Regarding this report

Report Introduction：

This report is the public sustainability report of Cixi Beishida Electric Tools Co., Ltd. Beishida actively implements the concept of sustainable development, treats investors fairly and justly, promotes harmonious and win-win development among enterprises, society and other stakeholders, and has made efforts and achieved results for the sustainable development of society and the enterprise itself.

time frame：

This report covers some of the company's achievements in sustainable development from January 1, 2023 to December 31, 2023, including but not limited to the year 2023.

Organizational scope:

All cases and data in this report are sourced from Cixi Beishida Electric Tools Co., Ltd.

The physical boundary of this report is Cixi Beishida Electric Tool Co., Ltd. and all its subsidiaries and branches.

Release cycle:

This report is an annual report.

Data source:

The data and case studies for this report are mainly collected through the financial reports, internal statistical reports, and corporate social responsibility practice cases submitted by various affiliated units of Cixi Beishida Electric Tool Co., Ltd. Unless otherwise specified, all amounts shown in this report are presented in Chinese yuan.

Report Title:

For the convenience of expression and reading, "Cixi Beishida Electric Tool Co., Ltd." is also referred to as "Beishida", "Cixi Beishida", "we", "company" and other terms in this report。

Report acquisition:

Please contact our contact person or visit our official website to obtain information.

Directory

1、 Basic information of the company

2、 Vision and Values

3、 Annual Honors

4、 Analysis of Substantive Issues and Strategic Goals for Sustainable Development

5、 Personnel information

6、 Social responsibility and sustainable development

7、 Sustainable development of the environment

8、 Corporate Governance and Stakeholder Communication

9、 Key Performance Disclosure

一、Basic information of the company

Cixi Beishida Electric Tools Co., Ltd. was established in 1999. It is a manufacturing enterprise specializing in the research and development, production, and sales of garden electric tools. Its products mainly include lawn mowers, lawn mowers, blowers, branch crushers, fence cutters, and a full range of garden electric tools, which are mainly exported to Europe, North America, Australia, and other regions. The blow suction machine and branch crusher produced by the company are both the first products in China. After years of development, the company has become an important supplier to well-known companies such as Husqvarna, Makita, TTI, and Stanley Black&Decker

Figure 1: Company Factory Area Image

The company covers an area of 90 acres and currently has a factory building area of 90000 square meters. Adhering to the quality policy of "quality first, customer foremost", the company has implemented a rigorous and efficient quality management system. In response to the challenges of economic globalization, the company has adopted information management systems such as ERP, PDM, OA, and DingTalk. Quality management and scientific management have made enterprises famous in the international market, and various products are highly favored by customers, establishing good business relationships with internationally renowned merchants.

Since its establishment, the company has long attached great importance to technological innovation. With the support of various levels of government, it has successively won the following awards: Zhejiang Famous Trademark (January 2016), Zhejiang Processing and Trade Innovation Development Demonstration Enterprise (January 2018), Zhejiang Export Famous Brand (Quality Zhejiang Goods) (January 2019), Green Development Harmony Award (February 2020), Excellent Team in the 2019 "Ankang Cup" Competition (April 2020), Ningbo High Quality Products (July 2020), Ningbo Specialized and Innovative "Little Giant Enterprise" (May 2021), 2021 Small and Medium sized Enterprise Credit Rating AA (2021), 2021 Zhejiang Province A-level "Contract abiding and Creditworthy" Enterprise (2021), 2021 Annual New Area Quality Award (April 2022), Four Star Enterprise for Innovative Management Improvement in Ningbo City (May 2022), Ningbo Green Factory (November 2022) Zhejiang Manufacturing Certification Enterprise (December 2022). Following the mission of "creating a green and beautiful home for humanity", the company has established brand awareness and reputation.

The company has passed quality, environmental, and occupational health and safety system certifications, BSCI social responsibility regular audits, and its products have passed various certifications such as CE, TUV, UL, ETL, GS, etc. The company attaches great importance to energy conservation, emission reduction, and safety production. It has formulated a safety production system and strictly implemented it, maintaining the vision of "building a leader in the domestic garden tool industry". The company always gives back to society in various forms, consciously undertakes social responsibility, and provides various assistance to the local community and environment to the best of its ability. On the basis of promoting employment and protecting the rights and interests of employees, it strives to improve their lives to the best of its ability.

二、Vision & Values

(1) Corporate mission: To create a green and beautiful home for humanity.

(2) Corporate vision: To become a leader in the domestic landscaping tool industry.

(3) Core values: Perseverance, upward mobility, contentment, and dedication.

Explanation Table of Core Values

Core values	interpret
persist in	Focus on the landscaping industry and become a small giant in the industry.
upward	Positioning high-end products, striving for excellence, and establishing a positive and uplifting culture.
Leye	Dedication to work, sincere treatment of employees。
dedication	Take on social responsibility and contribute to society.

