. Continuously striving to
become an outstanding enterprise is our
interpretation of the process of excellence.Perfection and detail are the best practices of
excellence.Everything is customer-oriented with
quality as the standard and strivers as the
foundation continuously creating value.13 SUSTAINABILITY REPORT 2024 14
Major events in 2024
March June
The Company hosted a partner The Company hosted a new
conference titled "Reach for the product launch event for summer
Heights Embrace the Breadth" which 2024 unveiling six
brought together a diverse group of innovative products that set
both new and longstanding partners the stage for enterprises
and industry friends in an open and and space operations to
collaborative atmosphere. In this achieve enhanced efficiency
digital age we are committed to greater precision and advanced
joining forces to achieve new heights digital intelligence.of innovation and
collaboratively create added value for
the industry. September
The 2024 Digital
Economy Industry Connection
2024 Conference was convened at
May the ZKTeco Building in
Xiamen further facilitating
The Xiamen Artificial in-depth exchanges and
Intelligence Industry Association in collaborations between
collaboration with ZKTeco has Xiamen and IoT
jointly initiated a salon event organizations and enterprises
focused on the innovation and nationwide. Together
application of multimodal BioCV participants explored the
technology. This event aims to deepen emerging opportunities within
understanding of multimodal the digital economy
BioCV technological advancements and collectively endeavored
and collaboratively explore to establish a new
the development trends of industrial ecosystem.digitalization and intelligence within December
the industry. Additionally it seeks The "Project Pangu" global
to investigate innovative applications promotion campaign was
across various scenarios including launched in Shenzhen
smart entrances and exits smart Dongguan Xiamen and 30
identity verification smart office other locations where
and smart retail. The event also subsidiaries and offices are
aspires to generate new ideas for located across China. The event
industrial ecosystem cooperation provided an in-depth analysis
while creating enhanced development of the implementation details
opportunities. of the "Project Pangu" and
issued a call to action to
passionate and exploratory
ZKTeco staff.15 SUSTAINABILITY REPORT 2024 16
Honors and awards
The Company has been listed as one of the "Top 50 Global Security Companies" by asmag for five consecutive years from
2020 to 2024. In 2024 it ranked 15th on the list and was awarded awards such as "Top 50 Innovation" "Top 10 Brands in
Smart Security" "Top 10 Brands in Smart Transportation" "Top 10 Brands in Smart Education" "Top 10 Brands
Intelligent Manufacturing" and "Top 10 Brands in Smart Buildings" in 2024 Global Industry Digital Innovation
Ranking by asmag. It was selected by the organizing committee and relevant institutions of the DC World as the "2024
DC World - Top Enterprise of the DC World Awards" and the "World Digital City Construction Contribution Award"
and awarded the "Honor Security Excellent Solution Award - ZKTeco Human Certificate Verification and Identity
Authentication Solution" "Honor Security Excellent Solution Award - ZKTeco Integrated Charging and Parking
Solution" and other awards. Meanwhile the zFace series facial and fingerprint access control terminals and the ZKTeco
X-ray security inspection equipment were awarded as the "Top 10 New Products" in China's security industry for 2024.It has been awarded the "2024 Outstanding Security Industry Solution - Smart Park Solution" "2024 Pioneer of
Chinese Security Enterprises Going Global" "China Security 'Artificial Intelligence+' Initiative & 2024 AIIA 'AI+
Security' - Typical Case" and other awards by the CHINA SECURITY & PROTECTION INDUSTRY
ASSOCIATION (CSPIA). It has been awarded the "Outstanding IoT Solution Award" and "Leading Brand in
Access Control" by the organizing committee of the 2024 China IoT Industry Conference and the 21st Huicong Brand
Festival. It won the third place in the "2024 Top 10 Access Control Brands Award" and the "2024 Top 10 Smart
Security Brands Award" by China Intelligent Building and other entities. It ranked first on the "Top 15 Access Control
Brands" list by the Latin American security technology media SecuriTIC in 2023. In addition since 2016 the Company
has been awarded the title of "Top 500 Manufacturing Enterprises in Guangdong Province" by Guangdong
Manufacturers Association and other entities for 9 consecutive years. In 2024 the Company joined the China
Construction Industry Association and the Fujian Society of Artificial Intelligence Science and Education (FSAISE).Guangdong Zkteco has been rated as a "SRDI small and medium-sized enterprise (SME)" by the Department of Industry
and Information Technology of Guangdong Province.During the reporting period Guangdong ZKTeco has been recognized by the Department of Science and
Technology of Guangdong Province as the Guangdong Multimodal Computer Vision and Biometric Engineering
Technology Research Center XIAMEN ZKTECO has obtained the "ITSS Information Technology Service Standard
Compliance Certificate" issued by the China Electronics Standardization Association. The "ZKTeco Cloud IoT
Platform" (Minerva IoT Platform) developed by XIAMEN ZKTECO has been rated as "Information System Security
Level Protection Filing Certificate (Level 3)".17 SUSTAINABILITY REPORT 2024 18
Data of 2024
Society
Total R&D investment Proportion of Cumulative number Number of training sessions
Governance 215.471 R&D personnel of authorized patents on intellectual property RMB million 31.42 protection% 963 items
Number of training sessions on 2 sessions
Operating revenue Net profit attributable to Distribution of cash product quality
1.991 shareholders of listed companies dividends (including tax) Product quality training durationRMB billion 183.046 92 timesRMB million RMB 86.6023 million 156 hours
Proportion of female directors Proportion of independent directors Person-time of special training on
Overall customer satisfaction score
Person-time of responsible
29 43 customer complaint response% 95/100 marketing training% 80 person-times 521person-times
Number of participants in
Punishments for violations of Number of interactions with investors Number of investor calls received Number of training sessions
information security and
information disclosure on the "Easy to Interact" platform on information security and
privacy protection training
408 times privacy protection91 1210 persons0 times time 17times
Signing rate of the "Integrity
Total number of suppliers Agreement" among suppliers
304100%
Proportion of female employees Coverage rate of social insurance
Number of employees
Environment 36.20% 100% entitled to maternity leave
Employee return rate for maternity Employee training investment
77persons
Annual environmental objective Illegal and irregular incidents in Compliance rate of leave RMB 232.1 thousand Employee training coverage
achievement rate the environmental field wastewater disposal 100% rate
100% 0 100% Number of work safety accidents item 100%
Amount of investment in work safety 0
Environmental investment
Compliance disposal rate RMB 111.3 thousand
of hazardous waste RMB 119.8 thousand
100%19 SUSTAINABILITY REPORT 2024 20
Sustainable Development
Management
Sustainable development
governance system Sustainable development risk management
Risk and opportunity control procedures
Sustainable development concept
To cope with risks and identify opportunities we have established a comprehensive Risk and Opportunity
ZKTeco adheres to the concept of sustainable development striving to achieve a comprehensive Control Procedure which clarifies the risks and opportunities that the Company may face in the production and
improvement in environmental protection social responsibility and corporate governance while pursuing operation process as well as how to carry out risk identification and assessment. It is applicable to the
economic benefits. We continuously strive to achieve more significant results in environmental social planning and implementation of risk and opportunity response in activities products and services within the quality/
and corporate governance aspects thereby contributing to the sustainable development of society. HSF/environment/occupational health and safety management system. Additionally the Company clarifies the
responsibilities and authorities of each department in the risk and opportunity response process promoting
collaboration among departments to better prevent and manage risks and improve operational efficiency.Sustainable development management mechanism Risk identification
ZKTeco always places green low-carbon and high-quality development in an important The Company has established a systematic and effective risk assessment and identification system based on
position continuously promoting the improvement of the Company's environmental social and strategic objectives and development ideas combined with industry characteristics. According to control
corporate governance systems. We enhance the supervision and participation of the Board of objectives relevant functional departments of the Company extensively and continuously collect various external
Directors in the Company's sustainable development affairs incorporate sustainable development information including collecting historical data paying attention to changes that have occurred or will occur to
management into the Company's overall risk assessment and management system and promptly macroeconomic environment and policies competitors new technologies and products internal operations
share the Company's theoretical achievements and practical experience in sustainable development with etc. The collected information is promptly identified for risks achieving control over risks.the public. Meanwhile the Company continuously improves its governance structure to enhance the
operational level of sustainable development management better adapting to strategic development
needs and fully considering the impacts risks and opportunities related to sustainable development in the
process of strategy implementation risk management and major decision-making.21 SUSTAINABILITY REPORT 2024 22
Risk assessment Risk Categories Risk Name Countermeasures
The Company has evaluated the severity and frequency of identified risks and confirmed them based on the evaluation Dealer management risk Improve the management ability of dealers and maintain good relationships
criteria of the Risk and Opportunity Control Procedure. The confirmation of risk severity and frequency is used to with them.determine the risk coefficient and then the measures to be taken for the risk are determined based on the risk
coefficient.We differentiate the severity of risks into five severity levels: very severe severe more severe moderate and
mild. When evaluating the severity of risks the severity level is divided into five levels based on the violation Make a full assessment of the bad debt risk of accounts receivable take Risk of bad debt losses on
of laws regulations and product standards the severity of personal injury the amount of property damage targeted preventive measures in advance and reduce and control the accounts receivable credit risk of customers. Formulate a reasonable collection plan.the time of shutdown and the radiation range that affects the Company.In addition we define the frequency of risk as 5 levels: very rare rare occasional sometimes frequent. The frequency
of risk occurrence is quantitatively confirmed by evaluating the frequency of uncertain factors the frequency of
risk occurrence and the possible frequency of occurrence as the evaluation criteria for risk frequency.Maintain a good cooperative relationship with raw material suppliers and
Financial risk Inventory depreciation risk customers and reasonably arrange the inventory of raw materials and goods
Risk response in stock.Risk Categories Risk Name Countermeasures
Closely monitor exchange rate fluctuations and use hedging and other
Risk of RMB exchange rate exchange rate hedging tools in accordance with relevant company
fluctuations regulations to reduce the adverse effects of exchange rate
Continuously increase R&D investment in recent years insist on fluctuations on the Company's production and operation.developing and optimizing single and multimodal hybrid biometric
Market competition risk technologies continuously expand and enriching the types of
biometric products and services and pay more attention to the overall linkage
design of product software and hardware.Closely monitor the global financial markets and relevant exchange rate
Risk of exchange rate policies of mainstream countries conduct analysis and judgment fully
fluctuations in mainstream utilize hedging and other financial tools to actively manage exchange
Gain a deep understanding of local laws regulations and policy countries rate risks and reduce exchange rate risks caused by fluctuations.environment and implement diversified business strategies. The
Overseas business Company's management personnel and various mechanisms are
operational risks accelerating their adaptation to the requirements of global operations cross
Operational risk regional management and standardized operations.Actively enhance the analysis of market demand and technology
Tax compliance risks caused by promptly grasp the business development direction strengthen the The risk of raising funds to
transfer pricing arrangements Regularly hire professional consulting agencies to analyze and management and supervision of the progress of the raised fund invest in projects that do not
between various tax entities demonstrate the transfer pricing strategies involved in the operation of the investment projects and improve the efficiency and return rate of the raised yield expected returns
within the Company both Company and some overseas subsidiaries and issue special reports. fund utilization.domestically and internationally
Legal risks of the impact of Risks related to
industry regulatory policies Make timely and effective adjustments and responses to relevant raising funds to
related to personal information policies and regulations and strictly comply with relevant laws invest in projects
protection and data protection on regulations and industry norms.company operations
Actively pay attention to local political stability economic
Technology and
product Technology and product Keep up with technological trends increase R&D investment and focus on
development industrial policy adjustments exchange rate fluctuations and
innovation risks innovation risks customer needs. The risks of cross-border
other situations and prepare for and prevent potential risks in advance;
implementation of investment establish a smooth communication and reporting mechanism
projects both domestically and internationally to ensure the smooth operation
of the project.Management risks caused by Establish a sound enterprise management system enhance
Internal control future expansion of the management capabilities and ensure the competitiveness and
risk Company's scale reliability of the Company's products and services.23 SUSTAINABILITY REPORT 2024 24
Sustainable development goals (SDGs)
ZKTeco actively responds to the UN SDGs adheres to and strives to achieve the mission of "AI cognition makes spaces
smarter and the world better" creating greater value for customers and society. The Company has always placed green
low-carbon and high-quality development in an important position actively exploring the path of a new green
circular economy continuously improving the level of sustainable development management to fully fulfill their
responsibilities and contributing to the achievement of the UN SDGs.SDGs Content of SDGs Action of ZKTeco SDGs Content of SDGs Action of ZKTeco
No poverty Participate in social public Decent work and economic growth Promote sustained inclusive and sustainable Adhere to equal employment.Eradicate all forms of poverty throughout the welfare economic growth achieve full and productive Protect employee rights and
world Carry out volunteer activities employment and ensure decent work for all interests
Good health and well- Build resilient infrastructure promote inclusive Encourage R&D and
being Ensure a healthy lifestyle and enhance the well- Implement work safety Industry innovation and infrastructure and sustainable industrialization and foster innovation.being of people of all ages measures innovation Protect intellectual property
Protect occupational health rights
Responsible Attach great importance to
Quality education Ensure inclusive and equitable quality Provide smooth career consumption and production product quality management.education and promote lifelong learning development channels Ensure sustainable consumption and production Protect customer rights and
opportunities for all Improve the employee models interests
training mechanism
Promote energy conservation
and carbon reduction
Gender equality Achieve gender equality and empower all women Oppose gender discrimination Climate Actions Take urgent actions to address climate change and Promote green office practices
and girls Care for female employees its impacts Identify climate risks and
opportunities
Clean drinking Promote peaceful and inclusive societies Standardize corporate Peace justice and
water and sanitation strong institutions
facilities Persist in saving water. conducive to sustainable development governance
Ensure safe drinking water and sanitation Achieve compliant provide access to justice for all and build Adhere to compliant
facilities treatment of wastewater effective accountable and inclusive operations
institutions at all levels Adhere to business ethics
Economical and
applicable clean
energy Ensure universal access to affordable reliable Carry out energy Partnership to Strengthen implementation measures and Build a sustainable supply promote goal
and sustainable modern energy conservation and emission achievement revitalize the global partnership for chain
reduction actions sustainable development Adhere to responsible
procurement25 SUSTAINABILITY REPORT 2024 26
Stakeholder communication
The Company values the rights and interests of stakeholders such as investors customers employees and partners. In the process
of business development the Company actively establishes various effective communication channels with stakeholders
understands and timely responds to their expectations and demands.Shareholders and Government and Customers Partners Employees Community Media Industry associations
investors regulatory agencies
Investor hotline
Board of Shareholders Hotline
Company website and email Labor union and employee Public welfare and charity Public media
Information disclosure Information reporting Company website and email address congress Daily communication
address Official WeChat platform Seminar Volunteer services Publicity Platform media
Easy to Interact Work reporting Official WeChat platform Industry association activities
Daily business communication Work assessment and visits Questionnaires Meeting
Investor on-site research Questionnaires Daily business communication Questionnaires
Questionnaires Questionnaires Questionnaires
Performance briefing Questionnaires
Questionnaires
Training and development
Operating in accordance with Product quality and safety Public welfare and charity Correct information disclosure
Continuous and stable laws and regulations Adhering to business ethics Basic rights and interests Smooth communication channels
returns Supporting local development Optimizing customer service protection Community public welfare Maintaining good cooperation
Information transparency Honest cooperation Health and safety Promoting the development of the
and disclosure Protecting the environment Privacy and information Promoting regional Special interview industry
security Humanistic concern development
Ensure continuous and Conduct internal training
stable operations Strengthen Enhance corporate governance Provide high-quality products Carry out timely complete and
investor communication Build a responsible supply chain Ensure salary and benefits Carry out public welfare and accurate information disclosure. Actively participate in industry
Ensure transparent Accept regulatory reviews Provide high-quality services charity activities Strengthen daily communication exchanges
information disclosure Adhere to business ethics Carry out occupational health Give back to communities Participate in industry standard
Ensure continuous equity Persist in protecting the Respond to customer demands management Organize joint activities development
distribution environment Take employee care measures
Our Response Expectations and Demands Communication Channels Stakeholders27 SUSTAINABILITY REPORT 2024 28
Importance Issue Matrix of ZKTeco
Importance issue recognition
Environmental
compliance management Data security and customer
Protecting the legitimate rights privacy protection
In accordance with the "Shenzhen Stock Exchange Guideline No. 17 on Self Regulation of Listed Companies and interests of employees Energy Product and service
Pollutant emissions utilization safety and quality
- Sustainable Development Report (Trial)" (hereinafter referred to as the "Guideline") and closely integrating
the characteristics of the industry and the actual operation of the Company while also referring to the relevant Waste disposal Occupational health Innovation-drivenand safety
requirements of international mainstream GRI Standards the Company comprehensively assesses its performance in Employee training and
development
various related issues to determine whether they will have a significant impact on the economic social and Water resource utilization Supply chain securityAnti-unfair competition
environmental aspects (i.e. impact importance) and at the same time considers whether each issue will have a
considerable influence on the Company's business model business operation development strategy financial Social Responding to climate changeStakeholder communication Anti-commercial
position cash flow financing methods and costs value chain etc. (i.e. financial importance). contribution bribery and anti-Circular economy corruption
Rural revitalization Due diligence
Issue Assessment Process Analysis Method
Step 1: Analyze based on the macro environment of global trends Ecosystem and biodiversity conservation
Understand the company the development trends of China's industries the industry the
background Company is in and its business model to identify the Company's
Treating small and medium-sized
enterprises (SMEs) equally
stakeholders the impacts risks and opportunities.Ethics in science and technology
By using the 21 issues set in the "Guideline" as the basis for the issue
list referring to the relevant requirements of international Financial Importance
Step 2: mainstream GRI Standards as well as the relevant issues in the same With financial With impact importance With financial importance Without financial importance
Conduct preliminary industry and aligning with the UN SDGs establish the Company's importance and impact without financial importance without impact importance or impact importance
screening of issues 2024 sustainable development issue library containing a total of 23 importance
issues. Importance Issue Recognition List
Issue
Impact importance assessment Importance
Environment Society Governance
Sort out the potential or actual positive or negative impacts of
each issue on the external environment society and economy Innovation-driven Product and
conduct research and analysis through questionnaires to stakeholders Issues with both service safety and quality
collect a total of 205 valid stakeholder questionnaires and financial importance Responding to Data security and customer /
combine expert judgment to assess the issues with impact importance. and impact importance climate change privacy protectionStep 3: Supply chain security
Evaluate issue importance
Issues with financial
Financial importance assessment importance but without / / /
impact importance
Through the analysis of impact dependence and other factors Environmental Protecting the legitimate rights
combined with expert judgment and the risk identification compliance management and interests of employees Anti-commercial bribery
and assessment list of each department of the Company identify Issues with impact Energy utilization Employee training and and anti-corruption
and assess the risks and opportunities under relevant issues and importance but Circular economy development Anti-unfair competition
assess the issues of financial importance. without financial Water resource utilization Occupational health and safety Due diligence
importance Pollutant emissions Waste Social Contribution Stakeholder
disposal Rural revitalization Communication
Form the list of issues with impact importance and financial
Step 4: importance and ensure that the relevant issues are disclosed in a Issues without Ethics in science and
Confirm and approve Ecosystem and transparent balanced and complete manner in the report. financial importance technology Treating small biodiversity conservation /
or impact importance and medium-sized issues enterprises (SMEs) equally
Significance of economic social and
environmental impacts29 SUSTAINABILITY REPORT 2024 30
01
Compliance
Governance:
Building the
Foundation for
Decent work and Peace justice and Partnership to Development
economic growth strong institutions promote goal
achievement31 SUSTAINABILITY REPORT 2024 32
Governance system Operation of the three boards
Board of Shareholders
Governance structure
The Board of Shareholders is the highest authority of the Company. To ensure that the Board of Shareholders exercises
ZKTeco is committed to enhancing the modernization level of corporate governance. Strictly adhering to its powers in accordance with the law and protect the legitimate rights and interests of shareholders the Company has
