孚能科技:孚能科技2023年度环境、社会及公司治理（ESG）报告（英文版）

Contents

105/ ESG Performance Table

118/ Benchmarking Index for No. 1 of Shanghai Stock

Exchange for Self-regulatory Guidelines of Listed

01/ About This Report 09/ Farasis Energy in 2023 Companies—Regulation of Operations

03/ Message from the Chairman 13/ ESG Governance

121/ GRI Standards Index

05/ About Farasis Energy 105/ Appendix 128/ Third Party Assurance Report

010203

Shaping Corporate Governance Showcasing Determination on Accumulating Strength and

with Compliance Concepts Green Development through Seizing Industrial Opportunities

Low-carbon Practices

[Feature] Leading Development with Party Building 25 [Feature] Embracing New Trends in Green 41 Creating Cutting-edge Technology 57

Continuously Improving Governance Structure 29 Development Overall Consolidation of Quality Management 63

Preventing Risks and Improving Quality and Efficiency 31 Advancing Efficient Resource Utilization 49 Fully Protecting the Rights and Interests of 66

Adhering to Integrity and Compliance in Operation 32 Committed to Natural Ecosystem Conservation 51 Customers

Embracing the Era of Tax Transparency 37 Perfecting Information Security Management 68

040506

Managing with Due Diligence and Stimulating Talent Vitality with Benefiting Society Through

Seeking Common Development High-Quality Environment Kindness and Actions

All-round Supply Chain Management 75 Protecting Basic Rights and Interests of 83 Community Charity 103

Enhancing Supply Chain Resilience 76 Employees Employee Volunteering 104

Sustainable Supply Chain Risk 77 Creating a Fair Environment for Growth 90

Management Firmly Constructing a Safe and Healthy Line 93

Responsible Mineral Management 78 of Denfense

Practicing Employer's Humanistic Care 9901 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 02

About This Message from About Farasis Farasis Energy ESG Shaping Corporate Governance with Showcasing Determination on Green Development Accumulating Strength and Seizing Managing with Due Diligence and Seeking Stimulating Talent Vitality with Benefiting Society Through Kindness

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

About This Report

Reporting Principles

The Environmental Social and Corporate Governance (ESG) Report (hereinafter referred to as “this report”) is

publicly issued by Farasis Energy (Ganzhou) Co. Ltd. (hereinafter referred to as “Farasis Energy”). This report is This report is ultimately compiled by identifying important stakeholders analyzing and rating materiality issues

compiled based on the principles of openness and transparency discloses practices and performance of Farasis related to environment society and governance making decisions on the scope of the report as well as collecting

Energy in fulfilling ESG-related issues in 2023. summarizing organizing and reviewing relevant data and materials in the preparation process.The following standards and requirements were referred to in the preparation of this report.Reporting Scope No. 1 of Shanghai Stock Exchange for Self-regulatory Guidelines of Listed Companies—Regulation of Operations

UN 2030 Sustainable Development Goals (SDGs)

Unless otherwise specified the policies statements and materials in this report cover the actual business scope

of Farasis Energy and our subsidiaries which is the same as that of the annual report issued by Farasis Energy.Unless otherwise stated this report is denominated in CNY (renminbi). The Global Reporting Initiative (GRI Standards) by the Global Sustainability Standards Board (GSSB)

ISO 26000 (ver. 2010): Guidance on Social Responsibility

Reporting Period

Access to This Report

This report is the second ESG report released by Farasis Energy covering the period from January 1st 2023 to

December 31st 2023. In order to enhance the readability of the report some of the contents or data have been This report is published in both electronic and printed formats. In case of conflicts the Chinese version shall

backdated to previous or subsequent years. prevail. You can access the electronic version of this report through the following website:

https://www.farasis.com/index/investor

Definition of Terms You can contact us as follows:

Phone: 0797-7329849

E-Mail: farasisIR@farasisenergy.com.cn

For the convenience of expression and reading “Farasis Energy” “we” and “the company” in this report refer to

Farasis Energy (Ganzhou) Co. Ltd. and our subsidiaries such as Farasis Energy (Zhenjiang) Co. Ltd. sustainability@farasisenergy.com.cn03 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 04

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

Message from the Chairman

The year 2023 marked a pivotal year for Farasis Energy promoting responsible sourcing we drove suppliers and In 2023 staying true to our mission we actively fulfilled our

witnessing our new capacity products collaborations and other partners for compliance and high-quality development. social responsibilities and continuously carried out activities

business. As a result our large-scale development journey We made efforts to improve product performance safety such as paying charitable visits to impoverished families

reached the zenith. reliability and eco-friendliness to meet the diverse needs of women who suffered from breast and cervical cancer

of customers promote the development of the new energy visiting lonely elder citizens during festivals and caring for

As the automotive industry swiftly transforms from electrification vehicle market and contribute to addressing energy and left-behind children. We established assistance workshops

towards intelligence the energy storage market is undergoing a environmental issues in the transportation sector. aimed at poverty alleviation. Through organized volunteer

rapid shift from policy guidance to market dominance. In 2023 teams we embodied the volunteer spirit of "dedication

we overcame numerous challenges posed by fierce resource In 2023 we obtained several domestic and international friendship mutual help and progress" warming the hearts

competition industrial rivalry quality improvement and certifications and assessments and won numerous honors of those around us with our unique ways and strengths

efficiency enhancement. By firmly adhering to the foundation and awards demonstrating our strength and brand. demonstrating the kindness benevolence and responsibility

of the rule of law principles of integrity and innovation as Specifically we obtained international quality environment of Farasis Energy.our driving force and recognizing quality as our lifeblood safety and automotive industry management system

we achieved robust development and sustained growth. We certifications such as ISO 9001 ISO 14001 ISO 45001 In the era of “carbon peaking and carbon neutrality” Farasis

made outstanding contributions to the development of the new and IATF 16949 as well as performance certifications from Energy is united in our “second” entrepreneurship working

energy vehicle industry and social progress. authoritative global third-party agencies. We successfully together with employees and stakeholders to build a green

secured numerous intellectual property rights encompassing and sustainable future for human society.In 2023 we proactively responded to the national strategy patents trademarks and software copyrights. Our company

of "carbon peaking and carbon neutrality" promoted green garnered widespread recognition and endorsement from Reflecting on the year 2023 we feel a profound sense

manufacturing and recycling and achieved the low-carbon diverse industries and media outlets which has added glory of pride and satisfaction. We have poured our sweat and

intelligent and circular manufacturing of power batteries. With and confidence to our brand building and market expansion. wisdom into the development and advancement of our

advanced production processes and equipment we improved company propelling the new energy vehicle industry forward

energy utilization efficiency and resource conservation In 2023 we prioritized the health safety and development and contributing to societal progress.rates reduced emissions of pollutants such as exhaust of our employees and created a sound human resources

gas wastewater and waste and mitigated greenhouse gas management system. Our company provided diverse Looking ahead to 2024 we are full of confidence and

emissions thus protecting the ecosystem. By exploring the trainings and learning opportunities fostering a harmonious anticipation. We will stick to the foundation of rule of law

recycling and reuse of power batteries we extended their corporate culture and atmosphere. We followed national and adhere to the principle of integrity harness innovation as

service life reduced waste and disposal and lowered their local laws and regulations on human rights and safeguarded our driving force and prioritize quality. We will continuously