Chart 2 Explanation of Core Values

三、Annual Honors

During the reporting period, the company continued to make efforts and improvements in its business management. In 2022, it also received recognition and praise from governments, institutions, and customers at all levels, and won multiple honorary awards. The main awards are as follows

Serial Number	Award Name	Granting unit
1	Level 3 enterprise for safety production standardization	Ministry of Emergency Management of the People's Republic of China
2	Zhejiang Province Specialized, Refined, Unique and New Small and Medium sized Enterprises	Zhejiang Provincial Department of Economy and Information Technology
3	Ningbo City Single Champion Potential Cultivation Enterprise	Ningbo Municipal Bureau of Economy and Information Technology
4	Zhejiang Famous Export Brand Enterprise	Zhejiang Provincial Department of Commerce
5	Ningbo Qianwan New Area Quality Award	Ningbo Qianwan New Area Management Committee
6	Innovation in Enterprise Management in Ningbo City to Enhance Four Star Enterprises	Ningbo Municipal Bureau of Economy and Information Technology
7	Ningbo Qianwan New Area three-star green factory	Ningbo Qianwan New Area Economic and Information Technology Bureau
8	Ningbo Green Factory	Ningbo Municipal Bureau of Economy and Information Technology
9	StanleyBlack&Decker 2022	StanleyBlack&Decker
10	National High-tech Enterprise	Ningbo Science and Technology Bureau/Ningbo Finance Bureau/Ningbo Taxation Bureau
11	Product Name: Zhejiang Manufacturing Enterprise	Zhejiang Brand Building Federation/SGS

Chart 3 Annual Honor Display

四、Analysis of Substantive Issues and Strategic Goals for Sustainable Development

The senior leaders of the company have always adhered to the principles of "perseverance, upward mobility, happiness, and dedication" in fulfilling their values, and have been leading by example. In terms of production safety, energy conservation and consumption reduction, environmental protection, safeguarding the rights and interests of stakeholders, and maintaining harmonious social enterprise relations, they have effectively achieved the coordination of economic and social benefits, short-term and long-term benefits, and self-development and social development, realizing the healthy and harmonious development of enterprises and employees, enterprises and society, and enterprises and the environment

On the basis of comprehensive consideration of policy and regulatory requirements, industry development trends, its own operational status, and stakeholder concerns, Cixi Beishida referred to international authoritative standards such as the Global Reporting Initiative's Sustainable Development Reporting Standards (GRI Standards) and the Sustainable Development Accounting Standards Board's (SASB) industry standards. At the same time, it had in-depth exchanges with external experts and consultants to identify core sustainable development issues related to the company.

These identified sustainable development issues cover multiple aspects such as environmental protection, social responsibility, and economic impact. Specifically, environmental protection issues include reducing carbon emissions in the production process, improving resource utilization efficiency, promoting circular economy practices, adopting environmentally friendly materials and processes, reducing waste generation and pollution emissions, protecting biodiversity and ecosystems, etc; The issue of social responsibility focuses on employee welfare and training, promoting community development and cooperation, strengthening social responsibility in supply chain management, complying with business ethics and anti-corruption regulations, safeguarding consumer rights, and paying attention to the rights of vulnerable groups; The economic impact issue involves optimizing business strategies to achieve long-term profitability, enhancing innovation and competitiveness of products and services, achieving a win-win situation between economic and social benefits, managing economic risks and uncertainties, and promoting sustainable development investment and cooperation.

The company further analyzed the impact of these issues on stakeholder assessment and decision-making, as well as the company's own degree of impact on the economy, environment, and society, and based on this, constructed a substantive issue matrix. The topics are classified into high, medium, and low levels based on their importance, and corresponding responses are provided in the report. Among them, highly important topics such as reducing carbon emissions, promoting circular economy practices, employee welfare and training, community development and cooperation will be highlighted in the report to demonstrate the company's commitment and practical actions in sustainable development.

五、Personnel information

六、Social responsibility and sustainable development

In the past year, our company has deeply recognized the importance of fulfilling social responsibility as an important component in promoting sustainable development. We actively respond to social expectations and are committed to demonstrating our responsibility in multiple fields.

1.Employee Rights and Compensation Benefits

While pursuing business development, Best regards employee rights and compensation as highly important, committed to creating a fair, motivating, and caring work environment for employees. The following are the specific situations and measures taken by Cixi Beishida in terms of employee compensation and benefits, working hours, social insurance, and holidays:

In terms of salary and benefits, we have designed a multi-level salary structure to meet the needs of employees in different positions and performance levels. The data shows that the proportion of employees with salaries higher than the average reaches 27.37%, which fully demonstrates the company's full recognition and reward of excellent employees' work performance and job value. At the same time, the proportion of employees with salaries higher than the median is as high as 50%, further reflecting the wide coverage and rationality of the salary system. In terms of specific salary data, the highest salary reaches 45000 yuan/month, while the lowest salary is 3500 yuan/month, with an average salary of 8500 yuan/month and a median salary of 6500 yuan/month. These data not only reflect the elasticity and flexibility of the compensation system, but also reflect fair evaluation and reasonable rewards for employees at different levels.

Beishida has also implemented differentiated compensation strategies for different positions. The average salary for technical positions is 16000 yuan/month, and the average salary for management positions is as high as 22000 yuan/month, which fully reflects the importance and attraction of technology and management talents. The average salary for skilled positions is 10000 yuan/month, the average salary for administrative and logistics positions is 7000 yuan/month, and the average salary for sales positions is 15000 yuan/month. These salary levels are synchronized with the market, ensuring the competitiveness and attractiveness of employee compensation.