the requirements of the "Company Law of the People's Republic of China" (hereinafter referred to as the "Company formulated the "Rules of Procedure for Shareholders' Meeting" to standardize the procedures for convening holding
Law") the "Code of Corporate Governance for Listed Companies" and the "Rules Governing the Listing of and voting at General Meetings and ensure that all shareholders especially minority shareholders enjoy equal
Shares on the ChiNext Market of Shenzhen Stock Exchange" (hereinafter referred to as the "ChiNext Listing rights and fully exercise their voting rights. During the reporting period the Company held a total of 3 General
Rules") and other laws and regulations the Company has established a modern governance system featuring clear Meetings including 1 annual general meeting and 2 extraordinary general meetings and a total of 13 proposals
division of responsibilities mutual checks and balances and efficient collaboration among the Board of Shareholders were deliberated and approved.the Board of Directors the Board of Supervisors and the management. The Company has developed an efficient
operation model that matches its actual development with rigorous and orderly internal management
processes and a scientifically designed organizational structure with clear functional divisions.Board of Directors
Company Organization
The Board of Directors is the decision-making body of the Company and is responsible to the Board of
Shareholders. The Company has formulated the "Rules of Procedure of the Board of Directors" to standardize
Board of Shareholders the deliberation methods and decision-making procedures of the Board of Directors and to promote the effective
performance of duties by directors and the Board of Directors and improve the level of standardized operation and
scientific decision-making of the Board of Directors. The Board of Directors has established Salary and
Strategy and Assessment Committee Strategy and Development Committee Audit Committee and Nomination Committee.Board of Supervisors Development Committee Through professional division of labor and effective supervision the Company's governance has been further
enhanced in terms of standardization and transparency.Board of Directors Salary and Assessment
Committee During the reporting period
Office of the Nomination Committee 6 Deliberating and approving Board of Directors The Company held 33 100% attendanceboard meetings proposals rate of board members
Managing Director
Audit Committee
One Deliberating and approving special
meeting for independent 2 proposals
directors was held
3 Deliberating and approving meetings of the
Salary and Assessment 9 proposals
Committee were held
4 Deliberating and approving meetings of the Audit
Committee were held 13 proposalsInternal Audit Department
R&D Center
Human Resources
Center
General Manager's
Office
Financial Center
Procurement Center
Manufacturing Center
Global Marketing Center
Investment and
Financing Department
Securities Department33 SUSTAINABILITY REPORT 2024 34
Diversification
The Company fully considers factors such as gender age educational background professional experience and skills of
the board members to ensure a diversified board composition meeting the needs of various business operations while Salary standards for directors: 1. Independent directors of the Company only receive director allowances with
enhancing the decision-making and execution capabilities of the Board of Directors. The Company has 7 each receiving RMB 150000 per year. 2. Mr. Che Quanhong as the full-time chairman of the Company
board members including 3 independent directors and 4 non-independent directors with 2 female directors receives chairman salary which is in line with the salary standards for senior management. 3. Non-independent
accounting for 29%. The board members have diverse professional backgrounds covering areas such as law directors who concurrently hold specific management positions in the Company do not receive additional
accounting and industry experts providing professional support for the Company's decision-making. director allowances apart from their regular job compensation.Salary standards for supervisors: Supervisors who hold positions in the Company receive salaries based on their
specific management roles in accordance with the Company's relevant salary and performance assessment
management systems. Supervisor salary is divided into basic salary and performance related pay. The basic
salary is paid monthly based on fixed salary while performance related pay is assessed based on annual
business goals and is determined and paid based on the annual achievement of benefits and personal work
Independence performance completion.In accordance with the "Company Law" the "Measures for the Administration of Independent Directors of Senior management salary is divided into basic salary and performance related pay. The basic salary is paid
Listed Companies" the Company's "Articles of Association" and other relevant regulations the Company has monthly based on fixed salary while performance related pay is assessed based on annual business goals and is
formulated the "Independent Director System" "Annual Report Work System for Independent Directors" and determined and paid based on the annual achievement of benefits and the senior management's work performance
"Special Meeting Work System for Independent Directors" clearly defining the election process and responsibilities of completion.independent directors to ensure they play a more active and effective role in corporate governance. Independent
directors hold the majority in each specialized committee and serve as the conveners of the Salary and Assessment
Committee Audit Committee and Nomination Committee. Through their professional backgrounds and
independent perspectives they provide scientific and objective opinions and suggestions for the decision-
making of the Board of Directors. Meanwhile independent directors participate in the review and supervision of
significant events through special meetings effectively ensuring the transparency and standardization of corporate Compliant operations
governance and safeguarding the legitimate rights and interests of all shareholders especially minority shareholders.Internal control
Board of Supervisors Internal control system
The Board of Supervisors is the highest supervisory body of the Company responsible for supervising the behavior
of directors and senior management. The deliberation methods and voting procedures of the Board of Supervisors The Company has established an internal control system based on the Company's "Articles of Association"
are strictly in accordance with the "Rules of Procedure for the Board of Supervisors". Each supervisor conscientiously and centered around the "Rules of Procedure for Shareholders' Meeting" the "Rules of Procedure of the Board of
fulfills their supervisory duties improving the corporation governance structure. The Company's Board of Supervisors Directors" and the "Rules of Procedure for the Board of Supervisors" etc. It clearly defines the roles of the Board of
consists of 3 members including 1 employee supervisor. During the reporting period the Company held 6 Shareholders the Board of Directors the Board of Supervisors and the specialized committees of the Board of
supervisory board meetings and deliberated and approved 21 proposals. Directors in the Company's decision-making and operation management and clarifies the responsibilities and
authorities in decision-making execution supervision and other aspects forming a scientific and effective
division of responsibilities and check-and-balance mechanism. It covers procurement management production
management product sales external investment R&D administrative management and other aspects ensuring that
Salary management for Directors Supervisors and Senior all work has rules to follow preventing and resolving various risks in the daily operation of the Company and
Managers improving operational efficiency and profitability.The Audit Committee has an Internal Audit Department which conducts audits and verification on the
Company's production and operation conditions financial security status and other activities and audits and
The Salary and Assessment Committee is responsible for formulating salary plans or schemes for directors and supervises the implementation of the Company's internal management system and internal control system forming a
senior management based on the main scope responsibilities importance of their management positions and the salary stable complete and professional internal control system.levels of relevant positions in other companies. In 2024 the Salary and Assessment Committee of the Company's
Board of Directors drafted the "Proposal on the 2024 Annual Salary Plan for Directors" and the "Proposal on the
2024 Annual Salary Plan for Senior Management" while the Board of Supervisors drafted the "Proposal on the 2024 Internal control evaluation
Annual Salary Plan for Supervisors". The "Proposal on the 2024 Annual Salary Plan for Directors" and the "Proposal on
the 2024 Annual Salary Plan for Supervisors" were deliberated and approved by the Board of Directors and the Board of
Supervisors and submitted to the Board Meetings for approval. The "Proposal on the 2024 Annual Salary Plan for In 2024 in accordance with the "Basic Norms for the Internal Control of Enterprises" and its supporting guidelines
Senior Management" was deliberated and approved by the Board of Directors. The aforementioned proposals stipulate as well as other internal control regulatory requirements the Company completed the "Self-evaluation Report on
the salary standards for directors supervisors and senior management. Internal Control in 2023" and disclosed it on time. Within the benchmark date of the internal control evaluation report
there were no significant deficiencies in the Company's internal control and effective internal control was
maintained in all major aspects. The Company's "2024 Annual Internal Control Evaluation Report" was prepared and
disclosed in 2025.35 SUSTAINABILITY REPORT 2024 36
Internal audit Protection of rights and interests of
To improve the Company's internal control system and reduce potential risks in areas such as finance and operations
the Company has formulated internal audit work regulations such as the "Internal Audit System" and the
"Implementation Rules of the Audit Committee of the Board of Directors" in accordance with relevant provisions investors
such as the "Code of Corporate Governance for Listed Companies" and the "Basic Norms for the Internal Control of
Enterprises" and in light of its own actual situation. The Company has an independent Internal Audit Shareholder returns
Department responsible to the Audit Committee. The Internal Audit Department is responsible for conducting
internal audits of financial and economic activities related to the Company's internal institutions and The Company has always regarded shareholder returns as a significant responsibility and strictly adheres to the
subsidiaries ensuring the effective operation of the Company's internal controls and preventing major risks. profit distribution policies stipulated in the Company's "Articles of Association" and the "Plan for Dividend Returns
External audit within Three Years after the Initial Public Offering and Listing of ZKTECO CO. LTD." to ensure that both new and existing shareholders can obtain reasonable investment returns. By clarifying the profit distribution
mechanism the Company further enhances the transparency and operability of profit distribution decisions
Starting from 2024 the Company has engaged an accounting firm to conduct internal control audits on its facilitating shareholders' effective supervision of the Company's operating results and profit distribution and
internal control system. The internal control audit expenditure for 2024 was RMB 280000. The external audit effectively safeguarding the legitimate rights and interests of shareholders.institution is responsible for independently and objectively assessing and verifying the Company's internal control
system further enhancing the effectiveness and transparency of the internal control system and ensuring its The Board of Directors has drafted the "Proposal on the 2023 Profit Distribution Plan" which was deliberated
compliance with relevant regulations such as the "Code of Corporate Governance for Listed Companies" and the and approved at the 2023 Annual General Meeting. The Board of Directors has completed the equity distribution on
"Basic Norms for the Internal Control of Enterprises". May 29 2024. The Company's 2023 cash dividend per share was RMB 0.45 with a total cash dividend (including
tax) of RMB 86.6023 million accounting for 48.86% of the net profit attributable to shareholders of the listed
company in the consolidated financial statements. The Company's planned 2024 profit distribution plan is to
Management of related party transactions distribute a total of RMB 97.0412 million in cash dividends and increase the share capital by 38816465 shares.The Company has formulated the "Related Party Transaction Management System" in accordance with relevant
laws and regulations such as the "Company Law" the "Securities Law" and the "ChiNext Listing Rules" as well
as the Company's "Articles of Association" and in light of its actual situation. This system clearly defines the specific
matters of related party transactions and the scope of related party identification and stipulates the review and Information disclosure
disclosure procedures pricing principles etc. for related party transactions. The Company strictly implements a
related party avoidance mechanism. When related party transactions are reviewed related directors and
shareholders must avoid voting. In accordance with the "Company Law" the "Securities Law" the "Measures for the Administration of
Information Disclosure of Listed Companies" the "ChiNext Listing Rules" and other laws and regulations and in
Meanwhile the Company has formulated the "Standardized Management System for Related Party Fund Transactions" combination with the provisions of the Company's "Articles of Association" the Company has formulated the
which clearly stipulates the principles norms payment procedures audit supervision and file management for "Information Disclosure Management System" to strengthen information disclosure management and protect the
funds transferred between related parties ensuring that the Company's funds transferred with related parties strictly right to know of investors especially small and medium-sized investors. The Company strictly fulfills its information
comply with laws and regulations and are fair compliant and effectively prevent the risk of related parties disclosure obligations ensuring that the disclosed information is true accurate and complete so that investors can
occupying or misusing the Company's assets. During the period of annual and half year report disclosure fully understand the Company's operating conditions financial position risk status and development prospects.the Company simultaneously discloses the "Summary Table of Non-Operating Fund Occupations and Other
Related Party Fund Transfers" ensuring the transparency of the management of related party fund transactions and The Company discloses important information such as regular reports and temporary announcements through
effectively safeguarding the rights and interests of the Company and all shareholders especially minority shareholders. the Shenzhen Stock Exchange CNINFO etc. Meanwhile the Company makes full use of its official website official
WeChat public account and other diversified channels to update company news in real time ensuring that
investors shareholders and other stakeholders can obtain relevant information in a timely convenient and
comprehensive manner and improving the efficiency of information communication.Tax management
In 2024 the Company disclosed a total of penalties 103 announcements including 4 regular reports and
The Company has always adhered to the basic principle of paying taxes in accordance with the law strictly abiding received no for information disclosure violations.by national and local tax laws and regulations and ensuring the timely and full payment of taxes. To strengthen
the standardization and effectiveness of tax management the Company has formulated a series of financial and tax-
related systems such as the "Management Measures for the Issuance and Use of Value-Added Tax Invoices" the
"Management System for Stamp Duty Declaration" the "Management Norms for Export Receipts and Foreign
Exchange" the "Management System for Corporate Income Tax Declaration" and the "Management System for
Individual Income Tax Declaration" strictly managing all tax-related work and preventing tax risks such as failure to
pay taxes on time and tax evasion. Meanwhile the Company actively organizes all employees of the Financial
Center to study new tax laws to ensure tax and financial compliance and timely tax payment. In 2024 ZKTeco did not
experience any tax violations and the Company organized 8 tax training sessions.37 SUSTAINABILITY REPORT 2024 38达成情况
Investor communications Enterprise credit evaluation
The Company actively communicates with investors and attaches In August 2023 the China Association of Small and Medium
great importance to investor relations management. In 2024 the Company Enterprises (CASME) evaluated the Company's credit status as
held a total of 3 investor communication activities. On May 7 2024 the Website: AAA valid until August 2026. This demonstrates the
Company held the 2023 Performance Briefing where directors Company's strong comprehensive strength in terms of 次
and senior management promptly explained the Company's 2023 www.zkteco.com operating conditions credit rating and profit levels. It
operating situation to investors covering the Company's products represents the Company's brand influence and credibility in the
R&D and annual financial data and focused on answering investors' capital market which helps enhance investor confidence and
questions about the 2023 annual report. On September 2 2024 the plays a significant positive role in strengthening the Company's
Company held the semi-annual performance briefing where three financial risk resistance and improving business efficiency.senior executives answered questions about financial data overseas
business and the planning and use of raised funds. On September 12 Phone:
2024 the Company participated in the "Firm Confidence Work 0769-82618868
Together and Enhance the Investment Value of Listed Companies -
Collective Reception Day for Investors in 2024 Guangdong Listed
Companies Investor Relations Management Month Activity" jointly
organized by the Guangdong Securities Regulatory Bureau and the
Listed Companies Association of Guangdong (GDLA). The Company
actively engaged in communication with investors around core topics Email:
such as corporate governance development strategies and operating Commercial conduct
performance. ir@zkteco.com
In addition the Company responds to investors' concerns in a
timely manner through its official website corporate email and Anti-commercial bribery and anti-corruption
phone etc. effectively safeguarding their right to know. The Company
always adheres to the principles of openness and transparency and
is committed to maintaining a good communication and trust
relationship with investors providing them with comprehensive and Internal integrity
accurate information support and assisting them in making rational
decisions.To establish a clean and compliant working environment
within the Company the Company has signed an "Integrity
Number of interactions with investors
Number of investor research receptions on the "Easy to Interact" platform Number of investor calls received Agreement" with its employees clearly stipulating that
employees must abide by national laws and regulations
1 91 408 business ethics and internal company rules and regulations during their performance of duties. They are prohibited from
Times Times Times participating in or accepting bribes kickbacks or any other
improper benefits in any form. The Company has established a
supervision and evaluation mechanism to review and assess
the integrity of employees in their work. Employees are
regularly required to fill out the "Honesty and Integrity Self-
Inspection Form". Any violations of the agreement will be dealt
Number of investor open exchange with in accordance with relevant laws and regulations and
Number of investor research visitors meetings held company policies. The Company recognizes the importance
5 3 of integrity in maintaining its reputation and sustainable development and requires employees to adhere to professional
Person-time Times ethics to jointly safeguard the Company's interests and image.Additionally the Company actively conducts integrity training
spreading anti-corruption and anti-bribery awareness to every
department from the individual to the collective. In 2024 the
Company conducted three legal training sessions and two hours
of anti-commercial bribery and anti-corruption training with 30
employees participating. No commercial bribery or corruption
incidents occurred within the Company.39 SUSTAINABILITY REPORT 2024 40
Case Whistleblower protection
In 2024 the Company held a meeting for procurement personnel with the theme of "Integrity Anti- The Company focuses on protecting whistleblowers. The content of the report is communicated and recorded by
corruption Warning and Opportunity" aiming to strengthen the professional ethics of procurement full-time personnel to strictly prevent the leakage and dissemination of privacy information such as the identity and
personnel prevent corrupt practices and ensure the fairness transparency and efficiency of procurement reporting materials of the whistleblower. Acts of retaliation against the whistleblower are strictly prohibited and
activities. Members of the Legal Department's Audit Team presented cases from their work to introduce the punished and if necessary judicial authorities will be requested to pursue legal responsibility in accordance with the
definition of integrity and proposed behavioral norms for integrity namely abiding by laws and law.regulations operating transparently resisting temptation and reporting proactively.Anti-unfair competition
The Company strictly adheres to relevant laws and regulations such as the "Anti Monopoly Law of the People's
Republic of China" and the "Anti Unfair Competition Law of the People's Republic of China" upholds the
principles of fair trade and fair competition and actively maintains a healthy and orderly market competition
Reporting channels environment to ensure a positive competition with rivals. During the reporting period the Company has always participated in market competition in accordance with laws and regulations and no malicious competition incidents
occurred.The Company has opened reporting channels such as telephone and email encouraging internal and external
personnel to report any improper behavior that violates laws regulations or business ethics through reporting channels.Duty Crime Reporting Channels of ZKTeco
Report phone: Report email:
13538555484（long-term） zklaw@zkteco.com
1371146414@qq.com41 SUSTAINABILITY REPORT 2024 42
02
Green Operations:
Safeguarding the
Ecological Future
Clean drinking water Economical and Climate Actions
and sanitation facilities applicable clean energy43 SUSTAINABILITY REPORT 2024 44
Responding to climate change Risk/Opportunity Risk/Opportunity Financial Impact Countermeasures
Type Description
Impact Period1
Governance Adopt energy-saving and
Clean energy and new Operating costs are reduced. The risk Short and
Energy carbon-reduction
ZKTeco actively responds to the opportunities and challenges brought by climate change fully integrating the response technologies are adopted. of future energy price hikes is medium to alternatives technologies in the mitigated. long term
to climate change into the Company's management and business practices. Reducing greenhouse gas emissions is production process to reduce greenhouse gas emissions.listed as a key part of the Company's environmental management and it explores an economic model that fits its own
development and can address the risks of climate change. The Company incorporates climate change-related functions
into its governance structure steadily advancing its work on climate change response laying a solid foundation
for achieving SDGs. New products or services Continuously engage in Products Short and are developed through R&D R&D and innovation to
and Operating revenue is increased. medium to and innovation. long term create green and low-Strategy services carbon products.The Company actively takes actions to respond to international and domestic requirements embracing the low-carbon
development trend in the industry with an open and positive attitude and proactively becoming a practitioner 1 Impact period definition: Short term: within one year; Medium term: 1 to 5 years; Long term: more than 5 years.promoter and contributor to green development thereby promoting sustainable development. To accurately identify
the impact of climate change on the Company's business the Company analyzes climate change-related risks
identifying the risks and impacts brought by climate change to the Company from both physical risks and
transformation risks and actively takes countermeasures.Risk/
Opportunity Risk/Opportunity Description Financial Impact Impact Period1 CountermeasuresType Impact risk and opportunity management
ZKTeco incorporates climate change risks into its corporate risk assessment and control system deeply
Acute The frequency and intensity of
Facility repair and operation are
extreme weather events such as suspended and costs of Short to Formulate relevant emergency plans