Chairman Board of Management carbon footprint. employees' legitimate rights and interests such as wages

enhance our core competitiveness and market influence

social security vacations and welfare thereby enhancing meet the expectations and needs of our customers fulfill our

Farasis Energy In 2023 we strengthened communication and collaboration their satisfaction and loyalty. Valuing their occupational social responsibilities and missions and create a brilliant

with our upstream and downstream partners jointly promoting development and growth we provided multiple routes future exclusive to Farasis Energy!

Yu WANG the green transformation and sustainable development of the for promotion and job transfers stimulating their work

industry chain. After establishing sound cooperation ties with enthusiasm and creativity. We cultivate their sense of

raw material suppliers automobile manufacturers and battery teamwork and innovation by offering a platform for them to

system recyclers we collaborated to optimize various aspects showcase and exchange ideas.of product design production use and recycling. Steadily05 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 06

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

About Farasis Energy Products and Businesses

Focusing on the R&D production and sales of lithium-ion batteries and battery systems for new energy vehicles Farasis

Company Profile Energy lays out a core market with green mobility and smart energy while actively expanding into emerging markets for

particular industry applications.Farasis Energy (stock code: 688567) is one of the globally leading producers of pouch batteries and energy storage batteries as

well as one of the first mass producers of NMC pouch batteries in China. Adhering to the mission of "provide clean energy build Our Clients

an intelligent world" we incorporate sustainable development into daily work processes and details; and we actively assume

global economic ecological and social responsibilities.No matter at what stage of energy development we can create clean energy solutions that meet human needs and lead

industrial development by leveraging our strength in R&D and manufacturing. Dedicated to the R&D production and sales of

pouch lithium-ion batteries we are developing rapidly in application areas like transportation energy storage equipment and Passenger Vehicle

the Energy Internet of Things.Farasis Energy aims to become a leading provider of power and energy storage battery solutions. We have established long-

term strategic partnerships with renowned Original Equipment Manufacturer (OEMs) domestically and internationally jointly

promoting the achievement of sustainable development goals. Through carbon neutrality in mobile transportation and energy

usage we aim to build a more sustainable world.We deliver leading clean energy products and services globally promoting the sustainability of human society and promoting

a better life for mankind. In future we will take the new energy vehicles and energy storage markets as our starting points and

gradually expand into the intelligent lithium-ion battery market.Corporate Culture

Our mission: provide clean energy build an Our vision: dedicate to technology innovation

intelligent world lead energy transformation promote a better

life for mankind

To achieve environmental protection goals

and reduce carbon emissions we assume We focus on technology learning and

the mission of providing green energy and innovation and ensure sufficient investment

strive to meet domestic international and in R&D as well as talent training. This allows

industry standards as well as customer us to maintain our leading position in the

requirements in every aspect of research industry and we keep track of changes in Emerging Businesses

production and sales. laws regulations and policies related to the

energy sector thereby contributing to the

landscape of energy transformation.Our spirit

Our spirit: innovation and entrepreneurship for win-win cooperation

We adhere to the principles of mutual respect honesty and humility as well as collaborative equality in internal communication

and interactions with external partners. Abiding by rules regulations and procedures we foster a working atmosphere of

seamless communication unity and forward momentum in our company. Showing respect to our competitors and valuing our

customers we continuously enhance product safety and quality uphold fair competition and eliminate corruption in the market.Our mission

Ou07 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 08

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

Our Products and Applications

We have implemented cutting-edge technology development for the future direction of battery development including semi-solid/ solid-state lithium-ion battery technology sodium-ion battery technology high-energy density power battery cell technology new chemical and electrochemical

systems for energy storage and anode and cathode material R&D technology. Currently we have mass-produced 285Wh/kg batteries developed and validated 330Wh/kg high-energy density batteries and stockpiled 400Wh/kg high-energy density battery technology.Cell Module

Sports Vehicle Drone Electric Trucks Electric Marine

BMS Pack

Electric Passenger Vehicle Electric Motorcycles Construction Machinery Rail Transportation Electric Buses Energy Storage

Our Business Locations

The mass production and under-construction capacity of Farasis Energy has exceeded 100 GWh meeting the global

demand for power batteries from customers.Stuttgart | Germany Ganzhou Site Zhenjiang Site Ganzhou Yaoneng Site Ganzhou New Energy Site

Zhenjiang | China Capacity: 5 GWh Capacity: 24 GWh Capacity: 12 GWh Capacity: 30 GWh

Silicon Valley | USA Gemlik | Türkiye

Anning | China Ganzhou | China

Guangzhou | China...Türkiye Site Yunnan Site Guangzhou Site

Capacity: 20 GWh Capacity: 24 GWh Capacity: 30 GWh

R&D Centers Manufacturing Sites R&D Centers & Manufacturing Sites09 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 10

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

Farasis Energy in 2023

Dr. Yu WANG Chairman of Farasis

Energy delivered a keynote speech at Dr. Yu WANG Chairman of Farasis Farasis Energy launched outdoor pow-

th Energy delivered a keynote speech at

Dr. Yu WANG Chairman of Farasis

Farasis Energy signed the Investment the China EV100 Forum putting forward er supply products at the 15 China th Energy elaborated on Farasis Energy'sand Cooperation Agreement for the the viewpoint that “the power batterythe 15 China Auto Bluebook Forum

International Battery Fair (CIBF2023) elaborat ing on Farasis Energy's understanding and judgement of the