In terms of working hours, we always strictly abide by national laws and regulations to ensure that employees' weekly working hours do not exceed the legal standards. During the reporting period, the average working hours of employees were 2447 hours. At the same time, in order to meet the personal and work needs of employees, we provide flexible work arrangements, encourage employees to maintain a work life balance, and ensure that they have sufficient rest and entertainment time.

In terms of social insurance, we provide comprehensive social insurance coverage for all employees, including pension insurance, medical insurance, unemployment insurance, work-related injury insurance, and maternity insurance, committed to safeguarding the social welfare rights and interests of employees, so that they can receive sufficient protection and support when facing risks.

In addition, in terms of holiday benefits, our company also provides employees with a variety of holiday arrangements, including statutory holidays, paid annual leave, sick leave, etc. We encourage employees to make full use of their holidays to rest and recharge, in order to maintain physical and mental health and work enthusiasm, and thus better engage in their work.

In summary, Beishida has made positive efforts and commitments in employee compensation and benefits, working hours, social insurance, and holidays, aiming to create a fair, motivating, and caring working environment for employees. We believe that through continuous effort and improvement, we can create a more harmonious and motivating working environment, and jointly promote the sustainable development of the enterprise.

2.Child labor and forced labor

In this year's sustainable development process, our company adheres to the core principles of human rights and labor rights, firmly opposes and strictly prohibits any form of child labor and forced labor. We are well aware that protecting the legitimate rights and interests of employees, especially minors and vulnerable groups, is an important component of corporate social responsibility.

Regarding the issue of child labor, our company strictly complies with the relevant provisions of the International Labour Organization and local laws and regulations, ensuring that all recruited employees reach the legal working age. We have implemented strict recruitment review procedures, including identity verification, age verification, and necessary background checks, to prevent any minors from being illegally employed. At the same time, we have also signed agreements with suppliers and partners, requiring them to adhere to this principle and jointly maintain a child labor free working environment.

In terms of forced labor, our company firmly opposes any form of coercion, threat, or illegal restriction of employee freedom. We respect the personal wishes and choices of each employee, ensuring that they establish labor relations with the company on an equal and voluntary basis. We provide a safe and healthy working environment for our employees and have established effective communication mechanisms to encourage them to report any possible forced labor behavior. For any violation of this principle, we will take strict measures, including immediately terminating cooperation with relevant parties and holding them accountable in accordance with the law.

In addition, we are committed to raising employees' awareness of child labor and forced labor issues, enhancing the legal awareness of the HR department and employees' self-protection ability through training and publicity activities. We encourage employees to actively participate in supervision and work together to maintain a fair and just working environment.

Looking ahead to the future, we will continue to strengthen the protection of employee rights and interests, continuously improve relevant policies and measures, and ensure that our enterprise becomes a sustainable development model free from child labor and forced labor. We believe that through our joint efforts, we can create a safer, more dignified, and just working environment for our employees, and jointly promote the sustainable development and social progress of the enterprise.

3.Create a scientific, safe, and environmentally friendly working environment

Our company is well aware of the crucial importance of safety production for the sustainable development of enterprises. Therefore, we regard safety production as a core element of enterprise operation and are committed to building a zero accident, zero injury work environment to ensure the safety and health of employees, while maintaining the long-term stable development of the enterprise.

To achieve this goal, we have developed a comprehensive safety production management system and defined corresponding safety production measurement indicators and objectives based on the characteristics of different workplaces. These indicators cover multiple aspects such as physical environment, chemical factors, biological factors, and human factors engineering to ensure that we can comprehensively and accurately assess and control various potential safety risks.

In special workplaces, we have strengthened safety production management, identified measurement items and indicators in detail, and developed targeted improvement measures. We regularly conduct safety inspections and evaluations of special workplaces to ensure effective implementation of various safety production measures and timely adjustment and improvement of relevant strategies.

In addition, we also focus on enhancing employees' safety awareness and emergency response capabilities. We regularly organize safety production training activities and emergency drills to familiarize employees with safety production regulations, master correct operating methods, and enable them to quickly and effectively take response measures in emergency situations

place	Measurement project	measuring method	Control indicators	Monitoring frequency	Monitoring department
Workshop	noise	Instrument testing	Meets national standards and has no occurrence of occupational diseases	1年/次	Qualified third-party testing companies
	Total dust	Instrument testing	Meets national standards and has no occurrence of occupational diseases	1年/次	Qualified third-party testing companies
	Mechanical hazards and use of labor protection equipment	Visual inspection method	No fatalities or serious injuries have occurred, the minor injury rate is controlled within national standards, and the hidden danger rectification rate is 100%	1次/月	Administration Department
dangerous goods warehouse	Fire and explosion prevention facilities	Visual inspection method, sampling inspection method	No fire or explosion accidents have occurred, and the rectification rate of hidden dangers is 100%	1次/月	Administration Department