explores technological innovation opportunities and market development potential in the transition to a low-
physical carbon economy continuously enhances the Company's resilience to climate risks and effectively integrates SDGs
risk typhoons floods heavy rain
alternative supply chains are medium and implement disaster response
heat waves and cold snaps have increased. Revenue loss is term plans to ensure rapid resumption of with the Company's strategy.increased. caused due to production or operations.service interruption.Climate-related Risk Identification Assessment and Management Processes
There is continuous rise in sea
level average temperature Strengthen flood control and By comprehensively analyzing the current trends in the natural and social Chronic Medium to
increase and extreme changes in Operating costs are increased. emergency management to reduce
Confirm
physical environment and identifying risks in different scenarios a preliminary list long term
precipitation patterns and the probability of business risk Step 1 management boundaries of potential climate risks for the Company is compiled using methods
weather patterns etc. interruption. and identify the climate such as industry research reports policies issued by regulatory agencies
risk list benchmarking against peers and stakeholder surveys.Firmly establish the concept of
There are changes in customer Sudden and unexpected green development and actively Step 2 Perform climate risk Based on the climate risk list each climate risk and opportunity is Market Medium to behavior uncertain market changes occur in energy long term promote the Company's energy assessment and ranking analyzed and evaluated and the importance of the risks is ranked.risk signals and rising energy costs. costs. conservation and carbon reduction
efforts.According to the results of the climate risk assessment each department
Step 3 Formulate conducts targeted risk management and response work and formulates Proactively release sustainability
There is impact on corporate reports disclose environmental countermeasures
risk handling plans and the relevant business departments are responsible
protection-related information for implementation.Reputation reputation due to non-
risk compliance or poor Operating revenue is reduced. Medium to
strictly implement relevant systems
performance in climate risk long term such as the "Environmental The relevant business departments regularly report the implementation of
management. Protection Law" and enhance environmental management Step 4 Monitor and manage countermeasures to the management and adjust actions in a timely
capabilities. manner based on the actual situation. The management regularly
supervises the key risk indicators.Transformation risk Physical risk
Opportunity45 SUSTAINABILITY REPORT 2024 46
Indicators and objectives Resource management
The Company continuously improves its climate change management system sets the objective of reducing carbon
dioxide emissions per RMB 10000 of revenue year by year and formulates a series of energy-saving and
consumption-reducing measures which are implemented in the operation process. Energy utilization
The Company implements laws and regulations such as the "Law of the People's Republic of China on
Conserving Energy" and the "Dual Carbon" strategy requirements incorporating energy conservation and
consumption reduction into its sustainable development strategy. To effectively utilize energy and resources and
Indicators Objective Achievement reduce resource consumption the Company formulates systems and norms such as the "Energy and Resource
Management System" and the "Energy Performance Management System" introduces the ISO 50001 energy
management system standard improves the energy management system enhances energy utilization efficiency and
Carbon dioxide emissions per practices the concept of sustainable development.RMB 10000 of revenue Decline year by year In progress The Company formulates the "Energy Measurement and Statistics Position Work Guidelines" the "Energy
Performance Management System" and the "Energy Statistics Account System" to clarify the specific
responsibilities and processes for energy measurement statistics analysis and performance management ensuring the
accuracy and traceability of energy data and providing a scientific basis for the Company's energy management
decisions. By establishing an energy performance management system it can continuously monitor and
optimize energy usage efficiency promoting the refinement and sustainable development of the Company's
energy management.Greenhouse gas emission management
The Company strictly adheres to laws and regulations such as the "Law of the People's Republic of China on Energy conservation and consumption reduction measures
Conserving Energy" promotes the rational use of energy prevents the occurrence of resource waste incidents
pays attention to the implementation and enforcement of greenhouse gas reduction measures fulfills its main The Company is committed to reducing resource and energy consumption and environmental costs during
responsibility for energy conservation and carbon reduction and ensures the smooth execution of energy production and operation and improving resource utilization efficiency. Institutional norms have been
conservation and carbon reduction goals. In response to the national call for green and low-carbon development the formulated such as the "Energy Conservation Target Management System" the "Energy Conservation Publicity
Company optimizes its energy structure improves energy efficiency promotes green office practices encourages System" and the "Energy Conservation and Emission Reduction Reward and Punishment System". The
low-carbon travel and reduces carbon emissions in all aspects and at multiple levels to contribute to the country's Company actively responds to various environmental protection instructions issued by the environmental
ecological civilization construction. At the same time it promotes the Company's transformation and upgrading protection department cooperates with the environmental protection department's instructions and
achieving a win-win situation in economic and social benefits. enhances employees' awareness of environmental protection and energy conservation.Saving electricity
The Company strictly prohibits the use of long-burning lights and lights on during the daytime. When there are
fewer people fewer lights should be turned on. When people leave lights should be turned off immediately. The
Company adjusts the positions of desks in each department (office) to make use of natural light as much as
possible. Energy-saving lamps are used and ordinary incandescent bulbs are not used. The Company reduces the
power consumption of electronic office equipment and standby power consumption. Computers printers
copiers scanners fax machines and other electrical equipment should be turned on and used reasonably.Power should be turned off when personnel leave work to prevent standby power consumption.For the use of air conditioners in the Company they should not be turned on in normal spring and autumn
weather. In summer and winter they should be turned on according to the temperature standard (the indoor cooling
temperature in summer should not be lower than 26°C and the indoor heating temperature in winter should
not be higher than 20°C). In special places they can be turned on according to work needs. When the air
conditioner is on windows and doors should be closed and the temperature should be set reasonably. It is
recommended to turn off the air conditioner half an hour in advance. It is prohibited to turn on the air conditioner
when no one is around to avoid wasting electricity. In addition the Company strictly prohibits the use of high-power
appliances such as electric stoves in the office. The configuration and switch time of electric drinkers should be
reasonably adjusted to reduce unnecessary power consumption.47 SUSTAINABILITY REPORT 2024 48
To enhance employees' professional capabilities in material management the Material Management
Department regularly conducts material-related training such as training on the use of packaging materials
identification of electronic materials and implementation of the "Line-Side Warehouse Material Management
Regulations". After the training a "Training Sign-in and Evaluation Form" is compiled to quantify the training results
Saving oil ensuring that the training effectively enhances the professional skills of relevant employees and provides strong
In the production process the Production Department should avoid the idling of production support for the efficient operation of the Company's material management.equipment to prevent the waste of electricity and lubricating oil. When maintaining and servicing
equipment and facilities each department should pay attention to the amount of lubricating oil used and
avoid excessive application which may lead to waste and leakage onto the ground polluting the
environment. Private use of company vehicles should be minimized. At the same time all full-time and
part-time drivers should be trained to operate and drive vehicles normally to ensure normal oil consumption.Water resource utilization
The Company strictly adheres to relevant laws and regulations such as the "Water Law of the People's Republic of
China" closely follows the policies and requirements of the state and local governments regarding water usage
and reuse and optimizes water resource management and utilization to contribute to the sustainable use of water
resources and the protection of the ecological environment. The Company continuously strengthens water
conservation management throughout the entire process of water extraction and usage achieving the recycling of
water resources. After tap water is purified through a water purifier 70% of the purified water is used in ultrasonic
cleaning machines. After professional treatment 60% of the reclaimed water meets the reuse standards and is
then returned to the water purifier for secondary purification effectively conserving water resources and
protecting the ecological environment. The Company's water source is municipal water supply. On-site Training Picture
Saving water
The Company intensifies the daily inspection maintenance and management of water-using equipment
promptly addressing any leakage or waste and strictly preventing the waste of water resources. The total Full-process material management
monthly water consumption is verified and statistically recorded by a designated person. Violations of water
conservation regulations and water waste are subject to penalties based on the severity of the offense. In
addition the Company vigorously promotes water conservation by posting water conservation slogans and other
methods to enhance employees' awareness of water conservation Material storage
The Company's Production Material Control (PMC) Department formulates a "Risk and
Opportunity List" for warehouse management comprehensively identifying potential risks
in each operation activity and position during the material management process in the
Material management warehouse. Through risk assessment and analysis corresponding existing safety control
measures and recommended improvement measures are determined providing clear work
directions for responsible personnel reducing losses caused by poor material management
Material management system and ensuring the normal operation of each link in warehouse material management to
maintain the stability of the Company's overall operation.The Company implements classified and labeled management for material storage. Based
To ensure the continuity and orderliness of the production process the Company has formulated the "Raw Materials on different requirements for static electricity protection and temperature and humidity
Warehouse Management Regulations" to rationalize warehouse operations ensure the safety and quality of materials materials are stored in different warehouse areas to ensure suitable environmental
guide and standardize the daily work of warehouse personnel and improve the efficiency of material conditions. During storage materials are required to be protected from moisture theft pests
turnover. The Company has established a complete material management organization with the material and rodents sunlight pressure exposure and tipping. Smoking is strictly prohibited in the
warehouse divided into an electronic materials warehouse and a mechanical materials warehouse. The specific warehouse and no fire sources are allowed. All flammable explosive and hazardous materials
responsibilities of each position in the raw materials warehouse management are clearly defined enabling are strictly controlled. Regular safety inspections are conducted to prevent material damage
efficient raw materials warehouse management and promoting the long-term sustainable development of material and accidents. The warehouse uses the SAP system to maintain accurate inventory records
storage management. and each item is subject to area division line marking and fixed location management.49 SUSTAINABILITY REPORT 2024 50
Material transportation Environmental management
The warehouse formulates detailed transportation plans based on production order
requirements and adopts appropriate packaging and protection measures and all items must
be neatly and stably arranged during transportation not exceeding the specified capacity.AGV machines are used for material transportation. During transportation all materials Environmental compliance management
must be protected from tipping fire and pressure. Real-time monitoring is conducted during
transportation and emergency plans are prepared to deal with unexpected situations. ZKTeco complies with environmental protection laws and regulations such as the "Environmental Protection Law of the
People's Republic of China" in its daily production and operation and attaches great importance to environmental
management. During the reporting period production and operating activities of the Company and its branches
and subsidiaries comply with the relevant national environmental protection requirements and there are no cases of
Receiving and usage being punished for violations of laws and regulations. In 2024 the Company's environmental protection investment reached RMB 119800. The Company actively fulfills its responsibility to protect the environment and was
Standard orders are fulfilled based on order requirements to ensure that the consumption of raw awarded the title of "Dongguan Environmental Management Demonstration Enterprise" in 2023 with the validity
materials during production complies with the material BOM and process requirements. period extending until March 2025.The Company has established an application and approval process for exceptional material
requisition (such as defective product returns and exchanges and component replacements) for
orders that require exceptional materials ensuring that raw materials are requisitioned and used as
needed and correctly avoiding waste. In terms of quality control and inspection incoming raw
materials are subject to quality inspection and reliability testing to ensure that their quality
meets production requirements. In the production process process inspections are conducted
on the usage of raw materials to ensure product quality stability.Circular economy
ZKTeco integrates the concept of green development into its daily operations and actively explores and
implements the circular economy. In the production process it optimizes the production process improves resource
utilization effectively disassembles classifies and reuses waste products and reduces waste generation. In daily
office operations the Company actively promotes paperless office practices and explores the use of e-paper
smart devices and solutions to achieve efficient resource recycling and promote the development of the circular
economy.Environmental management system
Green office practices
The Company has prepared an "Environmental Management Manual" based on the "Environmental Management
ZKTeco adheres to the concept of green office and is committed to implementing environmental protection measures Systems - Requirements with Guidance for Use" and according to ISO 14001 requirements combined with the
in daily operations. The Company strictly enforces energy-saving standards and reminds employees to pay actual situation of the Company's environmental management to determine the Company's environmental policy
attention to resource and energy conservation and avoid waste such as promoting paperless office practices and and clarify the responsibilities and interrelationships of environmental management among various departments.using digital technology for document management and communication to reduce paper consumption. For
unavoidable paper usage the Company encourages the use of recycled paper to reduce dependence on forest
resources. To ensure the effective implementation of green office measures the Company has established
corresponding management norms such as requiring employees to preview the format correctness before printing Environmental policy
documents to avoid re-printing due to format errors and unnecessary paper waste.Green production The Company
complies with implements reasonably continuously
regulatory pollution utilizes improves the
The Company is committed to achieving green production and low-carbon operations. In new production bases requirements prevention resources environment
advanced environmental protection technologies and equipment are introduced and production processes are
continuously optimized to reduce pollutant emissions and improve resource utilization efficiency.51 SUSTAINABILITY REPORT 2024 52
The Company establishes a sound environmental governance Risk identification and assessment
system with the General Manager responsible for
overseeing the Company's environmental management To ensure the systematic and standardized identification and assessment of
affairs and making final decisions on major environmental environmental risks the Company implements the "Environmental Factor
issues. The management representative is responsible for Identification and Evaluation Procedure" comprehensively identifying and assessing
establishing implementing and maintaining the Company's environmental impacts during its operations. Through the execution of the
environmental management system approving environmental "Environmental Monitoring and Control Procedure" key environmental indicators are regularly
objectives and indicators and approving environmental monitored and dynamically evaluated to ensure that all environmental risks are under control
management plans. Each department is responsible for and that environmental management measures are effectively implemented. During the
implementing environmental management and achieving reporting period the Company entrusted a third-party organization to conduct emission
the Company's environmental objectives. The Company actively tests on pollutants such as wastewater exhaust
carries out environmental management system certification. By the gas and noise from the factory with a 100 % pass rate for pollutant tests.end of the reporting period it has passed the ISO ISO14001:2015 Environmental
14001:2015 environmental management system certification. Management System Certificate Emergency plans and drills
The Company investigates environmental risks and hazards and improves risk
prevention and control measures for sudden environmental incidents. The Company
formulates the "Chemical Leakage Emergency Plan" and organizes chemical leakage
prevention drills to exercise the coordination and cooperation capabilities among various
Environmental Factor Objective Achievement departments. This ensures that in the event of an environmental accident it can be handled
promptly and effectively enhancing the Company's overall efficiency in responding to
Wastewater emergencies.discharge Up-to-standard discharge Achieved
Exhaust Case Chemical leak prevention drill
emissions Up-to-standard discharge Achieved
On December 10 2024 the Company conducted a chemical leak prevention drill in the open area in front of the
logistics platform. The drill covered the standardization and timeliness requirements of the emergency command
Up-to-standard noise emissions (≤ 65 decibels
Noise emissions Achieved system for accident alarms and communication as well as the handling of cordoning off and evacuation during the day ≤ 55 decibels at night) leakage treatment fire suppression and subsequent on-site monitoring and cleanup. This effectively enhanced
the employees' response and rescue organization capabilities in the event of a chemical leak and
100% reasonable classification and strengthened their environmental protection and safety awareness.Hazardous waste
disposal disposal of waste Achieved
Energy and Domestic water: ≤ 4m3 per person
resource Production water: ≤ 2500m3Domestic electricity: ≤ 30kWh per person
consumption Production electricity: ≤ 280000kWh Achieved
Monthly paper usage: ≤ 12500 sheets
Environmental risk control
The Company formulates and implements the "Risk and Opportunity Management Control Procedure". Starting
from risk identification and assessment it sorts out potential risks in environmental management effectively
consolidating the stable operation of the environmental management system and facilitating the Company's
achievement of SDGs.53 SUSTAINABILITY REPORT 2024 54
Hazardous substance management Waste gas management
The Company has formulated the "Environmental
Hazardous Substance Management Regulations" to The Company controls the emissions of waste gas during the production process in strict accordance with the
strictly control the content of hazardous substances in its "Integrated Emission Standard of Air Pollutants of the People's Republic of China" and the "Integrated Emission
products and uses professional equipment to test the Standard of Volatile Organic Compounds for Stationary Pollution Source" to ensure that the emissions comply
content of hazardous substances. The Company requires with national and local regulations. The Company has established a complete and regular maintenance mechanism for
suppliers to cooperate with the implementation waste gas treatment facilities and regularly arranged employees to conduct comprehensive inspections and
of the "Environmental Hazardous Substance maintenance of the facilities to ensure their stable operation. At the same time the Company continuously
Management Regulations" sign the "Commitment upgrades the technology of waste gas treatment facilities to effectively reduce the negative impact of waste gas
Letter of Not Using Hazardous Substances" and emissions on the environment demonstrating its commitment to green development through practical actions.strictly abide by relevant regulations during the The company pays attention to waste gas treatment and installs environmental protection exhaust fans to quickly
supply of raw materials and production process not draw smoke and dust to the rooftop where they are filtered and separated of harmful substances through
to use any hazardous substances exceeding the limit purification equipment ensuring that the air meets environmental protection emission standards. By regularly cleaning
standards to ensure that the supplied products comply the smoke and dust collection devices the dust collectors can operate efficiently. The smoke and dust treatment
with the EU RoHS Directive and other relevant Hazardous Substance Test Equipment methods for laser cutting welding and grinding processes are similar so the environmental protection dust
environmental protection laws and regulations and collectors are applicable to the entire production process.produce green products that meet customer requirements.Environmental protection training
The Company requires each department to identify the environmental training needs of employees based on actual work Waste management
requirements determine different training themes such as environmental awareness education environmental business
knowledge and professional skills training and qualification training for special environmental work and The Company strictly complies with relevant laws and regulations such as the "Technical Guidelines for Solid
formulate corresponding employee training plans to effectively enhance employees' environmental awareness. Waste Treatment & Disposition Engineering" and the "Law of the People's Republic of China on the Prevention and
Control of Environmental Pollution by Solid Waste" and handles general industrial waste and hazardous waste
with caution. It has formulated the "Waste Management Specification" to further standardize the classification
storage and treatment processes of wastes effectively reducing the potential harm of wastes to the
environment.Pollutant emissions
Wastewater management General waste
The Company complies with the "Law of the People's Republic of China on Prevention and Control of Water Pollution" To ensure the legal safe and environmentally friendly disposal of waste the Company has signed a "General
and conducts wastewater discharge management. To ensure compliant discharge of wastewater the Company hires a Industrial (Solid) Waste Treatment Service Agreement" with third-party organizations and hired organizations to
third-party organization to professionally treat the scattered wastewater produced by Tangxia Industrial Park assist it in handling general waste such as waste packaging tin tin dross and defective glass prisms. This
ensuring proper wastewater treatment and avoiding wastewater pollution to the surrounding environment. In effectively reduces the Company's pressure in waste treatment ensuring that general wastes are treated
2024 ZKTeco generated 48 tons of wastewater and the Tangxia Branch generated 50 tons of wastewater with a scientifically and in a standardized manner minimizing the negative impact on the environment.