30 GWh Power Battery Manufacturing industry has already achieved the held in Shenzhen.

transition from ‘nothing’ to ‘existence’ resolution and strategy to embrace the

development of the global power

Site Project with the Management TWh era. battery industry in the Dialogue column

Committee of Guangzhou Economic and the next stage is to transition from of the CCTV-2 Channel.and Technological Development Zone. ‘existence’ to ‘excellence’”.January 29th March 31st - April 2nd May 16th - 18th June 15th June 17th

Milestones in 2023

December 28th December 2nd November 28th - December 2nd November 15th August 16th - 20th

The plant for Phase I of Farasis En- Chairman Yu WANG delivered a speech Farasis Energy’s ternary pouch cells

Jiangling Group Electric Vehicle (JMEV) ergy's 30 GWh New Energy battery Farasis Energy unveiled a new super at the First New Energy Science and electric motorcycle product series

sodium-electric model equipped with project was officially delivered consol- pouch solution (SPS) at the China Electrification of Transportation Inter- super pouch solution (SPS) batteries

Farasis Energy's sodium-ion batteries idating the Farasis Energy's leading International Supply Chain Expo. national Conference announcing that and outdoor portable power supply

officially rolled off the production line role in the pouch battery industry. Farasis Energy had delivered its global products made their debut at the 7th

further expanding Farasis Energy's first commercial order of the model China-South Asia Expo in Kunming

product mix. equipped with the eVTOL power bat- Yunnan.tery.11 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 12

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

Awards and Honors

Social Responsibilities Information Security“The Fourth among Leading 2023 Responsibility Leadership Award 2023 Benchmark Enterprise forPrivate Enterprises in Fulfillment of in Excellent Cases for Corporate Social Industrial Information Security

Corporate Social Responsibilities Responsibility Practice in China’sin Jiangxi Province” in 2023 Automotive Industry Jiangxi Branch of National Industrial Information

Security Development Research Center

Jiangxi Federation of Industry China Association of

& Commerce Automobile Manufacturers

Employee Rights and Benefits

2023 Enterprise Talent Recruitment

Product Quality and Safety 2023 Extraordinary Employer and Utilization “Bo Le Award”

National Leading Enterprise in National Leading Brand in Quality of Zhenjiang Municipal Committee Liepin

Quality of New Energy Industry New Energy Industry of the Communist Party of

China People’s Government of

Zhenjiang City

China Association for China Association for

Quality Inspection Quality Inspection Supply Chain ESG Management

National Benchmark Enterprise of Stable and Qualified Product of Finalists for Green Supply Chain Award at the 2nd Annual

Quality and Integrity National Quality Inspection Environmental Social and Governance (ESG) Awards

China Association for China Association for British Chamber of Commerce Shanghai

Quality Inspection Quality Inspection

Product Research and Innovation Contributions

19th in the Top 100 Private Manufacturing

National Intellectual Property Enterprises in Jiangxi Province in 2023First Technology Leading TOP 100 on 2023 Hurun China Energy

Advantage Enterprise Enterprise in Jiangxi Province Private Enterprises

(October 2022 - September 2025) Information Office of People’s Government

of Jiangxi Province and Jiangxi Federation

China National Intellectual Science and Technology

Hurun Research Institute

of Industry & Commerce

Property Administration Department of Jiangxi Province

Gold Award of Forward-looking Power

and Thermal Management Category on 2023 ILED Golden Globe Award - 2023 Chinese Energy Golden Wing Award of the 4th

the 8th Lingxuan Awards 2023 Innovative Technology of the Year Storage Battery Brand Unmanned Systems Industry - Industry

“Little Giant”

China Society of Automotive

Engineers and China Committee GGLB China International Energy Zhuhai Unmanned

on Automotive Electronics Storage Conference Systems Association

Zhenjiang National EconomicDevelopment Zone 2023 “Top"OFweek Cup · OFweek” 2023 The World’s Top 15 Enterprises of 2023 Top Awards of China Leading Ten Enterprises” in Scientific and

Power Battery Innovative Outstanding Contribution to Industry Suppliers for Battery SysteTechnological Innovation

Technology Award Development

OFweek and OFweek Party Working Committee and China Automotive Battery NE Times and RIO

Libattery Management Committee of Innovation Alliance ConsultingZhenjiang Economic Development Zone13 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 14

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ESG Governance

Oversee the ESG performance;

Confirm our ESG strategy and objectives identification results of ESG

risks and opportunities and action plans;

ESG Governance Structure General Manager Review the ESG information disclosure.Upholding the mission of "provide clean energy build an intelligent world" Farasis Energy continuously promotes

sustainability deployment and achieves green transition and upgrading. To this end we integrate sustainability into Set up the ESG Committee which is under the management level and chaired

daily work to achieve sustainable development goals through green mobility and green energy. by General Manager and co-chaired by two senior executives at vice president

level;

Farasis Energy builds up an ESG governance structure led by the General Manager ensuring that the ESG strategy

and implementation are much more effective and systematic. Identify analyze and evaluate ESG risks and opportunities;

Lead the integration of ESG strategy and corporate strategies and define ESG

ESG Committee objectives and plans;

Farasis Energy’s ESG Governance Structure

Build the ESG policy system and motivation mechanism;

Report ESG progress and propose effective suggestions to the General Manager.Decision-making

Level 1 General Manager

Consist of department heads site directors/managers and ESG representatives

with a leading department to coordinate the efforts among departments and

Management Level 2 ESG Committee sites so as for the daily implementation;

The ESG leading department needs to coordinate functions and sites to

implement decisions from the management and supervise the progress.ESG Working Group

(Secretariat) Develop our ESG strategy and propose reasonable ESG objectives and plans;

Promote ESG action plans implemented in functions and sites.