Chart 5: Measurement Items and Indicators for Key Workplaces

Serial Number	Types of Disaster Details	Rights and Responsibilities Department	Possible scope and consequences of impact	Daily management and emergency prevention measures
1	Typhoons and floods	Emergency Leadership Group	Interruption of incoming and outgoing goods, production downtime, and personnel injury	Instant warning, advance notification and transfer of personnel and items。
2	fire	Emergency Leadership Group	Property damage, personnel injury, impact on supply, illegal activities	1. Fire inspection and rectification execution, regular fire drills 2. Activate the emergency plan
3	earthquake	Emergency Leadership Group	Interruption of incoming and outgoing goods, production downtime, and personnel injury	Activate emergency plan
4	explosion	Emergency Leadership Group	Personnel injury	Safety protection and improvement of employee awareness and ability
5	Environmental pollution incidents	Emergency Leadership Group	Illegal, affecting supply	Activate emergency plan
6	Health and epidemic prevention emergencies (such as COVID-19)	Emergency Leadership Group	Interruption of import and export, personnel infection	Activate emergency plan

Figure 6 Emergency Plan

Chart 7 Fire Safety Knowledge Training

Figure 8 Fire drill

4.Personalized and diversified development support

Cixi Beishida deeply understands that employees are the most valuable asset of a company, and their growth and development are crucial to the sustainable development of the enterprise. Therefore, we are committed to providing employees with a work environment that is full of opportunities, encourages innovation, and promotes career development, in order to unleash their potential and achieve a win-win situation between personal value and corporate goals.

In terms of career development, we attach great importance to employees' career planning. Through regular performance evaluations, feedback, and coaching, we help employees clarify their career goals, develop development plans, and provide necessary training and development opportunities. We encourage employees to participate in cross departmental and cross disciplinary project collaborations to broaden their horizons and enhance their overall abilities. At the same time, we have established promotion channels and career development paths to ensure that employees have a clear direction for growth in their career development process.

In order to promote the diversified development of employees, we actively promote the construction of an inclusive and diverse culture. We respect the individual differences and uniqueness of our employees, and encourage them to utilize their strengths and advantages. We provide diverse training and learning resources to support employees' exploration and development in different fields and professional skills. In addition, we advocate for cross-cultural communication and collaboration, providing employees with an open and inclusive work environment to promote innovative thinking and teamwork.

We firmly believe that the career development and diversified development of employees are important driving forces for the sustainable development of enterprises. By continuously cultivating and developing the potential of our employees, we can build a dynamic and creative team to tackle challenges, seize opportunities, and drive the company forward.

Looking ahead, we will continue to increase investment in employee career development and diversified development, and continuously improve relevant policies and measures. We will work hand in hand with our employees to create a better and more promising future, and jointly promote the sustainable development of the enterprise and social progress

Personnel type		Personalized factors	Personalized support measures
management	Enterprise prospects, corporate culture, personal growth, training and development, work environment Performance evaluation, salary and benefits, union satisfaction, cafeteria logistics, children's education, assistance to disadvantaged workers, and assistance to the disabled		Middle and senior management personnel participate in the formulation of company strategies, clarify the company's strategic development goals, improve various management systems, create good communication channels between senior management, pay for the five insurances and one fund, provide dormitories, breakfast, lunch, dinner, offer learning and study abroad, profit dividends, employee children's education, etc.
technician			Training, flexible working hours for some personnel, payment of five insurances, year-end bonus, company provided dormitories, breakfast, lunch, dinner, research and development innovation reward mechanism, implementation of project management system, excellent employee award, employee children's education assistance, etc.
Salesperson			Some personnel provide profit dividends, pay five insurances, conduct overseas market research and study, and the company provides dormitories, breakfast, lunch, and dinner.
Production personnel			The most competitive salary and benefits in the same industry, including payment of five insurances, excellent employee award, excellent team award, improvement award, company provided dormitory, breakfast, lunch, dinner, and employee children's education assistance.
Female employees	Women's Day condolences, maternity leave, breastfeeding leave		On International Women's Day, collective activities and distribution of condolence gifts are allowed. According to national regulations, maternity leave is granted, and paid breastfeeding leave is granted for children born within one year old.

Figure 9 provides personalized support for different levels of employee groups

七、Sustainable development of the environment

Cixi Beishida always adheres to the concept of "green development, environmental protection first", and regards environmental protection as an important component of the sustainable development of the enterprise. By formulating and implementing strict environmental protection policies, we are committed to reducing the impact of production activities and products on the environment, and actively promoting the implementation of green production methods.

1.Energy and resource utilization

According to statistics, electricity consumption in 2023 increased by 9% compared to 2022, water consumption increased by 44% year-on-year, and plastic particle consumption increased by 18.93%. The main reason for the year-on-year increase in energy consumption is the unsaturation of orders in 2023, and the inability of machinery and equipment to continuously produce output. During the period from May to September, due to a small number of orders, the workshop changed its working mode from two shifts to one shift production. However, the injection molding machine needs to operate 24 hours a day because it consumes more electricity and equipment when restarted. The main reason for the increase in water consumption is that in 2023, the company carried out two flushing and maintenance of the circulating water system during the off-season of production. At the same time, the water consumption base for 2022 is small, and when the water consumption value increases slightly, the ratio becomes larger. The main reason for the increase in energy consumption of plastic particles is the insufficient order volume in 2023, which results in frequent mold changes due to the limited production of products in the injection molding workshop over the long term. This leads to an increase in the consumption of plastic particles compared to the peak production season. The specific data is shown in the table below:

