Stock code: 688100

2023

Environmental Social and

Governance (ESG) Report

Willfar Information Technology Co. Ltd.Website: http://www.willfar.com

Phone: +86 731-88619798

Address: Wasion Science and Technology Park 468 Tongzipo West Road Yuelu Willfar Information Technology Co. Ltd.District Changsha City Hunan Province China

April 2024Report Description

Enterprises Covered by the Report Nouns and Pronouns used in the Report

This report encompasses Willfar Information Technology Co. Ltd. and its principal subsidiaries In this report “Willfar Information” “the company” and “we” all refer to Willfar Information Technology Co.Ltd.Reporting Period

Report Accessibility

January 1 2023 to December 31 2023

This report is released in electronic form on the Internet and can be accessed on the website of Shanghai Stock

Exchange (www.sse.com.cn) and the official website of Willfar Information Technology Co. Ltd.Reporting Frequency

This is an annual report Report Basis

This report is prepared in accordance with

Data Sources Global Reporting Initiative (GRI) Standards for Sustainable Development Reporting

Data is drawn from Willfar Information Technology Co. Ltd. and its subsidiaries with some China Corporate Social Responsibility Reporting Guidelines (CASS-ESG 5.0)

information sourced from third-party institutions The Shanghai Stock Exchange's Self-Regulatory Guidelines No. 14 for Listed Companies – Sustainable Development

Report (Trial) (Draft for Public Comment)

Date of Issuance of the Report

April 26 2024 Feedback Mechanism

Should you have any comments or suggestions regarding this report please reach out to us through the following means

Address: Wasion Science and Technology Park 468 Tongzipo West Road Yuelu District Changsha City Hunan

Province China Postal Code: 410205

Telephone: +86 731-88619798 Fax: +86 731-88619639

Company website: http://www.willfar.com E-mail: tzzgx@willfar.com01 03 04

Overview Section Society Section Governance Section

1.1 Statement from the Board of Directors Innovation-driven and High-quality Growth The Company's Sustainable Development Strategy

1.2 Company Profile 3.1 Innovation as a Driver of Development 4.1 Discussion & Analysis on the Company's Future

Development

1.3 Key Performance Highlights

3.2 New Momentum for High-quality Growth 4.2 Party and Mass Organization Building

1.4 Honors and Qualifications

3.3 Product Quality & Safety 4.3 Communication with Stakeholders

3.4 Sustainable Supply Chain Management 4.4 Sustainable Development Strategy

02 3.5 Customer Service System 4.5 Sustainability Indicators

3.6 Information & Data Security

Environment Section Corporate Governance & Sustainable Social Value3.7 Intellectual Property Protection 4.6 Operation of the General Meeting of Shareholders Board of

Environmental Protection Directors and Supervisory Board

2.1 Climate Change Mitigation Caring for Employee Growth 4.7 Disclosure of Information

2.2 Resource Consumption & Pollution Control 3.8 Equal and Legal Employment 4.8 Investor Relations Management

2.3 Environmental Issues & Management Overview 3.9 Employee Health & Safety 4.9 Business Ethics

2.4 Biodiversity Conservation 3.10 Employee Welfare & Caring Measures 4.10 Compliance Training

3.11 Employee Training

Green Development

2.5 Green System Establishment 3.12 Protection of Employee Rights and Interests Enhancing Equality Efficiency & Returns

3.13 Employee Motivation

2.6 Eco-friendly Corporate Operations 4.11 Focusing on Value Creation for Continuous Substantial Returns to Investors

2.7 Green Office Practices Social Contributions 4.12 Harmonizing Interests: Building a Win-Win Relationship

2.8 Facilitating Low-carbon Development between Management & Shareholders3.14 Social Contributions & Philanthropy

3.15 Industry Collaboration & Shared Development 05

Key Performance Tables & Index

CONTENTS

Table of ContentsThroughout the year the company has adhered to compliance and efficiency propelling its high-quality growth. Prudent operation

and high-quality development constitute our guiding principles for business expansion. We have consistently upheld the corporate

tenet of "Sincerity to Perfection Harmony of Duty and Profit" seamlessly integrating ESG principles into our corporate strategy

major decision-making and daily operations. The "Board Strategic Committee" has been renamed the "Board Strategic & ESG

Committee" tasked with researching and proposing recommendations on the company's sustainable development environmental

social and governance (ESG) policies. This committee also oversees the supervision and management of ESG-related matters.Under the "Board Strategic & ESG Committee" a "Sustainable Development ESG Working Group" has been established to lead

and manage ESG efforts coordinating relevant business departments and functional units across the company in executing ESG-

related tasks. Our General Meeting of Shareholders Board of Directors and Supervisory Board operate efficiently and in strict

adherence to disclosure regulations. Willfar raised net proceeds of RMB 610 million through its IPO which was fully allocated to

R&D investment and production expansion. Nearly RMB 300 million was spent on share repurchases for long-term incentive

programs. Our investment value has garnered industry recognition earning us the highest disclosure rating (A level) from the

Shanghai Stock Exchange being named an Excellent Board Practice Case by the China Association for Public Companies and

inclusion in the SSE STAR Market 100 Index among other honors.This year Willfar is committed to green empowerment serving the national "Dual Carbon" strategy. The report of the 20th

National Congress of the Communist Party of China pointed out the need to "actively and prudently advance carbon peaking and

carbon neutrality actions" based on China's energy resources and to implement the carbon peaking actions in a planned and step-

by-step manner. Leveraging technological innovation and R&D advantages Willfar focuses on the key demands of the national

energy development strategy and the State Grid mastering core technologies such as big data management communication chips

and edge computing and promoting low-carbon and zero-carbon development in the industry. Internally the company pushes for

green operations through smart manufacturing and creating low-carbon green parks adopting plant and equipment upgrades to

effectively reduce energy consumption and enhance the utilization of clean energy. Externally Willfar intensifies technological

innovations and product innovations in new electric power systems and smart grids leads the formulation of industry technical

standards consolidates its leadership in the electric IoT sector and actively explores new opportunities in energy structure

transformation and the digital economy providing intelligent solutions for cities enterprises parks and more serving the national

"Dual Carbon" goals.This year Willfar remains true to its original aspirations working together to create a better future. President Xi Jinping has

repeatedly emphasized that private enterprises should actively participate in philanthropic and charitable activities remembering

their roots and balancing righteousness and profit. Driven by innovation Willfar promotes compliance and sustainable

development in the supply chain fosters regional economic development through lawful taxation pays attention to employee

rights and develops jointly with its employees. The company has been honored as a national model for harmonious labor

relations a national model for trustworthy business operations and has been awarded the A-level credit rating for labor protection

for four consecutive years. Willfar actively fulfills the responsibilities and commitments of a national enterprise forming

volunteer teams participating in social welfare activities engaging in charitable donations and visiting and comforting the needy

thereby creating value for society and using technology to aid rural revitalization promoting mutual benefits between the

company and various societal sectors.In the wave of global digital economic development under the strategic guidance of Digital China and amidst the steady

advancement of the "Dual Carbon" goals digitalization and green low-carbon transformation have become inevitable trends in the

energy industry. Willfar remains committed to its core business deeply cultivates the industry and strategically expands globally.In the development of energy digitalization and green low-carbon transformation Willfar plays an active role as both an industry

promoter and an enabler continuously creating value for the nation investors and customers. Looking ahead we are poised for

action targeting long-term growth continuously innovating and advancing making greater contributions to global low-carbon

2023 marks the beginning of fully implementing the spirit of the Party's 20th National development and the prosperity of the digital economy!

Congress a pivotal year in the "14th Five-Year Plan" and an important year for the

comprehensive construction of a modern socialist country. High-quality development

has become an inevitable choice for listed companies. Against the backdrop of a

steadily recovering global economy energy transformation has opened up new market

spaces and the digital economy has sparked new demands for urban digital

construction. China's "Dual Carbon" strategy the building of a digital China the

development of the digital economy the advancement of the "Belt and Road"

initiative and the accelerated construction of new energy systems continue to activate

the momentum of national economic development. Faced with opportunities and

challenges Willfar will continue to adhere to its development strategy of "Connecting

the World with IoT Connecting the Future with Core Technologies" constantly strive

forward create and contribute value achieving sustainable corporate growth.Statement of the Board of DirectorsDevelopment Milestones

2004 - 2009 The company was established and took the lead in breaking through domestic substitution establishing a foothold in the

IoT industry.

2010 - 2014 The company cemented its leadership position in the power IoT industry through steady technological innovation

Company Profile

Willfar Information Technology Co. Ltd. was established in 2004 and is one of

the earliest enterprises specializing in the energy Internet in China. On January 2015 - 2019 The company continued to lead in domestic market share while

21 2020 it was successfully listed on the Science and Technology Innovation expanding into the international market deepening and promoting

Board of the Shanghai Stock Exchange (Stock Code: 688100.SH). With the urban IoT solutions.development strategy of "Connecting the World with IoT Connecting the Future

with Core Technologies" the company provides comprehensive energy Internet

solutions from data perception communication networking to data management

constructing a digital energy system that is perceptible observable measurable

and controllable for customers supporting efficient energy management in

various scenarios such as cities parks enterprises buildings water services and

fire protection. It is committed to achieving the national "Dual Carbon" goals

serving the construction of digital power grids and digital smart cities and

jointly building new power systems and digital twin cities.The company became a leading provider of energy IoT solutions focusing on

Enterprise Development Strategy: Connecting the World with IoT Connecting 2020 - 2023 three major markets.the Future with Core Technologies

Enterprise Mission: Sincerity to Precision Benefit to Coexistence

Creating Value for Shareholders Creating Value for Suppliers

The company creates value for shareholders with The company creates value for suppliers through collaborative cooperation and shared

sustainable competitive advantages and overall growth.profitability.Creating Value for Society

Creating Value for Users The company creates value for society through increasing tax contributions and

The company creates value for users by providing philanthropic activities.more accurate reliable and intelligent system Future Outlook The company will continue to benefit every city community business and solutions and services family with its products technology and services.Creating Value for the Industry

Creating Value for Employees The company creates for the industry by continuously promoting the

construction of energy Internet and the digitalization of comprehensive urban

The company creates value for employees with fair and governance capacity with cutting-edge information technology and strong

decent salaries and benefits and career growth. energy IoT driving power.

03-04202342.9%

Percentage of Female Directors

2.23 billion yuan Key Performance Highlights Supervisors and Senior Executives

Operating Revenue

25%

Percentage of Female

Employees 40%

Cash Dividend

Payout Ratio

15.65%

31.3% Compound Annual Growth Rate of Revenue Since

Net Profit Growth Rate 227 million yuan Listing

R&D Investment

197 million yuan 24.68%

Total Annual Tax

Payments Compound Annual Growth Rate of Net Profit Since

Listing

18.9%50.4%707

Return on Net Assets Percentage of R&D Valid Patents Obtained Cumulatively

Personnel

05-06Scientific Research Papers

In 2023 the company focused on cutting-edge domains conducting multiple research endeavors and achieved notable

outcomes. During this reporting period the company published a total of 6 scientific papers."Study on the Reading Method Based on Power Line Carrier for Line Loss Lean Management in

Distribution Transformer Area"

Digital Communication World

"Application and Practice of Wi-SUN Communication Technology in Advanced Metering

Infrastructure (AMI)"

Internet of things technologies

Annual Honors Ground Fault Section Localization Algorithm for Active Distribution Networks Based on Phase Transient Power Direction

High Voltage Engineering

The company has won the First Prize of Hunan Provincial Science and

Technology Progress Award for two years in a row garnered the First Prize of

Scientific and Technological Progress from the China Electrical Engineering Short-term Load Big Data Forecasting Scheme for the Power Industry Based on

Society received the Second Prize of Invention Patents in Hunan and secured the Heterogeneous Data

First Prize for Scientific and Technological Progress from State Grid Corporation. Annual Power Industry Informationization Conference

Recognized for its strategic development innovative technological achievements

and robust comprehensive strength derived from years of dedication in the Study on Synchronized Phasor Measurement Technology for Power Systems Using

Internet of Things (IoT) domain the company has been designated a National Edge Computing

Specialized Focused Innovative and Novel Enterprise and a National China Electrical Equipment Industry

Intellectual Property Advantage Enterprise. Additionally with its outstanding

ESG performance and a combination of both growth characteristics and Channel-Spatial attention convolutional neural networks trained with adaptive

momentum effect it has been successfully included in two major indices: the SSE learning rates for surface damage detection of wind turbine blades

STAR Market ESG Index and the SSE Select STAR Market Growth Momentum

50 Strategy Index.

Measurement

Honors and Qualifications

◆ Inclusion in the SSE STAR Market ESG Index National and Group Standards

◆ Inclusion in the SSE Select STAR Market Growth Momentum 50 Strategy Index

◆ Inclusion in the SSE STAR Market 100 Index As of the end of the reporting period the company and its R&D personnel had participated in the formulation of a total of 65 national industry local and group

◆ standards comprising 36 national standards 11 industry standards one local Inclusion in SSE Buyback 50 Index standard and 17 group standards.◆ Capability Maturity Model Integration (CMMI) Highest Level ML5 Certification

◆ National-Level Green Factory

3611117

◆ National Green Supply Chain Management Enterprise

◆ 2023 Power Science and Technology Innovation Award (First Prize) - Measurement and Control System and Control

Modules for Distribution Automation Terminals National Standards Industry Standards Local Group Standards Standards

◆ China Instrument and Control Society Science and Technology Progress Award (Second Prize) - High-Precision DC Energy

Metering Standard Device and Traceability Techniques and Industrial Application

◆ Machinery Industry Science and Technology Award (Second Prize for Technological Progress) - Full Automation Power IoT

Terminal Key Technologies and Large-Scale Applications

◆ State Grid Corporation Science and Technology Progress Award (First Prize) - Next-Generation Power Information

Collection System Key Technologies and Applications

◆ Excellent Cases for Carbon Peaking and Carbon Neutrality

◆ 2023 Hunan Province Key Research and Development Plan Project (Intended) - Dual-Mode Communication Chip for

Electric Power Internet of Things

◆ "PV Grid-Connected Intelligent Low-Voltage Circuit Breaker Project" - Outstanding Innovation Project Award Hunan

Instrumentation Industry

◆ 2023 Digital Hunan Top 10 Application Scenario Construction Plan Key Project - IoT Product Smart Manufacturing

Workshop Project Based on Industrial Internet 07-08

◆ Top 10 Innovative Enterprises in the First Hunan Advanced Manufacturing Technology Innovation Competition2. Environment Section

Environmental Protection

2.1 Climate Change Mitigation

2.2 Resource Consumption & Pollution Control

2.3 Environmental Issues & Management Overview

2.4 Biodiversity Conservation

Green Development

2.5 Green System Establishment

2.6 Eco-friendly Corporate Operations

2.7 Green Office Practices

2.8 Facilitating Low-Carbon DevelopmentClimate Change Mitigation Resource Consumption & Pollution Control

For a prolonged period human activities and natural factors have jointly influenced the world resulting in ongoing climate change characterized prominently

by global warming. This warming trend has triggered a multitude of cascading effects rendering climate crises and extreme weather events as global challenges. In The company is not classified as a key emissions entity and has not been included in the greenhouse gas emissions verification scope by the Hunan

June 2022 seventeen departments including the Ministry of Ecology and Environment the National Development and Reform Commission and the Ministry of Provincial Department of Ecology and Environment. The company attaches importance to the potential impacts of climate change risks on its business operations

Science and Technology jointly issued the “National Climate Adaptation Strategy 2035” comprehensively outlining and coordinating adaptation measures to climate and in order to better manage climate-related indicators it has conducted organizational greenhouse gas verification for Willfar Information in 2023 in accordance

change for the period up until 2035. with the "Guidelines for Calculation and Reporting of Greenhouse Gas Emissions for Other Industrial Sectors (Trial)" issued by the General Office of the National

Willfar Information actively responds to the "Dual Carbon" strategy implementing actions towards achieving carbon neutrality and addressing climate change. Development and Reform Commission. Concurrently following ISO14067:2018 "Greenhouse gases - Carbon footprint of products - Requirements and guidelines

The company systematically identifies and scientifically assesses climate-related risks evaluating the potential impacts on its own business communities and for quantification" and PAS2050:2011 "Specification for the assessment of the life cycle greenhouse gas emissions of goods and services" the company carried

stakeholders. It formulates risk mitigation measures and integrates climate change risk management into the company's overall risk management process. Willfar out greenhouse gas emissions measurement work at its production and operation sites during the reporting period providing data support for the realization of the

Information continuously enhances its capacity to guard against climate-related risks and embeds the principles of sustainability throughout all stages including company's carbon neutrality pathway. During the reporting period the company's greenhouse gas emissions were 3615.16 tons of carbon dioxide equivalents. In

product design R&D production and operations steadfastly pursuing green high-quality development. the future the company will continue to strengthen monitoring and data management actively engaging in the country's dual-carbon mission.Greenhouse Gas Emission Indicators

Climate Change Risk Opportunity Identification Environmental indicators 2023 Unit

and Financial Impact Analysis Greenhouse gas emissions 3615.16 tCO2

Extreme weather events such as heavy rains floods and typhoons: Emissions per unit of revenue 1.62 Per million yuan of annual revenue

1. Cause damage to various infrastructure facilities within the industrial park leading to direct economic losses and

additional maintenance costs; reduce the functions and services provided by these infrastructures thereby lowering their

anticipated societal and economic benefits; Indicators of Resource and Energy Consumption