3 ESG Working Group (Secretariat)

Executive Level 4 Production Sites ＋ 4 Departments All departments and sites shall execute various ESG decisions made by the

management;

Track daily work and supervise the progress;

ESG Practice Departments and

manufacturing sites Collect and summarize ESG data and provide information for decision making.15 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 16

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

Materiality Analysis

The identification and analysis of ESG topics help Farasis Energy stay informed of the top concerns of internal and external

stakeholders and promptly adjust its management strategies. In 2023 we surveyed and analyzed material topics of ESG Analysis of the Importance of ESG Topics for Farasis Energy in 2023

in stakeholders including management employees governments and regulators shareholders and investors customers

suppliers contractors partners communities and social organizations. We received 386 replies in this survey.Compared to the ESG topics of the previous year we added three topics including “Work of Workers' Congress/Labor Union""Digitalization and Intelligence System" and "Supplier ESG Audit". We adjusted "Clean-tech Introduction and Application" 2021

"Product Design and Lifecycle Management" and "Conflict Minerals Management" respectively into "Active Exploration and 14

Utilization of Renewable Energy" "Calculation of Product Carbon Footprints" and "Responsible Mineral Management". We

merged "GHG Emission" and "Raw Material Supply Risk Assessment" into "Response to Climate Change" and "Responsible

Mineral Management" respectively to improve our ESG topic management and better meet our development trends.Identification and Prioritization Materiality Analysis and Prioritization 15

Based on the research on laws and regulations Based on our ESG strategy we invite stakeholders

peer practices benchmark public responses and including management employees governments and 12 11

business strategy we updated the 2023 ESG topics regulators shareholders and investors customers 26 3

pool with an amount up to 44 topics and selected suppliers contractors partners communities and 2

28 of them as our priorities in accordance with our social organizations to join the survey on materiality 16 1 19 9

annual development plan. analysis. Based on the survey results we identified 17

the core topics that are most important and prioritized 18

for Farasis Energy's management this year. 7 22

104

823

25524

1. ESG Governance Structure 4. Anti-corruption and Anti-bribery 7. Party Building 27

Governance 2. Business Code of Conduct 5. Whistleblowing and Whistleblower Protection 28

Topics

3. Risk Management System 6. Shareholders' Rights Protection

8. Response to Climate Change 11. Green Product Research Development

Environmental 9. Active Exploration and Utilization of 12. Pollutants and Waste Management

Topics Renewable Energy 13. Biodiversity

10. Calculation of Product Carbon Footprints

Importance to Farasis Energy

14. Employee Right Protection 19. S alary Incentives and 23. Customer Right Protection

15. Employee Health and Safety Promotion 24. Intellectual Property Protection

16. Diversity and Inclusion 20. P roduct Quality and Safety 25. D ata Security and Customer Social

Topics Privacy Protection In response to the concerns of stakeholders regarding laws and regulations such as the Inflation Reduction Act and the 17. C omplaint and

Communication 21. P roduct Research and Innovation 26. Supplier ESG Management

EU Battery and Waste Battery Regulation we have intensified executive training and gradually planned to incorporate the

management of ESG-related issues into departmental KPI assessments. We have conducted ESG training and capacity-building

18. E mployee Training and 22. D igitalization and 27. Responsible Mineral Management activities specifically targeted at the Board of Directors and senior management including ESG training for management ESG Capacity Building Intelligence System 28. Community Welfare report kick-off meetings and executive training courses.

Importance to Stakeholders17 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 18

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

Referring to the relevant standards in "GRI 3: Material Topics" in the Global Reporting Initiative Standards (GRI Standards) by the Global Sustainability Standards Board (GSSB) we evaluate the actual or potential impacts of key topics on the economy environment society and human

rights involving our operations and business activities as well as different stages of the upstream and downstream value chain.Potential or Actual Impact Supply Chain Impact

Key Topics

Economic Aspect Environmental Aspect Social Aspect Procurement of Raw Materials Manufacturing or Operation Use by Customers Disposal

Product Quality and Safety Product Sales Environment Pollution Health and Safety ▲ ● ● ▲

Product Research and Innovation Product Sales Climate Change and Environment Intellectual Property Rights ▲ ● ● ▲

Employee Right Protection Employee Rights and Benefits ●

Employee Health and Safety Employee Health and Safety ●

Risk Management System Corporate Development ●

Green Product Research Development Climate Change ▲ ● ● ▲

Business Code of Conduct Fair Competition Corruption and Bribery Trade Secrets Product Insider Trading and Conflicts of Interest Quality and Safety ●

Supplier ESG Management Product Sales Climate Change and Environmental Pollution Human Rights ▲

Active Exploration and Utilization of

Renewable Energy Climate Change ●

Pollutants and Waste Management Environment Pollution ●

Salary Incentives and Promotion Talent Retention ●

● Direct impact ▲ Indirect Impact19 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 20

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

Performance and Progress in 2023

Shaping Corporate Showcasing Determination on Accumulating Strength Managing with Due Benefiting Society

Governance with Green Development through Low- and Seizing Industrial Diligence and Seeking Stimulating Talent Vitality with Through Kindness and

Compliance Concepts carbon Practices Opportunities Common Development High-Quality Environment Actions

SDG 16: Peace Justice SDG 6: Clean Water and Sanitation SDG 9: Industry Innovation SDG 12: Responsible SDG 3: Good Health and Well-being SDG 1: No Poverty

and Strong Institutions and Infrastructure Consumption and Production

Standardize the occupational health and safety Establish assistance workshops

Improve the business ethics Reduce waste of water and steam resources Enhance product performance via Strict supplier pre-evaluation and management system from top to bottom aimed at poverty alleviation to

management system and improve water efficiency and save water innovation establish a comprehensive selection help impoverished families

clarify the management of low-carbon and intelligent production Collaborate with supply chain SDG 4: Quality Education

issues such as corruption SDG 7: Affordable and Clean Energy system that integrates product partners to focus on topics such Develop an employee development system that SDG 4: Quality Education

conflict of interest fraud solution portfolios mass production as environmental protection labor encompasses the enhancement of managerial skills

money laundering and anti- Achieve green transition and intelligent sustainable and eco-friendly plants rights child labor occupational professional capabilities fundamental abilities and Actively conduct charity manufacturing through the introduction of as well as post-lifecycle product

competitive practices. health and safety and business learning support activities to help impoverished green energy energy-saving technological management all within a holistic ethics students

Improve the anti-fraud transformation digital development and lean lifecycle approach. SDG 5: Gender Equality

management Conduct supply chain due system promote resource Enhance the quantity and quality of diligence investigation and Improve the management procedures for the labor SDG 11: Sustainable Cities

and information sharing and patent applications and improve the management and continuously protection of female employees and Communities

jointly build a clean business SDG 12: Responsible Consumption and trademark portfolio carry out due diligence

environment. Production management of mineral resources SDG 8: Decent Work and Economic Growth Strengthen our care and