2022年		2023年		同比（%）
2022年用电总量（度）	5231093	2023年用电总量（度）	3170495
2022总产值（万元）	59383	2023总产值（万元）	32922
每万元消耗电量（度/万元）	88	每万元消耗电量（度/万元）	96	增加9.09
2022年用水总量（吨）	20132	2023年用水总量（吨）	16226
2022总产值（万元）	59383	2023总产值（万元）	32922
每万元消耗水量（吨/万元）	0.34	每万元消耗水量（吨/万元）	0.49	增加44.12
2022年塑料粒子消耗总量（kg）	4439089	2022年塑料粒子消耗总量（kg）	2926735
2022总产值（万元）	59383	2022总产值（万元）	32922
每万元消耗塑料粒子量（kg/万元）	74.75	每万元消耗塑料粒子量（kg/万元）	88.90	增加18.93

During the reporting period, according to the measuring instruments and invoices, the company purchased a total of 148283 kWh of photovoltaic electricity, accounting for 4.7% of the total electricity consumption.

1.Greenhouse gas emissions and accounting

During the reporting period, Cixi Beishida and all its subsidiaries and branches consumed a total of 3170495 kWh of electricity without generating fossil energy consumption. Based on the carbon emission factors and relevant default values of electricity in Zhejiang Province, the greenhouse gas emissions for Scope 1 were 0, and the greenhouse gas emissions for Scope 2 (purchased electricity) were 1664687.7704 kg CO2.

2.Compliance of chemicals, waste and raw materials

We have established a comprehensive system for managing chemicals and waste, achieving the classification, collection, harmless treatment, and resource utilization of chemicals and waste. By 2023, the company's compliance rate for hazardous waste disposal will reach 100%, and the comprehensive utilization rate for general industrial solid waste will exceed 92%. In addition, we actively promote the use of environmentally friendly materials and processes to reduce the generation of chemicals and waste.

The company uses non-toxic and harmless substances in the selection of raw materials during the product design process. The company's raw materials mainly include PP, ABS, PA, etc. According to the "Product Hazardous Substance Testing Report", the content of harmful substances such as cadmium, lead, chromium, PBBs, PBDEs, DIBP, DBP, BBP, DEHP, etc. in the product products meets RoHS requirements.

1.eco-design

（1）Product Energy

The company's products are mainly designed to use electricity as energy source. Compared with using diesel, gasoline and other oil products as energy source, using electricity as energy source will not produce pollutants such as sulfur dioxide and smoke; In addition, the company also has some products that are manually operated tools that do not consume energy during use, making them more energy-efficient and environmentally friendly

Chart 11 Product Display

 

（2)Reduce noise emissions

To reduce noise emissions, the company designs products based on their appearance to reduce product noise. In addition, protective covers and other noise reduction measures are added to the machines to reduce environmental noise emissions and hearing damage to users. For example, the noise level of general lawn mowers and other mechanical equipment is about 90 decibels. By using mufflers, the product noise can be reduced to 75 decibels.

Figure 12 Component Display

 

 

(3)life cycle

In terms of product functional design, the company optimizes and integrates the functions and mechanisms of its products. However, in processes such as landscaping, multiple landscaping machinery and equipment are often required to operate in rotation. Configuring various tools and devices with various job functions on a host to achieve multi functionality. For example, the product in the picture, after replacing different job units, enables the tool to have three functions: weeding, cutting trees, and pruning branches. This can improve the utilization rate of the host, reduce the resource and energy consumption of manufacturing other garden tools, effectively save energy and resources, and extend the product's service life

Chart 13 Product Display

八、Corporate Governance and Stakeholder Communication

1.Compliance management system

Compliance Policy and Framework: The company has established a comprehensive compliance policy system, which clearly defines the laws, regulations, industry standards, and internal rules and regulations that employees and management should comply with. These policies cover multiple key areas such as anti-corruption, anti money laundering, data protection, environmental protection, labor employment, and intellectual property protection, ensuring the legality and compliance of the company's operational activities.

Compliance organizational structure: The company has established a dedicated compliance department responsible for supervising and managing the company's compliance work. The compliance department reports directly to the board of directors or senior management to ensure that compliance matters are taken seriously and promptly addressed by senior management. At the same time, each department also has a compliance liaison officer responsible for promoting, supervising, and reporting compliance within the department.

Compliance training and awareness enhancement: The company regularly provides compliance training for employees, including new employee onboarding training, regular refresher training, and specialized training for specific areas. The training content covers updates to laws and regulations, interpretation of compliance policies, case analysis, etc., aiming to enhance employees' compliance awareness and risk prevention capabilities.

Compliance monitoring and auditing: The company has established a compliance monitoring mechanism to promptly detect and correct violations through internal audits, compliance inspections, reporting hotlines, and other means. At the same time, collaborate with external auditing agencies to conduct regular evaluations of the company's compliance management system, ensuring its continuous and effective operation.

2.Risk Management System

Risk management framework: The company has established a comprehensive risk management system, including four core links: risk identification, assessment, monitoring, and response. Identify, assess, and manage various internal and external risks that may affect the achievement of company goals through a systematic approach.