100% compliance rate for wastewater disposal.
Company Name General Industrial Waste Category Unit Waste Treatment Volume in 2024
Ultrasonic cleaning water treatment and reuse project
The Company has an ultrasonic cleaning process in the production process of its products and the water to be Waste packaging waste tin slag and
treated mainly includes wastewater generated after filtration by a water purifier and wastewater from ZKTeco defective glass prisms Ton 2.54
ultrasonic backend cleaning. The Company has engaged a professional third-party organization to treat the
aforementioned wastewater using reclaimed water reuse filtration facilities. The purified wastewater is then
reused in the production process achieving closed-loop management of production water and effectively Tangxia Branch Cutting sediment Ton 2
conserving water resources.55 SUSTAINABILITY REPORT 2024 56
Hazardous waste Ecosystem and biodiversity conservation
To ensure that the hazardous waste generated during the Company's production and operation is
professionally and compliantly handled the Company has entered into a "Commercial and Industrial Waste Treatment ZKTeco strictly adheres to relevant environmental protection laws and regulations. The Company's
Agreement" with a third-party organization with professional qualifications. The agreement clearly defines the rights operating activities do not directly affect ecosystems biological species and their habitats or biological genetic
and obligations of both parties in the hazardous waste treatment process ensuring that each item of hazardous waste resources and will not cause damage to ecosystems and biodiversity. During the project site selection process
is properly handled in accordance with regulatory standards and professional norms laying a solid foundation for the of the Company's operating activities it avoids natural reserves key ecological function zones or other areas with
legal and safe disposal of hazardous waste from the source. In 2024 ZKTeco entrusted a third-party company to significant biodiversity value and does not damage local water sources and ecosystems. During construction and
dispose of 2.19 tons of hazardous waste in a compliant manner and its Tangxia Branch disposed of 9.4 tons of waste operation it conducts greening based on the planting characteristics and ecological environment around the project to
in a compliant manner. avoid impacts on soil and groundwater.Furthermore due to the high risk in the transportation of hazardous waste to prevent leakage and other
unexpected situations that could pollute the environment the Company has formulated a detailed inter-provincial
transfer plan and filed it for record. To ensure the professionalism and safety of the transportation process the
Company has specially entrusted an experienced third-party professional company to be responsible for the
entire transportation process of hazardous waste from the generation site to the disposal site ensuring that the
transportation process is safe and worry-free.Company Name Hazardous Waste Unit 达成情况Quantity
Waste activated carbon Ton 1.9
Waste packaging materials Ton 0.09
ZKTeco
Waste container tanks Ton 0.2
Waste activated carbon Ton 1
Waste paint residue Ton 6
Waste container tanks Ton 0.3
Tangxia Branch
Waste rags Ton 1.1
Washout wastewater Ton 157 SUSTAINABILITY REPORT 2024 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76
03
Excellent Quality:
Ensuring
Information
Security
Industry Responsible Partnership to
innovation and consumption promote goal
infrastructure and production achievement
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Innovation-driven
Governance Global R&D Center Distribution
R&D Distribution Legend
Main Map Title
Innovative concepts Continental BoundaryUndefined Boundary National Boundary
Regional Boundary
Military Demarcation
Line
ZKTeco attaches great importance to product R&D and innovation and insists on taking technological
innovation as the strategic support for the Company's high-quality development. It has formulated and updated Map Approval Number: GS(2023) 2752
systems such as the "Product Development Process" "Engineering Change Process" "Customization
Dalian R&D Center
Demand Classification and Baseline Standards" and "Technical Committee Management Charter" further
improving the product R&D system and driving high-quality development through innovation. The Company is
laying out a global R&D system continuously improving its technological innovation capabilities and
competitive advantages and continuously consolidating its core technology and cloud platform technology
capabilities laying a solid foundation for R&D.The Company takes multimodal BioCV as its core technology integrates ZKTeco's independent intellectual property
rights in multimodal computer vision and multimodal biometric technology and constructs an end edge and cloud
service technology ecosystem and the full stack and full-scenario solution achieving dual wheel drive of market and
technology and helping the Company achieve high-quality development.R&D organization Xiamen R&D Center
1000+ R&D Teams
Global and multi-faceted R&D platform system
The Company always takes market demand and technological innovation as the main driving force and pursues Coverage of research areas
leading core technologies as its core product competitiveness. Based on "taking the world's perspective as our Computer vision technology and multimodal recognition algorithms
Software and cloud platform systems and IoT technology
own perspective" we continuously pursue new technologies and build a global multi-dimensional open and Hardware and firmware platform system and RF technology Indian R&D Center
integrated R&D platform system. Application technology transformation and innovative technology Dongguan-Shenzhen
R&D Center
The Company has four R&D Centers namely Dongguan-Shenzhen R&D Center Xiamen R&D Center Dalian
R&D Center and India R&D Center responsible for research in hardware software platform products
algorithm technology and other aspects. Each R&D Center has high professionalism and continuously
improves its R&D and innovation capabilities.
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R&D talent Strategy
ZKTeco always regards talent strategy as an important strategy of the Company and strives to promote
employees to become participants and contributors to innovation by adhering to an innovation system with an Risk/Opportunity Risk/Opportunity Financia Impact Countermeasures
engineer culture. Innovation is the first driving force talent is the first resource and a high-quality R&D team Type Description l Impact Period2
provides innovation assurance for the Company.Evaluate whether there are When employees join the
insurmountable technical Company they sign a
Indicators Unit 2022 2023 2024 difficulties in the R&D process confidentiality agreement to
of new technologies that prevent the leakage of
prevent the project from technology. Before a project is
achieving its expected goals; initiated a technical
Number of R&D Person 1125 1226 1118 whether the Company's R&D feasibility review is personnel achievements will be replaced by conducted with a focus on
new technologies before they discussing the feasibility and
are launched on the market maturity of new technologies
Proportion of R&D due to the industry's rapid for key requirements. At the %
personnel 29.7 29.86 31.42 technological updates. The same time efforts are made to Company's internal R&D enhance technological
achievements may be leaked R&D cooperation by
due to reasons such as collaborating with
Number of R&D personnel by gender employee departure hacker universities research
attacks and violations by institutions and others to
partners causing losses to improve the level of
Male Person 884 956 890 the Company. technology and innovation capabilities.Strengthen talent cultivation
Female Person 241 270 228 and recruitment formulate personnel training plans
The shortage of high-quality and attract and retain high-
professionals may affect the quality professional talents;
progress and quality of R&D establish an incentive
projects or the departure of mechanism and enhance
core personnel may lead to employees' innovation
R&D training technology leakage and ability and work efficiency impact project schedules. through incentive
assessment equity
incentives and other means.Case Keep a close eye on the
development trends of new
technologies increase
In 2024 to enhance employees' understanding and application of AI technology enable AI tools to investment in the R&D of
empower daily work improve work efficiency integrate AI technology with the Company's Through market research cutting-edge technologies
products and create better "AI + ZKTeco products" solutions for customers the Company explore market demands and enhance the
launched the "Focus on AI Application to Promote Business Development" AI enterprise prompt cooperate externally to Company's technological
training. integrate innovative innovation capabilities; build a resources identify and technological innovation
seize emerging platform integrate internal
technologies and increase and external resources
investment. promote technological
exchanges and
cooperation and accelerate
the process of technological
innovation.
2Impact period definition: Short term: within one year; Medium term: 1 to 5 years; Long term: more than 5 years.
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Opportunity Risk
Technical opportunity Talent risk Technical risk
Increased operating revenue and
strong market competitiveness Increased cost Increased cost
Short and medium to long term Short to medium term Medium to long term57 58 59 60 61 62 63 SUSTAINABILITY REPORT 2024 64 65 66 67 68 69 70 71 72 73 74 75 76
Impact risk and opportunity management Indicators and objectives
Risk identification ZKTeco adheres to the mission of "AI cognition makes spaces smarter and the world better" maintains strategic
Internal assessment method: In combination with the "Product focus and collaborates with partners and customers to concentrate on four core tracks: smart space smart office digital
Development Process" analyze the possible risks involved at each node from demand identity authentication and smart business. It continuously integrates its multimodal BioCV core technology with digital technologies such as AI IoT big data and cloud computing to meet the personalized and diverse needs of
introduction project initiation and development testing and verification to global customers.production handover. Organize internal cross-departmental meetings to
involve personnel from R&D marketing finance legal affairs and other relevant In 2025 the Company will set a performance assessment target of a 15% year-on-year growth in operating revenue or net profit for the unlocking of the employee stock ownership plan and the vesting of equity incentives. This
departments for risk assessment. At the same time refer to historical R&D and will drive technological innovation and product upgrades address the technical shortcomings in "audio-video+AI
innovation projects to analyze and summarize possible risk factors and analyze capabilities" and "visual language models" and enhance the Company's market competitiveness. By
possible risk items based on financial data such as project return on investment and constantly optimizing the product development process and improving product quality and delivery efficiency it will
fluctuations in R&D investment ratio. meet market demands and continuously update and iterate products.External reference method: By paying attention to national and local government
laws regulations policy documents and industry standards related to innovation and
R&D as well as researching and analyzing risk events of competitors or industry-
leading enterprises identify possible risk items. Actively collect feedback
from stakeholders such as shareholders employees customers
suppliers community organizations and non-governmental organizations.Achievement of objectives during the reporting period
Risk assessment Master the core algorithms of biometrics leading the industry in multimodal biometric technology;
Assess the size and likelihood of risks mainly through subjective
judgments and descriptions of their nature scope of influence and Create the unique ultra short delay supercomputing technology;
potential consequences as well as through specific financial data and
indicators such as the growth rate of new product sales and the first-pass
yield of new product delivery. Deep research on multimodal BioCV AI technology;
Technological accumulation of AGI technology and smart retail scenarios.Risk assessment and ranking standards
Assess the impact of risks from four aspects: Financially examine whether
there is direct economic loss and measure it in terms of amount or financial
indicators; strategically focus on whether it disrupts the Company's strategy
such as changes in R&D direction or market position; reputationally determine
whether the Company's reputation and brand image are damaged referring to media
reports word-of-mouth and customer satisfaction; and socially pay attention to
negative impacts on society and the environment such as pollution or resource
waste during R&D. To determine the likelihood of risk occurrence it is usually Next year's objectives and medium- to long-term planning
necessary to refer to the frequency and probability of similar risks in the past for
competitors and companies in the same industry as well as to invite experts for
assessment and conduct scenario analysis under different circumstances to
evaluate the possibility of risk occurrence.Risk management
Based on the annual key indicators for R&D such as the growth rate of new Continuously promote the Increase investment in Accelerate the upgrading of
product sales the number of patent applications and the direct pass rate of new deep integration of various core technologies of product globalization multimodal biometrics and
product delivery collect and analyze the data of these indicators on a quarterly products and software engineering design platforms create a deepen the integration of
basis to promptly identify changes and trends in risks. Use the JIRA project capabilities and agile scenario data connectivity computer vision and production capabilities and
management tool to conduct real-time monitoring of the key links and risk ecosystem and enhance the biometric technology; enhance engineering
points of R&D innovation projects. For R&D innovation projects with high risks scenario customization and integration capabilities.and low returns avoid the risks by not undertaking such projects. delivery capabilities of
software platforms;
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R&D investment Innovation capability recognition 达成情况 此外，公司已由单一生物识别技术发展为计算机视觉与生物识别多模态BioCV人工智能技术的先驱者，将计算In 2024 ZKTeco has been awarded titles such as 机视觉与生物识别相结合，实现了多模态人工智能属性以及场景互动的共情体验生态。
Indicators Unit 2022 2023 2024 "National High-tech Enterprise" "Guangdong Province
Doctoral Workstation" "Guangdong Engineering
Technology Research Center" "Technology-based Small and
R&D investment amount RMB '0000 18798.38 21361.34 21547.10 Medium-sized Enterprises" and "Innovative Small and
Medium-sized Enterprises". Within the Company's
consolidated scope the Company has been awarded the titles
Ratio of R&D investment to % 9.80 10.84 10.82 of 1 SRDI enterprise and 3 national high-tech
operating revenue enterprises.Engineering Experimental Center
Focusing on advanced R&D with innovation as the foundation ZKTeco's R&D Experimental Center is
R&D and innovation practice dedicated to advancing technology R&D. It has more than 20 laboratories including electronic laboratory optical
laboratory communication laboratory wireless laboratory reliability laboratory etc. It can conduct basic research
from raw materials devices single boards and complete machines creating a systematic capability foundation.The Guangdong Biometrics and Security Technology Engineering Technology Research Center is the only
provincial-level engineering center in the biometric industry in Guangdong Province. Relying on the talent team
and research equipment of ZKTeco the center accelerates the transformation of scientific research achievements
into real productivity with the goal of building a provincial-level first-class research platform for deep integration of
biometrics by researching and developing key common technologies in the industry thereby promoting industrial
technological progress.Strategic Partner
Introduction Joint Laboratory
of experts
and talents Encouraging R&D and innovation
Continuous
innovation The Company continuously improves its technology innovation incentive mechanism formulates the
guarantee "ZKTECO Patent Application and Reward Measures" and further standardizes the management of
mechanism technology rewards. Through various incentive measures the Company encourages employees to actively participate
CIC in R&D and innovation improve the Company's core competitiveness and market share and achieve long-term
development of the Company. The Company sets up incentive policies such as project sprint incentives patent
ZKTeco School-enterprise bonuses project assessment bonuses and equity incentives to reward innovative projects and talents on a monthly or
Open Lab cooperation annual basis maximizing employees' innovation enthusiasm. In addition we provide employees with salary standards
that match their abilities organize annual job qualification evaluations and determine their positions and salaries
based on the results of ability evaluations.Core technological advantages
ZKTeco possesses core algorithms in the field of biometrics and has a strong competitive advantage. After years of
Collaborative R&D mechanism technological accumulation the Company has built a core technology system focusing on single biometric
technology and multimodal biometric technology. In the field of single biometric recognition the Company has
In order to strengthen talent cultivation and enhance innovation capabilities ZKTeco continues to promote successfully developed biometric technologies such as fingerprints facial features palmprints veins (including finger
collaborative R&D and establishes "school-enterprise talent strategic cooperation" with famous universities. We veins and palm veins) and irises. In the field of multimodal biometrics the Company continues to innovate and has
jointly built a "school-enterprise talent strategic training platform"; jointly established the "Dongguan Key Laboratory launched various multimodal biometric technologies such as "fingerprint+facial recognition" "facial+palm vein
of Multimodal Computer Vision and Biometric Recognition"; and jointly applied with a certain university for the recognition" "fingerprint+finger vein recognition" "facial+iris recognition" and "fingerprint+palmprint+facial
"2024 Dongguan Major Science and Technology Project Inclusion" and the "2025 Key Field R&D Project - Key recognition". It has obtained multiple invention and utility model patents in the field of multimodal biometrics.Technology Breakthrough" and other projects.