Introduce ISO 50001 to optimize energy efficiency SDG 17: Partnerships for the Introduce SA8000 to continuously improve the work

attention towards left-behind

children and help vulnerable

and energy-saving methods improve energy- environmentGoals SDG 17: Partnerships for groups in the communities

saving measures and conduct greenhouse gas Optimize the human resource management system

emission accounting in accordance with ISO the Goals

surrounding our company’s

Promote enterprise-academia- and employee recruitment and employment processes operational premises

14064 research institute cooperation to improve recruitment efficiency and optimize Collaborate with suppliers for open

Maximize the utilization of raw materials and carry strengthen international exchange recruitment channelsinnovation and tackle industry-

out a life-cycle assessment and communication and continuously wide challenges such as product SDG 10: Reduced Inequalities

build a high-level R&D team carbon footprints and material

SDG 13: Climate Action Quickly and effectively solve recycling Follow the principles of equal pay for equal work

customers’ quality issues and improve and equal employment and clarify that we do not

Timely formulate our strategy of carbon peaking product quality to satisfy customers discriminate against job seekers based on gender

and carbon neutrality age race religious beliefs disabilities and etc.* Conducted 14 training sessions * Environmental protection investment of CNY * 1483 R&D employees accounting * Supplier Code of Conduct signed by * Conducted 42 safety drills and 631 safety * Annual external donation and

on anti-corruption and anti-bribery 3.8273 million2 energy conservation 22.6 % of target suppliers

4 rural revitalization fund up to

for about % of all employees 100 training sessions reaching

88.684.5107100

% of employees CNY million

reaching % of employees and projects with investment of CNY 100 1.11155 * % of direct material purchasers 100 million * patents applied for this year * Women holding % of all management * The employment assistance % of suppliers and contractors1 trained in sustainable procurement 13.26

* PV power generation of with a total of 485 patents applied 100 positions (manager level or above) 17.48% of

workshops of us helped 12

* Assessed corruption risks for 100% 37129897.40 * % of active cathode material kWh for; 80 patents granted this year junior management positions (supervisor level or needy families offering 12 jobsof operation premises suppliers covered by audits of

* Total consumption of recycled water of 293 the supply chain due diligence above) and 20% of senior management positions with a total of granted patents * Organized the “Bringing Love * Conducted internal audits on business 611234.60 tonnes management system (statutory senior managers) Home - Warming Children to ethics issues for 100% of operation * 987 customer complaints with a 19 5724 Protect Their Growth” at the B * critical mineral raw material * new employeespremises * “ ” rating in CDP Climate Change “Children’s Love Harbor” to send

closure rate of

No Questionnaire 95.85

%3 suppliers covered by audits of warmth and Spring Festival

* major incidents of suspected annual supply chain due diligence souvenirs to children and

monopoly or unfair competition * Zhenjiang Site realized "Carbon Neutral management

Production" for specific products and Ganzhou families

site achieved carbon neutraltiy on its operational

boundries as certified by ISO 14068

1 D ue to the presence of shift workers at the production and operation sites the implementation and organization of integrity compliance training cannot ensure that all employees are fully covered. 4 Target suppliers are those based on internal supplier development and procurement control procedures.

2 O ur investment in environmental protection mainly includes hazardous waste treatment hazardous waste appraisal hazardous waste warehouse expansion and renovation environmental

testing radiation monitoring etc.

3 Unclosed complaints from the U.S. and European customers concern the cycle of returning defective products to the selling country which affects the progress of problem analysis.21 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 22

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

Stakeholders Engagement

Based on background information such as industry characteristics products and services as well as mission and vision we identify various groups involved in our operations and business activities. By considering the frequency and importance of communication with each group their

level of understanding of us and their influence on our operations and business we have selected eight key stakeholders namely employees governments and regulators shareholders or directors customers suppliers communities and social organizations. We actively establish a

normalized communication mechanism with stakeholders striving to create greater value for all parties.Category

Management Employees Governments and Shareholders and Customers Suppliers contractors Communities Social Organizations

Regulators investors and partners

● Governments and

related authorities at ● Academia and research

● Board Directors various levels ● Suppliers institutes

● Domestic and ● Communities

Representative ● Managers General employees ● ● Shanghai Stock ● Investors international ● Contractors around our ● ESG rating agencies

Exchange (SSE)

● Department heads customers Partners sites● ● Media

● China Securities

Regulatory ● Industrial associations

Commission (CSRC)

● Anti-corruption and Anti-bribery ● Product Quality

●

Employee Right Product Quality and

●

● ● Employee Right ● Product Quality and Employee Right and Safety ● Green Product Research Safety Management Protection Product Research and ● Protection Protection Safety Management ManagementDevelopment Innovation

●

Product Quality and Product Research and

●

●●

Product Quality and Safety Innovation Product Quality and

● Employee Right Employee Health ● Employee ● Product Quality and

●

Management Safety Management Safety Management Protection

and Safety Right Safety Management

● ● Protection

●

Employee Right Protection Product Research and

Risk Management Product Quality

● Supplier ESG ● Employee Health ● Employee Right

Expectation ● Innovation System Management and Safety and Safety ● Pollutants Protection

● Active Exploration and Utilization ● Employee Health and Green Product

Management and Waste

●●

of Renewable Energy Research Business Code of

● Product Research ● Product Research Management Employee Benefits and ● Safety Conduct and Innovation Supports

● Pollutants and Waste Development and Innovation ● Farasis

●●

Management Business Code of Employee Right Risk Management

● Farasis Energy’s

● ● Business Code of Energy’s

● Employee Health and

Conduct Protection System Charity ProgramsSalary Incentives and Promotion Conduct

Charity Safety

● Programs

● Party branch ● Regular information

Labor Union disclosure● ● Media briefings and

●

Farasis Core Shareholders’ Meeting

● Pre-sales roundtables

●

Regular work reports Community Employee Regular information ● ● Investors’ roadshows communication ● Face-to-face ● Regular

Management meetings Exchange Platform

disclosure and meetings ● After-sales service ● Supplier trainings meetings communication and

●

Engagement ● E-mail box Participation in relevant

feedback

●●

Special training meetings Hotline and e-mails

● Regular ● Onsite audit and ● Charity and

●

Method Corporate WeChat Onsite visiting communication such communication donation

● Project cooperation

●●

● E-mail box ● account Communication as customer visits ● through industry Business performance Regular visits