Risk assessment method: The company adopts a combination of qualitative and quantitative methods to assess risks. Qualitative assessment focuses on the likelihood and degree of impact of risk occurrence, while quantitative assessment quantitatively analyzes risks through historical data, expert judgment, and other methods. Meanwhile, based on the risk assessment results, develop targeted risk response strategies and measures.

Key risk areas: The company pays special attention to key risk areas related to compliance, such as legal compliance risks, financial compliance risks, operational compliance risks, etc. By strengthening internal controls, improving institutional processes, and enhancing employee compliance awareness, the probability and impact of these risks can be effectively reduced。

Risk monitoring and reporting: The company has established a risk monitoring mechanism to continuously monitor key risk indicators and regularly report the risk status and implementation of response measures to the board of directors or senior management. This helps the company adjust its risk management strategy in a timely manner to ensure effective risk control.

3.Compliance and Risk Management Effectiveness and Future Planning

Summary of Achievements: Over the past year, the company has achieved significant results in compliance and risk management. By strengthening compliance training, improving risk management mechanisms, and enhancing internal monitoring, the probability of compliance and operational risks has been effectively reduced. At the same time, the company has demonstrated strong adaptability and flexibility in responding to external regulatory requirements and market changes.

Future plan: Looking ahead, the company will continue to deepen its compliance and risk management work. On the one hand, we will further improve compliance policies and risk management systems, and enhance the refinement and professionalization of compliance management; On the other hand, we will strengthen the integration and innovation of technology and compliance management. At the same time, the company will strengthen communication and exchange with regulatory agencies, industry associations, and peers to jointly promote the improvement of industry compliance and risk management level.

4.Integrity and Business Ethics

In the past year, our company has been committed to maintaining a high standard of integrity and business ethics environment, ensuring that our business activities not only comply with laws and regulations, but also exceed industry ethical expectations. This chapter aims to disclose our key measures and achievements in anti-corruption and bribery, anti unfair competition, intellectual property protection, anti money laundering, and conflict of interest management.

(1) Anti corruption and bribery

We firmly oppose any form of corruption and bribery, have implemented strict anti-corruption policies, and provide regular training to all employees, emphasizing the importance of integrity and transparency. We have established a reporting mechanism to encourage employees to report suspicious behavior and ensure that all reports are promptly and fairly investigated. In addition, we have conducted strict screening and monitoring of suppliers and partners to ensure the integrity of the entire value chain.

(2) Anti unfair competition

We adhere to the principle of fair competition and oppose any behavior that disrupts the order of market competition. To this end, we have formulated detailed policies to prevent unfair competition, explicitly prohibiting unfair competition behaviors such as market manipulation, dissemination of false information, and infringement of others' trade secrets. We encourage innovation and win market share by providing high-quality products and services, rather than relying on unethical means.

(3) Intellectual Property Protection

Intellectual property is a key component of our core competitiveness. We attach great importance to the protection of intellectual property rights. We not only actively apply for and maintain our own patents, trademarks, and copyrights, but also strictly abide by relevant laws and regulations and do not infringe on the intellectual property rights of others. At the same time, we have established a comprehensive intellectual property management system and provided intellectual property training to employees to enhance their awareness and ability to protect.

(4) Anti money laundering

We recognize the serious harm of money laundering activities to society, and therefore have taken strict anti money laundering measures. We have established an effective internal control system to monitor and report suspicious transactions, and maintain close cooperation with relevant regulatory agencies. We also provided anti money laundering training to our employees to ensure they understand and comply with relevant laws and regulations.

(5) Conflict of Interest Management

We recognize that conflicts of interest may cause damage to the reputation and interests of the company, and therefore have established strict conflict of interest management policies. We require all employees to declare their personal and family interests at the time of employment and regularly update this information. We have conducted a thorough assessment of potential conflicts of interest and taken appropriate mitigation measures.

5 Information Security

Information security, as one of the core elements of company operations, has received unprecedented attention from us. With the acceleration of digitalization, protecting customer information, company assets, and maintaining business continuity have become our inescapable responsibilities. This report aims to comprehensively review the company's practices, achievements, and challenges in information security over the past year, and look forward to future development directions.

(1) Information Security Management System

Policies and Standards: We have developed a comprehensive information security policy that clarifies standards and processes in key areas such as information classification, access control, password management, data backup and recovery.
Organizational structure: An information security management department has been established to oversee and implement information security policies, ensuring consistency and effectiveness of information security across the entire company.
Training and Awareness Enhancement: Regularly organize information security training to enhance the information security awareness of all employees, ensuring that they understand and comply with the company's information security policies.

(2) Key Information Security Practices

Data encryption and access control: All sensitive data has been encrypted and strict access control mechanisms have been implemented to ensure that only authorized personnel can access sensitive information.
Network security: We have strengthened the security protection of network boundaries, deployed security devices such as firewalls and intrusion detection systems, and regularly conducted network security vulnerability scans and repairs.
Cloud security and third-party risk management: In response to the adoption of cloud services, we have signed strict data security agreements with cloud service providers and conducted comprehensive information security reviews of third-party partners.
Emergency response and disaster recovery: A detailed emergency response plan has been developed and regular disaster recovery drills have been conducted to ensure rapid business recovery in the event of an information security incident.