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Participating social organizations
In addition the Company has evolved from a single biometric technology to a pioneer in computer vision and biometric
multimodal BioCV AI technology. By combining computer vision with biometrics the Company has achieved an By the end of the reporting period the Company had joined multiple industry associations actively engaged in industry
empathetic experience ecology of multimodal AI attributes and scene interaction. exchanges promptly shared its R&D achievements and learned about the latest technologies in the industry.Summary of ZKTeco Participation Associations
Participation in industry standard development
S/N Name
Participating in the formulation of industry standards and norms can enable the Company to grasp the forefront of
industry development direction and carry out technology development and product layout in advance. Since its
establishment the Company has been focused on the R&D of biometric technology and is one of the main participants National Information Technology Standardization Technical Committee Technical 1
in drafting and revising multiple technical standards and specifications in the industry. Committee on Biometrics (NITS SC37)
Summary Table of Standards Formulated with Participation of ZKTeco 2 Xiamen High-tech Association (member entity)
Category Standard No. Standard Name Participant 3 Xiamen Technology Innovation Association (director entity)
Information Technology - Biometrics
- Test Methods for Face Recognition ZKTeco and National standard GB/T 42981-2023 System XIAMEN ZKTECO
4 Xiamen System Integration Association (member entity)
Security Precautions - Facial
Industry standard GA/T 1093-2023 Recognition Application - Entrance and Exit Control Facial Recognition ZKTeco
Technical Requirements 5 Xiamen Software Association (director entity)
Security Protection - Palm Vein
Industry standard GA/T 2152-2024 Recognition Applications - Acquisition ZKTeco
Device 6 China National Information Technology Standardization Network (NITS) (member)
Security Protection - Palm Vein ZKTeco and
Industry standard GA/T 2153-2024 Recognition Applications - Evaluation Methods for Algorithm XIAMEN ZKTECO Chinese Information Technology Application Innovation Working Committee of China
Performance 7 Electronics Standardization Association (member)
Information Technology - Biometric
National standard GB/T 44404.1-2024 Identity Assurance Services - Part 1: BIAS Services ZKTeco
8 IIFAA (member entity)
Information Technology - Application
of Biometric Recognition Technology ZKTeco and
National standard GB/T 44261.1-2024 in Video Surveillance Systems - Part 1: System Design and Specifications XIAMEN ZKTECO 9 Intelligent Terminal Microelectronics Association (ITMA)
Information Technology - Application
熵基科技在生物识别领域掌握着核心算法，具备强大的竞争优势。经过多年的技术积累，公司已构建起以单一 of Biometric Recognition Technology in Video Surveillance ZKTeco and National standard GB/T 44261.4-2024 Intellectual property protection生物识别技术和多模态生物识别技术为核心的技术体系。在单一生物识别领域，公司成功开发了指纹、面部、 Systems - Part 4: Ground Truth andXIAMEN ZKTECO
Video Annotation Procedures
掌纹、静脉（包括指静脉和掌静脉）、虹膜等生物特征识别技术。在多模态生物识别领域，公司不断创新，已 ZKTeco strictly complies with laws and regulations such as the "Patent Law of the People's Republic of China" theInformation Technology - Biometrics - "Copyright Law of the People's Republic of China" and the "Anti Unfair Competition Law of the People's Republic of
经推出了“指纹+面部识别”“面部+掌静脉识别”“指纹+指静脉识别”“面部+虹膜识别”以及“指纹+掌纹+面部识别” Face Recognition System Application China". It attaches great importance to its own intellectual property protection strengthens the utilization of National standard GB/T 44248-2024 ZKTeco
等多种多模态生物识别技术，获得了多项多模态生物识别领域的发明和实用新型专利。 Requirements patent information and avoids infringing on the intellectual property rights of others. The Company has formulated systems such as the "Intellectual Property Management Measures" the "Patent Management Measures" the"Copyright Management Measures" the "Trade Secret Management System" and the "Trademark Management
Measures" to strengthen the management of intellectual property rights.
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The Company has established an Intellectual Property Department to manage intellectual property related work
responsible for reviewing and supervising various aspects of the Company's intellectual property work establishing Indicators Unit 2022 2023 2024
an intellectual property management performance evaluation system establishing an intellectual property
risk warning mechanism managing company patents and handling intellectual property disputes. In 2023 XIAMEN
ZKTECO has passed the certification of intellectual property management system.To promote the concept of intellectual property protection the Company actively carries out intellectual property Number of patent Item 145 142 204
training for the Company's R&D personnel including patent protection and intellectual property risk prevention. In applications
2024 the Company conducted a total of two intellectual property training sessions.
Cumulative number of Item 629 675 739
software copyrights
Case Cumulative number of Item 1129 1181 1220
trademarks
In 2024 in order to better assist employees in sorting out the technical points during the project R&D
process and extracting patent application points to better protect the Company's technological
achievements the Company launched patent mining training and arranged for external patent
agencies to come to the Company to assist employees in patent mining through one-on-one
communication. Ethics in science and technology
Technology is a powerful tool for development but it can also be a source of risks. The new round of
technological revolution and industrial transformation is accelerating and the breakthroughs and applications of
emerging technologies are having an increasingly profound impact on economic and social development. The ethical
issues that come with them have become a common challenge faced by the world. Ethics in science and
technology are the value concepts and behavioral norms that need to be followed in scientific research technology
development and other technological activities and they are an important guarantee for the healthy development of the
science and technology cause. ZKTeco adheres to the "Data Security Law of the People's Republic of China" the
"Personal Information Protection Law of the People's Republic of China" the "Provisions on the Administration of
Deep Synthesis of Internet-based Information Services" and the "Interim Measures for the Administration of
Generative Artificial Intelligence Services". The Company has released the "BioCV TinyML Multimodal Model
Technology Application White Paper" showcasing our latest achievements in multimodal models and TinyML edge
computing and also indicating our profound insights into the future of AI. In 2024 the Company did not experience
any incidents that violated relevant laws and regulations on ethics in science and technology.Product and service safety and quality
Indicators Unit 2022 2023 2024
Cumulative number of
authorized patents (patents Item 736 858 963 Governance
within the validity period)
Product quality management system
Cumulative number of
authorized invention patents Item 106
149171
Providing high-quality products is the Company's unremitting pursuit. In order to establish and improve the quality
management system of ZKTeco improve product quality enhance the competitiveness of the Company in the
Cumulative number of international market and elevate the Company's management level to a new level we have prepared the "Quality
authorized utility model Item 231 245 248 Management Manual" as a guiding document for the Company to implement quality management and carry out
patents quality planning quality control and quality improvement activities following the principle of customer satisfaction in accordance the "ISO 9001:2015 Quality Management System Requirements" and the
"QC080000:2017 Hazardous Substance Process Management (HSPM) System Requirements" standards and
Cumulative number of combined with the actual situation of the Company. The Manufacturing Center is the main responsible department for
authorized design patents Item 399 464 544 the Company's product quality management. The Company regularly assesses the Quality Manager's performance with
assessment targets including the number of major quality issues customer quality losses and the number of quality
issues at the factory exit.
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Quality policies
Product quality training
To enhance employee quality awareness the Company
Continuously innovate technology; continuously improve product quality; always pursue actively carries out product quality training by a
customer satisfaction. combination of external and internal online and offline
methods. The Quality Management Department is
responsible for providing internal training to employees and
providing targeted training of different categories and contents
for employees concerned quality inspectors etc. External
Use environmentally friendly materials prevent pollution make continuous improvements training is conducted online covering multiple aspects
and meet regulations and customer requirements! such as production line design factory planning QCDSM
indicators etc. In 2024 the Company conducted a total of
89 internal training sessions and 3 external training sessions
with a total training duration of 156 hours and covering 325 The Company conducts product quality
people. training for external suppliers.Quality certifications Customer service system
ZKTeco its Dongguan Branch and Guangdong ZKTeco have all passed the GB/T 9001-2016 and ISO
9001:2015-CNAS CN certifications. As an innovative international technology company since its establishment in 2007 ZKTeco has always adhered
to a global market network layout based on the concept of localized services. ZKTeco has now established a
relatively complete global marketing service network system. As of December 31 2024 the Company has
established 28 branches 14 subsidiaries and 202 service outlets in 31 provinces cities and autonomous regions
across China with a sales and service system covering the whole country. The Company has established a total
of 49 controlling subsidiaries overseas located in 34 countries and regions worldwide with product sales covering
over 100 countries and regions. The Company continuously accelerates its global layout and promotes the
construction of the Company's regional grid marketing system. At the same time the Company has actively
participated in large-scale overseas exhibitions receiving increasing attention in overseas markets such as South
Africa Brazil and Singapore.Domestic market
We are committed to safeguarding customer rights and interests and
continuously improving customer service levels. For domestic
customers the Company has established systems such as the "After-
sales Service Management Specification for China Business Group"
the "After-sales Service Process for China Business Group" the
"After-sales Quality Exception Handling Specification" and the
"Product Warranty Policy of ZKTeco" to standardize product after-
sales service management and after-sales exception handling
process and improve customer satisfaction. The Company has
Product Quality System Certificate been certified as a five-star service provider in accordance with
the "Evaluation System for After-Sales Service of Commodity" (GB/T
27922-2011).
After-Sales Service Certification
Certificate73 SUSTAINABILITY REPORT 2024 74
Overseas market Full process management of customer service in overseas markets
The Company's overseas business revenue accounts for a relatively large proportion due to a large number of overseas
customers. Therefore we have developed a customer service management system that is different from
the domestic market. We have considered the characteristics of multilingualism
multiculturalism and multi-time zones to fully improve customer satisfaction. Different overseas subsidiaries
have developed customer service systems that are adapted to local policies. For example the Mexican
subsidiary has developed systems such as "Politica-de-Garantias-2023" (after-sales maintenance policy) to better Market research and analysis: Gain a deep understanding of the
protect customer rights and interests. characteristics and needs of markets in various countries/regions.Customer consultation and answers: Provide consulting services
tailored to different cultures and languages to answer customer inquiries.Overseas market customer service system
Pre-sales services Product introduction and customized solutions: Provide customized
product solutions based on customer needs.
01
The headquarters team provides services to global branches and customers; Order processing and follow-up: Ensure smooth order process track order status and respond to customer needs in a timely manner.
02 Cultural sensitivity training: Provide team training for customers with
In-sales services different cultural backgrounds to enhance cultural sensitivity.Local teams of branches provide localized pre-sales in-sales and after-sales services to local
distribution customers and their customers;
03 Problem solving and technical support: Provide technical support for
Local teams of branches and various distribution agent teams jointly provide various services to local different languages to ensure timely resolution of customer issues.customers including but not limited to online and offline training experiential interaction
and after-sales service ensuring comprehensive coverage and timely response to customer needs.Customer satisfaction survey and feedback: Conduct regular surveys to
After-sales services understand customer satisfaction and continuously optimize services based
on feedback.Overseas market customer service concept
After-sales service system for overseas markets
Localized services: With the local team at the core understand and respect the local culture
customs and language.Provide 24/7 customer
support services in different
time zones.Seamless communication: With customers as the center provide accessible and efficient 24/7
communication channels ensuring that language and time zones do not become communication support
barriers.Through internal team
training transmit relevant
Multilingual Knowledge knowledge to the customer's team and
Build a multilingual team to support team base and
Personalized care: continuously learn and Gain a deep understanding of customer needs and provide cover the diverse language training respond to different
personalized and thoughtful service experiences. needs of customers. situations through training.57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 SUSTAINABILITY REPORT 2024 76
Strategy
Customer service training Risk/ Risk/Opportunity Description Financial Impact Opportunity Countermeasures
and assessment Type Impact Period3
To better serve customers the Company
conducts customer service training for relevant
employees special training for new employees and
assessment of trainees including theoretical and
practical assessments. In addition the Company If a product or service fails to
provided specialized training on customer complaints adapt to the changes in Regularly conduct market
including etiquette standards for customer service market demand and customer research to understand
personnel and how to enhance customer preferences it will have a low changes in market demand and
experience in order to better respond to customer market acceptance rate; customer preferences and
complaints. competitors may launch more promptly adjust the
Customer Service Training - competitive products or services direction and focus of R&D to seize market share; or the
Online Learning Platform innovation; closely monitor industry may have strict changes in industry regulations
regulations standards and standards and certification
Statistics on Customer Service Training and Assessment certification requirements for requirements and proactively new products or services and if obtain relevant certifications for
they are not met they cannot products.Indicators Unit 2022 2023 2024 enter the market.Person-time of special training on
customer complaint response Person-time 85 90 80
Total duration of special training on The continuous emergence of
customer complaint response Hour 84 96 80 new technologies new materials and new processes provides the Continuously pay attention to
cCompany with technical market demands and the
support to enhance the safety development trends of new
and quality level of its products. technologies promote Number of special training sessions Times 12 12 2 technological exchanges and
on customer complaint response Through technological innovation the Company can cooperation cultivate talents
develop safer more efficient and enhance the Company's
Number of assessments on more environmentally friendly
technological level and
12 12 2 products thereby strengthening develop high-quality new customer complaint response Times its market competitiveness. products.
Pass rate of assessments on %
customer complaint response 86 90 100
3Impact period definition: Short term: within one year; Medium term: 1 to 5 years; Long term: more than 5 years.
Impact risk and opportunity management
The Company has developed the "Risk and Opportunity Control Procedure" to identify and evaluate various risks and
opportunities in the quality management system establish countermeasures for risks and opportunities clarify
operational requirements including risk avoidance risk reduction and acceptable risks establish a comprehensive risk
and opportunity management system enhance the Company's risk resistance and provide operational guidance for
incorporating and applying risk and opportunity identification and evaluation measures in the quality management
system. See the content of "Sustainable Development Risk Management".
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Opportunity Risk
Technical opportunity Market risk
Increased operating revenue Increased cost
and strong market and reduced
competitiveness income
Short and medium to long term Short and medium to long term57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76
77 SUSTAINABILITY REPORT 2024 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96
Indicators and objectives
The Company sets annual quality objectives which are signed off by the General Managers of business groups
and summarized in the "List of Company Quality Objectives". Each department formulates and decomposes
objectives based on the overall objectives and conscientiously implements and monitors them to ensure the achievement Key Performance (Less Than) Target Achievement in 2024
of the overall objectives. In addition we assess the implementation of quality objectives and record the Department Indicators (Quantitative) Value/Month (Monthly Average)
implementation process and assessment results.To achieve our policies and objectives we require all employees to establish the guiding ideology of "quality first" and Number of major quality 1 Achieved
the service awareness of "customer first" establish and maintain a strict and effective management system within the complaints from customers
Company operate in strict accordance with prescribed procedures and documents and provide users with the most
satisfactory and compliant products at the best cost and with the best production and service. Number of serious quality 2
complaints from customers Achieved
Number of production batch
Key Performance (Less Than) Target 2Department Achievement in 2024 Mechanical error incidents
Achieved
Indicators (Quantitative) Value/Month (Monthly Average) Products
Department
Number of major quality Number of quality issues 6
complaints from customers Achieved reported by customers (less Achieved
than)
Number of serious quality Number of major quality 1
complaints from customers 10 Achieved complaints from customers Achieved
Number of production batch 4 Number of serious quality Achieved 2 Achieved
error incidents complaints from customers
ZKTeco
(Excluding Basic
Manufacturing) Number of customer 2 Number of production batch complaints caused by design Achieved 1Ecological error incidents Achieved
reasons Products
Number of times customers Department Number of quality issues
have reported quality issues 27 Achieved reported by customers (less 5 Achieved
than)
Number of major quality 1 Number of major quality Achieved
complaints from customers complaints from customers
1 Achieved
Number of serious quality 4 Achieved Number of serious quality 2
complaints from customers complaints from customers
Achieved
Number of production batch
Electronic 2 Achieved Thai factory
Number of production batch 1
error incidents error incidents Achieved
Products
Department
Number of quality issues Number of quality issues
reported by customers (less 13 Achieved reported by customers (less 3 Achieved
than) than)
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Product quality management Production equipment management
The Company has developed the "Equipment and Instrument Management Control Procedure" to ensure the
normal operation of production equipment testing instruments and metallurgical tools through service renovation
calibration maintenance and management and to reasonably and effectively meet production and testing needs. The
Product Quality Control Process of ZKTeco Production Department and Quality Department are responsible for the application management daily
maintenance and first-level maintenance of the equipment instruments and jigs used in their departments. The
Engineering Department is responsible for the feasibility and configuration assessment design manufacture
repair and modification of the Company's equipment organizing the acceptance of the equipment by the user
departments and the second-level and third-level maintenance. The Procurement Department is responsible for
R&D design quality contacting equipment suppliers to cooperate with the Engineering Department in formulating equipment plans and
Control product quality throughout the entire stages of R&D testing and negotiating quotations. The Management Department is responsible for the assessment of purchase costs and the review
product handover and approval of equipment applications.The Company regularly performs calibration on the equipment either internally or externally with an internal
calibration cycle of six months and an external calibration cycle of one year. The Engineering Department or those with
an instrument calibration certificate shall submit an "Annual Calibration Plan" at the beginning of each year and
schedule the calibration according to the annual plan. In addition the Company has developed an "Annual
Maintenance Plan" for production equipment and carried out daily maintenance and upkeep of the equipment.Order quality
control Conduct order review and PMC review Customer service management
Intelligent service management
We have created a WeChat official
Material quality account of "ZKTeco Customer Service
control Inspect and recheck materials and hold material review meetings We have opened a national technical service Center" where customers can consult
hotline through cloud services and online communicate and operate
the service center has set up 80 agents after-sales maintenance equipment
to intelligently record inbound calls password reset and other work online.outbound calls and business transactions.Assembly quality
control Conduct quality inspection on production equipment and conduct process
inspections
Through the online customer service
system common questions are classified
We have established an after-sales service and answers are edited covering multiple
management system website where aspects such as attendance access control
Finished product customers can operate product after-sales video surveillance and security inspections.quality control management effectively reducing Automatic responses can be triggered by Inspect product packaging and perform factory quality control communication processes and improving identifying key words.work efficiency.Customer satisfaction
improvement Analyze and improve the product based on customer feedback National technical service hotline: 4006900999
WeChat official account: ZKTeco Customer Service Center
Continuous quality After-sales service management system: https://cn.zkteco.com/cn/product
improvement Analyze and repair defective products evaluate and verify before considering
continuing production rework or discontinuation Online customer service system: https://www.sobot.com/console/login57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76
77 78 79 80 81 SUSTAINABILITY REPORT 2024 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96
Customer complaint response Indicators Unit 2022 2023 2024
Number of customers participating in 3511
the survey Nos. 3497 3778
Domestic market Proportion of customers participating in % 88 92 95
In order to improve service quality standardize the complaint handling process system put customers at the center and the survey
improve customer satisfaction we have formulated the "Customer Complaint Acceptance System for China Number of valid customer satisfaction
Business Group" which clarifies the customer complaint acceptance regulations related to product or service quality in questionnaires distributed Copies 3947 3817 3997
the China Business Group.Overall customer satisfaction score
The Company adheres to the principle of "customer first quality first high-quality service and timely Points 92/100 93/100 95/100
response" in the after-sales service and technical support. When receiving customer complaint calls we calm their
emotions communicate complaint content with them and keep records. We promptly handle them within the
Company and provide feedback on the results to the complaining customers. We have set requirements for the
deadline for handling customer complaints to ensure that their demands can be met in a timely manner. After the
complaint handling is completed we fill out the "Customer Complaint Handling Record Form" and the "Technical Responsible marketing
Service Report Form (After-sales Service Form)" and archive and save the documents generated during the complaint
process.The Company regulates its information management and publicity work in strict accordance with the
"Advertising Law of the People's Republic of China" and by formulating systems such as the "Management
Measures for External Publicity of China Region Business Division" adheres to responsible marketing and strictly
Overseas market prohibits all forms of false advertising. We are committed to showcasing the service capabilities and competitive
advantages of ZKTeco to the market while maintaining absolute authenticity and objectivity and strictly prohibiting
Offline complaints: Customers can directly complain to the legal representative of each subsidiary or directly complain false advertising. To enhance our employees' awareness of responsible marketing we provide annual training on
to the legal representative of the business unit during regular visits. The legal representative of the subsidiary and responsible marketing to them.business unit will analyze and provide feedback based on specific circumstances.Online complaints: Customers can provide feedback on relevant complaint suggestions to the Company through the
reserved email on the official website and the Company will respond to customers based on specific circumstances.Indicators Unit 2022 2023 2024
Person-time of responsible
marketing training Person-time
556609521
Customer satisfaction survey
Total duration of responsible
Customer feedback is an important source of information for ZKTeco to continuously optimize its services and the marketing training Hour 8 8 8
Company attaches great importance to and continues to carry out customer satisfaction management. We
conduct customer satisfaction surveys on an annual quarterly or monthly basis through telephone WeChat QQ
questionnaire and other survey methods. The survey targets core agents in China large end customers overseas Number of responsible
subsidiaries and customers related to quality ticket customer complaints. We also follow up on customer feedback or marketing training sessions Times 4 4 4
suggestions and generate a "Customer Satisfaction Survey Follow-up Form".