● Complaint ● Farasis Energy’s

●

● Corporate WeChat account ● Third-party trainings hotline official website

● Employee suggestion associations etc. briefings and WeChat public

box presentations ● Customer audits account and other

● "Farasis Home" official ● IR activities leveraged open channels

account by social media01 Our Progress:In 2023 relying on the Shareholders’ Meetings Board of Directors and Board of Supervisors

as the governance foundation and guided by building of Communist Party of China (“CPC”

or “Party”) Farasis Energy developed an internal control system a compliance and risk

management system and a tax governance system as well as a business ethics and anti-

Shaping Corporate Governance corruption system. We continued to shape a solid and transparent corporate governance system.with Compliance Concepts Our Performance:

Promote the process of board composition diversity. Our Board of Directors comprises 11

members including 4 independent directors; while the Board of Supervisors consists of 5

members including 3 females.Establish effective corporate governance system. In 2023 we held 17 board meetings 3

shareholders’ meetings and 12 supervisory board meetings.[Feature] Leading Development with Party Building

Maintain adequate investor interaction. We organized and participated in 47 reverse

Continuously Improving Governance Structure roadshows and strategy meetings conducted 13 investor onsite communication sessions

Preventing Risks and Improving Quality and Efficiency on manufacturing sites held seven online public exchange meetings with investors (over

Adhering to Integrity and Compliance in Operation 1600 attendees) and answered over 80 online questions on SSE’s public platform.Embracing the Era of Tax Transparency

Strengthen the party and government construction of enterprise. The Group Party

Committee has 9 members including 1 general Party branch and 4 Party branches. There

are currently 99 registered Party members and 11 applicants for Party membership.Promote anti-corruption and clean government work. Conducted 14 training sessions on

anti-corruption and anti-bribery reaching 88.68% of employees and 100% of suppliers and

contractors.Ensure compliance operation. No major incidents of suspected monopoly or unfair

competition throughout the year.25 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 26

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

To further optimize and adjust the organizational structure of the Group’s Party organization Farasis

Energy’s Party Branch applied to the Comprehensive Party Committee of Fields and Industries of Case

“New Economic and Social Organizations” of the Enterprise Service and Industry and Information

Bureau of Ganzhou Economic and Technological Development Zone for the establishment of a

group Party committee (9 members) in June 2023. CPC Provincial Congress Delegate Office

Enhancing the Management of Party Organizations

To fully leverage the exemplary role of Party

We enhance the development of Party organizations implement the CPC's organizational life members as pioneers Farasis Energy has setsystem and normalize and institutionalize learning and education. We adhere to the Party Branch's up the “CPC Provincial Congress Delegatework approach of "three promotions three cultivations and three improvements" and implement Office” consisting of the Party Member Group

the CPC's organizational life system. We set up "The Vanguard of Party Members" "CPC Member for Battery Cell Innovation Party Member Group

Sentry" and "Party Member Zone of Responsibility" in production areas to ensure the presence for Pack Innovation and Party Member Group

of Party members in key positions and at times of difficulties and ensure Party members lead the for Special Projects. The office aims to promote

robust growth. advanced experience transform innovative

achievements solve technological bottlenecks

Work Approach of “Three Promotions Three Cultivations and Three Improvements” of new energy technology and promote

technological progress in Farasis Energy.Three Promotions Three Cultivations Three Improvements In terms of new materials the Office developed 13 cathode materials for sodium-ion batteries laying the foundation

for the timely delivery of products for sodium-ion battery projects.Promoting Services Cultivating Technical Experts into Improving Cultural In terms of supplier development the Office developed nearly 10 material suppliers throughout the year securing

via Party Building Party Members Quality our power battery supply chain.Promoting Cultivating Party Members into Improving Teamwork In terms of technical support the Office provided technical support for various mass production projects and cell

Innovation via Technical Experts Cohesion products nearly 20 times successfully solving about 8 process and technical problems. The Office also applied for

Services Cultivating Party Members and Improving or published three technical invention patents.Promoting Technical Experts into Corporate Development

Development via Management Momentum

Innovation

Party Organizations and Culture

The Group Party Committee sets up Party members’ rooms with the standards of "places facilities

signs CPC flags books and newspapers and regulations". We set up 12 "Vanguards of Party We firmly advance training for applicants for Party membership and potential Party members. In 2023 we accepted three

Members" 4 "Party Member Zones of Responsibility" and 64 Party members "make promises and potential Party members trained 11 applicants for Party membership and registered 27 Party members among the floating

practice their promises" to ensure Party members lead the robust growth. In future we will launch population. During the past year we organized 15 trainees to participate in training courses and all successfully graduated.the "1269" Party building strategy specifically one goal two enhancements six leadership and

nine transformations. It will further promote the corporate culture organization system quality and Through carriers such as the Party congress "Jiangxi Party Building Cloud App" and public account we actively organized

efficiency. Party members to learn and follow the CPC's ideology and improve their political stance. All members of the Party Committee

use the "Jiangxi Party Building Cloud App" quickly sparking a learning trend among all Party members and cadres.In 2023

Number of general Number of Party branches Number of Party

Party branch(es) members of the year

1 4 99 Person

Number of new members of the year Number of applicants for Party membership

30 Person 11 Person

[Feature] Leading Development with Party Building27 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 28

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

Adhering to the principle of Party building leading mass building we inspire new vitality in each (general) party branch and carry Case

out mass and group activities to enhance team emotions and cohesion. In 2023 we conducted 14 activities of various types.We fully utilize the "Farasis Home" official account video channel and offline promotional carriers (such as bulletin boards and The Third Selection of “Top 10 Outstanding Youths” of Farasis Energy

banners) to publicize the deeds dedication and craftsmanship spirit of labor models and advanced collectives.We have organized the Selection of “Top 10 Outstanding Youths” for three

consecutive years to recognize young employees who have demonstrated

Educational and Cultural Activities outstanding performance innovative spirit and leadership potential intheir work. In October 2023 we carried out the Third Selection of “Top 10Outstanding Youths” of Farasis Energy and 34 candidates participated in this

Learning Xi Jinping Organizing education activity. We finally selected 10 individuals through various stages such as

Thought on Socialism briefings to learn and personal/departmental recommendation online voting onsite evaluation and

with Chinese implement Xi Jinping

Thought on Socialism democratic evaluation.Characteristics for with Chinese Typical Case of “Top 10 Outstandinga New Era every Characteristics for a Youths” - Ming Chunfa

month Major Deeds:New Era

In 2018 he joined the Product Testing Department and achieved the process standardization of testing tasks and

the sharing of test data in the department by leveraging his knowledge of automated control and management

experience. This significantly improved the test efficiency and reduced errors.The Second

th The Third Selection of He met the customers’ testing requirements through semi-automatic control methods with his knowledge and session "May 4