(3) Information Security Risk Assessment and Monitoring

Risk assessment: Conduct regular information security risk assessments, identify potential threats and vulnerabilities, and develop corresponding risk mitigation measures.
Monitoring and Reporting: An information security monitoring system has been established to monitor the security status of critical information systems in real-time and regularly report the information security status to senior management.

6 Supplier Management and Support

In the daily operation of the company, special attention is paid to the relationship between suppliers and partners, and effective communication and exchange are achieved through long-term cooperation. Based on stabilizing the existing supplier team, the company expands and optimizes supplier resources, promotes and develops supplier relationships in conjunction with the company's development strategy, guides and promotes mutual growth with suppliers, and continuously improves the sustainable procurement management system.
In order to better communicate the company's sustainable procurement policy, a total of 234 "Supplier Code of Conduct" were issued in 2023, with a 100% return rate.

During the reporting period, all suppliers signed contracts that included sustainable development clauses, and strictly handled relevant matters in accordance with the agreements and contracts. There were no outstanding payments or violations of sustainable clauses by suppliers. The company has made clear regulations on the qualification review, annual assessment, and exit mechanism of suppliers, and organizes an annual performance evaluation of suppliers every year. Based on the evaluation results, the company clarifies the details of future cooperation with suppliers to ensure the stability and efficiency of the supplier team.

The procurement department conducts on-site evaluations of the selected supplier locations in accordance with the "Qualified Supplier Selection and Identification Procedure". The procurement unit, in conjunction with quality control, development, engineering, and other units, conducts on-site evaluations based on the "Supplier Basic Information Form" and "Supplier Evaluation Scoring Form". If the score is above 60 points after on-site evaluation, it is preliminarily determined as a qualified supplier and is able to provide the products required by our company. Initially designated as a qualified supplier, provide samples for confirmation testing.

In order to implement the details of the company's sustainable procurement policy and promote the process of sustainable management system, the company has conducted three special training sessions on sustainable procurement and supplier management, covering 100% of the procurement department employees.

In order to procure materials with good quality, timely supply, and low cost, and achieve performance indicators such as feed qualification rate, procurement timeliness rate, and procurement cost reduction rate, the company conducts inquiry and quotation work based on material classification. With the help of industry-leading ERP systems, comparative procurement and other advanced technologies and methods, the inquiry and quotation review team is composed of departments such as production, quality control, technology, procurement, and finance. Based on the principles of fairness and impartiality, we provide evaluation opinions on usage, feed qualification rate, timely delivery rate, and cost-effectiveness to ensure that the company purchases products at a reasonable price and with high quality. To measure supplier delivery performance, the company conducts annual evaluations to confirm supplier delivery quality, delivery time, price, and technical service capabilities. The procurement department, together with the quality control department, records the inspection status of each batch of materials provided by qualified suppliers, fills out the "Supplier Review Report", and uses this as an important basis for evaluating the quality of annual qualified supplier supply. At the beginning of each year, the procurement department organizes relevant departments of the company to conduct a re evaluation of qualified suppliers, fills out the "Supplier Evaluation Score Form", and after the evaluators provide evaluation opinions, it is submitted to the procurement department manager for approval and re listed in the "Qualified Supplier List" for the next year.

 

To promote the common growth and development of suppliers and the company, the company regularly organizes technical/market information exchanges with suppliers, holds supplier conferences regularly, organizes assistance activities, and cooperates with each other to promote improvement and development. For example, Lanshan Electric has a cooperation history of more than 20 years with the company. The company's technical and quality personnel have provided long-term technical assistance to Lanshan Electric. Currently, Lanshan Electric has become a well-known enterprise in the motor industry, with sales exceeding 500 million yuan.

Chart 14: 2023 Supplier Conference

7Customer Communication and Rights Protection

The company has established the concept of "customer-centric", caring for customers in both consciousness and action, striving to meet their needs, and viewing the company's products and services from the perspective of customers. Through regular and irregular collection and analysis of customer information, the company timely understands the satisfaction status of internal and external customers, seeks improvement opportunities, and enhances the satisfaction of internal (upper and lower processes and employees) and external customers with the company's products and services.
Customer relationship management is a continuous process of strengthening communication with customers, constantly understanding their needs, and continuously improving and enhancing products and services to meet their needs. Its connotation is that enterprises use information technology and Internet technology to achieve integrated marketing for customers. It is the technical realization and management realization of enterprise marketing with customers as the core. For details, in order to win various customers and meet their expectations, the company takes different relationship support measures for different customers.
According to the company's "Customer Complaint and Product Return and Recall Management Regulations", the sales department is the main department that accepts customer complaints. It actively takes measures to minimize or even eliminate customer complaints about the company's products and services in areas such as product quality and follow-up services that may cause customer satisfaction deviations. Responsible for collecting customer feedback on product related information, tracking the timeliness of responses to customer information processing registration forms, supervising the timeliness of returns to customer information processing registration forms, properly responding to customer complaint information, achieving customer satisfaction, and tracking and verifying the "customer usage effect". The relevant responsible department is responsible for analyzing the causes of complaints, taking corrective and preventive measures, and improving the timeliness of complaint responses. When necessary, the technical department cooperates with the production department to analyze and study solutions to quality complaints related to technical aspects. If there are process technology adjustments, the production technology needs to develop and update SOPs. The Quality Control Department is responsible for determining the nature of complaints, reviewing the information replied by the responsible department, and if there are objections to the analysis results, it is necessary to communicate with the relevant responsible department again. If necessary, the General Office can be requested to assist in handling the matter; Track and verify the completion of measures for customer complaints, classify and summarize complaints on a monthly basis, and archive them. The company stipulates that it takes 1-3 working days to quickly and effectively resolve customer complaints, and customers will share their service experience with their sales representatives.
The sales department summarizes customer complaint information on a monthly, quarterly, and annual basis. The quality control department organizes relevant departments to hold "monthly quality meetings" and "annual quality meetings" to analyze the trend of customer complaints and evaluate them as part of the customer satisfaction review. In addition, the company has established an 8D team to address customer complaints, using the 8D process to generate 8D reports. Customer complaint cases are placed on the production line as quality warnings, and lessons learned are summarized in the company's shared drive for learning and improvement.
The company understands customer needs through various means such as websites, exhibitions, visits, phone calls, emails, etc., and through practice, understands the best way to maintain relationships between customers. The company's sales department conducts regular market sales analysis, review, evaluation, and analysis of business conditions, customer relationship building, and customer fit once or twice a year