Strengthen Business Continuity Management (BCM): Referencing international standard ISO22301 continuously

improve the company's BCM mechanisms enhancing resistance to risks. Identify potential threats to critical business Category 2023 Unit

operations including events and environmental factors that may disrupt company operations and facilities negatively

impacting them. Evaluate and analyze potential losses designing a Business Continuity Plan (BCP) to guide business Water 176942.00 t

recovery. Regularly assess drill results and if necessary continually refine and update the plan

Electricity 5503055.50 KWH

2. Disrupt normal production and operations causing contract delivery delays Natural gas 81264.47 m3

Awareness Cultivation and Practical Drills: Develop a business continuity training curriculum to foster

awareness and skill development among employees. Regularly organize practical drills to test the

operational feasibility and time coordination of the BCP enhancing emergency response capabilities in Pollutant Emission Indicators

the face of disasters

Category 2023 Unit

3. Impact upstream and downstream supply chains and product transportation causing production delays Hazardous waste generation (tin slag) 4.005 t

In terms of logistical support formulate comprehensive emergency response plans for severe weather conditions

such as those for heavy rainstorms and flooding. Equip operational sites with emergency power generation Hazardous waste recycling & utilization rate 100 %

facilities. Routinely organize employee drills for relevant emergency scenarios and provide specialized training on

emergency rescue procedures to enhance preparedness and response capabilities. Total phosphorus concentration in discharged wastewater 1.72 mg/L

COD concentration in discharged wastewater 30 mg/L

Chronic climate risks such as persistent drought and sustained high temperatures: Concentration of total suspended particulate 0.28 mg/m3

1. Seasonal shortages in the supply and demand of energy sources like electricity and natural gas potentially leading to matter in discharged wastewater

energy supply disruptions which can impact normal production for the company and its upstream and downstream supply Ammonia nitrogen concentration in

chains thereby compromising the uninterrupted operation of company business 21.4 mg/Ldischarged wastewater

BOD5 concentration in 6.3 mg/L

Continuously enhance the level of production process automation drive the transformation of production processes to discharged wastewater

become increasingly automated optimize manufacturing workflows and adopt automated and digital equipment to Petroleum concentration 0.14 mg/L

minimize the impact of human and natural factors on production efficiency in discharged water

Financial Indicators

2. Prolonged high temperatures lead to increased production costs. The need to regulate workplace temperatures results in

higher electricity expenses; persistent heat may decrease worker productivity raising labor costs; and it affects normal Category 2023 Unit

production in the company's upstream supply chain contributing to increased raw material costs

Investment in 10.83 10000 yuan

In response to high temperatures that may lead to reduced efficiency and heatstroke develop detailed contingency environmental protection

plans and regularly conduct drills. Strengthen education and publicity efforts on heatstroke prevention and first aid Investment in R&D 22743.59 10000 yuan

for workers implementing effective preventive measures against heat stress. Conduct regular health checks for

employees engaged in high-temperature work adjusting labor and rest regimes for such tasks as necessary to 11-12

maintain both work quality and safe production while ensuring the health and life safety of employees.Countermeas Countermeas Countermeas Countermeas Countermeas

ures ures ures ures uresEnvironmental Issues &

Management Overview

The company is not categorized as a high- The company's waste primarily stems from The company places great emphasis on the

energy-consuming or high-emission enterprise; the the production process consisting mainly of tin and establishment of green manufacturing and

primary resources and energy consumed during its its compounds defective and discarded electronic operational systems having developed

production and operations are water electricity and components generated during processing outer comprehensive management procedures to rigorously

natural gas. The company exercises responsible water packaging cardboard boxes and wastes from office control energy consumption during production and

use relying on a sufficient supply from the municipal activities produced by employees. All wastewater operations regulate the disposal of waste generated

water system without any concerns over sourcing. generated by the company is domestic sewage with in the course of business and ensure compliance

During the reporting period the company strictly no industrial wastewater produced during the with legal requirements thus minimizing the

adhered to environmental laws and regulations manufacturing process. The company also generates negative environmental impact of its operations. The

proactively promoting clean energy and smart a small amount of greenhouse gas emissions from company consistently strengthens carbon emission

manufacturing to reduce energy consumption. The electricity and natural gas consumption production management gaining a comprehensive

company effectively utilizes rooftop space for processes generator usage and vehicle operations. understanding of its current greenhouse gas Willfar strictly bides by national and local laws and regulations on biodiversity

photovoltaic power generation employs advanced Equipment in operation produces minimal noise. emissions optimizing its energy consumption protection puts the practice of biodiversity protection into all aspects of its business

intelligent manufacturing techniques in its production structure and diligently working to reduce Biodiversity

processes and has already converted workshop greenhouse gas emissions thereby continuously actively protects the natural ecology and biodiversity and is committed to building

lighting to LED technology. contributing to the attainment of the "dual carbon" Protection an ecological civilization in which human beings and nature coexist in harmony.goals.In 2023 the Company had no production or operation sites located in

biodiversity-rich areas within near or outside of nature reserves. None of the

Company's production and operational activities products and services was found to

have a significant impact on biodiversity.Business Continuity Management

Implementation of Business Continuity Plan

Waste and Pollutant Emission Management

The company strictly abides by national laws and regulations such as the

"Energy Conservation Law of the People's Republic of China" the

"Environmental Protection Law of the People's Republic of China" the "Air

Monitoring & Drills Pollution Prevention and Control Law of the People's Republic of China" and

Formulation of Business Continuity the "Solid Waste Pollution Prevention and Control Law of the People's

Plan Republic of China."

Management During the production process the main waste gases generated by the

Process products are tin and its compounds defective and discarded electronic

components produced during processing solid waste from outer packaging

Risk Assessment Continuous Improvement cardboard boxes noise produced by equipment in operation wastewater and

household waste generated by employee office and living activities. During the

reporting period the sampling test results of the company's three wastes by a

third-party inspection agency were all below the standard limit range. No cases

of violations of environmental laws and regulations were found during the

reporting period.

13-14Green System Establishment

The company and its subsidiaries conscientiously implement laws and regulations related to environmental protection such as the

"Environmental Protection Law of the People's Republic of China" the "Water Pollution Prevention and Control Law of the People's Republic

of China" the "Air Pollution Prevention and Control Law of the People's Republic of China" the "Environmental Noise Pollution Prevention

and Control Law of the People's Republic of China" and the "Solid Waste Pollution Prevention and Control Law of the People's Republic of

China" while voluntarily fulfilling their social responsibility for ecological and environmental protection. The company strictly enforces

modern enterprise management systems establishing a system of responsibilities for safe production documents for environmental management

systems occupational health management systems financial management systems daily management systems for employees and more. To

properly handle utilize and effectively manage the company's solid waste and wastewater reducing pollutant emissions and harm and

alleviating pollution to the environment a waste management system has been established. To prevent and reduce production accidents and

equipment wastage due to "leaks spills and drips" a regular maintenance system for facilities and equipment has also been put in place. Willfar Information Intelligent

The company's wastewater is channeled through municipal sewage pipes to a treatment plant for unified discharge. Solid waste is managed Manufacturing Workshop

categorically with waste electronic components treated as hazardous waste and entrusted to companies with professional handling Willfar Information has incorporated green

qualifications while general solid waste is handed over to the local environmental protection department for unified treatment. During the supply chain management into its corporate

reporting period the company strictly followed relevant laws and regulations regarding environmental protection in obtaining discharge permit development strategy implementing top-level

documents with the total quantity of each pollutant emission meeting the requirements for total quantity control. design to promote energy-efficient and low-

carbon sustainable development industries. The

company fully utilizes modern environmental

protection and advanced production

Establishment of the Company's Energy Management technologies actively driving the development

System of a circular economy and industry-wide energy

The company has established an energy management system and set up an conservation and emission reduction.Energy Management Center incorporating energy consumption management into

the dynamic supervision platform of the Willfar Park Data Center at Willfar. This

data center enhances park management efficiency reduces governance costs and

demonstrates governance effectiveness by introducing digital intelligent and smart

applications.The company has formulated relatively comprehensive medium- and long-term

development plans fully adopting modern environmental protection measures and

advanced production technologies vigorously promoting the development of a

circular economy and energy conservation and emission reduction in the electronic

equipment manufacturing industry providing the highest quality products for the

construction of a "resource-saving and environmentally friendly society" and

shouldering the most mission-oriented social responsibility. Key tasks and measures

include the promotion of clean production the development of waste utilization

projects the advancement of the circular economy the elimination of outdated

processes and equipment and the increase in the comprehensive utilization rate of

"three wastes" ultimately achieving low-carbon development for the enterprise and

harmonious development for the city. Additionally the company focuses on the

layout of the electronic manufacturing industry actively extending the industrial

chain. Upstream it fosters green suppliers to achieve high-quality procurement of

raw and auxiliary materials and green development. Downstream leveraging the

company's advanced R&D technology it serves key industries such as smart cities

smart parks smart security and smart water affairs creating a city-level smart brain

eventually forming a competitive and distinctive electronic equipment

manufacturing industrial park within the region.Establishment of the Company's

Environmental Management

SystemEco-friendly Corporate Operations Green Office Practices

Simultaneously the company adheres to green manufacturing and operations. In recent years it has continuously raised the level of clean production

conscientiously fulfilling its obligations for clean production carefully formulating clean production work plans and implementing clean production Taking the synchronous development of economy and environmental protection as the purpose and focusing on

solutions and measures into daily production and operation management gradually establishing a long-term mechanism for clean and low-carbon creating an environment-friendly resource-saving enterprise the company implements various energy saving and emission

development. The entire process of the company's production activities services and related management activities has passed ISO14001 environmental reduction initiatives in the office area and encourages employees to be green and low-carbon office practitioners.management system certification. Through the use of intelligent manufacturing technology the company has increased the coverage of automated

production improving both production efficiency and quality. By implementing green design and selection green procurement and green supply chain

management green manufacturing and operations green logistics green packaging and green recycling significant achievements have been made in areas

such as energy consumption control energy conservation and emission reduction and green manufacturing with the aim of fostering an environmentally

friendly and resource-efficient enterprise that advances economic and environmental progress in tandem. Paper Saving

In transportation the company internally improves efficiency through intelligent green warehousing and logistics achieving standardized management 1 Willfar advocates paperless office promotes electronic approvals and electronic document storage

and real-time traceability storage and shipping management for materials throughout the entire process. Externally it promotes green logistics by and encourages double-sided printing to reduce paper usage.optimizing transportation methods and increasing transport efficiency giving priority to low-carbon and efficient modes of transport to reduce carbon

emissions during product transportation. In packaging the company strictly follows the design philosophy of "compatibility recyclability and lifecycle

management" implementing modular and functional standard designs for packaging integrating packaging for different products using sustainable

materials reducing the variety of packaging boxes and enhancing packaging box utilization rates.

2 Water SavingThe company encourages internal water-saving measures such as posting water-saving slogans using

water cups instead of bottled water etc.Energy Saving

The company actively constructs and The company has adopted measures such as The company thoroughly implements the

improves a recycling system for used materials improving process design utilizing clean energy and important instruction from President Xi Jinping on 3 The company implements a "Lights off when leaving" policy in office areas sets air conditioning

within the product manufacturing and usage raw materials and employing advanced technologies promoting industrial technological transformation temperature to 26°C and keeps doors and windows closed in summer and posts signs advocating walking

and equipment thereby effectively curtailing pollution

process proactively assuming responsibility for and upgrading with intelligent manufacturing as theat its source boosting resource utilization efficiency up and down the stairs below the third floor and turning off the power when no one is around to reduce

the recovery and resource utilization of discarded main offensive direction guided by the "14th Five-and strengthening environmental protection. Several of equipment power consumption and standby energy consumption.products. Collaborating with professional waste Year Plan for Intelligent Manufacturingits products have earned RoHS certification and Development." Combining the latest requirements

product recycling enterprises the company has Product Carbon Footprint certificates demonstrating and plans from various provinces and cities it has

achieved the full recycling and reuse of all waste the company's active contribution to the pursuit of

materials in the manufacturing process. carbon peaking and carbon neutrality goals.built an intelligent manufacturing factory setting a

benchmark for green production in the industry.Additionally through partnerships with third-party Green TransportationWillfar Information's intelligent manufacturing

platforms the company has established a projects span market demand product research and 4 Shuttle bus services are provided to reduce employee driving; the use of public transport means and new-energy

production system encompassing material development process design logistics vehicles is encouraged for which the company has installed charging piles.circulation energy circulation and waste resource manufacturing and services across the entire product

recycling achieving advanced levels in resource lifecycle management significantly enhancing

and energy utilization efficiency and pollutant product design big data operations production

emission indicators compared to domestic processes quality control equipment management

counterparts. and safety management.Through various carbon accounting and evaluation analyses Willfar Information based on the principle of "correct

carbon emissions calculation according to standard specifications" satisfies the fundamental MRV principles of being

measurable reportable and verifiable. Through numerous energy-saving renovations and the utilization of clean energy

the company effectively achieves carbon reduction setting an excellent industry benchmark. The park has implemented

aging room renovations workshop lighting energy-saving renovations meter testing table energy-saving renovations

water supply system energy-saving renovations and energy-saving technical renovation projects effectively reducing

electricity consumption water consumption and energy consumption. The aging room replaces energy-consuming

equipment with new energy-saving equipment installing a temperature monitoring system for real-time monitoring and

turning fans on and off based on temperature; workshop lighting is replaced with energy-saving lamps/LED lamps

consuming only 40% of the energy before renovation and effectively eliminating electrical safety hazards from existing

fluorescent lamps; 20 meter testing tables are improved along with improvements to meter testing software and

processes. Under the same output conditions the improved meter testing process saves an average of 50% energy;

through water supply system energy-saving renovations a water saving rate of no less than 10% is achieved;

implementing energy-saving technical renovation projects results in a year-on-year decline in unit product energy

consumption providing management and technical support for the deep recovery and efficient utilization of secondary

energy within the enterprise; the company increasingly values renewable resources and clean energy such as

photovoltaic power generation generating 502352.31 kilowatt-hours of photovoltaic power in 2023; concurrently

achieving a 100% hazardous waste recovery rate further integrating resource utilization and the circular economy into

enterprise development. 17-18Willfar Information boasts a robust industrial foundation in the realm of digital grids. Leveraging its industry experience as the

foundation and innovation as the driving force aligned with national industrial policy guidance catering to the supply-side needs of the

new power systems under construction by State Grid and China Southern Power Grid as well as the demand-side requirements for source-

Facilitating Low-Carbon Development grid-load-storage interactions in digital-smart cities the company masters core self-developed technologies such as big data applicationmanagement communication chips and edge computing. It provides solutions for distribution networks and power consumers

maximizing energy efficiency enabling energy to be observable measurable adjustable and controllable contributing to clients' energy

security reliability and efficiency.In the context of digital grids Willfar Information has constructed a comprehensive product portfolio encompassing core chips key

The report to the 20th National Congress of the Communist Party of China required to devices and application systems offering digital solutions to stakeholders across the energy value chain. Digitalization constitutes the

"actively and prudently advance the carbon peaking and carbon neutrality goals. Based on our core lever of the energy internet utilizing digital means to integrate all aspects of source-grid-load-storage. The informatization

nation's energy and resource endowment we will adhere to the principle of establishing first and intellectualization and interactivity of distribution and power consumption will emerge as principal development directions for the new

breaking later implementing the carbon peaking action plan in a planned and stepwise manner."

Achieving the "carbon peak" and "carbon neutrality" objectives will fundamentally reshape power system. Willfar Information will capitalize on its substantial technological and product advantages in the digital grid domain

China's future production and lifestyle patterns exerting far-reaching influence on the country's providing cutting-edge technologically advanced support for data collection safety monitoring and information transmission required by

socio-economic development. An electricity-dominated energy approach will underpin the mainstream energy enterprises. The company aims to help users conserve energy utilize energy safely efficiently and conveniently

industrial and economic transformation and the steady improvement of people's living serving to support a sustainable harmonious society for both people and the environment embodying the principles of "peak carbon" and

standards. Simultaneously in the context of green and low-carbon trends deep de- "carbon neutrality." Several new solutions independently developed by Willfar Information align with the demands of constructing a new

carbonization zero-carbon technologies efficient electricity consumption technologies

power system under the "dual carbon" strategy addressing various market pain points and providing fresh ideas and references for

renewable energy generation technologies and virtual power plant technologies are becoming

frontiers of future science and technology as well as new competitive focal points. industry product innovation.The convergence of the energy revolution and the digital revolution is driving the digital In the realm of digital-smart cities the company addresses the "digital carbon neutrality market" across domains like smart energy

transformation of the power grid. A novel energy ecosystem is witnessing escalating levels of

smart firefighting smart water and smart electricity consumption. Drawing upon its profound R&D capabilities Willfar Information

digitization networking and intelligence. In response to the pressing demands on the power

generation side for large-scale high-proportion integration and consumption of new energy tailors advanced holistic solutions for digital-smart city scenarios in water gas firefighting enterprises and industrial parks deeply

sources and on the power consumption side for extensive interactivity and mobility of resonating with carbon neutrality management requirements. Currently in the smart water sector the company offers a water supply

distributed energy sources and electric vehicles this acceleration will facilitate the digital pipeline leakage monitoring solution tackling issues such as high water loss rates production-consumption gaps unclear pipeline

transformation of the power grid promote coordinated interaction between energy sources

grids loads and storage and propel the grid's evolution into a more intelligent energy Internet. conditions inaccurate leak localization and high maintenance costs. In the smart park domain it develops an integrated park management

platform to effectively save energy and reduce consumption. In the smart gas sector it implements heat network construction projects

realizing functions like monitoring and automatic balancing of secondary networks thereby achieving energy conservation emission

reduction and cost-effectiveness. Willfar Information is committed to reshaping the management and efficient utilization of electricity

water gas heat firefighting and municipal services through energy internet solutions thereby assisting clients in enhancing energy

utilization efficiency curbing waste and consumption of energy and ultimately reducing overall carbon emissions.