"Top 10 Outstanding supplier research. After projects were assigned he participated in the equipment selection installation and

Medal Collective" Youths" commissioning work for the testing building laying a foundation for the development of key customer projects.Competition

He diligently studied technology and applied his knowledge to optimize the design of testing fixtures change the

wiring method of charging and discharging equipment and upgrade the software for charging and discharging

equipment. These improvements enhanced the space utilization rate of SPS cells and expanded the measurement

School-attending range of charging and discharging equipment. The modified testing equipment meets the development requirements

Ceremony for Watching Films of existing SPS cells.Farasis Energy with Revolution

Employees’ theme

Children Party Conduct and Integrity

Our Party Committee strictly implements the Provisions on the Implementation of Primary Responsibilities of the PartyJuly 1st Gala of “Date with Spring Committee (Party Leadership Group) for Overall Strict Party Governance and convened two Group Party Committee (Branch)Cultural Benefit Tea” - International meetings throughout the year to specifically discuss the work of overall strict Party governance and Party conduct and integrity

Activities of New Era Women’s Day Tea building.Civilization Practice Plantation Outing

Series in Ganzhou in and Tea Picking We actively promoted thematic education and convened four Party committee meetings themed by education and leadership

2023 Activity on March 8th throughout the year to clarify responsibilities and strengthen accountability. We conducted two thematic tutorials and each

(general) party branch organized four collective learning sessions. In line with the learning theme and practical work we

organized four exchange and discussion sessions for Party members and organized four volunteer service activities led by Party

members.Number of Party Unit/Time Number of people covered Unit/Person times In 2023 the Group Party Committee received the title of "Advanced Primary Party Organization" from the Party Working

member activities by Party member activities Committee of "New Economic and Social Organizations" of Ganzhou Economic and Technological Development Zone. It

received a commendation from the Party Working Committee of "New Economic and Social Organizations" of Ganzhou

2393

20 86 Economic and Technological Development Zone in the Notification on Supervision of Party Building Work and Thematic

Education in Non-public Economic and Social Organizations in Q3 of 2023. It received the title of "Two Strong & Six Good"

53 Party Organization for Party Organizations of New Economic and Social Organizations in Ganzhou Economic and Technological

Development Zone. It received a "Good" rating in the evaluation of 88 Party organizations for Party building. In 2023 we

received the titles of the Fourth among Leading Private Enterprises in Fulfillment of Corporate Social Responsibilities in Jiangxi

Province the "Ganzhou May Day Labor Award" the Excellent Organization for the "Five-Small" Production Competition in

2021 2022 2023 2021 2022 2023 Ganzhou the Demonstration Enterprise for Industrial Reform in Ganzhou Economic and Technological Development Zone and

the Advanced Group for Blood Donation in Ganzhou.29 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 30

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

Continuously Improving Governance Structure Independence of Board membersThe Board of The Board of including

Directors comprises Supervisors consists of Non-independent Independent 3 female directors directors members members

persons persons

Continuously Standardizing Corporate Governance 11 5 supervisors 7 4

Ages of Board members Educational backgrounds of Board members

Farasis Energy gradually improves internal rules and regulations and continuously promotes standardized and procedural 40-49 50-59 60 and above Doctoral degree and above Master’s degree Bachelor’s degree

management according to laws regulations and regulation rules including the Company Law of the People’s Republic of China

the Securities Law of the People’s Republic of China the Code of Corporate Governance for Listed Companies and the Rules 5 persons 4 persons 2 persons persons persons person

Governing the Listing of Stocks on the Science and Technology Innovation Board of Shanghai Stock Exchange. 8 2 1

We have established a series of systems and a corporate governance structure with clear rights and responsibilities and mutual Professional backgrounds of independent directors

checks and balances. They include the Articles of Association of Farasis Energy (Ganzhou) Co. Ltd. Rules of Procedure of

Shareholders’ Meetings Rules of Procedure of the Board and Rules of Procedure of the Board of Supervisors. We strictly run Number of independent directors Number of independent directors with a Number of independent directors with a

with an industry background professional background in risk management background in accounting or finance

the Shareholders’ Meeting Board of Directors and Board of Supervisors based on decision-making authority and scientific

procedures. 2 persons 3 persons 2 persons

Our Board of Directors has established the Audit Committee Strategy Committee Nomination Committee Remuneration and

Evaluation Committee and Technology and Product Committee. Each committee plays a positive role in decision-making and Enhancing Communication with Investors

supervision in relevant areas.Farasis Energy aims to protect investor rights by complying with disclosure requirements and developing policies such as

the Management Measures for Investor Relations and Management Measures for Information Disclosure to build strong and

healthy investor relations.Shareholders’ Meeting

We regularly organize strategy meetings roadshows reverse roadshows and online public exchange

Audit Committee meetings with investors to timely communicate our latest developments to the capital market and

Exchanges create transparent communication.Board of Supervisors with Investors In 2023 we organized and participated in 47 online and offline investment exchanges to maintain the

Strategy Committee attention of the capital market.Nomination Committee Board of Directors We hold regular online public meetings such as performance briefing meetings performance

forecasts and investment communication meetings to focus on interpreting our regular financial status

operating performance and achievement of management goals as well as our future business plans

Performance

Remuneration and Evaluation Committee and prospects. We update the progress of major issues such as equity trading in listed companies Briefings promptly and provide answers to the key concerns of investors.In 2023 we organized seven public exchange meetings including performance briefings with over

Technology and Product Committee 1600 attendees from participating institutions.We regularly conduct onsite communication sessions for investors on our manufacturing sites so

Onsite Surveys that they can fully learn about the operation of our sites product manufacturing processes and

Corporate Governance Structure of Farasis Energy of Specific production processes as well as the industrial application of our latest technologies.Objects

In 2023 we organized 13 onsite communication sessions.In 2023 We conscientiously implemented the responsibilities of the three committees emphasized deepening the We fulfill our information disclosure obligations and on this basis we implement a voluntary

awareness of governance optimizing the internal mechanism of corporate governance and protecting the legitimate

rights and interests of investors. Announcement disclosure system to guarantee the truthfulness accuracy and completeness of the information

Disclosure disclosed.The board meetings held The supervisory board The shareholders' The meetings of the In 2023 we issued 75 interim announcements 4 periodic reports and several other disclosures.meetings held meetings held Committees under the

Board of Directors held We actively answer the questions raised by investors on public platforms such as Shanghai

Stock Exchange E Interactive and investor hotlines promote information communication

between listed companies investors and other market participants and protect the rights and

17 times 12 times 3 times 18 times Social Media interests of small and medium-sized investors.