评价和改进方式	评价内容	周期
销售总结大会	讨论、分析营销工作情况，对建立、维护顾客关系的方法及绩效情况良好，对已实施的有利于建立顾客关系的措施进行肯定、宣传和推广；讨论其他利于改进顾客关系的措施，调整营销策略。	季度/次
市场分析专题会	由销售部经理组织召开，分析经营工作情况，销售情况，和顾客关系建立方法的评估和分析，并对存在的问题，提出改进要求并组织实施。	月/次

Chart 15 Evaluation and Improvement Table

The sales department conducts an annual survey on customer satisfaction. The customer satisfaction survey questionnaire not only includes product, delivery, and service aspects, but also measures customer loyalty. In addition, customer loyalty information is also obtained through customer performance evaluations, mutual visits and exchanges, customer complaints, and order changes.

九、Key Performance Disclosure

社会责任与劳工人权关键绩效指标
按性别划分员工比例	男员工比例	59%
	女员工比例	41%
按年龄划分员工比例	30岁以下员工比例	17%
	30-45岁员工比例	47%
	45岁以上员工比例	36%
按职能划分员工比例	技术岗位员工比例	17%
	管理岗位员工比例	14%
	技能岗位员工比例	64%
	行政后勤岗位员工比例	5%
特殊群体员工	弱势群体员工比例	17.6%
职业发展	员工培训平均时数	122.5
	员工培训考核合格率	95.7%
	职业发展覆盖率	74.8%
健康安全	工伤事故数量	0
	工伤损失总工时	0
	应急演练次数	4
	健康安全风险评估率	100%
	职业病风险评估率	100%
	职业病体检覆盖率	100%
	职业病发生人数	0
工作条件	最高薪酬	45000元/月
	最低薪酬	3500元/月
	平均薪酬	8500元/月
	薪酬中位数	6500元/月
	高于平均薪酬人员占比	27%
	高于中位数薪酬人员占比	50%
	平均休假时长/天	12
	年度平均工作时长/小时	2447
	休育儿假员工数	18
	社保覆盖率	100%

 

环境关键绩效指标
能源与资源	能源总消耗量/KwH	3170495
	光伏用电总量/KwH	148283
	水资源总消耗量/m³	16226
	循环水用量/m³	12036
	原料总消耗量/吨	2926.735
	再生原料消耗量/吨	1053
废弃物	废弃物总量/吨	218.2
	危险废弃物总量/吨	0.1
	Total amount of general waste/ton	18
	Compliant disposal of hazardous waste quantity/ton	0.1
	Quantity of recycled/reused waste/ton	200
Emission Monitoring	Compliance rate of wastewater monitoring	100%
	Compliance rate of exhaust gas monitoring	100%
	Compliance rate of factory noise monitoring	100%
Greenhouse gas emissions	Scope 1 Greenhouse gas emissions/Kg	0
	Scope 2 Greenhouse gas emissions/Kg	1664687.77

 

Key performance indicators of corporate governance
Compliance and Risk Management	Timely update rate of compliance policies	100%
	Compliance training coverage rate	100%
	Internal audit frequency	1
	Number of internal audit issues	3
	Number of internal risk assessments	1
Integrity and Business Ethics	Number of business ethics training sessions	3
	Coverage rate of business ethics training	100%
	Number of incidents related to business ethics	0
	Number of specialized training sessions on information security	2
	Coverage rate of information security training	100%
	Number of information security incidents	0
	Number of conflict of interest events	0
	Number of related complaints and reports	0
SUPPLIER MANAGEMENT	Supplier evaluation quantity	73
	Supplier evaluation qualification rate	86%
	Supplier Code of Conduct Feedback Rate	100%
	Sustainable procurement contract coverage rate	100%
	Number of internal sustainable procurement training sessions	3
	Coverage rate of internal sustainable procurement training	100%
	Number of penalties for violations of sustainable clauses by suppliers	0
customer management	Total number of customer complaints	14%
	Timely resolution rate of customer complaints	100%
	Total score of customer satisfaction survey	9.2
	Number of product recall times	0
	Number of product safety incidents	0