19-20Empowering the New Power System for Sustainable Development

Virtual Power Plants and Source-Grid-Load-Storage Monitoring & Regulation Intelligent Gas Monitoring System Fortifies Gas Safety

In Willfar Information's virtual power plant solution advanced sensing layer smart metering technology captures operational Willfar Information's intelligent gas monitoring system solution harnesses real-time gas concentration monitoring

information from distributed "source-grid-load-storage" resources. Proprietary chips communication modules and intelligent gateways at

the network layer aggregate this information and upload it to the cloud platform. AI computation analysis and load forecasting scheduling data allowing users to set custom alert thresholds for preemptive warnings before actual alarms occur thus preventing

modules then issue dispatch instructions. This solution is widely applied to demand-side adjustable resources like photovoltaic-storage power potential incidents. The platform features intelligent services like annual inspection reminders and detector fault alerts

plants charging and swapping stations energy consumption monitoring and flexible interconnection of distribution substations. Utilizing enabling maintenance personnel to promptly address equipment issues and ensure safe operation.rapid-response coordination control technology it facilitates the transition from "power following load" to "power-load interaction."

◆ Smart Charging Piles Augment Virtual Power Plants in

Smart City Construction

Willfar Information's smart charging piles have been deeply integrated into

multiple application scenarios including projects in Guangxi Guizhou the Changsha

Bus Group and the Lugu Valley Construction Group. They exhibit significant

advantages in areas such as intelligence compatibility feature richness and energy

conservation. Combining the company's traditional strengths in information

communication and data platforms these smart charging piles have become a crucial

component of Willfar Information's virtual power plant system solutions. They

enhance the response capacity of the system in areas like distributed energy allocation

flexible potential exploitation load forecasting and real-time coordination control

enriching the system's regulatory modes.

21-22One-Stop Service System for Fire

Control

Fire Safety Unit Early Warning System Maintenance and Service Provider Supervision System

Visualized fire risk factors real-time alerts Intelligent Operation System Enhanced service quality and control

Service process and quality control with

◆ Smart Firefighting System Safeguards Financial Industry 7*24h support

Security

Willfar Information's smart firefighting solution integrates smart firefighting with

traditional firefighting methods. Leveraging advanced technologies and scenario innovations Convenient intelligent

it redefines the fire protection architecture for parks prioritizing human-centric design and Professional efficient fire maintenance fire safety management

centering on AI algorithms fully integrating computing power and AIOT capabilities to management application: multi-dimensional control maintenance

provide the necessary computational data for fire management. Empowered by smart brain guidance predictive maintenance etc.algorithms the solution enables visualized controllable and traceable fire safety management

ensuring real-time precise fire prevention and control and transparent management. It has Fire Data Middle Platform

already been successfully implemented in institutions such as Agricultural Bank of Hunan Highly compatible IoT connectivity to cloud platform

Postal Savings Bank of Heilongjiang Industrial and Commercial Bank of China Agricultural

Commercial Bank of Xinjiang and Shanghai Pudong Development Bank continuously

Various SoData Collectioncial Units

safeguarding the security of the financial industry.Various Social Units Various Social Units Various Social Units...Integrating Smart Water Infrastructure into Industry

Ecosystems to Boost Sector Development

The Linli Hydrological Station and Shimen Hydrological Station upgrade projects constructed

by Willfar Information have been deemed to meet construction quality standards and possess

complete documentation. Approval is granted for the project's completion acceptance under the

contract. The hydrological stations employ various flow measurement methods such as a newly

installed fully automatic intelligent cableway system H-ADCP system and mobile radar wave

automatic flow measurement system enabling automatic reporting of flows at different water

levels. Comprehensive video surveillance and external display screens for promotional purposes

fulfill remote monitoring and management requirements. The stations have been praised as the

"most beautiful hydrological stations" by relevant leaders.

23-24Collaborating on Global Energy Transformation for a Shared Planet

DCU Driving Upgrade and Development of Bangladesh's Power Infrastructure Smart Environmental Protection IoT Sensing System

Willfar Information's smart environmental protection system software combined with environmental monitoring IoT

Willfar Information provides HES MDMS CIS and Billing systems to Electricité du Laos (EDL) the national power sensing devices fully leverages innovative advanced feasible and scalable technologies such as hydrological monitoring

company of Laos. This project comprehensively upgrades EDL's existing AMI system enhancing its intelligent management IoT sensing big data analysis AI-powered intelligent monitoring and cloud computing. These technologies are integrated

capabilities laying the groundwork for the subsequent comprehensive transformation of 1.6 million households and will also drive and collaboratively innovated embracing the principles of comprehensive sensing automatic transmission intelligent

the intelligent transformation of other energy management sectors in Laos such as water utilities. analysis and fine-grained management. They establish a multi-layered three-dimensional environmental perception system

for the Yanghu ecosystem a visual intelligent analysis platform and an application showcase system forming a multi-

layered innovative monitoring system. This system supports the comprehensive management campaign for the water

environment in Yanghu substantively enhancing lean management capabilities optimizing water environmental quality and

aesthetics ultimately striving towards the goal of a "free-flowing lake clear water verdant shores and picturesque

scenery."

Ultrasonic Water Meters Drive Digital Transformation and Upgrading of Water

Services in a Certain African Country

Willfar Information's new generation of overseas intelligent ultrasonic water meter series tailored specifically to overseas

market demands represents the company's latest product lineup. This series incorporates patented technologies related to flow rate

and pipe segment flow field design positioning itself at the forefront of the industry in critical technical attributes such as high

range ratio low start-up flow and low pressure loss. These features provide water utilities with highly accurate and cost-effective

metering instruments. Leveraging patented structural design technologies the meters offer unique functionalities like automatic

reporting upon tampering. As the first batch of product suppliers for the country's smart water meter upgrade project Willfar

Information is instrumental in catalyzing the digital transformation and modernization of the country's water services sector.。

25-263. Society Section

Innovation-driven and High- Caring for Employee Social Contributions

Quality Growth Growth

3.1 Innovation as a Driver of 3.8 Equal and Legal Employment 3.14 Social Contributions &

Development Philanthropy

3.2 New Momentum for High- 3.9 Employee Health & Safety 3.15 Industry Collaboration &

Quality Growth Shared Development

3.3 Product Quality & Safety 3.10 Employee Welfare & Caring

Measures

3.4 Sustainable Supply Chain 3.11 Employee Training

Management

3.5 Customer Service System 3.12 Protection of Employee Rights and Interests

3.13 Employee Motivation

3.6 Information & Data Security

3.7 Intellectual Property Protection1 2 3

Innovation as a Driver of Development

Innovation is Willfar's DNA and development is its relentless pursuit. As the core driving force of growth the

company delves deeply into the Energy Internet of Things cultivating the "human capital science and technology and big Deepening Chip Strategy: Chips are one Innovative Development of IoT R&D of Emerging Technologies:

data" triad of new elements to bolster its soft power steadily consolidating its development foundation and continually of Willfar Information's key R&D directions Application Layer Software Systems and Willfar Information will focus on

broadening its protective moat for growth. Through technological innovation the company enhances development quality tailored to current grid communication Platforms: As the driving force behind strengthening the development of key

shapes new momentum and establishes new advantages. In 2023 the company's R&D investment amounted to technology needs. In 2023 the company technological innovation software artificial intelligence (AI) technologies

227435900 yuan accounting for 10.22% of operating revenue registering a year-on-year increase of 14.57%. The achieved notable successes in the chip field represents the company's core technical such as big data analytics edge

company had 409 R&D personnel constituting 50.4% of the workforce. including the First Prize of China Electric capability rapidly evolving towards computing and topology recognition

In its pursuit of technological advancement the company strictly adheres to laws and regulations such as the Patent Power Science and Technology Award. networked platform-based and intelligent deeply integrating them into the business

Law of the People's Republic of China the Trademark Law of the People's Republic of China and the Copyright Law of Building upon the launch of a new generation directions. In the future the company will processes of smart grids and smart cities.the People's Republic of China. Guided by the national standard GB/T 29490—Enterprise Intellectual Property of HPLC+HRF dual-mode communication prioritize increased investment in IoT By updating and upgrading intelligent

Management Specification it manages intellectual property-related matters. In 2023 the company added 64 patents chip modules and modules in 2023 the application layer software systems and algorithms for tasks like topology

including 29 invention patents and 48 software copyrights. Cumulatively the company holds 707 valid patent company will continue to increase investment platforms targeting the global market and identification load forecasting and visual

authorizations (149 of which are invention patents) 898 software copyrights and 6 rights to integrated circuit layout in chip and communication module R&D focusing on serving the digital monitoring the company will contribute

designs. Regarding national and group standards by the end of the reporting period the company and its R&D staff had further focusing on optimizing key management needs of customers in areas to the construction of a new power system.participated in the formulation of 65 national industry local and group standards including 36 national standards 11 technologies and communication modules of like smart grids intelligent firefighting

industry standards 1 local standard and 17 group standards. Wi-SUN local routing mesh network. This and intelligent water resources

Focusing on Three Key Areas of R&D to Empower Smart Grids and Smart Cities will address the timely and efficient remote management under the dual carboncollection and analysis of data enabling requirements helping them achieve cost

In 2023 against the backdrop of global digital smart city construction and green development Willfar Information bidirectional interaction between energy savings and efficiency enhancements

continues to align with the State Grid's requirement for the continued strengthening of smart strong digital grids and flows and data streams aiming to become a through digitalization.the Southern Grid's plan for the balanced upgrading of traditional grids alongside the deepening of digital leading supplier of AMI (Advanced Metering

empowerment. It seizes opportunities in global digital smart city development and green strategies concentrating its Infrastructure) solutions in international

R&D efforts on three key areas to expedite the conversion of innovative outcomes. markets.The Company Intellectual Property in 2023

Deepening Integration of Production Education and Research to Facilitate Key

Technological Breakthroughs and Support Dual Carbon Goals Ca类teg别ory New本 A期dd新iti增ons in 2023 Cu累m计ul数ati量ve Total

In 2023 the company continued to vigorously promote the in-depth integration and development of production

education and research pooling high-end intellectual resources facilitating the sharing of research outputs and Inven发tio明n专 P利atents 29 29 149 149

encouraging various innovative elements to converge within the enterprise. This fosters deep integration of production

education research and application. Currently the company has initiated cooperation projects with national-level new- Utilit实y 用M新od型el专 P利atents 29 29 313515

type research institutions and Zhejiang University geared towards the construction of a new power system. Addressing

the demands of intelligent power distribution and utilization scenarios they are developing dedicated chips and intelligent D外es观ig设n P计a专ten利ts 6 6 243 243

terminals for power distribution and utilization supporting the comprehensive precise perception on-site information

processing intelligent decision-making and safe efficient operation of smart power distribution networks. Concurrently Softw软ar件e C著o作py权rights 48 48 898 898

the company will collaborate with multiple universities on key technological breakthroughs in active distribution network

ground fault protection enhancing the safety of active distribution network operations ensuring the secure connection and Ot其he它rs 0 0 6 6

reliable operation of large-scale distributed power sources thereby contributing to the realization of the national dual

carbon strategic targets. T合ot计al 112 112 1611 1611

29-30New Momentum for High-Quality Growth

In today's rapidly changing market environment the company is acutely aware that "improving

quality and enhancing efficiency" is not only a survival strategy but also the foundation for growth.This year marks a critical juncture in Willfar Information's Five-Year Plan as well as a year of

deepening its internationalization. Although the world's political and economic landscape and growth

dynamics render the coming year uncertain the trend towards seeking opportunities amidst risks

pursuing development and fostering peace remains unchanged. Environmental protection and the

dual carbon goals remain integral to the shared destiny of humanity. Amidst such a transformative

era the company firmly believes that the key to navigating external uncertainties lies in

"strengthening oneself" relying on internal certainty.Persistent and Active Pursuit of "Improving Quality and Enhancing Efficiency" to Consolidate New-Quality Productivity Output and International Cooperation

the Path of High-Quality Development Willfar Information boasts a wealth of scientific talent and innovative resources underpinning the development and

In terms of operational quality improvement the company guided by the theme of "steady progress and innovative application of new technologies. Moreover with a solid foundation in the manufacturing of distribution and utilization

development" adheres to the principle of increasing revenue while controlling expenses implementing the "Three Increases and equipment and IoT devices the company possesses a comprehensive production system and supply chain network enabling

Three Reductions": increasing contracts increasing collections and increasing market share; eliminating waste bad receivables it to swiftly respond to market demands and mass-produce high-quality technologically advanced products.and inventory with potential obsolescence risks. Regarding risk prevention and performance enhancement risk prevention is Regarding the international output of new-quality productivity Willfar Information has planned multiple investments

given top priority with the aim of consistently improving profit quality and ensuring that every penny of revenue stems from in overseas smart factories and is concurrently negotiating capacity building solution export projects with multiple partners.healthy business operations. Additionally the company seeks efficiency and benefits from management practicing the "addition Leveraging technologies such as automated production systems cloud services big data analytics and AI algorithms it

subtraction multiplication and division" of operations focusing on "improving quality and enhancing efficiency" striking a provides smart factory construction solutions in various equipment manufacturing fields including water metering devices

balance prioritizing key areas making well-informed decisions and fully activating new drivers for high-quality development. energy efficiency management equipment communication modules and communication devices and distribution network

In terms of revenue enhancement first the company conducts in-depth analyses of domestic and international political- equipment. By combining Willfar Information's talent resources and supply chain network these initiatives facilitate digital

economic situations and market opportunities capitalizing on existing markets while actively pushing for the exploration of transformation and innovative development for both self-built and collaborative factories driving global market expansion

emerging markets. Second in project execution and delivery the company ensures all projects are completed on time with high product and technology collaboration and capacity cooperation for mutual win-win development.quality and efficiency delivering excellent services. Third in technological innovation and application the company

continuously invests in research and development integration innovation enhancing the competitiveness of its IoT-connected

solutions for the future proactively responding to global green development policies and contributing the strength of Willfar to More than One

the realization of China's new power system smart cities and carbon neutrality goals. Hundred Million

30 Provincial

Full-Scale Promotion of Internationalization to Activate New Drivers for High-Quality Connections toPower Grid Power IoT

Development Nine Regional Companies Over 250 Devices

Sales Centers Local Power

In the context of digitalization and intelligence the company will closely follow industry trends and keenly understand and 30 CompaniesProvincial

customer needs dedicated to providing clients with exceptional system solutions and high-quality services. While Offices

continuously deepening its presence in the smart grid domain it will also expand into smart cities overseas markets and the 2800 County-

chip sector. Level Power Companies

The company is fully and swiftly advancing international "three transformations" – in terms of internationalized market

thinking institutional structures and management teams – implementing strategic shifts. According to market demands the

company will transform from a pure export model to one featuring localized production and sales overseas broadening its

global market coverage gaining deeper insights into local market demands enhancing brand influence in local markets and

nurturing a professional team with international perspectives and cross-cultural communication skills thereby boosting

competitiveness in international markets and activating new drivers for the company's high-quality development.