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Data security and customer privacy
Management organization
protection
The Company has established an Information Security and Privacy Management Committee and an
Information Security Management Working Group. With the vision of protecting the Company's core assets and
preventing information leakage the Company has established and implemented a series of strategies systems
Governance measures and methods through asset collection risk analysis and plan formulation and established an information security management system which has been comprehensively promoted and implemented within the
Company. The Information and Product Security Committee is a Promotion Group under the highest organization of
the Company's information security responsible for the overall information security management of the Company
and for promoting the implementation of information security and other departments cooperate to complete
Institutional policy information security related work.Information Security Information Technology Service and Privacy Security
With the development of information technology revolution and economic globalization competition between
enterprises has shifted to competition in technology and information. Protecting the Company's core Management System Diagram for XIAMEN ZKTECO
technology secrets and other information assets and preventing information leakage have become the basic
guarantee for the Company's sustainable development. ZKTeco has established multiple information security and Top management of the Company management
privacy protection related systems and regulations in strict accordance with laws and regulations such as the Company
"Cybersecurity Law of the People's Republic of China" and the "Data Security Law of the People's Republic of
China" including the "Cybersecurity Management Regulations" the "Information Security and Privacy Incident
Management Regulations" the "Software Development Security Management Regulations" etc. covering personnel Information Management
security management access control management network and communication security operational security Committee
information security continuity management information asset protection privacy related management etc.In order to define the process and requirements for establishing implementing maintaining and continuously
improving information security information technology services and privacy security management systems in the
Company clarify the responsibilities of all related parties establish management policies and basic strategies Execution layer
and guide all business units and employees to carry out their work comprehensively within the Company ZKTeco
has developed the "Information Security and Privacy Management Manual" in accordance with international Business Unit Manager
standards such as the "Information Security Management Requirements" (ISO/IEC 27001:2013) and the "Information
Technology - Security Techniques - Code of Practice for Information Security Controls Based on ISO/IEC 27002 for
Cloud Services" (ISO/IEC 27017:2015). XIAMEN ZKTECO has developed the "Management Manual" for Group members
information security management information technology service management and cloud security management Information Promotion Group/Information
system documents for privacy security. Technology Service Group
Management
Information security and privacy security policy: representative
Members of each
department
Information security is everyone's responsibility and risk control is continuously improved.System certifications
Information technology service policy:
The Company actively carries out information security and privacy protection related management system
certifications. ZKTeco has passed ISO 27001:2022 information security management system certification and ISO
27701:2019 privacy information management system certification. XIAMEN ZKTECO has passed ISO 27001:2013
information security management system certification ISO 27701:2019 privacy information management system
Quick response professional focus first-class service and continuous improvement. certification and ISO 27017:2015 cloud service information security management system certification all of
which are valid during the reporting period.57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76
77 78 79 80 81 82 83 84 85 SUSTAINABILITY REPORT 2024 86 87 88 89 90 91 92 93 94 95 96
Onboarding Online and Offline Training for ZKTeco's New Employees on Information Security
Information security training
The Company provides information security-related training to new employees upon their onboarding.Meanwhile it conducts regular information security awareness training for current employees and carries out training
assessments and satisfaction surveys. In the past three years the Company has not experienced any violations of Information Security Training of XIAMEN ZKTECO
information security and privacy protection. The Company attaches great importance to data security protection and
continues to increase investment in data security.Training on Information Security and Privacy Protection Conducted by the Company
202220232024
Indicators Unit
Dongguan Xiamen Dongguan Xiamen Dongguan Xiamen
Number of relevant training times 12 4 12 4 12 5
sessions conducted
Number of participants in 253
practice and training person-times 958 586 1005 664 957
Employee coverage of % 31 52
practice and training 34 71 50 74 Privacy and Cloud Security Training of XIAMEN ZKTECO
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77 78 79 80 81 82 83 84 85 86 87 SUSTAINABILITY REPORT 2024 88 89 90 91 92 93 94 95 96
We summarize information assets of various departments and compile the "List of Information Assets" and classify
Strategy and rate them based on their characteristics (confidentiality integrity and availability). For information assets at level III
or above we assess potential risks including risk likelihood consequences and asset level form preliminary risk levels
determine final risk levels after taking measures and record them in the "Risk Assessment Form"; develop a risk
Risk/ Financial Impact management plan for level 3 and above risk assets and risk items and prepare a "Risk Assessment Report & Management
Opportunity Risk/ Opportunity Description Impact Period4 Countermeasures Plan".Type
Data and customer privacy Regularly carry out special audits on information security conduct Emergency event managementleaks will violate relevant laws
and regulations on information self-examination and self- To address information security risks ZKTeco has developed alternative measures and emergency plans to ensure the
security as well as the correction to ensure compliance with legal and regulatory Company's level of information security management. The Company has established systems such as the requirements of regulatory
agencies and customer audits and requirements and the requirements "Business Impact Analysis (Information Security)" the "Information Security Continuity Management
face the risks of being for regulatory agencies and user Regulations" and the "Information Security Continuity Management Plan" to provide stable and reliable guidance for
reported legal proceedings or audits; continuously optimize the
penalties. information security management
ensuring information security. Moreover in order to respond to possible emergencies achieve scientific procedural
system. and standardized emergency response to network and information security emergencies and build an information
and network security guarantee system the Company has developed multiple emergency plans to take timely
measures in the event of information security emergencies. In addition the Company regularly conducts emergency
drills for data security. During the reporting period the Company carried out multiple emergency drills including data
backup drills business continuity drills and network equipment emergency drills.Emergency Plan Formulated by the Company for Dealing with Information Security
Public concern over data Formulate clear data security
security and privacy protection is policies and procedures; Emergencies
on the rise. Once a data enhance technical protection
leakage incident occurs the data backup and recovery;
Company's brand image will be establish an emergency
severely damaged. response mechanism.ZKTeco XIAMEN ZKTECO
"Emergency Response Plan for Storage "Emergency Plan for Failure Handling in
When designing and Server Failures" Internet Behavior Management (AC)"
The public is increasingly developing products pay "Emergency Plan for Handling Failures in
concerned about personal data attention to information "Emergency Plan for Handling Core Switch
security and privacy protection security and privacy Access Aggregation Switches" Faults"
and the market demand for protection innovate product "ZKTeco's Fire Emergency Mechanism" "Emergency Plan for Power Outage"
highly secure information and and service models and "ZKTeco's Power Outage Emergency
data products is on the rise. enhance technical "Fire Emergency Mechanism"
protection capabilities. Mechanism"
"Emergency Plan for Failure Handling in ……
Internet Behavior Management (AC)"
4Impact period definition: Short term: within one year; Medium term: 1 to 5 years; Long term: more than 5 years. ……
Impact risk and opportunity management Information security audit
The Company has formulated regulations such as the "Internal Audit Procedures for Information Security
ZKTeco has formulated the "Information Security Risk Assessment Guidelines" the "Personal Privacy Risk Management System" "Information Security Risk Management Procedures" and "Information Asset
Assessment Guidelines" and the "Information Confidentiality Classification Guidelines" to assess and manage Protection Management Procedures". It conducts regular internal audits on information security and issues the
information security risks and personal privacy risks. XIAMEN ZKTECO has formulated the "Information "Internal Audit Report for Information Security". The Company conducts information security audits on the business
Confidentiality Classification Guidelines" and the "Information Security Risk Management Procedures" to activities of departments categorizes the problems or deficiencies in information security management and
identify and determine the confidentiality levels of various information in the Company's business activities. The requires relevant departments and personnel to complete rectification within the required rectification period based on
confidentiality levels from level I to level V are classified as top secret confidential internal restriction internal the rectification suggestions in the "Corrective and Preventive Action Report". At the same time the Company regularly
disclosure and external disclosure. hires external professional third-party organizations to conduct on-site information security audits summarizes the
discovered problems and provides suggestions. The Company has compiled the "Corrective Action Requirements"
report for the Company's reference.
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Opportunity Risk
Market opportunity Reputation risk Legal risk
Increased income Decreased income Increased cost
Medium to long term Short and medium to Short and medium to
long term long term57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76
77 78 79 80 81 82 83 84 85 86 87 88 89 SUSTAINABILITY REPORT 2024 90 91 92 93 94 95 96
Indicators and objectives
The Company has set information security information technology service and privacy security management
objectives and all objectives were achieved during the reporting period.Cloud service availability ≥ 99.9%;
Timely response rate to privacy incidents ≥ 95%.Ensure the security of the Company's core information assets and
prevent information leakage.Number of security incidents:
Target value of major safety incidents: 0 times per year;
(Including but not limited to core code damage and loss leakage of
trade secrets to competing companies in the industry financial
statement leakage etc.) Information security management work plan:
Target value of major security incidents: no more than 3 times per
year;
(Including but not limited to network interruption exceeding one
working day power outage exceeding one working day etc.) By conducting various Continuously improve Improve data/ Strengthen the
Target value of general safety incidents: no more than 8 times per forms of security data/information information security detection and
year. training courses enhance employees' security management technical monitoring of data/
(Including but not limited to network interruption exceeding half a awareness and systems and norms infrastructure and information security
working day power outage exceeding half a working day etc.) execution of and implement them; systems such as and continuously carry
information security; updating firewall out security inspection
Number of information leaks: equipment network audits emergency
management devices response drills etc. to
Zero incidents of information leakage at or above the confidential (AC) etc. effectively prevent and
level. handle data security
threats.Data security management measures
Target assessment qualification rate agreed upon in the service level
agreement ≥ 99%; Data security protection
Software design implementation rate ≥ 97%;
Customer satisfaction ≥ 85%.The Company conducts risk identification and analysis on supplier information customer data employee data
etc. and takes targeted measures to protect their data security and privacy. In addition the Company requires all
relevant personnel to sign the "Confidentiality Agreement" and install ESMC port management software and
antivirus software to prevent virus and Trojan attacks.
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Information Information
technology security
service objectives:
objectives:
Privacy
security
management
objectives:57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76
77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 SUSTAINABILITY REPORT 2024 92 93 94 95 96
Information security technology guarantee
Protecting supplier information: Protecting customer data:
The Company keeps confidential paper For customer data related to R&D technical
versions of supplier information while support the Company has formulated the
electronic versions are stored in the "Technical Support Service Customer Data
NAS and access permissions are set. Privacy Management Rules" to clarify the
XIAMEN ZKTECO classifies suppliers Set up a firewall at the entrance of the external network to resist external virus work requirements of technical support
sets different information security personnel. In addition we require and Trojan intrusion.requirements for the confidential customers to sign a "Privacy Protection
information involved by different Statement for Technical Support Services"
suppliers and takes targeted reminding them to backup and clear device data
measures. before sending the product for repair; for
special circumstances where it cannot be Install AsiaInfo antivirus software on the server.cleared customers need to sign relevant
statements and the Company's technical
support personnel will clear the data and
keep records after processing.Use internal network system. External network needs to be accessed
through VPN.Achieve product data/sensitive information encryption.Protecting employee data:
The Company stores paper versions of
employee data in the Printing Room sets
access control and permissions and clears them
upon expiration; electronic files are stored in the Carry out computer port management (using ESMC for terminal control).NAS and only support internal network access.Access permissions are set and relevant data
is backed up weekly.Restrict some personnel's internet access and use the SangFor AntiBot System
Company Access Control to control their Internet behavior.Anonymize product user data.Implement access control (develop the "Access Control Management
Regulations").Company Printing Room
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ZKTeco's information security technology guarantee measures57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76
77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 SUSTAINABILITY REPORT 2024 94 95 96
Data security technology cooperation Quantity Table of Suppliers of ZKTeco in 2024
Indicators Unit Quantity in 2024
ZKTeco actively expands cooperation in security
ecosystem technology conducts in-depth communication with
data security technology companies and invites external
organizations to provide training and guidance to employees Total number of suppliers Nos. 304
comprehensively strengthening the Company's
capabilities in threat intelligence collection vulnerability
scanning risk assessment and other aspects. In April
2024 the Dongguan Bureau of Industry and Information
Technology entrusted Guangzhou China GDN Security
Technology Co. Ltd. to conduct an information security
risk assessment for the Company; from June to July 2024 Supplier access
SGS provided information security internal auditor training
and document gap analysis training for the Company;
in September 2024 the Dongguan Bureau of Industry and The Company manages the access of suppliers by setting corresponding standards and approval processes in supplier
Information Technology conducted the "Wanqi'an-2024" sourcing supplier certification and supplier selection ensuring that the selected qualified suppliers meet the
Dongguan Industrial Enterprise Cybersecurity Attack and
Defense Drill for the Company; in November 2024 Sangfor Company's business needs in terms of quality delivery price compliance and trade security. The Company has
Technologies Inc. conducted a comprehensive security set minimum access standards for suppliers for both production and non-production procurement and set
assessment of the Company's computer room; in 2024 minimum requirements for supplier enterprise size registered capital industry experience system certification
XIAMEN ZKTECO hired external institution Indusface product environmental protection etc. for different materials.WAS to conduct application penetration testing and invited SGS Information Security Training for
SGS to provide information security training for its employees. XIAMEN ZKTECO
Supplier review
Customer privacy protection
For new suppliers the Company conducts on-site reviews at the supplier development site. Before the first trial
ZKTeco respects and protects the privacy of customers and formulates the "Product Privacy Policy". It will sign a production suppliers within the province shall organize personnel from R&D/material certification or
"Confidentiality Agreement" before conducting business cooperation with customers requiring the confidentiality engineering procurement and other departments to conduct on-site reviews of their process capabilities
of information between both parties. We have made provisions in the "After-sales Quality Exception Handling quality status delivery time etc. The review results shall be filled in the "Supplier Site Assessment and Review
Specification" to protect customer privacy: do not call and view user information without user authorization; do not
modify delete copy or transmit user data to the outside world without user authorization; do not exchange Form". After approval by relevant personnel sustainable procurement may be carried out if the review
customer accessories without user authorization; do not change customer machine hardware and software settings results are at level C or above (including level C); suppliers from outside the province can conduct self-
without user authorization. In addition we require relevant personnel to notify customers to clear device assessment or video review based on actual needs and evaluate whether they meet the Company's procurement
data before handling after-sales product returns and exchanges. needs based on written qualification materials and technical strength (patents technical specifications etc.)
provided by the suppliers. For suppliers listed in the "Qualified Supplier List" the Company will conduct
Each overseas subsidiary has established relevant policies and systems to protect customer information. For regular or irregular reviews based on their actual situation.example the Mexican subsidiary has formulated the "Aviso-de-Privacidad-Integral (Comprehensive Privacy
Statement)" the "Politica-de-Privacidad-ZKTeco-LATAM (Privacy Policy)" etc. to standardize customer
privacy protection.Supplier Review Rating Table at Development Site
Supply chain security
Category Level Score
Governance
Excellent Level A 90.1-100 points
Supplier management Good Level B 80.1-90 points
In order to standardize supplier management improve the Company's supplier classification and grading Qualified Level C 70.1-80 points
management mechanism develop differentiated supplier management strategies and ensure the
achievement of procurement objectives the Company has formulated the "Supplier Management Control
Procedure" which makes clear provisions for supplier access supplier assessment supplier classification etc. At the Improved after coaching Level D 60.1-70 points
same time the Company has developed a "New Supplier Selection Certification Procedure" to standardize the
selection of new suppliers for the Company ensure the quality of purchased materials provide stable sources
of goods and improve the competitiveness of the Company's products. The Company conducts intelligent Unqualified Level E Below 60 points (inclusive)
management of suppliers through digital systems such as SAP and SRM.
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Strategy
Supplier assessment
Risk/ Risk/Opportunity Financial Impact
Opportunity Description Impact Period CountermeasuresThe Company has established a supplier performance management team which is organized and led by the Type
Quality Department. It mainly includes departments such as the Executive Procurement Department the
Resource Development Department the Quality Department the Material Certification Department and the
R&D Department responsible for conducting monthly performance assessments of suppliers. For suppliers who
score last 5 in consecutive assessments the Company has conducted interviews or on-site coaching and Select multiple suppliers for
output the "Minutes of Supplier Quality Problem Counseling Meeting". For suppliers who score last 5 in Insufficient raw material raw material procurement to
consecutive assessments the Company has considered reducing orders and eliminating them. capacity and issues such ensure a continuous supply of
Decreased Short to as conflict minerals may lead raw materials; require medium
to disruptions in the income term suppliers to sign the "Letter of
Company's supply chain Commitment for Not Using
Supplier classification affecting the production and Conflict Minerals" and strictly
sales of its products. control the source of raw
materials for the Company.The Company divides suppliers into four categories based on supply risk and procurement amount: core
suppliers leverage suppliers bottleneck suppliers and general suppliers. Different management strategies are
adopted for different categories of suppliers to improve the efficiency and level of supplier management.Adjust the procurement
strategy flexibly in accordance
with market conditions
The prices of raw materials Short and medium negotiate with suppliers on Increased cost
High have risen and logistics costs to long price and payment terms or term
Leverage suppliers Core suppliers have increased. adjust the supply ratio from
different manufacturers with
the same material to cope with
price fluctuations.General suppliers Bottleneck suppliers
By integrating advanced
information technologies such
as IoT big data and AI
Low the Company's supply Carry out digital and Reduced Medium
cost to long chain management becomes intelligent management of term
Low Supply risk High more intelligent and automated the supply chain.thereby enhancing the response
speed of the supply chain.Supplier Category Management Objectives 5 Impact period definition: Short term: within one year; Medium term: 1 to 5 years; Long term: more than 5
Core suppliers Establish partnerships and develop competitive advantages.Leverage suppliers Leverage resources to reduce procurement costs. Impact risk and opportunity management
Bottleneck suppliers Lower procurement risks and ensure effective supply. The Company attaches great importance to solving the uncertainty of the supply chain and ensuring supply chain safety. In order to ensure effective production ensure the supply of purchased materials and prevent unexpected
losses caused by shortages or poor quality of purchased materials the Company has formulated the
General suppliers Streamline internal processes and reduce management costs. "Supplier Emergency Control Procedure". Through process planning arrangements are made in advance to
quickly respond to problems and ensure timely delivery of products to customers.