31-32Product Quality & Safety Product Recall Procedure

Actively promoting the "Lean Production" model and the optimization of testing processes with a "4-in-1" approach the company

continuously improves energy-saving and emission-reduction measures in the production process. As a leading provider of Energy Internet of

Things solutions in China the company actively contributes to the development of the Global Energy Internet promoting smart grid and digital- Timing for Potential Recall of Already Delivered Products to

smart city development through clean and green means. Customers

For a long time the company has thoroughly implemented the guiding principle of "Safety First Prevention-Oriented and Preemptive

Treatment Integrated" establishing a series of meticulous safety production systems including the Compliance Obligation Control Procedure Information Collection & Analysis

Emergency Preparedness and Response Control Procedure Compliance Evaluation Control Procedure and Environmental and Occupational on Defects Handling & Root Cause

Health Operation Management Control Procedure. Potential safety hazards are identified subjected to regular inspections and maintenance and Analysis of Recalled

the company requires its directors supervisors senior executives and managers at all levels to lead by example in adhering to safety codes Products

overseeing each other to rigorously enforce safety practices. The company has established a product traceability system tracking products Defect

Investigation

throughout the entire process providing quality assurance to customers. In case of defects or quality issues a recall can be promptly initiated. The Corrective & Preventive

company strictly abides by laws and regulations such as the Production Safety Law of the People's Republic of China the Product Quality Law of Actions and Assessment of Treatment Effectiveness

the People's Republic of China and the Trademark Law of the People's Republic of China. During the reporting period no product recall was

triggered due to safety and health reasons nor were any cases discovered where the company violated laws and regulations related to product and

service quality. Formulation of Recall Plan Recall Summary &

On the path of continuous innovation and capacity building for quality assurance the company explores and practices creating the WQM & Determination of Recall Record Control

(Willfar Quantity Management) digital quality management platform based on the concept of "One Core Two Wings and Three Integrations." Scope

The core refers to a comprehensive quality management philosophy and IPD research and development system architecture. The two wings consist

of an operational production quality management platform built on CRM+ERP+MES and a supplier quality management platform based on SRM. Issuance of Recall Notice The end

Ultimately the platform achieves three integrations: seamless quality management from demand to acceptance fusion of decision-making & Implementation of Recall

processes with operational data and integration of problem retrospection with closed-loop management. Through the implementation of the WQM

platform Willfar Information has achieved a qualitative leap in its quality management level and service capabilities resulting in substantial

enhancements across operating performance customer satisfaction and brand benefits.◆ Product Quality Inspection Process

Flowchart of Product Quality Inspection Process Product Service Certificate

Monitoring and

Measurement of In-line Finished

Finished Products Products

Monitoring and Measurement

of Processes and Semi- First Piece on the

Finished Products Production Line Functional Performance

Inspection Testing

Judgment

"Procedure for Control of

Nonconforming Products" and

Warehousing "Management Regulations for

Handling Product Anomaly Events"

Judgment

Final Random

Inspection Prior to

Shipment

"Procedure for Control of

Nonconforming Products" and

"Management Regulations for

Handling Product Anomaly Events" Judgment

Next

Process Delivery

Product quantitative information

632400 yuan 99.93% 99.75%

4052 person-times

349

108 hours

3times

0

Investment in Production Training Production Number of Number of Product Customer

Work Safety Training Duration Emergency Participants Production Qualification Satisfaction

Drills in Emergency Accidents Rate 33-34

Drills

Patrol

Inspection

Mutual

Inspection

Specialized

Inspection

Initial

InspectionSustainable Supply Chain Management

The company has established a comprehensive supplier evaluation system. First based on information from domestic and

international sources as well as major manufacturers within the industry pre-qualification screening is conducted to identify preliminary

supplier candidates. Subsequently a joint assessment is carried out by R&D and quality personnel from respective business divisions

encompassing the supplier's quality management system technical capabilities corporate reputation product quality indicative pricing

and commercial terms. Following the Supplier Management Regulations and the detailed supplier evaluation criteria only those suppliers Customer Service System

achieving the required composite score may proceed at which point they are requested to complete a 'Supplier Introduction Application

Form' which upon approval by the Management Representative is entered into the system.Upon establishing a partnership the company conducts random inspections on each batch of products delivered by suppliers. In the

event of quality issues the Quality Department shall issue a 'Notification of Nonconforming Product' to the supplier who must promptly

respond with corrective measures. The Quality Department then verifies the closure of these improvements. Should serious quality

problems arise a 'Quality Alert Notice' is issued and depending on the severity a 'Quality Blacklist' may also be dispatched. In response

the Procurement Department would suspend the supplier's qualifications and cease placing orders based on the blacklist issued by the Technical Service Response

Quality Department. Moreover the Procurement Department conducts performance evaluations of suppliers who have delivered five or Willfar Information places great importance on customer feedback and requirements establishing a rapid technical service response

more batches within a half-year period with assessment criteria encompassing technical expertise quality delivery timeliness pricing and

service quality. Suppliers achieving an A-grade in the evaluation are given priority consideration for orders while those receiving a D- system with the service policy of "Prioritizing customers' urgency anticipating their needs and continuously enhancing service value

grade undergo rectification or potential elimination. through professional expertise!" The company remains steadfastly customer-centered providing prompt professional and efficient support

In its dealings with large medium and small-scale suppliers and clients alike the company consistently upholds the principle of and services. Nationwide it maintains 36 service branches staffed with dedicated technicians on a 24-hour rotation ensuring

equality and fairness. By ensuring there are no instances of overdue payments during the reporting period it fosters a more sustainable comprehensive pre-sales mid-sales and post-sales services to meet client demands.supply chain ecosystem.Diversified Service Models

Offline: Building a global service network to enhance customer experience through localized services enabling in-depth

understanding of customer needs

Online: Establishing a network technical service center for real-time remote communication and one-stop services offering

scientific solutions to customers

Willfar Information has incorporated green Integration and Interaction of Online and Offline Channels: Providing efficient and intelligent services

supply chain management into its corporate strategy

instituting top-level design for green SCM with the

objective of driving energy-efficient low-carbon and

sustainable industries. The company universally In pursuit of the overarching objectives of Customer Satisfaction

applies contemporary environmental protection a green supply chain Willfar Information

methods and advanced manufacturing technologies focuses on enhancing energy efficiency and

vigorously promoting circular economy and wide- managing carbon emissions across various The company has put in place the 'Management Regulations for Handling & Closing Customer Complaints

ranging energy conservation and emissions reduction stages encompassing green product design eco- Regarding Product Quality.' In 2023 customer satisfaction reached 99.75%. After receiving customer feedback the

thus providing premium-quality products for the conscious raw material acquisition green

creation of a "resource-efficient and environmentally technical service department takes over confirming the fault phenomenon. If the fault is verified departments such asfactory manufacturing environmentally sound

friendly society" assuming its most mission-centric R&D engineering and quality conduct root cause analysis formulating a resolution plan involving product repair or

social responsibilities corporate operations green packaging and replacement to eliminate the fault. Internally long-term improvement measures are developed in response to the issueproduct recycling. to prevent similar occurrences in the future.Customer Problem Resolution Process

Willfar Information will persistently embed the

philosophy of "green development" consistently

refining its green supply chain management framework Core measures involve the formation of green

expediting the development and service deployment of intelligent factories endorsement of clean production

high-tech high-value-added products characterized by initiation of waste utilization projects advancement of the

"green technology intelligent environmental protection circular economy and assembly of an energy Network Technical Service Center 7*24 Hour Free Service Hotline

and dependable efficiency." It will streamline product management system platform. Simultaneously Willfar Technical Solutions Technical Documentation FAQs etc. Remote Telephone Support

structure elevate product quality institute a resource Information will strategically position and extend itself

recycling system throughout the entire value chain and within the electronic manufacturing industry's value chain

set a paradigmatic benchmark for low-carbon green proactively nurturing green suppliers upstream to assure

development within the industry. high-quality eco-friendly raw material procurement.Work Order

Service Requests Confirmation On-site Service Service Evaluation

Concurrently the company will pivot around the Downstream leveraging the company's state-of-the-art

convergence of energy streams and information flows R&D competencies it will cater to pivotal sectors like

devising holistic solutions oriented toward carbon smart municipal governance smart industrial parks smart Establishment of standardized service management processes and

neutrality facilitating governments businesses security and smart water management collaboratively local on-site support through branch offices

industrial parks and other clientele in embracing carbon- erecting city-scale intelligent control systems ultimately

neutral actions and collectively engaging in and actualizing the company's low-carbon development in

propelling China's carbon neutrality targets. consonance with urban development. Continuous Improvement Mechanism

Service processes are digitally informatively and dynamically managed with market information collected and

analyzed customer feedback implemented in a closed-loop manner and experience compiled into a knowledge base

thereby driving continuous improvement and innovation of the company's products and services.

35-36Information & Data Security Intellectual Property Protection

In accordance with ISO/IEC 27001:2022 "Information security cybersecurity and privacy protection—Information Intellectual property is one of the company's most critical assets. The company strictly abides by relevant laws and

security management systems—Requirements" the company continuously refines and optimizes information security and regulations respecting the intellectual property rights of clients and suppliers. It has formulated the 'Regulations on

privacy protection-related management systems. Integrating these management requirements into primary business Intellectual Property Management' to regulate its own IP management work establishing a comprehensive intellectual

processes it has established a comprehensive customer data security management system. Through multiple layers of property secrecy system and associated record management system clearly defining aspects such as employee

customer data privacy protection mechanisms it effectively prevents incidents of data insecurity or leakage of customer confidentiality non-compete restrictions confidentiality rewards and penalties and archival management. The company

enters into 'Confidentiality Agreements' with employees instituting constraints through formal procedures to prevent the

privacy. leakage or loss of IP information. Furthermore it conducts IP education and training for employees engaging in IP

awareness-raising campaigns sharing experiences and enhancing employees' understanding of IP protection. Concurrently

the company actively promotes IP protection within the industry striving to foster self-regulatory norms and participating in

the formulation of industry standards to reinforce IP protection.The company scrupulously adheres to laws and The company adheres to a dual-track approach of

regulations related to personal information and data "Technology + Mechanisms" erecting an impenetrable

security including the 'Personal Information Protection Law firewall for information security rigorously safeguarding

of the People's Republic of China' the 'Cybersecurity Law the information security of clients users suppliers and

of the People's Republic of China' the 'Data Security Law industry chain partners and eliminating the possibility of

of the People's Republic of China' and the 'Consumer information or privacy leaks. On one hand it has

Rights and Interests Protection Law of the People's established a system security protection framework for

Republic of China.' It consistently carries out publicity and information systems relying on proprietary technologies to

educational activities on confidential knowledge rigorously continually drive product operational system and

implementing the signing of confidentiality commitment management system security upgrades software updates

letters by all employees strengthening confidentiality and by collaborating with renowned information security

awareness reinforcing confidentiality responsibilities companies continuously enhances the level of information

cultivating confidentiality habits and enhancing employees' security protection. On the other hand it continually

voluntary adherence to confidentiality in their daily work refines internal management mechanisms signing

and business activities ensuring strict observance of legal 'Information Security Confidentiality Agreements' with

provisions and compliance systems. relevant personnel and reinforcing the cultivation of

The company significantly invests in construction employee responsibility and professional ethics. It

enhancing its technological capability to safeguard implements multiple measures to strengthen oversight

information security fortifying technical means to construct safeguarding information security and preventing the

a controllable data and network security hardware and disclosure of client user supplier and industry chain

software defense system. It employs measures such as data partner information and privacy to third parties. In the

encryption access control and audit logging identity event of potential security attacks or internal violations

authentication and access control to ensure client once detected they are immediately reported to law

information security. enforcement authorities. No information leak incidents

The company strengthens supervision over information were recorded during the reporting period.security and cybersecurity ensuring the effective

implementation of client information security safeguards.Annually it undergoes third-party review and in line with

regulatory requirements and internal management

guidelines conducts unscheduled special self-inspections of

network and data security. The inspection content primarily

includes: access management data classification and

grading data security data backup data destruction

information security and privacy protection.During the reporting period no events involving data

security breaches or client privacy leaks occurred.

37-38Employee Growth and Development

Employee composition

Equal and Legal Employment

The company adheres to equal and legal employment protects the legal rights and interests of employees eliminates discrimination due to religion

gender age marital status disability sexual orientation and other factors and strictly protects employees' personal information and privacy. The company 812persons 100% 100% 100%

introduces a large number of excellent and highly educated talents every year. Our management team and core technology team include members of industry

associations and standardization committees most of whom have been working with the company since its inception with many years of IoT industry

technology and management experience so that the company's technology R&D and business strategies are in line with the direction of industry development.Employee Health and Safety

Willfar proactively addresses workplace safety by continuously enhancing safety awareness among its employees particularly at the grassroots level. The

company invests in extensive safety training and skill enhancement to foster an environment where all employees are actively engaged in safety management.This commitment has led to the formation of a model team distinguished by its robust safety consciousness strong operational skills and high efficiency. Willfar 25%

prioritizes the preemptive management of safety risks achieving zero work-related fatalities and zero days lost due to workplace injuries over the past three

years. Furthermore no violations of health and safety regulations were recorded during the reporting period. 4%

Willfar has established a staff assistance fund to support employees facing personal hardships and has also created an Innovation and Entrepreneurship

Fund to encourage employees to engage in innovative and entrepreneurial activities. Additionally the company provides complimentary accommodations and

access to sports and recreational facilities including a soccer field basketball courts badminton courts a gym and a library all aimed at enhancing physical Number of Percentage of Employee Labor contract Social insurance Training

health and providing relaxation opportunities outside of work. Willfar places a high emphasis on employee health offering free annual health checks and employees in female turnover rate signing rate coverage rate coverage rate2023 employees

strengthening health management practices to ensure the well-being and safety of all staff. The company rigorously identifies and addresses potential hazards

conducts emergency drills and promotes safety training and cultural activities which have led to its recognition as an outstanding unit for safe production and

fire safety in the Changsha High-Tech Zone.In each of the past three years (including 2023) the number of work-related deaths was zero the number of working days lost due to work-related injuries Age structure of R&D staff

was zero and no violation of laws and regulations relating to workplace health and safety was found during the reporting period.

210 persons

632400 yuan 100% 100%

4052 person-times

109 persons

588 times 79 persons

349 persons

11 persons

3 times

0 0 persons

Investment in Production Production Number of Number of Health Check-up Health Record New Diagnosed

production safety training Training emergency drills participants in Rate Coverage Occupational Below 30-40 years 40-50 years 50-60 years Above 60

emergency drills Disease Cases 30 years old old old old years old

R&D training Logistics and warehousing training

Production training Material quality trainingEmployee Motivation

The company has established a functional remuneration system that combines job responsibilities

with target responsibilities setting differentiated salary structures based on varying job duties and

functions. It has also devised incentive policies for different levels and categories of positions.Upholding the principle of value contribution the company regards value contribution as the core

principle guiding remuneration distribution ensuring a proper match between employees and their roles

enabling those who contribute more to earn more thereby guaranteeing fairness incentives and

competitiveness in the company's compensation. The average income per employee has been steadily

increasing year on year.In accordance with relevant national laws and regulations and with a view to achieving business

objectives considering market competition levels and incentive effects the company formulates

compensation management and incentive management schemes. Through the pull of remuneration

incentives the company fully mobilizes the enthusiasm of employees at all levels promoting mutual

development between the enterprise and its employees culminating in a win-win scenario of shared

benefits. As of the end of 2023 the company had cumulatively repurchased approximately 12.31 million

shares via the Shanghai Stock Exchange trading system through centralized bidding transactions with a

total payment amount of approximately RMB 299 million yuan. These shares are intended for future use

in equity incentives further enhancing the company's long-term incentive mechanism.Employee Training Protection of Employee Rights and Interests

The company consistently adheres to fair just and open employment policies rigorously enforcing the 'Labor Contract Law'

The company provides employees with an excellent development platform. To fully harness the talents of research and development strengthening labor contract management and safeguarding employees' legal rights and interests. While ensuring the company's sustained

personnel it has specifically established an Engineering Technology Research Center an Academician Workstation and a Postdoctoral and steady development it pays attention to ensuring reasonable income growth for employees and actively provides them with various

Research Station among others fostering a good environment for growth. Additionally the company has built a comprehensive training levels of job training professional skill training occupational health training and safety training ensuring both the physical and mental

system utilizing its "Talent Production Line" to focus on both internal cultivation and external recruitment conducting tiered and well-being of employees and realizing concurrent growth in employee income and corporate profits.categorized training for various employee development and skill enhancement programs constantly injecting fresh energy into the The company emphasizes the protection of female employees' rights conscientiously implementing laws and regulations such as the

company's smooth business operations. 'Law of the People's Republic of China on the Protection of Women's Rights and Interests' and the 'Special Provisions on Labor Protection

for Female Employees.' It strictly enforces provisions regarding maternity and breastfeeding leave for female employees while ensuring

Based on the company's culture long-term strategic planning annual business management and actual needs for job-specific and equal pay and benefits for both female and male employees as well as providing equal opportunities for career development.professional skills an annual training plan is formulated giving rise to a multi-layered categorized diverse results-oriented and dynamic

training landscape tailored to the company's development and aligned with employees' growth trajectories. Employee Welfare & Caring Measures

The company genuinely safeguards employee rights providing in addition to the legally mandated "Five Insurances and One Fund"

group commercial supplementary medical insurance accidental injury medical insurance and accidental injury hospital cash allowance

Online + Offline: Simultaneously promoting online training and micro-courses insurance among other protections. It also attends to the daily living needs of employees and their families distributing gratuity or gifts

Form of Training establishing a Learning Day model to encourage autonomous learning during festive seasons offering a rich array of benefits to employees.Willfar Information has organized the "Happy Summer Vacation" summer camp guiding employees' children on a journey of joy

knowledge and friendship during the summer break allowing them to broaden their horizons gain knowledge and hone their willpower

Internal Training: Providing robust talent and organizational support for business through travel.development through new employee training high- middle- and junior-level management The company's in-house cafeteria offers free lunches and overtime meals to employees and it provides fully-equipped staff apartments

cadre training specialized training on essential knowledge and skills for new products and and shuttle buses covering most of Changsha City facilitating employees' daily commutes.services and regular hosting of博士 Innovation Business Science Salons. Additionally the The company advocates for reasonable work arrangements providing employees with various types of paid leave. With increased

Combination company plans and organizes cross-functional professional skill training on a regular basis

tenure the number of days for certain categories of leave will also increase and it organizes a diverse range of activities to enrich

employees' lives.of internal and and monitors internal professional training within each department.external External Training: Focusing on Innovation Business Cloud Lectures Comprehensive

training Ability Enhancement for International Talent and Business English ProficiencyImprovement Training encouraging functionally reassigned personnel to undergo external

training to adapt to new job requirements. Concurrently the company actively advances the

Learning Day initiative incentivizing employees to engage in self-directed learning.Encouraging all Business Divisions/Responsibility Centers to foster an atmosphere of universal learning:

Formulating concrete training plans applying knowledge gained to practice and comprehensively enhancing the

business management and team management abilities as well as individual capacities of the company's mid-to-senior-

level management cadres.Willfar Information has been recognized as a 'National Model Enterprise for the

Creation of Harmonious Labor Relations.'

41-42Social Contributions & Philanthropy Types and Contributions of Philanthropic and Charitable ActivitiesWillfar Information actively assumes the responsibilities and commitments of a national enterprise fostering the concept of a

"Public-Welfare Oriented Willfar." The company has assembled a volunteer team actively engaging in charitable endeavors such as

donations educational sponsorships and visitation and consolation activities. They have ventured to Xiluo Town and Guitang Town in

Longshan County to participate in rural revitalization efforts extending condolences to struggling households and students. Demonstrating

Social Contribution of Main Business and Key Industry-specific Indicators the high sense of responsibility and contribution of a socially-oriented enterprise the company strives to create value for society.The company adheres to leveraging technological and informational means to facilitate rural revitalization. Rural areas serve as the

In the domain of digital grids the fusion of energy revolution and digital revolution is propelling grid digital transformation. As new-generation frontlines of this revitalization effort where average household incomes are relatively low; energy conservation can effectively reduce

digital technologies such as cloud computing big data and the Internet of Things deeply integrate and widely apply with energy technologies the household expenses enhancing disposable income levels. As urbanization rates continue to climb issues such as heavy grid loads and

emerging energy ecosystem continually raises its levels of digitization networking and intelligence. The large-scale high-proportion grid connection weak rural power infrastructure gradually surface. To address these challenges faced by rural areas the company has developed and

and consumption of new energy sources on the generation side coupled with the extensive interconnection of interactive and mobile facilities like launched a Smart Energy Solution for Rural Households. By monitoring digital information such as electricity load safety appliance

distributed energy and electric vehicles on the consumption side necessitates accelerated grid digital transformation to facilitate coordinated interaction types and conditions charging piles and household distributed photovoltaic systems in new rural households the solution enables

between power sources grids loads and storage steering the grid towards a more intelligent and ubiquitous energy internet. analysis diagnosis and control of electrical equipment. It can provide digital value-added services to rural households and entire villages

Cost-reduction and efficiency-enhancement strategies drive the development of the energy digital economy as the grid accelerates its digital including energy consumption analysis energy-saving diagnosis load regulation electrical safety and appliance malfunction warnings

transformation. According to National Grid announcements while electricity prices in China persistently decline grid construction is intensifying with realizing intelligent energy use for rural households and villages rendering rural household energy observable measurable controllable

ultra-large grids ranking among the world's best in voltage levels energy resource allocation capacity and connected renewable energy scale placing and adjustable.significant operational pressure on the sector. Internally to achieve real-time sensing visualization and control throughout the entire management

process and externally to meet customers' increasingly diversified personalized and interactive demands reliance on digital technologies to enhance The Organization Department of Hunan Xiangjiang New Area led

management and service levels is crucial thereby fostering industrial upgrading and unlocking the energy digital economy. Willfar Information Technology Co. Ltd. among other key enterprises

The Southern Grid 14th Five-Year Plan for Grid Development highlights that Southern Grid has prioritized distribution grid construction in its '14th in the area to Xiluo Town and Guitang Town in Longshan County to

Five-Year' agenda earmarking investments totaling 320 billion yuan accounting for approximately 47.8% of total investment. Key aspects of carry out rural revitalization work consoling struggling households and

distribution grid construction include: students.

1) Continuously strengthening urban distribution grid development ensuring that high-reliability demonstration zones and premium power supply During this event the Two New Committees under theOrganization Department of the New District organized various

pioneer areas have an annual average outage time not exceeding 5 minutes reaching an international leading standard with distribution self-healing enterprises to donate funds adopting a combined approach of "multiple-

achieving 100%; to-multiple" concentrated assistance and "one-to-one" decentralized

2) Consolidating and upgrading rural grids enhancing distribution network intelligence. Large-scale renovation and upgrading efforts will be assistance aimed at providing aid and comfort to struggling households

carried out on a county-level basis. By 2025 the annual average outage time for all-network customers will drop to less than 5 hours per household with and students in Guitang Town and Xiluo Town maximizing the

downtown areas reducing to 0.5 hours per household urban areas to 2 hours per household and rural areas to 7.5 hours per household maintaining a effectiveness of poverty alleviation and educational support. Leaders

domestic leading position. from the New District's Organization Department and key enterprises

According to a State Grid announcement the State Grid continues to significantly increase investment in distribution grids building a domestically also personally visited four struggling households presenting them withpoverty relief funds and supplies encouraging them to overcome

and internationally leading energy internet enterprise with Chinese characteristics. Amidst persistent growth in electricity load flexible integration of difficulties and strive for self-reliance and self-improvement.new energy distributed power sources and electric vehicles along with strengthened demand for diverse electricity usage from consumers State Grid

and Southern Grid are expected to sustainably augment investment in distribution grids. Willfar Information rooted in the grid industry and deeply

engaged in grid digitalization and informatization revolves around energy flow and data flow. The company utilizes self-developed communication chips

and modules for data transmission followed by self-developed gateway devices for data interaction delivering a comprehensive energy management

solution encompassing both software and hardware. In response to the emphasis in State Grid and Southern Grid's '14th Five-Year' work priorities on Children entered Willfar Information's workshop In the Willfar Information's exhibition hall

reducing outage times and lowering line losses the company has specifically developed fault location schemes and line loss analysis schemes. These Witnessing scenes of automation and intelligence They saw a myriad of chips and water meters

enable real-time monitoring and precise localization of power outages across transformer-station-line-box-consumer levels as well as multi-level line Understanding the essence of intelligent They gained a vague understanding of their parents' work

loss analysis from substation to branch box branch box to meter box and meter box to household meter supporting intelligent anti-theft diagnosis. This manufacturing

Got to know more industry knowledge

effectively facilitates proactive sensing judgment and repair ensuring precise and swift fault repair services and rapid power restoration alongside rapid Knowing that science and technology are the first

validation of comparison analysis results against on-site electrical abnormalities enabling efficient and precise investigation of user electricity theft productive forces Marveling at the vibrant growth of technology

behavior. Pilot projects have already been successfully implemented in provinces like Anhui and Guizhou effectively reducing distribution grid line

In their young hearts a new dream takes root

losses and thereby contributing to carbon emission reductions in these grids.

43-44Industry Collaboration & Shared Development

National Key Research and Development

Project with the Participation of Willfar

Information Passes Inspection

The Key National Research & Development Program Project -

"Key Technologies for Digital Grids" has smoothly passed inspection

organized by China's Ministry of Industry and Information

Technology. Led by the Digital Grid Research Institute Co. Ltd. of

China Southern Power Grid Company the project was jointly

undertaken by multiple in-grid enterprises and renowned domestic

universities. Willfar Information as the sole industrial entity deeply

participated in the study of critical project topics successfully

completing the development of "Core Chips for Edge Computing"

and "Edge Computing Devices Based on Multi-service Coordination"

as per project plans. The outcomes of these topics were evaluated by

an authoritative expert panel as being internationally advanced.Hunan Province New Power System Development Joint Research Center

Shandong Province Higher Education Energy Management Training Conference Successfully EstablishedWillfar Information Supports Key Technology R&D

Held at Willfar Information

In early September 2023 the Launch Meeting for the Construction of the New Power

From March 22nd to 25th the Shandong Province Higher Education Energy Management Training Conference System in Hunan Province and the Establishment of the Hunan Province New Power System

organized by the Energy Management Branch of the Shandong School Logistics Association and hosted by Willfar Development Joint Research Center was held in Changsha. As a member of the joint

Information took place at the Willfar Science and Technology Park. Over 150 representatives from various universities in research center Willfar Information's President Li Xianhuai was invited to attend the

Shandong the Shandong School Logistics Association government bodies and enterprises attended the conference. During meeting. As a participating organization Willfar Information assigned experts to serve on

the event experts from universities and senior executives from Willfar Information engaged in in-depth dialogues and the Expert Committee specifically engaging in research tasks within five research sub-

interactive exchanges through a series of themed lectures focusing on topics such as green and low-carbon policies and the centers: clean and efficient coal utilization smart hydropower load aggregation (virtual

establishment of university energy systems significantly enhancing mutual learning and reference in the domains of smart power plants) new energy equipment and digital energy.campus construction and educational logistics services.Launch Meeting Held for a CEC Group

Standard Mainly Developed by Willfar

Information

In early August 2023 the Launch Meeting for the

Compilation of 2023 Group Standard organized by the Electric

Integrated Circuit Standardization Technical Committee of the

China Electricity Council and hosted by Willfar Information

Technology Co. Ltd. with the support of Beijing Zhixin

Microelectronics Technology Co. Ltd. was convened at the

Willfar Science and Technology Park. This meeting marked the

official commencement of the compilation of a group standard

led by Willfar Information. 'Technical Requirements for

Integrated Modules Used in Low-voltage Semiconductor Circuit

Breakers' a group standard spearheaded by Willfar Information

pioneers the standardization process for core functional

components in low-voltage semiconductor circuit breakers

indicating new breakthroughs and directions in Willfar

Information's R&D efforts in the core module sector of low-

voltage semiconductor circuit breakers for the power industry.

45-46Willfar Information Invited to Attend 2023 "Empowering Enterprises with Intelligence: Entering Willfar Information Participates in the 2024 Willfar Information Invited to Attend Sino-Saudi

Council Meeting of Innovative Alliance for New Supercomputing" Collaboration Meeting Held American Transmission & Distribution and Investment Conference

Power Systems Willfar Information Forms Strategic Partnership with Public Utility Exhibition

Supercomputing Center

On July 11 the 2023 Council Meeting of the Innovative In March 2023 the "Empowering Enterprises with The 2024 American Transmission & Distribution and On December 12 the "Sino-Saudi Investment Conference"

Alliance for New Power Systems was held in Beijing. The Intelligence: Entering Supercomputing" collaboration meeting Public Utility Exhibition (DISTRIBUTECH International was held in Beijing. Vice Minister of Commerce of China Li

meeting thoroughly implemented the important speeches and was held at the National Supercomputing Center in Changsha 2024) was grandly held at the Orange County Convention Fei delivered a speech and Saudi Arabia's Minister of

instructions of President Xi Jinping. Li Hong Chairwomen of attracting over 160 companies from various industries. Li Center in Orlando USA from February 27 to 29 attracting Investment Khalid Al-Falih gave a presentation. Li Hong

Willfar Information attended as a council member of the Xianhuai President of Willfar Information represented the nearly 17000 professional visitors and over 500 globally Chairwomen of Willfar Information attended the opening

alliance gaining an in-depth understanding of the national goals company in signing a strategic partnership agreement with the leading exhibiting companies. At DistribuTECH2024 ceremony and participated in the conference. Several Arab

and plans for the construction of a new power system. The supercomputing center on site. This collaboration will leverage Willfar Information showcased its solutions for power AMI countries have concurrently formulated long-term development

company will continue to adhere to innovation-driven Willfar Information's strengths in high-performance computing & energy IoT intelligent distribution networks and water & strategies that align with the Belt and Road Initiative reflecting

development contributing to the construction of China's digital big data information security and artificial intelligence gas AMI demonstrating the latest achievements and a shared desire for mutual development between China and

grid and facilitating the digital transformation of new power providing the necessary computational power support and technologies in China's energy IoT industry as well as the Arab nations which presents numerous opportunities for future

systems. algorithmic research for the supercomputing center's digital vision and comprehensive strength of Chinese enterprises. economic and investment cooperation between the two sides. In

transformation enterprise smart brain big data intelligence The company also sought to establish connections and the future Willfar Information will actively respond to the Belt

platform and digital twin platform construction. collaborations with professionals and clients from around the and Road Initiative proactively participating in the construction

world. of new energy systems and smart management in Saudi Arabia

and the broader Arab region contributing to the digital and

intelligent transformation of cities in the region.

47-48Willfar Information Invited to Attend the 24th Willfar Information Attends the 31st Shanghai Willfar Information Participates in the 16th WINMETER Energy Invited to Attend the 2nd

European Power & Energy Exhibition International Electric Power Equipment & Asian Power & Energy Exhibition National Water Saving Industry Innovation &

Technology Exhibition Development Achievements Exhibition

On November 28th local time the 24th European Power & On November 15th themed "Innovation Drives High- From November 14th to 16th Willfar Information was From November 15th to 17th the 2nd National Water

Energy Exhibition opened grandly in Paris France. As a leading Quality Development of the Electric Power Industry" the 31st invited to the 16th Asian Power & Energy Exhibition held in Saving Industry Innovation & Development Conference was

enterprise in the Energy Internet of Things (IoT) Willfar Shanghai International Electric Power Equipment & Jakarta Indonesia. The event attracted over 12000 held at Shenzhen World Exhibition & Convention Center

Information was invited to attend showcasing its latest Technology Exhibition was held in Shanghai co-organized by professionals from 50 countries worldwide 70 power (New Bao'an Pavilion). Concurrently the 2nd National Water

technologies and innovative achievements in the digital grid the China Electricity Council and State Grid Corporation of companies and 300 enterprises. By attending the 16th Asian Saving Industry Innovation & Development Achievements

domain comprehensively. China. Willfar Information was invited to participate bringing Power & Energy Exhibition Willfar Information Exhibition took place with WINMETER Energy a subsidiary

a diversified array of solutions. President Li Xianhuai attended demonstrated the vision and comprehensive strength of a of Willfar Information participating. WINMETER Energy

the opening ceremony and presented a keynote speech sharing Chinese enterprise fostering close connections and showcased industry-leading products and water-saving

the company's experience and case studies in utilizing collaborations with global industry leaders professionals and solutions including intelligent water management solutions

information technology to facilitate the construction of a new clients to collectively build a brighter future. urban-rural integrated water supply solutions modular water

power system. meters and ultrasonic water meters demonstrating Willfar

Information's continuous dedication and R&D strength in the

smart water sector.

49-50Willfar Information Attends the 2023 China Listed WINMETER Energy Invited to Attend the 5th Willfar Information Attends the 24th APPEA WINMETER Energy Invited to the 2023 High-

Company Entrepreneurs Annual Meeting Guangdong-Hong Kong-Macao Greater Bay Area Conference Quality Water Supply Development Forum

Water Resources Forum

With the theme of "Stimulating New-quality Productivity The 5th Guangdong-Hong Kong-Macao Greater Bay Area On October 20th the 24th East Asia and Western The "2023 (8th) High-Quality Water Supply

Leading High-quality Development" the 2023 China Listed Water Resources Forum themed "Gathering Water Wisdom Pacific Power Industry Association Conference was held in Development Forum" jointly hosted by E20 Environment

Company Entrepreneurs Annual Meeting was held in Shenzhen Creating a Green and Beautiful Bay Area" officially kicked off Xiamen Fujian Province with Vice President Han Zheng Platform · Water Supply Service Promotion Alliance and

on November 10th an event organized by the China Association in Dongguan. WINMETER Energy a subsidiary of Willfar attending the opening ceremony and delivering a speech. Changsha Water Group opened in Changsha. WINMETER

During the conference President Li Xianhuai and Vice

for Public Companies guided by the Shenzhen Municipal Information was invited to participate. Having been invited Energy a subsidiary of Willfar Information was invited toPresident Fan Lv of Willfar Information accompanied

Government supported by the Shenzhen Stock Exchange and multiple times to the Greater Bay Area Water Resources Forum visitors at the booth introducing the company's overview attend. Topics at the forum encompassed opportunities and

co-hosted by the Shenzhen Municipal Bureau of Local Financial WINMETER Energy received an exclusive interview during the and overall solutions in intelligent grids and digital cities challenges for the water supply industry under the wave of

Supervision and Administration and the Futian District People's event from the organizer's official media partner Tencent News. extensively detailing the digitalized distribution and Chinese-style modernization new measures for water supply

Government. Chairwomen Li Hong of Willfar Information was The company aims to further strengthen its ties with various utilization solutions international energy AMI systems security innovation in fine-tuned corporate operation and

invited to attend and participated in the "Female Entrepreneurs' water resource units in the bay area through this gathering virtual power plant/micro-grid solutions and IoT fire management advanced and value-added water supply

Sharing Forum" within the context of innovation delivering an contributing more significantly to the region's smart water monitoring solutions. services and more collectively exploring the future of the

insightful presentation. Furthermore due to its persistent efforts infrastructure development. industry and interpreting "New Water Supply under Chinese-

and outstanding performance in high-quality development style Modernization."

Willfar Information distinguished itself among over 5000 A-

share listed companies earning recognition as a "2023 Board of

Directors Excellent Practice Case."

51-52China-Africa Economic & Trade Expo Opens

Willfar Information Supports Sustainable New

Energy Development in Africa

On the morning of June 29th the Third China-Africa

Economic & Trade Expo and China-Africa Economic &

Trade Cooperation Forum opened at the Hunan

International Convention and Exhibition Center in

Changsha. Chairwomen Li Hong of Willfar Information

attended the opening ceremony. Chinese enterprises'

operations on the African continent represent a "two-way

pursuit" with Willfar Information's products and services

aimed at improving local infrastructure while also

contributing to the socio-economic progress of African

nations.The 4th Green Expo Opens and Willfar Information Receives "National

Green Factory" Award Boosting Green Development in Hunan Digitally Empowered Energy Creates the Future | Willfar Information Participates in the 2023 International Digital Energy Exhibition

On July 28th the 4th Hunan International Green Development Expo opened in Changsha.President Li Xianhuai of Willfar Information attended and participated in the conference. The event Digitally empowered energy creates the future. The 2023 International Digital Energy Exhibition

featured an award ceremony for enterprises receiving the title of National Green Factory in 2022 was held at Shenzhen Convention & Exhibition Center (Futian) from June 29th to July 2nd with

with Willfar Information being honored with the "National Green Factory" award. This recognition Willfar Information showcasing numerous solutions. The exhibition featured a professional "5+1+1"

fully demonstrates Willfar Information's role as a leader in continuously building advanced green format with Willfar Information as a leading Energy IoT solutions provider presenting new

technologies products models and formats around digital smart grids and smart cities. Through these

manufacturing enterprises driving the green industrial transformation within the industry exchanges the company hopes to foster industry consensus promote standardization and coordination

accelerating the establishment of green manufacturing systems and promoting high-quality of digital energy on a global scale and stimulate regional energy cooperation and mutual benefits.industry development.Willfar Information Invited to Attend the 5th

West Africa (Nigeria) International Water Expo

2023

The 5th West Africa (Nigeria) International Water Expo

2023 was grandly held at Landmark Centre in Lagos Nigeria

from July 11th to 13th with Willfar Information a leading

provider of Energy IoT solutions being invited to participate.As a professional water treatment exhibition the West Africa

Nigeria International Water and Wastewater Exhibition offers

Willfar Information comprehensive information and trade

opportunities to access the African market enhancing the

company's visibility.