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Procurement
amount
Oppo-rtunity Risk
Digital transformation of Market risk Supply chain
the supply chain disruption risk57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76
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The Company has established an emergency response team with the General Manager of the Supply Chain The cooperation between the Company and suppliers is based on the principles of fairness justice mutual benefit and
Committee serving as the team leader and the Resource Development Manager Executive Procurement win-win cooperation. The mutual trust conventions and contracts established by both parties in the cooperation are
Manager Material Certification Department Manager Quality Manager and PMC Manager as team members to the foundation of business cooperation and improving efficiency and common development are the common goals
coordinate and handle supply chain security management related work. For different emergency events the of both parties. The supply chain has always adhered to the principles of "sunshine purchase honesty and
Company has developed emergency plans and clearly defined various emergency measures. In the event of an trustworthiness integrity and self-discipline" requiring suppliers to also bear relevant responsibilities for social
emergency the emergency response team decides whether to implement the emergency plan based on the current responsibility and environmental impact. By formulating complete procurement management agreements and
procurement situation of the Company's production plan and unifies the command of emergency response. continuously improving the procurement process the Company ensures that the source of materials is legal and
compliant. In order to promote and regulate the active fulfillment of corporate social responsibility by partners in the
Emergency Response Team supply chain we have signed a "CSR Agreement" with suppliers to regulate the requirements of both parties including labor rights environmental protection occupational health and safety business ethics and other aspects.Team leader
General Manager of
the Supply Chain Committee
Clean procurement
The Company continues to enhance the business ethics awareness of our suppliers and is committed to establishing
honest fair and trustworthy business cooperation relationships with them. To ensure the transparency of the
Team members Team members procurement process the Company and its suppliers jointly signed the "Integrity Agreement" and the
Resource Team members Manager of Material Team members Team members "Procurement Framework Agreement" advocating mutual supervision and creating a fair competition honest and
Development Executive Certification Quality Manager PMC Manager trustworthy and sunny and healthy business environment. At the same time the Company has set up a dedicated
Manager Procurement Manager Department complaint channel for accepting reports of illegal and disciplinary behaviors encouraging the reporting and
exposure of behaviors that violate work integrity such as accepting commercial bribes and transmitting improper
benefits and protecting whistleblowers. In 2024 the signing rate of the "Integrity Agreement" among suppliers was
100%
Indicators and objectives
Objective Achievement
Reporting Acceptance Channels
No significant risks or impacts occurred in the supply chain links. Achieved EMAIL： TEL：
zklaw@zkteco.com 1371146414@qq.com 13518555484
Responsible supply chain management
Sustainable procurement
Conflict mineral control
ZKTeco always adheres to the concept of sustainable development throughout the procurement
management process. Before establishing a cooperative relationship with suppliers both parties need to sign ZKTeco has always practiced and actively assumed social responsibility adhered to ethical procurement promoted
agreements such as the "Environmental Protection Agreement" the "Commitment Letter for Non Infringement of sustainable development of the industry chain and strictly controlled conflict minerals. We require suppliers to sign a
Intellectual Property Rights" and the "Commitment Letter for Non Use of Hazardous Substances". In addition "Letter of Commitment for Not Using Conflict Minerals" in the new supplier identification and selection procedure
before adding suppliers to the Company's "Qualified Supplier List" suppliers are required to provide the Environmental document strictly control the Company's raw material sources and make every effort to ensure the procurement
Compliance Declaration the Material Composition Declaration and the Third-party Environmental Testing Report and use of non-conflict minerals in the supply chain within a commercially reasonable range.completed by laboratories with ISO/IEC 17025 certification qualifications.
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04
People-oriented
Creating a
Harmonious
Society
Good health Quality Gender Reduce
No poverty and well-being education equality inequality
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Protection of employee rights and interests During the reporting period the Company hired 52
employees through campus recruitment and 161
employees through social recruitment.Employee recruitment
The Company has formulated multiple management systems including the "ZKTeco's Recruitment and Configuration
Management Regulations" and the "ZKTeco's Recruitment Behavior Operation Standards" in strict accordance with relevant
laws and regulations such as the "Labor Law of the People's Republic of China" (hereinafter referred to as the "Labor Law")
and the "Labor Contract Law of the People's Republic of China" (hereinafter referred to as the "Labor Contract Law"). Adhering
to the principles of "respect fairness and impartiality" and "efficient identification scientific evaluation personnel position Campus Recruitment
matching and selective recruitment" the Company standardizes the recruitment and entry process of employees and ensures that
recruitment work is fair just and orderly. We adhere to the talent concept of "those who are capable come first and talents
emerge in large numbers" evaluate talents based on their abilities qualities and values and build ZKTeco's talent supply chain.Employee recruitment channels
The Company closely follows its talent development strategy and actual business needs to build a dual recruitment channel
both internally and externally. Externally the Company widely recruits outstanding talents through social and campus
recruitment and actively responds to national policies by providing equal employment opportunities for special groups such as the
disabled and veterans fulfilling its corporate social responsibility. Internally the Company opens an internal talent market to
employees providing them with more opportunities to expand their career development fields. Through a coordinated internal Social Recruitment
and external recruitment strategy the Company not only continuously introduces new talents from outside injecting new vitality
into its development but also creates a broader development space for internal employees promoting the common
progress of talents and the enterprise.Given the high level of understanding and loyalty among internal employees towards the Company the Company adheres
to the principle of "internal first external later" in recruitment prioritizing internal recruitment to promote internal talent
flow and optimize allocation and enhance employee motivation. When internal recruitment cannot meet the Company's
employment needs the Company considers external recruitment to attract outstanding talents and revitalize the enterprise's
talent pool. The Company conducts an annual effectiveness evaluation of recruitment channels retains efficient recruitment
channels and eliminates inefficient ones.Number of new employees：213.Social This includes online recruitment platforms on-site job fairs and third-party
recruitment human resource services etc. 1
123
79
This includes both online and offline campus recruitment presentations job 90 133
Campus
recruitment fairs school-enterprise cooperation and cooperation with third-party campus
Divided Divide
by d by
recruitment companies etc. gender age
Internal
recruitment This includes internal job transfers and promotions. Male Female
30 years old 31-50 Over 50
and under years old years old
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Employee structure
Legal and compliant employment
Total number of employees:3558. Compliance with employment procedures
The Company strictly adheres to relevant laws and regulations such as
123 the "Labor Law" and the "Labor Contract Law" to ensure the compliance
During the
fairness and transparency of the employee recruitment and reporting period
1288 employment process. The Company legally signs formal labor contracts the Company's
2245 with all employees re-employment agreements with rehired labor contract
2270 1190 personnel and internship agreements with interns safeguarding the rights signing rate was
Divided Divided and obligations of both parties and ensuring clear and compliant labor by
gender by age relations. The Company attaches great importance to the protection of employee privacy and strictly follows relevant regulations on personal 100 %
90 information processing to effectively safeguard the legitimate rights and interests of employees and build a harmonious and stable
employment relationship. During the reporting period the
Company's labor contract signing rate was 100%.Male Female 30 years old 31-50 Over 50
and under years old years old
1 194 Prohibition of child labor
11978805
The Company firmly opposes any form of disguised employment of child
1702 1736 labor and strictly implements the "ZKTeco's Recruitment Behavior During the
Divided by Divided
educational Operation Standards" and the "Recruitment Background Check Operation reporting period by
background 1118 specialty Standards". Identity verification is conducted during background the Companydid not
1363 checks and new employee onboarding to ensure that all new hires meet the legal age requirements and prevent the accidental recruitment experience
of child labor. If child labor is found to have been accidentally any incidents
Doctor Master's degree Production Sales Technical recruited the Company will immediately terminate their employment personnel personnel personnel of child labor.and properly arrange for their return to their parents or guardians.Bachelor's degree Other Financial Administrative During the reporting period the Company did not experience any
personnel personnel incidents of child labor.Number of employee departures Total employee turnover rate Opposition to forced labor
861人30.53%
The Company strictly complies with labor laws and regulations and prohibits
the use of any form of forced or compulsory labor ensuring employees' legal During the reporting period
right to rest. The Company has clear policies on working hours and leave the Company
implementing a 5-day 8-hour workweek system and combining other working
Diversification equality and inclusiveness hour systems to ensure that the average working hours per person do not exceed 8 did not
hours. For overtime situations the Company implements policies of paying
The Company has always adhered to the principles of "respect fairness and impartiality" and firmly opposes experienceovertime wages or granting compensatory time off prioritizing employees'
any form of discriminatory behavior. The Company clearly stipulates in the "ZKTeco's Recruitment Behavior preferences for compensatory time off to ensure that overtime is arranged voluntarily incidents of
Operation Standards" that it is prohibited to pass on discriminatory ideas such as region race and gender. During and reasonably. Additionally the Company provides employees with paid forced labor.recruitment and employment the Company abides by the relevant provisions of ZKTeco's Business Values Guide statutory holidays such as annual leave sick leave and maternity leave to ensure they
cares for employees and does not take the hepatitis B test and pregnancy test as employment conditions does not have sufficient rest time when needed. During the reporting period the Company
take social class nationality religion etc. as the criteria for judging employees and respects and guarantees the did not experience incidents of forced labor.rights and interests of employees. During the reporting period the Company did not experience any incidents of labor
discrimination.
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Compensation and benefits management Performance assessment
The Company continuously optimizes its performance management system and incentive and restraint
Compensation system mechanisms formulates the "Employee Performance Management System" adheres to the principles of "fairness openness and scientificity" and conducts monthly quarterly and annual performance appraisals. The Company sets
up various performance assessment models including but not limited to behavior and attitude assessment methods
The Company has established a scientific and reasonable compensation system formulated and key performance indicators (KPIs) personal business commitments (PBCs) etc. and flexibly selects appropriate
implemented the "Compensation Management System" to standardize compensation management enhance performance assessment methods based on the actual business needs of each department to ensure the
the incentive balance and fairness of compensation and ensure scientific and reasonable compensation effectiveness and fairness of performance management. The results of performance appraisals will be used as
distribution. The Company determines salary standards based on the principles of remuneration for work important references for employee salary adjustments promotions and other work applications. Monthly/Quarterly
fairness and justice and mutual benefit between labor and capital according to the corresponding job level of the performance results affect monthly performance bonuses while quarterly/annual performance results affect daily
position fully leveraging the incentive and guiding role of compensation. floating rewards.Performance feedback and appeals
Fixed salary (basic salary) Floated salary (position salary)
We attach great importance to the two-way communication between performance appraisers and those being
Basic salary and position salary Performance bonus special bonus year- evaluated improve the performance communication and feedback mechanism and provide regular end bonus year-end performance bonus performance interviews and feedback for employees. After each performance appraisal cycle managers
annual evaluation bonus and medium and proactively communicate with employees about their performance to help them understand their work
long-term bonus performance and provide improvement suggestions. If employees have objections to the performance
appraisal results they can submit written appeals to their superior leaders. If no consensus is reached
employees can submit the "Performance Appraisal Appeal Form" to the Human Resources Department within 3
Company working days after receiving the performance appraisal results. The Human Resources Department will
Compensation
Subsidies and allowances WelfareStructure conduct research together with the employee's department within 5 working days after receiving the complaint.Insurance and housing fund and others
Age allowance attendance bonus and others
Equity incentives
To fully stimulate and mobilize the enthusiasm and initiative of the core team effectively combine the
interests of the Company shareholders and employees and maximize the co-growth of multiple values the Company
officially released the "2022 Restricted Share Incentive Plan" in September 2022. In November 2024 the second
Welfare system phase of the restricted shares granted under the plan was completed and 1557855 restricted shares were granted
to 436 eligible incentive objects.To protect the rights and interests of employees enhance the cohesion of the Company and attract and retain The Company held the 7th Session of the Third Board Meeting on November 10 2023 and deliberated and approved
outstanding talents the Company provides employees with generous benefits. During the reporting the "Proposal on Repurchasing Company Shares through Centralized Bidding Trading". The Company was
period the Company's social insurance coverage rate was100 %. agreed to use its own funds to repurchase the issued RMB denominated ordinary shares of the Company through
centralized bidding trading for employee stock ownership plans or equity incentives. As of February 1 2024 the
Company's Welfare System Company's share repurchase plan has been completed. The Company repurchased 2230000 shares through the dedicated securities account for share repurchases by centralized bidding with a total transaction amount of
RMB 59683228.10 (excluding transaction fees). The repurchased shares will be used for equity incentives or
National statutory welfare Independent company welfare employee stock ownership plans.Insurance and housing Bonus Accommodation Health Democratic management and communication
fund Special or temporary Annual physical
Social insurance and bonuses and year-end Dormitories examination of
housing provident fund in bonuses employees
accordance with the law Democratic management mechanism
Vacation Catering Entertainment Others The Company establishes the trade union in accordance with relevant laws and regulations irregularly holds employee
Statutory leaves such as Annual meetings Nurseries gyms congresses facilitates communication channels and safeguards the legitimate rights and interests of annual leave sick leave
maternity leave etc. Cafeteria gatherings performance employee interest free employees such as the right to know and participate. Employees of the Company join the trade union organization on a events and lucky draws housing loans etc.every year voluntary basis. The management structure of the trade union organization includes members such as the Chairman
finance and economics cultural and sports labor and welfare and women's protection. Employee representatives
account for about 5% of the total number of members.
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Diversified communication channels
The Company has established equal and democratic diversified
communication channels ensuring that employees can obtain timely and Case: World Book and Copyright Day Event
clear information in different scenarios through face-to-face meetings
emails internal social networks (such as Colleague Bar and ZKTeco
World) etc. At the same time the Company has established a The Company set up a spring event scene integrating books and scenery making it convenient
complete employee feedback channel and it encourages employees for everyone to read donate and recommend books. This event aims to stimulate employees'
to raise questions and suggestions at any time through setting up interest in reading cultivate their reading habits enhance their knowledge and humanistic
employee suggestion boxes employee proposal centers etc. To further qualities help the Company build a learning organization promote talent development within the
enhance information transparency the Company has set up a company enterprise and strengthen the cohesion of the Company.affair disclosure column issuing announcements internal communications
etc. to help employees better understand the development and objectives
of the enterprise. Employee Suggestion Box Poster
Company Affair Disclosure Column WeCom Workbench - Employee Proposal Center
Case Club Activities
Labor dispute resolution
To enrich the cultural life of employees promote communication and exchanges among them and
The Company's trade union organization assumes the function of labor dispute mediation and collaborates with local create a positive and healthy team atmosphere in June 2024 the Company launched a club
community service organizations to handle labor disputes. The management of labor disputes within the Company recruitment and successfully established eight clubs: the basketball club the table tennis club the
is the responsibility of the Human Resources Department of each business group. They handle abnormal labor badminton club the coffee club the hiking club the singing and performing club and the psychology
relations through employee interviews and event verification and issue disciplinary notices in accordance with club. Each club actively organized activities making the employees' spare time more colorful.company regulations. If employees have objections they can file complaints with the Human Resources Center. If the
issue cannot be resolved the trade union leader and community leader will intervene for mediation. Currently
there are few labor disputes in the Company and employee satisfaction is high.Employee activities and employee care
Employee activities
The Company adheres to a people-oriented management philosophy and is committed to creating a warm and
harmonious working atmosphere for employees. Through organizing a variety of cultural and recreational
activities it helps employees relieve work pressure rejuvenate their work energy and stimulate their potential.
117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136109 SUSTAINABILITY REPORT 2024 110
Focus on employee mental health
Case Mid-Autumn Festival Event
The Company attaches great importance to the construction of employee mental health and has launched an online
course titled "Mental Health and Self-Psychological Adjustment" to help employees deeply understand the
The Company held the "Full Moon of Mid-Autumn ZKTeco Overflowing with Affection - Be the significance of mental health master scientific stress management methods and cultivate a positive attitude towards
Swallow in the Tide of the Times" Mid-Autumn Festival theme event organizing a lantern riddle guessing life.activity to create a festive atmosphere enrich cultural life and promote communication and
interaction among employees.Employee assistance
The Company has formulated the "Management Regulations for Corporate Care of Sick Employees". The Company
provides care and assistance to sick employees and their families visits sick employees with gifts and money and
reimburses the travel expenses for cross city visits. In order to help employees with major illnesses solve practical
difficulties and reduce the burden of medical expenses on employees the Business Group Management Department
provides assistance and consolation money based on the actual situation of employees. At the end of 2022 the
Company launched an interest-free housing loan for employees to meet their housing needs and assist those with
housing difficulties. The terms were updated and revised at the end of 2024 expanding the scope of borrowing to
include car purchases and loans for serious illnesses.Protection of female employees' rights and interests
Case Employee Family Day
The Company strictly adheres to the requirements of laws and regulations such as the "Law of the People's Republic of
China on the Guarantee of the Rights and Interests of Women" actively implements exclusive paid leave for female
employees such as prenatal check-up leave prenatal rest leave maternity leave and breastfeeding leave and
The Company held the ZKTeco Family Day event to express gratitude to the employees for their hard strengthens protection for female employees during pregnancy maternity and breastfeeding periods. We respect
work and dedication at ZKTeco over the years and to thank the employees' families for their and care for female employees strive to combat discrimination against special groups such as pregnant women
support. This event also aimed to allow more employee families to understand the Company and implement human rights protection effectively. In 2024 77 employees enjoyed maternity leave with a 100%
experience its culture and enhance the cohesion of the enterprise. return-to-work rate after maternity leave and 0 employees enjoyed parental leave.Case International Women's Day - "Her Power Hot and Spicy" Salon
The Company held a "Her Power Hot and
Spicy" salon to inspire female employees to
bravely break through themselves rebuild
confidence and value and enhance work
enthusiasm and creativity.57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76
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Career development channel
Case Conducting the Lecture "Reject Domestic Violence Cherish the Good"
Career development path
To further deepen legal publicity and rights protection services and to truly pay attention to
women's livelihood and strive to create a good social atmosphere of gender equality and
protection of women's rights the Company invited staff from Dongguan Yingke Law Firm to The Company formulates the career development path and promotion channels for employees based on actual
conduct the lecture "Reject Domestic Violence Cherish the Good". conditions providing diversified career development directions and opportunities to maximize the vitality and
potential of employees. The Company divides employees into five categories namely management
marketing technical professional and operational categories. Except for the management category employees in
other categories are evenly divided into six levels and are promoted step by step based on work experience and
performance. The career development path is clear.ZKTeco's Position Pattern
Management Executive Operational Management Decision-
Category (M) Management (M3) Management (M4) makers (M5)
New
Rank entrants Assistants Junior Intermediate High Senior Experts
Marketing category (S) S0 S1 S2 S3 S4 S5 S6
Technical category (T) T0 T1 T2 T3 T4 T5 T6
Professional category (P) P0 P1 P2 P3 P4 P5 P6
Operational category (O) O0 O1 O2 O3 O4 O5 O6
Internal job transfer mechanism
The Company has established a complete internal job transfer mechanism mainly comprising two types: internal
transfer within the business group and cross-business group transfer. For internal job transfer the department with
talent demand should first initiate the internal recruitment request. The Human Resources Center will then
recommend resumes and select the transferred employees through interviews. After the transferred employees
pass the assessment in the probation period the internal job transfer will be completed achieving the optimal
Employee training and development allocation and reasonable flow of talent resources.Talent development concept The number of The number of The number oftransfers in the transfers within the transfers across
Company is: business group is: business group s is:
The Company adheres to the concept of "developing the enterprise with technological innovation and talents"
and is committed to building a multi-level and multi-dimensional career development channel to provide a broad 1249 963 286
stage for employees to display their talents. We uphold the values of "responsibility integrity pragmatism and
excellence" and in talent cultivation we focus on the dual improvement of moral character and professional ability.We also establish a performance-oriented incentive mechanism to achieve the harmonious development of personal
growth and enterprise development.