53-54Willfar Information Invited to Attend the 2023 Willfar Information Signs Strategic Willfar Information Participates in the 2023 China Willfar Information Attends the

Philippines IoT Congress Memorandum of Understanding with Saudi International Clean Energy Expo 2023 Boao New Power System

Investment Ministry on the First Day of International Forum

China-Arab States Cooperation Forum

The 2023 Philippines IoT Congress was grandly held at the On June 11th the 10th China-Arab States Businessmen On March 28th the "2023 China International Clean On March 22nd and 23rd the 2023 Boao New Power

World Trade Center in Pasay City Metro Manila Philippines Conference and the 8th Investment Seminar were held at the Energy Expo" jointly organized by the China Electricity System International Forum was held in Boao Hainan.from June 26th to 28th. Willfar Information as a leading Energy King Abdulaziz International Conference Center in Riyadh Council State Energy Investment Group Co. Ltd. China Focused on "Openness Cooperation Sharing Promoting

IoT solutions provider was invited to participate. At the the capital of Saudi Arabia. Chairwomen Li Hong Vice Chamber of Commerce for Import & Export of Machinery Green and Low-Carbon Energy Development" the forum

exhibition Willfar Information showcased the latest President Zhang Zhenhua and Vice President Zhong Xiuyu of and Electronic Products China Industrial Overseas explored pathways for the development of new power systems.achievements and technologies of China's Energy IoT industry Willfar Information attended the opening ceremony and Development & Planning Association and China Vice President Fan Lv and Communication & Chip Business

demonstrating the vision and comprehensive strength of Chinese participated in the conference. During the event Willfar Photovoltaic Industry Association among others opened in Group President Xiao Linsong of Willfar Information were

enterprises establishing connections and collaborations with Information signed a strategic memorandum of understanding Beijing. Willfar Information as a leading Energy IoT invited to attend the forum.professionals and clients worldwide and envisioning a bright with the Saudi Investment Ministry (MISA) and the Saudi solutions provider made a stunning appearance.future together. NTCC Group. Li Hong Zhang Zhenhua and Zhong Xiuyu

also met with the Royal Commission for Jubail and Yanbu.

55-564. Governance Section

The Company's Sustainable Corporate Governance & Enhancing Equality Efficiency &

Development Strategy Sustainable Social Value Returns

4.1 Discussion & Analysis on the 4.6 Operation of the General Meeting of 4.11 Focusing on Value Creation for

Company's Future Development Shareholders Board of Directors and Continuous Substantial Returns to Investors

Supervisory Board

4.2 Party and Mass Organization Building 4.7 Disclosure of Information 4.12 Harmonizing Interests: Building a Win-

Win Relationship between Management &

Shareholders

4.3 Communication with Stakeholders 4.8 Investor Relations Management

4.4 Sustainable Development Strategy 4.9 Business Ethics

4.5 Sustainability Indicators 4.10 Compliance TrainingDiscussion & Analysis on the

Company's Future Development

The "Dual Carbon" Strategy Spurs Accelerated "Digital Economy" Drives Comprehensive Development of Riding the Wind of the Belt and Road Initiative

Transformation and Upgrading of the New Power System Smart Cities Unleashing the Blue Ocean of Energy IoT

The 14th Five-Year Plan proposes that the added value of the core industries of the

The report to the 20th CPC National Congress put forward the notion of "actively yet digital economy account for 10% of GDP by 2025. Smart cities provide a continually According to statistics from relevant institutions in 2022 the primary Southeast Asian

prudently advancing carbon peaking and carbon neutrality. Based on China's energy and growing application scenario for the development of the digital economy with promising countries (Indonesia Vietnam Singapore Malaysia and Thailand) saw an electricity

resource endowments we will adhere to a principle of first establishing before dismantling prospects in areas such as smart water services smart gas smart firefighting integrated consumption growth rate of +5.4% leading China and the United States by approximately 2

implementing carbon peaking actions in a planned and phased manner" and explicitly energy for smart parks and more ushering in an era of robust smart city construction. percentage points and significantly exceeding Europe. In the same year electricity

stated the intention to "accelerate planning and construction of a new energy system" and The State Council requires that by 2025 the nationwide public water supply network investment growth in developing countries outside China was only 7% lagging far behind

"strengthen the system for energy production supply storage and marketing ensuring leakage rate be controlled at 9% or lower. The Outline for the Construction of the National the 14% growth in China and developed economies. Against the backdrop of surging

energy security." Water Network explicitly calls for promoting the high-quality development of China's water electricity demand and sluggish investment Southeast Asian nations urgently need to

network through means like "accelerating intelligent development." According to forward- accelerate their pace of new investments to support their rapidly growing power needs. The

Achieving the goals of "carbon peaking" and "carbon neutrality" will reshape China's looking industry research institutions the market space for the combination of smart water IEA estimates that the growth rate of power investments (including power generation) must

future modes of production and living exerting far-reaching impacts on socioeconomic platforms intelligent water treatment equipment and pipeline renovation equipment exceeds reach 30% to meet their energy transition construction plans. Specifically average annual

development. An energy system dominated by electricity will underpin the transformation 300 billion yuan. grid investments in Southeast Asia are expected to reach $30 billion between 2026 and 2030

and upgrading of industrial economies and the steadily improving living standards of the In 2023 China completed investment of nearly 1.2 trillion yuan in water conservancy with grid investments increasing threefold over a decade reflecting robust demand.people. Simultaneously under the trend of green and low-carbon development new low- construction setting a new historical high with a year-on-year growth of 10.1%. In 2024 the

carbon technologies particularly deep de-carbonization zero-carbon efficient power usage national water network construction will be comprehensively advanced prioritizing the Over the past decade China has signed over 200 cooperation documents on jointly

renewable energy generation and virtual power plant technologies are becoming the coordinated development of urban and rural water supply integration large-scale centralized building the Belt and Road Initiative with 152 countries and 32 international organizations

forefront of future technology and new competitive focal points. water supply and the standardized construction of small-scale water supply projects tailored fostering high-quality Belt and Road cooperation that promotes industrial structure

to local conditions. Efforts will be intensified to construct a digital twin water network upgrading and enhances industrialization digitalization and informatization in participating

To accomplish the "dual carbon" objectives energy is the "main battlefield" and advance the digital transformation of the first batch of key nodes in the national water countries. As these countries undergo industrial restructuring and accelerated urbanization

electricity is the "principal force." In the power sector which accounts for the largest share network renovate and upgrade more than 1000 medium and large-scale irrigation districts there will be a strong demand for energy IoT.of carbon emissions promoting clean energy on the supply side and boosting electrification and coordinate the construction of main irrigation district facilities with high-standard Currently the estimated total investment across economies along the Belt and Road

rates on the demand side are imperative. farmland. stands at approximately USD 575 billion encompassing 70 countries along the route.With the nation's continued push for smart city construction smart firefighting as an Sector-wise energy and power represent the largest investment area within the Belt and

The construction of the new power system is accelerating necessitating the integral part of it will see sustained growth in market demand. Meanwhile energy efficiency Road strategy with an estimated investment of around USD 264.5 billion accounting for

advancement of grid digitalization and intelligent transformation promotion of Power IoT improvements drive increased demand for comprehensive energy services. According to a 46% of the overall total.Energy IoT and smart distribution grid construction enhancement of source-grid-load- forward-looking industry research institution the Chinese industrial energy efficiency

storage coordination and interaction capabilities and continuous improvement of related service market is expected to reach nearly 100 billion yuan by 2025 while the firefighting The Belt and Road Initiative spans over 60% of the world's population (exceeding 4

technological iterations and product demands. market will approach 120 billion yuan indicating vast market potential. billion) and is characterized by significant infrastructure investment needs and

Additionally the markets for smart gas smart heating smart manhole covers and underdeveloped local industries. It serves as the primary focus for China's overseas powerIn the future we will steadfastly drive the digital transformation and intelligent smart streetlights exceed 600 billion yuan. In the realm of integrated energy management investments and water project construction. Asia and Africa are the principal project regionsupgrading of the power grid and promote China's advanced digital grid solutions globally smart parks comprehensive energy and energy efficiency monitoring and intelligent within this context with Belt and Road projects in these continents accounting for acontributing our strength to the global pursuit of clean and efficient energy utilization. charging will generate a market surpassing 400 billion yuan constituting new sources of remarkable 89.2% of the total investment amount across the more than 140 countries where

growth. initiatives have been launched globally.Looking ahead we will center our efforts on the green dual-carbon mission of smart Moving forward we will continue to advance product internationalization leveraging

cities as well as the intelligent security imperative serving the global commercial sector's our comprehensive solution capabilities in sensing communication and system integrati5o9n-60

digital transformation and the intelligent management of household energy. providing comprehensive technical and operational services to the global market.Party and Mass Organization Building

Willfar Information Technology Co. Ltd. steadfastly adheres to the leadership of the Communist Party of China (CPC) and under

the guidance of the higher-level Party Committee established the Willfar’s Party Committee in 2022. The committee oversees five

branches and currently comprises 118 Party members including 5 probationary members. An impressive 75.69% hold undergraduate

degrees or higher forming a highly-educated high-caliber high-standard and rigorously-disciplined vanguard force. Our Party branches

adhere to the core tenet of integrating Party building into business operations emphasizing the Party's role in guiding the company's high- The Willfar Party Committee

quality development and reciprocally reinforcing Party building through this growth. They align Party activities with employee career

advancement establishing distinctive model Party member posts dedicating themselves to employee support and taking the lead in social

welfare initiatives. In 2022 the Party Committee convened six plenary sessions organized eight Party-building events and hosted five

visits for Party and mass organization building.The Willfar Party Committee encompasses five

In early July 2023 the Willfar Party Committee held its first

general assembly of the year guiding all Party members in studying branches with a total of 118 Party members

Party history reinforcing faith in Party leadership enhancing their including 89 directly-managed members and 29

sense of mission and responsibility aligning with national strategies

and contributing to societal progress. floating members.Among them 75.69% hold a bachelor’s or above

forming a highly-educated highly-skilled and

well-self-disciplined vanguard team.On July 25 2023 the Party Committee organized

a themed Party lecture for all Party members

titled "Striving as a New Era Idealist Dedicated

Professional Exceptional Talent and Contributor

to the Centennial Dream of Willfar."

On August 16 2023 the Digital Smart City Branch of the Willfar Party Committee conducted a themed Party day

event "Remaining True to Our Original Aspirations: Answering a Hundred Questions Advancing Resolutely on Mount

Lu." The event intertwined intellectual and ideological learning and exchange further consolidating unity and cohesion

among branch Party members.

61-62Communication with Stakeholders Sustainable Development Strategy

Stakeholders Stakeholder Concerns Key Points for Fulfilling CSR in 2023

利益相关方 Incorporation of Sustainable Development Principles into Corporate ? Compliance training and anti-corruption training plan completion rate 100%

? Convened 2 shareholder meetings and 10 board meetings Culture

? Compliance management? ? Risk management training 2 times The company has seamlessly integrated ESG practices into its daily operations embedding sustainability into the company's top-

Shareholders ? Risk management and control ? The signing rate of "Letter of Integrity and Self-Discipline Commitment" was level design. The company has established a "Board of Directors Strategy & ESG Committee" which is responsible for overseeing and

? Profitability 100% managing the company's sustainability-related matters as well as environmental social and corporate governance (ESG) issues. Under

? Net profit attributable to shareholders in 2023 increased by 31.26% year-on- this "Board of Directors Strategy & ESG Committee" a "Sustainable Development ESG Working Group" has been set up to lead and

year manage ESG-related work organizing and coordinating ESG-related activities across various business departments and functional

? Providing quality products and divisions within the company. For consecutive years the company has proactively advanced ESG practices adhering to the guidance

services ? As of December 31 2023 the company had obtained a total of 707 currently of the national "Dual Carbon" strategy responding to the country's initiatives on the construction of a new energy system and the Belt

? Protecting consumer rights and valid patent authorizations (including 149 invention patents ) 898 software and Road Initiative actively fulfilling its philanthropic responsibilities and consistently creating value for the market industry nation

Clients interests works and 6 exclusive rights to integrated circuit layout design and society at large. Since the year following its listing the company has published annual Social Responsibility Reports. In 2023 it

? Compliance and responsible ? Through responsible supply chain management responsible production and garnered accolades including being named a "National Green Factory" an "AAA Credit Unit Evaluated by the China Electricity

marketing responsible marketing we continued to improve customer satisfaction and Council" achieving the highest disclosure rating (A-level) from the Shanghai Stock Exchange securing a 5A rating in the Secretary to

? R&D innovation accumulate a good market reputation. the Board's Performance Evaluation by the China Association for Public Companies receiving an ESG rating of "A" from Wind

? Intellectual property protection Information recognition for Best Practices in the Board Office Outstanding Practices in Annual Performance Briefings the "Excellent

?100% employee labor contract signing rate Case for Carbon Peaking and Carbon Neutrality" awarded by the Xinhua Credit Jinlan Cup the "2023 ESG Model Enterprise"

? In terms of democratic management the Labor Union fully protected the distinction at the Boao Enterprise Forum and the "Best ESG Award" from Cailian Press Group among other prestigious honors.? Protecting employee’s rights and legitimate rights and interests of employees

interests ? To strengthen Party building with the approval of the Party Committee of

Employees ? Providing training and Changsha High-tech Zone Hunan Province the Willfar Information Partydevelopment platform for Branch was officially upgraded to the Party Committee on September 19 2022

employees ? Employee benefits enriched

? Caring for employees’ lives ? Employee training and promotion mechanism helped employees realize their

value

? Employee health protection strengthened

? The company paid taxes in accordance with the law throughout the year. In

Compliance management? 2023 the company's total tax payment was 197 million yuan. Since its listing?

Paying taxes according to law the company has paid a total of 620 million yuan in taxes with no tax evasionGovernment ? Leading the healthy incidents.? Excellent Case for

development of the industry ?"Measurement and control system and its measurement and control module

Best ESG Carbon Peaking

for distribution automation terminals" won the 2023 Electric Power Technology Award and Carbon

Innovation Award Neutrality

?Invited to participate in major industry events such as the New Power System

Technology Innovation Alliance Council and New Energy Active Support

Technology Symposium the 10th China Electronics Summit Forum with the The selection of the "Xinhua Credit Jinlan Cup

theme of "Technological Integration · Industrial Ecology" and gained Guided by the Shanghai United Media Group and

experience organized by Cailian Press Group the "4th Elite ESG Excellence Cases" list is organized by Xinhua

Partners ?Exchange and cooperation ? The "Intelligent Power Big Data Integrated Analysis Platform Research and Secretary to the Board Selection of the 'Luanlu' Series News Agency's China Economic Information

Development and Engineering Application Project" jointly created with 2022" invited authorities from association organizations Service. Willfar Information with its all-

Guangdong Power Grid Tsinghua University etc. won the first prize for securities firms' research institutes investment banking encompassing practice of ESG and social value

scientific and technological progress. experts and academic institutions to select eligible creation stood out among hundreds of cases

? Subsidiary Zhuhai Zhonghui was selected into the list of smart manufacturing listed companies. Willfar Information with its earning the distinction of "Excellent Case forecological partners in Guangdong Province Carbon Peaking and Carbon Neutrality."

? Tendering processes was streamlined through an integrated information outstanding performance in social responsibility

Fair play system to ensure standardized procedures seamless workflows utmost

corporate governance and technological innovation

? transparency of tendering was honored with the "Best ESG Award."Suppliers ? Supply chain sustainability

● Anti-bribery ? Adopting supplier audit procedures supplier management regulations qualityagreements negotiated and established with suppliers and supplier evaluation

methods etc.Information disclosure and As one of the earliest domestic enterprises? dedicated to the field of Energy Internet Willfar

Society transparency ? Company news displayed through official Weibo and official website

? News interview ? 112 dynamic articles published to strengthen communication with the public Information places great importance on ESG work

? Visit and exchange consistently upholding the business tenet of

"Sincerity Precision and Harmonious Benefit-

sharing" and integrating ESG principles into major

strategic decisions and daily operations of the

company.

63-64Willfar Information Included the SSE STAR Market ESG Index SSE Select STAR Analysis of Sustainability Topics

Market Growth Momentum 50 Strategy Index SSE STAR Market 100 Index and SSE

Buyback 50 Index

Initial Identification of Sustainability Topics

Conducting policy research reviewing the company's own business

The Shanghai Stock Exchange (SSE) and China Securities Index Co. Ltd. recently announced that they will officially launch the SSE 01 operations benchmarking against industry peers and consulting with

STAR Market ESG Index on March 21st and the SSE Select STAR Market Growth Momentum 50 Strategy Index and SSE SmartChoice STAR experts to identify material sustainability topics

Market Leader Strategy Index on March 4th. These indices aim to promptly reflect the performance of listed securities on the STAR Market and

further enrich the STAR Market index system. In the initial list Willfar Information with its exceptional ESG performance and a combination

of growth characteristics and momentum effects has been selected for the SSE STAR Market ESG Index SSE Select STAR Market Growth Communication with Internal Stakeholders

Momentum 50 Strategy Index SSE STAR Market 100 Index and SSE Buyback 50 Index. 02 Engaging in internal communication across departments within thecompany to understand internal concerns identifying both actual and

potential impacts associated with these points

Communication with External Stakeholders

03 Compiling minutes from communications with external stakeholderssuch as investors suppliers and media organizing their demands and

concerns and assessing the actual and potential impacts of these points

SSE STAR Market ESG Index SSE Select STAR Market Growth Momentum 50 Assessment of Importance and Priority of

This index reflects the overall performance of listed

securities from STAR Market companies with better ESG Strategy Index (Code: 950260) selects the top 50 listed 04 Sustainability TopicsMaterial topics determined based on interviews stakeholder

performance considering factors such as market securities from STAR Market companies based on ratings and expert judgments

capitalization coverage investment capacity and ESG comprehensive performance in revenue growth rate and

evaluations. The latest sample for this index includes 29 momentum over the past year reflecting the overall

securities from the STAR 50 Index sample and 21

securities from the STAR 100 Index sample with all performance of STAR Market companies with both growth Su可st持ai续na发bi展li议ty题 Topics Man议a题ge管m理ent of Topics

samples having an ESG rating of A or higher. characteristics and momentum effects. Clean power development Green empowerment helps the construction of new power systems

电力清洁化发展 with n绿ew色 赋en能er，gy助 a力s以 th新e能 m源ai为n主 b体od的y新型电力系统建设Integ城ra市te综d 合ur能b源an管 e理nergy Pro提vi供de多 d元iv化e的rs解ifi决ed方 s案o，lu助tio力n数s 智to城 as市s建ist设 the construction of digital smartmanagement cities

Indep自e主nd创e新nt情 in况novation Adher坚e 持to创 in新n驱ov动a、tio创n新-d人ri才ve培n养 i、nn行o业va创ti新ve合 t作alent training and industry

innovation cooperation

Clim气at候e 变ch化ange Pr推om动o节te能 e减n排er，gy倡 c导on绿s色er环va保tion and emission reduction and advocate资源使用和能耗管理 green 践en行vi绿ro色n经m营en、ta绿l 色pr办ot公ec，ti推on动节能减排，关键数据持续跟踪管理SSE STAR Market 100 Index (Code: 588190) SSE Buyback 50 Index Resource use and energy Practice green operations and green offices promote energy

The STAR 100 Index selects 100 mid-cap securities with This index selects the top 50 listed securities with high consu废m弃p物ti和on排 m放a物na管g理ement con绿se色rv生at产io，n 严an格d遵 e守m废is弃sio物n和 r排ed放u物cti管o理n制 an度d continue to track andgood liquidity from the STAR Market differentiating itself buyback ratios as its sample reflecting the overall manage key data

from the STAR 50 Index which focuses on large-cap

performance of companies with high buyback ratios. Wast

公e 司an治d理 e情m况issions Green 优p化ro治du理c架tio构n， a强nd化 s制tr度ic保t c障ompliance with waste and emissionsecurities thus further enriching the size-based index

system of the STAR Market. mana投g资em者e权nt益保护 ma保na障ge投m资e者nt权 s益ystems

Corporate governance A wide range of products and solutions contribute to the construction

投资者沟通 of adv强an化ce投d资 p者ow沟e通r systems

Investor rights protection Protect investors’ rights and interests

Inves消to费r 者co权m益m保u护nication Pro保te护ct客 in户v隐es私to，rs持’ 续rig提h升ts客 a户nd满 i意nt度erestsCons员um工福er利 ri和gh薪ts酬 protection Protec具t c有u竞st争om力e的r 薪pr酬iv，ac丰y富 a的nd福 c利ontinuously improve customersatisfaction

Emp员lo工ye权e 益be保n护efits and Co畅m通pe晋ti升tiv渠e道 s，al职ar业y 安ri全ch保 b障en，e确fi保ts职工权益Willfar Information's inclusion in the SSE STAR Market ESG Index and SSE Select STAR Market Growth Momentum compensation

Prote员ct工io培n养 o和f e激m励ployee rights Smoot多h 元pr化om培训ot，io启n 动ch员工股权激励50 Strategy Index represents another high recognition of the company's ESG performance growth characteristics and annels ensure occupational safety and ensuremomentum effects. Since its listing the company has achieved dual growth in annual revenues and net profits every year and i产nt品er质es量ts emplo确ye保e 产ri品gh质ts量 a保nd持 i行nt业er领es先ts

with a compound annual growth rate of 15.65% for revenues and 24.68% for net profits. Employee development and Diversity training and launch of employee equity incentives

The company adheres to value creation as its core while placing significant emphasis on investor returns. After moti客va户ti服on务体系 全球化销售体系，广泛服务全球客户successfully listing on the STAR Market on January 21 2020 raising net proceeds of 610 million yuan the company has Product quality Ensure product quality remains industry leading

invested all funds into R&D innovation and capacity enhancement resulting in steady and robust growth in operating Cust廉om政e情r 况service system Globa廉l s政al建es设 system extensively serving global customers

performance. Since its listing the company has cumulatively distributed cash dividends of 490 million yuan and in 2023 it Integ雇ri佣ty情 s况tatus Clean 平go等v雇er佣nm，e杜n绝t c童o工ns和tr歧uc视ti行on为plans to distribute a cash dividend of 4.3 yuan per 10 shares (inclusive of tax) with an estimated total distribution of 210 Employment status Equal employment and elimination of child labor and discrimination

million yuan. By then the company is expected to have cumulatively distributed cash dividends of 700 million yuan 供应链管理 建立并持续完善供应链管理制度，优化供应链管理exceeding the amount raised through its IPO. The company plans to implement a dividend payout ratio of 40% for FY 2024 Supply chain management Establish and continue to improve the supply chain management

substantively rewarding investors through action. 助力乡村振兴 system持 a续n助d 力op乡ti村m振iz兴e supply chain management

Moving forward Willfar Information will continue to be guided by the "Dual Carbon" strategy actively contributing to Supporting rural revitalization Continue to support rural revitalization

the global digitalization of cities and green low-carbon development creating value for investors and promoting the 公益活动情况 积极践行公益活动 65-66

healthy stable and orderly development of the STAR Market. Public welfare activities Actively carry out public welfare activitiesMatrix of Sustainability Topics Sustainability Indicators

Environment Social Responsibility Corporate Governance N名a称me Targe目t 标va值lue 2020323年度 U单ni位t

Greenh温o室us?e体 g排as放 e量missions / /High 36

3156.165 . 1 6 tCO2 tCO 2

Greenhouse gas 温em室i气ss体io单ns位 p排e放r 量 2.8 2.8 1 . 6 2 1.62 Per m每il百li万on元 y年u收an入 of unit of revenue annual revenue

● Investor Rights Protection Water ?co?ns量umption / / 176179462 9 4 2 吨 Ton

● Waste and emissions management ● Corporate Governance Discharge per unit of water 100.00 79.5 tons /million yuan of

● Integrity Status ● Integrated Urban Energy Management ?co?n单su位m排p放tio量n 100.00 79.5 吨/百万元a年n收nu入al revenue

● Employee Development and Motivation Electr电ic能 energy● Protection of Employee / / 5503505053.0555.5 K千W瓦H时● Clean power development

Rights and Interests. ● Product Quality and Safety Emissions per unit of electrical 3 28 kWh /million yuan of 电能e单n位er排gy放量 3228 242734 7 3 千瓦时/百万元年收入● Employee Benefits & ● Climate Change ● Investor Communication annual revenue

Com.pensation . Environm环e保n投tal入 protection ● Customer Service System / / 10.1830 . 8 3 万元 10000 yuan

● Consumer rights protection investment

● Independent Innovation ● Supply Chain Management Tot纳al税 t总ax额 paid / / 1.971 . 9 7 亿元100 million yuan

● Supporting. Rural Revitalization Compliance and anti-corruption 100 100 %

● Public Welfare Activities ● Resource Use & Energy Consumption 合规tr培ai训ni、ng反 c腐o败m培pl训et计io划n 完ra成te率 100 100 %

"Letter of Integrity and Self-

● Employment Practices Discipline Com《m廉it洁m与en?t"律 s承ig诺ni书ng》 签订率 100 100 1 0 0 100 %%

rate

安全?产投?/63.24万元

Investment in work safety / 63.24 10000 yuan

Number o安f 全pr?o产du事ct故io数n accidents 0 0 0 0 起

Low Importance to Company Value High

Importance to Economic Social and Environmental ImpactOperation of the General Meeting of Shareholders Board

of Directors and Supervisory Board

Organizational Structure

Governance Structure Shareholders' Supervisory

Meeting Board of Directors

Senior

Board Management

The company has established and perfected its governance structure. Shareholders' meetings the board of directors the

supervisory board and senior management coordinate and check and balance each other with the board secretary and independent

directors diligently fulfilling their duties effectively enhancing the impartiality and scientific nature of decision-making ensuring the

company's lawful management and standardized operations. The company's board of directors has formed a Strategic & ESG Strategic & ESG Audit Committee

Committee Audit Committee Nomination Committee and Remuneration & Evaluation Committee with members confirmed Committee

through rigorous procedures playing a significant role in the company's operations and management. Additionally corresponding

rules such as the 'Strategic & ESG Committee Working Rules' 'Audit Committee Working Rules' 'Nomination Committee Working

Rules' and 'Remuneration & Evaluation Committee Working Rules' have been formulated. Remuneration &

Nomination

To better conduct the company's ESG work and optimize the top-level design of ESG management the 'Board of Directors Evaluation

Strategic Committee' has been renamed the 'Board of Directors Strategic & ESG Committee' responsible for overseeing and Committee Committee

managing the company's sustainable development and related environmental social and corporate governance (ESG) matters. Under

the 'Board of Directors Strategic & ESG Committee' a 'Sustainable Development ESG Working Group' has been established to lead

and manage ESG work coordinating relevant business departments and functional departments within the company to carry out

ESG-related tasks.Independent directors are the promoters of optimization in the company's governance structure supervisors of the company's Composition of Personnel

standardized operations and protectors of the interests of minority shareholders. The board of directors conscientiously performs its

functions strictly abiding by relevant laws and regulations such as the 'Company Law' and the provisions of the 'Articles of Cate类go别ry Board o董f D事ir会ectors Superv监iso事ry会 board Seni高or级 m管an理ag人em员ent T合ot计al

Association' and 'Board Meeting Rules'. A system of independent directors has been established. In 2023 the company's independent Total numb总er人 o数f people 9 9 33 22 1144

directors in accordance with national laws and regulations and the provisions of the 'Articles of Association' and 'Independent

Director Work System' diligently fulfilled their duties expressing opinions on matters requiring independent director opinions Among 其th中em：: 女w性omen 22 2 2 2 2 6 6

proposing relevant opinions and suggestions on the company's operational management affairs playing an active role in improving

the company's governance structure and standardizing its operations. The company's board of directors consists of 9 directors Proportio女n性 o占f w比omen 2222.2.22%2% 66.676%6 . 6 7 % 100% 1 0 0 % 42.86% 42.86%

holding 2 shareholders' meetings 10 board meetings and 9 supervisory board meetings throughout the year.Digitization is the most important trend in various industries in the 21st century. With

continuous advancements in energy technology and productivity and the country's

firm commitment to the "Dual Carbon" strategy a profound energy revolution is

underway presenting numerous opportunities and challenges for the energy industry.The company has formulated multiple strategies to better seize these opportunities

while also addressing risks particularly financial risks. Although the debtors of the

company's accounts receivable are primarily creditworthy and financially strong

power and water companies with good recovery guarantees for accounts receivable

and a relatively low risk of bad debt losses the company has already established a

prudent bad debt provision policy in line with accounting standards. However if the

company's accounts receivable continue to rise significantly clients experience

deteriorating financial conditions or are unable to make payments on time or the

company faces tighter external funding conditions it could face considerable

operating capital pressure negatively impacting the company's production and

operations and financial situation. To address this the company has imposed higher

requirements on aspects such as strategic planning organizational structure internal

control operational management and financial management striving to mitigate the

impact of these risks.

69-70Empowering Key Roles to Enhance Governance Capabilities

Internal Control & Management Mechanism

During the reporting period the company established an internal control system tailored to "Key minorities" play a vital role in corporate governance. The company will: 1) promptly

its operational and developmental needs in accordance with relevant national requirements and provide feedback and communicate legally mandated training organized by capital market regulators;

guidelines streamlining and optimizing related management systems and processes to enhance 2) fully leverage resources from regulatory platforms such as the CSRC SSE Pujiang Lecture Hall

the company's risk prevention capabilities and standardize its operations.China Association for Public Companies and Capital Markets College organizing online and offline

During the reporting period the company strictly adhered to the provisions of the Articles training for "key minorities" and the company's management team ensuring they stay informed about

of Association the Insider Information Registrant Management System and other relevant the latest laws and regulations enhancing their professional skills and compliance knowledge reserves

regulations diligently carrying out confidentiality measures before information disclosure and and driving an overall improvement in the company's governance level.the registration of insider information.Risk Control & Management

Integrating Regulatory Dynamics to Strengthen Foundations for

In recent years the company has consistently upheld sound governance promptly updating and revising relevant

systems continually improving its internal management mechanisms to ensure compliance and optimized governance Development

safeguarding the rights and interests of small and medium-sized investors. In accordance with the Independent Director

Management Measures Supervision Guideline No. 3 for Listed Companies - Cash Dividends of Listed Companies To maintain close alignment with regulatory policies the company establishes a

Guidelines for the Articles of Association of Listed Companies and other relevant laws and regulations the company continuous tracking and feedback mechanism for regulatory dynamics collecting analyzing

updated and revised 12 internal systems including the Articles of Association Rules of Procedure for Shareholders'

Meetings Rules of Procedure for Supervisors' Meetings Independent Director Work System External Guarantee and timely transmitting the latest regulatory information. It compiles and interprets the newest

Management System Information Disclosure Management System among others strengthening the rights regulatory policies market rules and relevant legal and regulatory information on a quarterly

responsibilities and obligations of independent directors further standardizing the corporate governance structure actively basis compiling them into a booklet for the company's "key minority" personnel.fulfilling social responsibilities and protecting the legitimate rights and interests of investors. Concurrently the company

conducted a comprehensive examination and upgrade of its governance structure establishing a more efficient Simultaneously it disseminates the changes in regulatory policies and their impact on the

management system and more market-oriented mechanisms conducting 2 risk management trainings annually. company's business to the management team familiarizing them with their responsibilities in

information disclosure reporting of significant events and insider information management

fostering a compliance mindset throughout the organization guiding the company towards

steady development on a foundation of compliance.Keeping Pace with Policy Developments to Ensure Compliance

and Efficiency

Updating and reinforcing the implementation of new systems: At the 9th meeting of the

3rd Board of Directors the company approved revisions to the Articles of Association

Independent Director Work System External Guarantee Management System Intercompany

Transaction Implementation Rules and 5 other governance systems in light of the listed

company governance rules issued by the CSRC and SSE in 2023. The company will strengthen

internal training communication and process execution checks for the revised systems

enhancing their effective implementation.The company will also establish a mechanism for regular monitoring of new regulatory

requirements ensuring a swift response to regulatory developments. Following the

promulgation of new regulations in the capital markets the company will timely revise and

approve relevant internal systems in accordance with requirements.

71-72Explanation of Governance-

Related Matters Risk Analysis

During the reporting period the company strictly adhered to Risk of Unprofitability or Significant Decline in Performance

the requirements of laws and regulations such as the "Company From the company's financial situation the company has maintained a continuous profit-making status for several years

Law of the People's Republic of China" the "Securities Law of the with steady year-on-year growth. In 2023 the company's operating revenue was 222524.9 million yuan and the net profit

People's Republic of China" the "Guidelines for the Governance of attributable to shareholders was 52525.99 million yuan. In 2023 the net profit attributable to shareholders increased by

Listed Companies" the "Listing Rules for Sci-Tech Innovation 31.26% year-on-year and the net cash flow generated from operating activities increased by 62.21% year-on-year.Board Stocks of the Shanghai Stock Exchange" the "Self-

Regulatory Guidelines No. 1 for Sci-Tech Innovation Board Listed

Companies – Standardized Operation" and other normative Core Competitiveness Risk

documents as well as the "Articles of Association of Willfar The IoT industry benefits from the rapid iteration of IoT technologies leading to rapid development of new products

Information Technology Co. Ltd." (hereinafter referred to as the technologies and application markets. As downstream application scenarios continue to diversify many large enterprises

"Articles of Association") continuously improving its corporate and startups are actively entering the fields of smart cities and energy internet intensifying market competition. If the

governance structure establishing and perfecting its internal control company cannot continuously innovate and conduct R&D on new technologies in response to market changes continuously

system further promoting the company's standardized operation strengthening its core competitiveness it may place the company at a disadvantage in the increasingly fierce market

and enhancing its governance level. During the reporting period the competition potentially having a certain adverse impact on the company's operating performance.company operated in a highly regulated manner with strong

independence compliant information disclosure and its actual Operating Risks

governance situation met the requirements of the normative In recent years driven by a series of domestic and international policies and the development of new technologies the

documents governing listed company governance. Specific details IoT industry in which the company operates has continued to grow with the company's overall operating scale further

are as follows: expanding. This places higher demands on the company in aspects such as strategic planning organizational structure

Regarding Shareholders and Shareholders' Meetings: internal control operational management and financial management. If the company's management cannot effectivelyenhance management capabilities and optimize management systems it may result in the company's management system

During the reporting period the company strictly complied with relevant laws and regulations and the requirements of the being unable to fully adapt to the rapid expansion of its business scale causing adverse effects on the company's future

"Articles of Association" and the "Rules of Procedure for Shareholders' Meetings of Willfar Information Technology Co. Ltd." operations and sustained profitability.convening and holding shareholders' meetings in a standardized manner conducting proper voting on matters under consideration by Industry Risks

the shareholders' meeting ensuring all shareholders fully exercise their legal rights. During the reporting period the company held a

total of 2 shareholders' meetings convened by the board of directors. The industry authorities relevant to the IoT industry in which the company operates mainly include the National

Development and Reform Commission Ministry of Industry and Information Technology State Administration for Market