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Employee training measures
Construction of teaching team
The Company has formulated the "Training Management System" to standardize the training management. In terms
of talent cultivation we create a rich and diverse online and offline learning environment and training
opportunities for the growth and progress of employees. We strive to create a corporate culture atmosphere of The Company implements the "mentor system" and "internal lecturer system" management methods
mutual trust respect and help providing sustainable development space and opportunities for each employee and formulates the "ZKTeco's Mentor System Management Measures" and "Lecturer Management Regulations" clarifying
encouraging employees to work together and grow together in the Company. the selection benefits and teaching management of mentors and internal lecturers and is committed to
building a high-quality team of mentors and internal lecturers. As of the end of the reporting period the Company
had a total of 221 lecturers including 48 special invited lecturers 20 senior lecturers 48 intermediate lecturers and
105 junior lecturers.
Training System for Employees of ZKTeco
Case TTT training
Training System of ZKTECO CO. LTD. ZKTeco Global
To enhance the capabilities of lecturers in
course design and development PPT creation and
Curriculum system Specialized project Key Learning Initiatives optimization teaching presentation and training
techniques and to improve the system for lecturer
training and selection the Company has
launched an internal lecturer training program.Training for middle and senior-level cadres Middle-level cadre
training class Hi-Po Manager Program
The program consists of 14 class hours and
Cadre involves 20 participants.training
Middle-level cadre training Basic-level cadre
training class Solution Sell Training
Professional competence enhancement Solution sales
training for positions training camp Overseas Sales Camp
Project management
Marketing Technical Manageme Professional Operationa training camp
category category nt category category (P) lcategory CTO Program Construction of training platform
(S) training (T) training (M) training training (O) training In-house trainer
training camp
The Company has established an online learning platform - Yunxuetang providing employees with a rich and
General skills training for employees with Quality management Marco Polo Program diverse online learning environment. Through online management of course resources real-time teaching
1-3 years of service training camp online examinations and result analysis it helps to build an enterprise knowledge base and promote the
standardization and professionalization of the Company's training management. Yunxuetang includes five
Local Staff On-boarding application sections: Training Center Online Classroom Testing Center Research Center and Teacher OJT training for probationary position
New The "Red Heart Management. The course content covers multiple areas such as human resource management sales
employee Class" of new management financial management middle and senior management and workplace skills. In 2024 the platform
training recruits in campus
Foreign Language added 283 courses on company products operation norms project management product knowledge etc.Company-level onboarding training recruitment
Center
Online learning platforms internal knowledge sharing platforms and online live
streaming/conferencing platforms Diversified training
The Company offers systematic training for employees in areas such as technical improvement and
A training course system based on job qualifications management innovation including induction training professional training product training full-time training external
training job rotation cross-professional practice academic advancement and experience sharing.
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Vocational training57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76
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Case New employee training Training evaluation and assessment
To help new employees integrate into the team The Company uses the Kirkpatrick model to comprehensively evaluate training results and provides feedback
quickly the Company actively conducts new to the supervisory department as a basis for developing and revising training plans. Response evaluation provides
employee onboarding training covering feedback on the training results of trainees through survey questionnaires or interviews. Learning evaluation involves
aspects such as corporate culture rules and the knowledge and skills mastery of trainees through exams speeches and other methods. Behavioral and result
regulations and job skills to facilitate their level evaluation involves the achievement of training objectives through tracking surveys and face-to-face interviews
rapid growth and role transition. In 2024 the between training leaders and trainees. After the training is completed an assessment will be conducted to ensure
Company held one new employee training fairness impartiality and openness. If trainees have any doubts about the assessment process they can report it to
session totaling 16 class hours including 10 class the Human Resources Center which is responsible for investigating and informing them of the results within a week.hours conducted online and 6 class hours
offline.Indicators Unit 2024
Employee training investment RMB '0000 23.21
Case Yellow Belt Training
Employee training sessions Session 966
To further popularize the lean concept among more
front-line employees cultivate and establish
an internal pool of high-potential talents and Total number of trainees Person-time 23998
build a compound talent team capable of
applying lean management ideas methods and
tools the Company organized a lean management Employee training coverage rate % 100
course - Yellow Belt Training which lasted
for 8 class hours and was attended by 99 people.Occupational health and safety
Case Office Software Professional Skills Training
To further enhance organizational work
efficiency and professional skills and help Occupational health and safety management system
everyone deeply master the advanced
functions and application techniques of office
software improve the automation and data The Company has always adhered to the concept of "safety first prevention first and comprehensive
processing capabilities of daily office work and governance" taking work safety as the primary work focus. In accordance with relevant laws and regulations such as
promote a dual leap in work efficiency and the "Occupational Disease Prevention and Control Law of the People's Republic of China" the "Work Safety Law
quality the Company has specially organized an of the People's Republic of China" (hereinafter referred to as the "Work Safety Law") and the "Workplace
Excel office skills training. The training lasts for 3 Occupational Health Management Regulations" it has formulated the "Occupational Health and Safety Management
days which lasted for 18 class hours and was Manual" and the "Occupational Disease Management System" and earnestly implemented various occupational
attended by 32 people. health and safety management measures to comprehensively ensure the health and safety of employees. During the
reporting period ZKTeco and Guangdong ZKTeco passed the ISO 45001:2018 occupational health and safety
management system certification.
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Long-term Plan for Occupational Health and Safety
All departments should assist safety management personnel in implementing the Company's
safety and environmental protection regulations and requirements. They should organize their
employees to study and implement the Company's various work safety regulations and operating
procedures and do a good job in work safety publicity and education within their departments carry out
various safety activities and provide safety education for new employees.Holding firm to the safety line
Occupational Health and Safety Management Occupational Health and Safety Management Safety risk management
System Certificate of ZKTeco System Certificate of Guangdong ZKTeco
Safety responsibility system
Safety hazard investigation
The Company has established improved and organized the implementation of the Work Safety
Responsibility System and signed a work safety objective management responsibility letter in accordance with the The Company has established and improved a safety inspection
principle of "whoever is in charge is responsible" to clarify the work safety responsibilities of entities management management mechanism and set up a dedicated safety inspection
personnel at all levels and employees in each position strengthen the safety awareness of all employees and prevent team. By combining self-inspections with special inspections regular
the occurrence of accident hazards. The Manufacturing Center and the Administration Department are the inspections with surprise inspections and inspections with
main responsible departments for safety management. rectifications it continuously eliminates unsafe factors related to
people machines and the environment in production. Each
production department strictly implements the daily safety inspection
Objectives and planning system focusing on checking the operating conditions of electrical
equipment the safety performance of mechanical equipment the
integrity of fire-fighting facilities the implementation of safety
protection measures and the reserve of labor protection and epidemic
2024 Safety Objectives prevention materials etc. This ensures that potential safety hazards
are identified and rectified in a timely manner effectively building a Monthly Comprehensive Safety Inspection
solid line of defense for work safety.Environmental Factor Objective Achievement
Emergency plans and drills
The Company adheres to the requirements of relevant regulations
Occurrence of potential fire explosion and
Zero safety accidents Achieved such as the "Work Safety Law" and the "Fire Prevention Law of the other safety accidents People's Republic of China" formulates the "Emergency Rescue Plan
for Work Safety Accidents" standardizes the Company's emergency
management work and ensures that emergency rescue can be
implemented promptly effectively and orderly after an accident
Electric shock Zero safety accidents Achieved safeguarding the lives of company employees production equipment
and property safety. The Company implements the fire control policy
of "prevention first combining prevention and elimination" actively
Causing occupational health injuries organizes and conducts fire emergency drills strengthens the fire safety awareness of all employees and tests the ability of each
(mechanical injuries object strikes burns Zero safety accidents Achieved emergency response team to handle emergencies. During the
etc.) reporting period the Company organized two full-staff fire drills in Work Safety Fire Drill
the Zhangmutou Industrial Park.57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76
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Safety protection measures Health education and training
The Company has formulated the "Occupational Disease Prevention and Control Publicity Education and Training
System". It regularly conducts training on occupational health laws and regulations basic knowledge of occupational
hazard prevention and control maintenance and management of occupational hazard prevention facilities
Posting escape route maps Hazardous chemical management and correct use and maintenance of personal protective equipment comprehensively enhancing employees'
awareness of occupational health and safety and their protective capabilities. At the same time the Company
The Company regularly updates the The Company strictly manages promotes occupational health through bulletin boards blackboard newspapers (wall newspapers) and occupational
escape route maps of each hazardous chemicals according to
national regulations to ensure the hazard warning signs creating a favorable occupational health culture.manufacturer which are attached to the
entrances or exits or gates of each safety of the entire process. Dangerous goods containers must be sturdy tight and
department. The supervisors of each labeled with special signs. The
Production Department are responsible for instruction manual shall indicate the
supervising employees to nature of the dangerous goods and Occupational disease prevention measures
understand the escape route maps. safety precautions. In addition the Company assigns professional
personnel to manage dangerous goods.The Company conducts a quarterly inspection of occupational hazard
Inspection protection facilities and fills out the "Occupational Hazard Protection Facility
of
protection Inspection Form". The Company maintains warning signs alarm facilities eye
facilities washers and first-aid kits every quarter and fill out the "Maintenance Record
Form".Management of first-aid kit Management of emergency
When each department of the Company exit lights and related lighting
needs a first-aid kit it shall submit an Electrical workers are responsible for Notification The Company posts signs such as "Note Dust Prevention" and "Wear Protective
application. After approval the relevant inspecting and repairing emergency exit of Masks" in places prone to dust generation and signs such as "Noise Harmful" and
department provides it according to the lights and related lighting equipment in occupational
various departments actively carrying "Wear Ear Protectors" in places prone to noise generation."List of First Aid Medicine" and checks it hazards
weekly to see if there is a need to out circuit acceptance preparing for
supplement the types and quantities of various disasters and accidents and
drugs. At the same time it is recorded in reducing the occurrence of safety
the "First-aid Kit Inspection Form". accidents.Indicators Unit 2024
Occupational health management Amount of investment
in work safety RMB '0000 11.13
Number of work
safety accidents Case 0
Occupational hazard testing Occupational health examinations
Number of deaths due to
The Company has developed the "Occupational To safeguard employees' health rights understand their health work-related causes Person 0
Hazard Monitoring and Evaluation Management conditions and prevent occupational diseases the Company
System". Every year it hires qualified occupational has established the "Occupational Health Monitoring and Total number of employees with Person 0
health testing institutions to conduct comprehensive Record Management System for Workers". For employees work-related injuries
occupational hazard factor testing in the workplace. in positions with occupational hazard factors it implements
During the reporting period the Company focused on pre-employment on-the-job post-employment and Coverage rate for work-related % 100
monitoring 14 types of positions exposed to emergency occupational health examinations and establishes injury insurance personnel
occupational hazards including argon arc welders occupational health monitoring records to dynamically track Total investment in
polishers and laser cutters. A total of 104 inspection employees' health conditions. RMB '0000 1.73safety training
points were checked with 102 qualified points
achieving a qualification rate of 98.07%.57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76
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Social contribution
Volunteer activities
The Company adheres to the spirit of voluntary service of "dedication friendship mutual assistance and
progress" encourages employees from all over the country to participate in volunteer activities and
contribute love and warmth to society. Over the years the Company has proactively fulfilled its social
responsibilities and actively carried out various volunteer activities such as environmental protection and caring
for the elderly and other vulnerable groups spreading the Company's care to every corner of the world.South Africa - Donating Materials to a Preschool South Africa - Sponsoring a Rugby Club to Facilitate Youth Development
Daily necessities donations
Columbia - Montserrat Mountain Forest South Africa - Care for Elderly Homes and
Clean-up Campaign Frail Care Centers
Public welfare donations
The Company actively engages in various public welfare and charitable donation activities. By donating materials
to impoverished areas and supporting the development of education it fulfills its social responsibilities
and commitments through concrete actions contributing to the building of a more harmonious world.Educational donations
India - Donating Daily Necessities to a Local Thailand - Donating Daily Necessities to a
Charitable Trust Shelter
Indonesia - Donating Funds and Supplies to a Europe - Sponsoring a Badminton Club to Promote Colombia - Donating Supplies to Families in Need
Local Orphan School Sports and Healthy Living57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76
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Social donations
Charitable donations
The Company is enthusiastic about public welfare and actively participates in charitable activities
conducting charitable donations to support community development and rural revitalization. In 2024
Guangdong Zkteco has donated RMB 10000 to the Jinhe Community Residents' Committee in Zhangmutou Town
Dongguan City during the 19th Spring Festival Gathering for the God of Longevity in Jinhe Community;
in 2024 it donated RMB 5000 to the Jinhe Zhupai Shareholding Economic Cooperative in Zhangmutou Town
Dongguan City during the Spring Festival Gathering for the God of Longevity in Zhupai Village Jinhe Community
7000 yuan to the Jinhe Shareholding Economic Joint Cooperative in Zhangmutou Town Dongguan City
during the "6.30" Rural Revitalization Support and Dongguan Charity Day event and RMB 10000 to the
Zhangmutou Charity Foundation in Dongguan City. ZKTeco has donated RMB 5000 to the Tangxia Chamber of
Thailand - Donating Funds to a Local Hospital Thailand - Donating Funds to a Retirement Home for Overseas Chinese Women Commerce in Dongguan City and RMB 10000 to the Tangxia Charity Foundation in Dongguan City during the
"6.30" Rural Revitalization Support and Dongguan Charity Day event.Colombia - Donating Supplies to Rescue Stray Animals in Collaboration with the Charity Organization
"Tapitas x Patitas"57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76
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Index
Shenzhen Stock Exchange Guideline No. Shenzhen Stock Exchange Guideline No.Contents Global Reporting Initiative GRI 17 on Self Regulation of Listed Companies Contents Global Reporting Initiative GRI 17 on Self Regulation of Listed Companies
Global Reporting Initiative (GRI) Standards - Sustainable Development Report (Trial) Global Reporting Initiative (GRI) Standards - Sustainable Development Report (Trial)
Responding to climate Article 21/Article 22/Article 23/
About the Report 2-1/2-2/2-3 / change 3-3/201-2 Article 27
Resource management 3-3/302-4/303-1
Address by General Articles 34 to 362-11/2-22/2-23 /
Manager
Environmental 3-3/101-2/101-4/303-2/306-1/306-2/
management 306-3/306-4/306-5 Articles 29 to 33
About Us 2-1/2-2/2-6 /
Innovation-driven 3-3 Article 41/Article 42/Article 43
Data of 2024 201-1 Article 19
Product and service
safety and quality 2-25/3-3/416-1/416-2 Article 47
Sustainable
development 2-14/2-22 Article 51/Article 52 Data security and
governance system customer privacy 3-3/418-1 Article 48protection
SDGs / / Supply chain security 2-8/2-25/3-3/308-1/308-2/414-1/414-2 Article 44/Article 45
Stakeholder
communication 2-12/2-16/2-27/2-29/413-1 Article 53 Protection of employee 2-7/3-3/201-1/401-1/401-2/401-3/405-1/
rights and interests 406-1/408-1/409-1 Article 49/Article 50
Importance issue 3-1/3-2/3-3 /
recognition Employee training and
development 3-3/404-2 Article 49/Article 50
2-9/2-10/2-11/2-12/2-13/2-16/2-18/2-19/
Governance system 2-20/3-3 Article 51
Occupational health 3-3/403-1/403-2/403-3/403-5/403-6/
and safety 403-7/403-8/403-9/403-10 Article 49/Article 50
Compliant operations 2-23/2-24/2-25/2-27/3-3 Article 51
Social contribution 3-3/203-1/203-2 Article 38/Article 40
Protection of rights and
interests of investors 2-16/2-26/2-29/3-3/201-1 Article 53 Index / /
2-26/2-27/3-3/205-1/205-2/205-3/206-1
Commercial conduct Article 54/Article 55/Article 56 Feedback / /
Compliance Governance: Building the Sustainable Development About ZKTeco Introduction to the
Foundation for Development Management Report
People-oriented Creating a Harmonious Excellent Quality: Ensuring Green Operations:
Society Information Security Safeguarding the Ecological
Future57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76
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Feedback
For ZKTeco your identity is:
Thank you for taking the time to read the "2024 Sustainable Development Report of
ZKTECO CO. LTD.". We attach great importance to and look forward to hearing your □ Shareholders and investors □ Government and regulatory agencies
valuable opinions and suggestions on the Company's sustainable development work and
sustainable development management. Your opinions and suggestions are an important basis □ Customers Partners □ Employees Industry associations and organizations
for us to continue improving sustainable development work and enhancing sustainable
development management. We sincerely invite you to assist us in completing the relevant issues □ Community public and media □ O t h e r s (please specify)
in the reader's feedback and provide feedback to us through the following methods. Thank 1. Your overall evaluation of the 2024 Sustainable Development Report:
you again for your strong support of our sustainable development work! □ Very good □ Good □ General □ Poor □ Very poor
2. Do you think the information disclosed in this report is accurate clear and
complete
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3. Do you think this report is readable
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Phone:0769-82618868 4. Do you think this report can comprehensively reflect the significant impact of the
Company on the economy society and environment
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5. What is your evaluation of the logical thinking structural arrangement and layout design
Email:ir@zkteco.com of this report
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Address: No. 32 Pingshan Industrial Road Tangxia Town 6.What topics in the 2024 Sustainable Development Report have attracted your most
Dongguan Guangdong China attention_____________________________________________________________
7.What other information would you like to obtain from the report
__________________________________________________________________________
8.What is your opinion on our Sustainable Development Report or sustainable development
management
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