Regarding Controlling Shareholders and Listed Companies: Regulation Ministry of Housing and Urban-Rural Development and specific application industry authorities involving

numerous laws and regulations. Currently the company strictly conducts production and operations in accordance with

During the reporting period the controlling shareholder of the company strictly adhered to relevant laws and regulations industry laws regulations and industry standards. If industry development falls short of expectations or market demand

regulating their behavior exercising shareholder rights lawfully through shareholders' meetings without directly or indirectly declines it will lead to a slowdown in the growth of the company's sub-sector thus affecting the company's rapid growth.interfering with the company's decision-making and operational activities beyond the scope of the shareholders' meeting. The company

did not provide guarantees financial assistance or non-operational fund occupation for the controlling shareholder or other related Financial Risks

parties nor did it engage in any actions detrimental to the interests of the company or other shareholders. Although the debtors of the company's accounts receivable are primarily creditworthy and financially strong power and

water companies with good recovery guarantees for accounts receivable and a relatively low risk of bad debt losses the

Regarding Directors and the Board of Directors: company has already established a prudent bad debt provision policy in line with accounting standards. However if the

During the reporting period the company's board of directors consisted of 9 directors including 3 independent directors with the company's accounts receivable continue to rise significantly clients experience deteriorating financial conditions or are

number and composition of the board meeting the requirements of laws regulations and the "Articles of Association". All directors unable to make payments on time or the company faces tighter external funding conditions it could face considerable

diligently attended board meetings and participated in shareholders' meetings continuously deepening their understanding of relevant operating capital pressure negatively impacting the company's production and operations and financial situation.laws and regulations fulfilling their respective responsibilities with integrity diligence and dedication. The board of directors strictly Most overseas projects signed by the company use foreign currencies as settlement currencies. With the expansion of

followed the "Articles of Association" the "Rules of Procedure for Board Meetings of Willfar Information Technology Co. Ltd." and the company's overseas business fluctuations in the RMB exchange rate will have a certain impact on the company's

other relevant regulations in convening and holding board meetings executing shareholders' meeting resolutions and exercising their operating results.powers according to the law. The board of directors has established subordinate committees including the Audit Committee the Macro-environmental Risks

Strategic & ESG Committee the Nomination Committee and the Remuneration & Evaluation Committee which are of great

significance in enhancing the company's management and operational capabilities and ensuring the scientific nature of investment The company's industry is closely linked to national macroeconomic policies and industrial policies. Cyclical

decisions. During the reporting period the board of directors held 10 meetings examining and approving matters such as the annual fluctuations in the national economy changes in policy direction regarding industry development etc. may affect the

report. company's production and operations.In June 2023 the company completed the board of directors' re-election forming an international board with diverse professional

backgrounds and complementary skill sets. Each board member possesses extensive experience in areas such as enterprise

management business operations technical expertise risk compliance finance and audit & internal control. Considering the

company's need for international development and the characteristics of the energy IoT industry the company not only recruited a

professional independent director candidate from the accounting field but also appointed a scholar from the field of electrical

engineering as an independent director along with a Singaporean economist and financial expert as an independent director.Regarding Supervisors and the Supervisory Board:

During the reporting period the company's supervisory board consisted of 3 supervisors with the number and composition of the

board in line with the requirements of laws regulations and the "Articles of Association". The company strictly followed the

"Company Law" the "Rules of Procedure for Supervisors' Meetings of Willfar Information Technology Co. Ltd." and other relevant

regulations standardizing the convening holding and voting procedures of the supervisory board diligently fulfilling its duties and

attending company board meetings and shareholders' meetings. The company's supervisory board can independently and effectively

supervise the legality and compliance of the company's financials and the duties performed by the company's directors and senior 73-74

management safeguarding the legitimate rights and interests of the company and its shareholders.Management of Other Risks Information Disclosure

1. Risks of Policy/Legal/Regulatory Adjustments: Under the constraints of carbon peaking and carbon neutrality goals The company strictly complies with the "Listing Rules for Sci-Tech Innovation Board Stocks of the Shanghai Stock Exchange" the " Self-

changes in relevant laws and regulations concerning industrial circular economy green product design pollution control in Regulatory Guidelines No. 1 for Sci-Tech Innovation Board Listed Companies – Standardized Operation " the "Articles of Association" and other

production and the use of clean energy may increase the company's compliance costs. relevant regulations fulfilling its legal obligation to disclose information. During the reporting period the company timely disclosed periodic reports

and interim announcements. The company ensures that information is disclosed truthfully accurately completely and promptly guaranteeing timely

Continuous Monitoring of Policies and Regulations: Continuously track relevant laws and regulations related to carbon public access. It has also established and improved its ESG information disclosure system actively promoting annual ESG disclosures.neutrality conduct training to understand the content of regulations regularly organize compliance reviews and

implement green and low-carbon strategies.Visualization of Information

2. Risk of Technological Iteration and Innovation: Research on energy conservation and environmental protection Disclosure Simplification of Technical

technologies and energy-saving technological transformations may increase the company's R&D cost. Technological Terminology

changes and innovations in green product design may leave the company vulnerable to setbacks in its core competitiveness.When drafting announcements the company

Increased Investment in Technological Innovation: Strengthen research on green technologies and the establishment of While releasing periodic reports the endeavors to avoid overly technical terms

green standards enhancing the company's capacity for innovation in green products and green manufacturing processes; company employs visual formats such as using easily understandable language to

deepen the integration of industry academia and research continuously improving the innovation incentive mechanism performance briefings graphic convey information reducing the reading

building core technological breakthroughs and leading capabilities. summaries and short videos to interpret difficulty for investors.both periodic reports and interim

announcements. These engaging intuitive

3. Market Volatility Risk: With the growing emphasis on sustainability consumer markets are increasingly aware of methods help investors better understand

and demanding green products. Failure to grasp this shift in direction could result in the loss of market share. the company's operating results financial

condition and development strategies.Positioning in Green and Low-Carbon Technologies: Strengthen investments in green sustainability strategies

advancing research on green products and green technology standards catering to the growing green consumption

demands of markets and modern consumer groups

Internationalization of Information

4. Reputation Risk: Stakeholders' awareness of climate risks and opportunities is increasing. Should the company adopt a wait-and- Disclosure

see attitude toward climate change or fail to respond to stakeholders' concerns it could impact the company's reputation. Auxiliary Explanations in Internationalization of information disclosure is a part of the

Graphical Format company's commitment to internationalization in the capitalmarket. The company releases bilingual (Chinese and

Periodic reports will incorporate English) versions of one-page summaries of periodic reports

Enhancing Transparency in Information Disclosure: Establish a diversified disclosure mechanism treating climate additional graphical aids such as charts environmental social and governance (ESG) social

change as a central issue communicating through various channels and platforms with stakeholders; strengthen and data comparisons making responsibility reports and action plans for enhancing

compliance construction ensuring the compliance of information disclosure information clearer and easier to efficiency and returns. These publications showcase thecompany's financial status and business operations to global

comprehend. investors facilitating stronger connections with international

investors and demonstrating the company's commitment and

efforts in sustainable development and social responsibility.Regarding Fundraising Management Registration & Management of Persons Familiar with Insider Information

The company operates major fundraising projects in a During the reporting period the company scrupulously

standardized manner strictly abiding by relevant laws and observed the provisions of its Articles of Association the

regulations in fulfilling disclosure obligations for such projects. Registration & Management System for Persons Familiar

The company has formulated the "Fundraising Proceeds with Insider Information and related regulations diligently

Management System of Willfar Information Technology Co. ensuring confidentiality prior to information disclosure and

Ltd." specifying detailed provisions on the storage usage and diligently conducting the registration of such persons.management of fundraising proceeds. The company manages

fundraising proceeds in accordance with these regulations

utilizing temporarily idle proceeds in a rational manner for cash

management with a focus on protecting small and medium-

sized investors. In August 2023 the company's fundraising

project reached completion with the company organizing the

collection and review of relevant materials successfully

completing project acceptance and disclosure work.Counterm Counterm Counterm Counterm

easures: easures: easures: easures:Business Ethics

Investor Relations Management

Tax Compliance

The company has established systems related to investor protection and investor relations

management further refining the two-way communication mechanism between the company and The company upholds the business philosophy of operating

investors. While listening to investors' suggestions the company promptly conveys these legally and paying taxes in accordance with the law strictly

observing tax laws and regulations diligently fulfilling the

recommendations to the board of directors and management contributing to the improvement of responsibilities and obligations of corporate citizens to pay taxes

business strategies and maintaining a relationship of mutual trust and aligned interests with investors lawfully while actively promoting employment and driving

economic development. In 2023 the company's total tax payment

continuously enhancing investor relations management capabilities. was 197 million yuan with a cumulative tax payment of 620 million

yuan since its listing.Establishing multiple effective communication channels with investors the company holds

annual performance briefing sessions for periodic reports with the chairman and president leading There were no incidents of tax evasion or tax fraud during this period.board members and technical professionals in conducting online exchanges with a broad range of

investors. The contents of SSE e Interactive investor calls and emails are managed and recorded daily Anti-Monopoly

by dedicated personnel with prompt responses provided. The company also pays attention to investor

communication platforms frequented by small and medium-sized investors such as East Money Stock Based on the relevant rules and regulations of China's

Bar Snowball and Flush responding promptly to investors' requests. Anti-Monopoly Law the company has made clear

stipulations and implemented governance in the area of

Actively aligning with international practices and raising the "internationalization" level of anti-monopoly aiming to promote the standardized

investor relations the company strengthens communication with overseas investors implementing the healthy and sustainable development of the company'seconomy and to oppose monopolies fostering a fair

"go global" strategy. On March 13 2023 the company was officially included in the list of SSE competitive environment. During the reporting period the

Connect targets better establishing investment channels for overseas investors further refining the company did not encounter any cases of violations of laws

company's investor structure and enhancing its international profile. and regulations related to anti-monopoly and anti-unfair

competition nor were there any concluded lawsuits against

the company alleging unfair competition practices.Compliance Training

Fair Competition

To implement the "Opinions of the State Council on Further Improving the Quality of Listed Companies" The company has established supplier management

and continuously enhance the company's operational standardization and improve the quality of information procedures and an annual quality review system for

disclosure the company organized multiple compliance training sessions in 2023 for directors supervisors and suppliers adopting principles of fair bidding tender

management attended by the CSRC exchanges and the listed company association. Internal learning materials procurement and quality prioritization in dealing with

were distributed to reinforce the compliance awareness of directors supervisors and management enhancing suppliers. To further standardize supplier management and

management capabilities improving governance levels comprehensively promoting the company's sustained enhance supply chain quality the company employssupplier audit guidelines supplier management regulations

stable and healthy development upholding market fairness and protecting investor interests. Through these quality agreements negotiated with suppliers and supplier

efforts the management team further refined the company's internal control system optimized the governance evaluation methods to scientifically assess suppliers'

structure strengthened supervisory responsibilities and continuously improved their fulfillment of duties. qualifications production sites technical proficiency and

quality assurance systems. During the reporting period the

In 2023 the completion rate for compliance training and anti-corruption training programs was 100% with company did not discover any cases of violations of laws

a 100% signing rate for the "Letter of Integrity and Self-Discipline Commitment". and regulations related to bribery and corruption nor were

there any concluded corruption lawsuits against the

company or its employees. Additionally the company has

put in place relevant reporting mechanisms and

whistleblower protection policies making the prevention of

commercial bribery and unfair competition more

comprehensive.

77-78Building a Win-Win Situation for Management and Shareholders through

Creating Value as the Foundation for Consistently Delivering Substantial Returns to Shared Interests

Investors

Willfar Information focuses on value creation in its business management and attaches great importance to investor returns. The company has established a functional compensation system that integrates job responsibilities with goal-oriented

accountability with value contribution serving as the core principle guiding remuneration incentive allocation. This

On January 21 2020 the company successfully listed on the Sci-Tech Innovation Board raising net proceeds of 610 million yuan all

of which were invested in research and innovation and capacity enhancement resulting in sustained steady growth in operating ensures fairness motivation and competitiveness in the company's salary distribution. Concurrently it continually refines

performance. its employee career development framework fully mobilizing staff members' enthusiasm and creativity thereby

Since its listing the company's annual revenues and net profits have consistently grown with a compound annual growth rate of enhancing employee cohesion and the company's core competitive edge.

15.65% in revenues and 24.68% in net profits. The company has cumulatively distributed cash dividends amounting to 490 million yuan The company has put in place and implemented a series of policies and measures to reinforce the shared

and completed a share repurchase equivalent to 2.46% of the total share capital with a repurchase amount of 299 million yuan. In terms of responsibility and shared benefits mechanism between management and shareholders. This stimulates the initiative and

earnings quality the company's return on equity has also shown continuous growth. innovative spirit of the management team driving the company's long-term steady growth.Introduction of the Company's First Employee

30% Increase in Per-Share Dividend Payout for 2023 40% Cash Dividend Payout Ratio Proposed for Share Ownership Plan Shared Responsibility and Benefits: Plans for Long-

2024 Term Equity Incentive Schemes over the Next Two

On March 21 2024 the company held its annual general The company has launched its first employee share ownership Years

meeting to deliberate on the dividend payout plan for 2023. It In 2024 the company will focus on long-term sustainable plan with a total of 4 million shares. The plan includes a lock-up In the future to continuously strengthen the shared responsibility

proposed to distribute a cash dividend of 4.3 yuan per 10 shares development taking into account the company's actual situation period with the shares being released in three stages upon reaching and benefits constraint between management and shareholders the

(inclusive of tax) to all shareholders representing a 30% year-on-year strategic development plans and industry trends to establish a 12 24 and 36 months respectively from the date the target shares are company intends to utilize all repurchased shares for long-term equity

increase in per-share cash dividend payouts with a total distribution of scientific continuous and stable return plan and mechanism for transferred to the employee share ownership plan. The proportion of incentives. It plans to implement 4 million shares in 2025 and 4.3148

210 million yuan in cash dividends. Thus far the company has investors ensuring the continuity and stability of the profit shares unlocked in each stage is 40% 30% and 30% respectively. The million shares in 2026. This will ensure a long-term incentive and

cumulatively distributed 700 million yuan in cash dividends since its distribution policy. It is planned to set a cash dividend payout ratio employee share ownership plan also incorporates individual constraint mechanism for the company's management team and core

listing exceeding the amount raised through the initial public offering of 40% for 2024 profits. performance assessment metrics. Based on the employee's evaluation business team promoting alignment of interests and shared benefits

demonstrating tangible returns to investors through actions. score and comprehensive evaluation results a performance grade is between management and all shareholders ultimately enhancing the

determined. While providing ample incentives to plan participants overall value of the company.this also generates corresponding constraints encouraging long-term

shareholding and focusing on the company's long-term value

effectively aligning the interests of holders with those of the company

and its shareholders.Enhancing Equality

Efficiency & Returns

137-91-480Appendix: Key Performance Table

Performance Indicators Value in 2023 Unit Indicator index

Total assets 425755.94 10000 yuan Performance indicators Value in 2023 Unit Indicator index

Net profit attributable to shareholders 52525.99 10000 yuan Greenhouse gas emissions 3615.16 tCO

Financial Operating income 222524.90 10000 yuan 2Greenhouse gas

Performance Net profit 52634.68 10000 yuan 05?06 11?12 Emissions per unit of income 1.62 Per million emissions yuan of 11?12

R&D investment 22743.59 10000 yuan performance annual revenue

Number of directors on the board of Total number of employees in 2023 812

directors 9 Number of male employees 612

Regulatory General meeting of shareholders 2 Times Employee Number of female employees 200

performance Board meeting 10 Times 63?64 69?70 responsibility Ratio of female employees 25 % 39?40?

Supervisory board 9 Times performance Turnover rate 4 %

Labor contract signing rate 100 %

Number of Party members in the

company 118 Social insurance coverage 100 %

Number of probationary Party Training sessions 588 Times

members in the company 5 Employee training coverage 100 %

Party building Number of Party committee meetings Employee occupational health 100 %

performance held throughout the year 6 Times 61?62 Occupational health examination rate 39?42

Number of Party building activities 8 Times performance Occupational health record coverage 100 %

Number of visits received for Party Newly diagnosed cases of 0

building and mass organization 5 Times occupational diseases

building

Compliance and anti-corruption Investment in work safety 63.24 10000 yuan

Compliance training completion rate 100 % Number of people trained in work 4052

management 67?68

performance "Letter of Integrity and Self-

safety

Discipline Commitment" signing rate 100 % Work safety training duration 108 Hour

Risk management Safety management

performance Risk management training 2 Times 63?64

Number of work safety emergency 3

performance 33?34drills

Electric energy 5503055.50 KWH Number of participants in work 349

Energy & resource PV power generation 502352.31 KWH safety emergency drills

consumption Water consumption 176942 Ton 11?12 17?18

performance Number of production accidents 0

Natural gas 81264.47 Cubic meter Number of newly authorized patents 64

COD concentration in discharged in the year

wastewater 30 mg/L

Quality and service

performance Rate of qualified products 99.93 % 29?30 33?34

BOD5 concentration in discharged

wastewater 6.3 mg/L

Customer satisfaction 99.75 %

Helium nitrogen concentration in

discharged wastewater 21.4 mg/L

Total phosphorus concentration in

Pollutant treatment discharged wastewater 1.72 mg/L

performance 11?12?Petroleum concentration in discharged

wastewater 0.14 mg/L

Total suspended particulate matter

concentration in discharged exhaust 0.28 mg/m3

gas

Hazardous waste generation ( tin slag) 4.005 Ton

Hazardous waste recycling rate 100 %

Environmental protection investment 10.83 10000 yuan