In 2023 we answered more than 80 questions from investors on the E-interactive platform and

answered a number of questions from the investor hotline.31 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 32

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

Preventing Risks and Improving Quality and Adhering to Integrity and Compliance in Operation

Efficiency

Empowering Stakeholders to Grow in Compliance

Improvement of Internal Control System

"Compliance makes long-term success". Compliance is not a cost but a productive force.Being responsible for establishing improving and effectively implementing the internal audit system the Board of Directors and

its Audit Committee ensure that the information disclosed in internal audits is true accurate and complete. Under the direct

leadership of the Board of Directors and its Audit Committee our Supervision and Audit Department exercises internal audit Compliance System

power and reports to them.Based on applicable laws regulations and regulatory provisions we have established policies and systems such as Farasis

All internal organizations subsidiaries and significant equity holding companies of Farasis Energy cooperate with our Energy’s Code of Conduct for Compliance Operation Ethical Conduct Management Procedures and Provisions on the

independent Audit and Internal Control Department to fulfill its responsibilities under the laws and regulations accept internal Investigation of Responsibilities for Breach of Rules and Disciplines. These policies and systems clearly define the management

audit supervision and provide necessary conditions. of topics such as corruption conflicts of interest fraud money laundering and anti-competitive practices safeguarding the

sound development of Farasis Energy.This department is entitled to access and review documents meeting minutes computer software and other relevant

materials related to production and operation including but not limited to plans budgets final settlement account books Farasis Energy’s Code of Conduct for Compliance Operation: It aims to standardize the legal and compliant business activities

reports contracts and other related documents. It is entitled to request the audited organizations to provide documents of all employees as well as third parties engaged in business activities on behalf of Farasis Energy to avoid compliance risks at

objects information and other materials necessary for the audit work. It is entitled to conduct onsite inspections inventories the source and prevent potential issues.or supervision of assets and to request departments and personnel to conduct face-to-face workflow tests. If any personnel

conduct any behavior that obstructs or disrupts audit work or refuses to provide materials with the approval of the leader this

department may take necessary temporary measures and propose decisions and suggestions to pursue the responsibility of Corrupt A "corrupt practice" refers to the act of offering giving receiving or soliciting - no matter directly or indirectly

such personnel. Practices - anything of value to influence improperly the other party.This department regularly screens internal and external risks compiles a risk list and periodically updates it. It collaborates with Fraudulent A “fraudulent practice” refers to any act or omission including misrepresentation that is someone knows

responsible departments to update the risk control matrix ensuring a suitable risk control model. Practices recklessly misleads or attempts to mislead a party to obtain financial or other benefits or avoid obligations.For high-risk business process (such as certain procurement fund management asset management and etc.) this department Collusive A “collusive practice” refers to any arrangement between two or more parties for any improper purpose

formulates an annual audit plan and completes multiple project audits within a one-year audit cycle to ensure that high-risk Practices including the purpose of improperly influencing the other party.matters are included in the annual routine audit. Coercive A "coercive practice" refers to the act of impairing harming or threatening to impair or harm - no matter

Practices directly or indirectly - any party or the property of the party to influence improperly the actions of a party.Management of Compliance Risks An “obstructive practice” refers to any act of intentionally destroying falsifying altering or concealing

evidence materials required for an investigation or providing false materials to investigators in an attempt to

Obstruction seriously impede the investigation of alleged corrupt fraudulent coercive or collusive practices as well as

We have developed the Management Procedure for Compliance Practices threatening harassing or coercing any party to prevent it from participating in the investigation or disclosing

Obligations and Evaluation of Compliance to guide our compliance known investigation information.management personnel and organize relevant departments to

evaluate compliance in EHS labor employment anti-bribery anti- Sexual harassment refers to any unwanted act that violates the will of another person and causes discomfort

fraud information security intellectual property energy management Sexual or association with sexual connotations through language expressions actions text images videos audio

and etc. Harassment links or any other form of information regardless of whether the perpetrator of the act or the sender of the

information has the intention or purpose of harassment or any other improper motive.In the early stage of compliance evaluation each specialized

compliance liaison collects and sorts out applicable legal and

regulatory standards for each specialized project identifies Ethical Conduct Management Procedures: To standardize the internal employees’ business conduct and Farasis Energy ‘s

compliance obligations related to Farasis Energy and then develops business activities our management takes the lead in promoting the cultivation of business ethics and actively organizes ethics

a List of Legal Obligations and Other Requirements. training that covers employees personnel dispatched by third parties and suppliers. The Audit Department supervises the

integrity and ethics of Farasis Energy ‘s economic activities and provides recommendations that comply with ethics and laws

The compliance management personnel request the responsible when necessary.departments to provide supporting materials created during the

performance of compliance obligations based on evaluation criteria. Provisions on the Investigation of Responsibilities for Breach of Rules and Disciplines: These Provisions aim to standardize the

By comparing the collected supporting materials with the identified handling and accountability for serious violations and disciplinary cases in the business and engineering areas of all entities

compliance obligations the compliance management personnel affiliated with Farasis Energy. They are designed to effectively address issues of negligence in management education and

provide a conformity evaluation identify areas for improvement and supervision related to serious violations and disciplinary cases as well as omission and passive attitudes on sensitive and risky issues.issue improvement notices accordingly.33 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 34

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

Enhancement of Compliance Awareness

To effectively prevent fraudulent practices we our branches and subsidiaries as well as all departments have improved

internal control systems and regularly conduct internal control self-assessments.We comprehensively collect and screen newly issued laws regulations and standards as well as policy notifications published In the Anti-Fraud Management System and Provisions on the Investigation of Responsibilities for Breach of Rules and

by state authorities. We compile the selected information that is applicable to our company into a Compliance Classroom - Disciplines we have established clear audit and control business process (such as accounting and procurement procedures)

Updates of Latest Regulations and publish it on our OA system every two weeks. to prevent corruption and bribery. These procedures regulate the professional conduct of all employees especially directors

In 2023 we focused on interpreting the EU battery regulations and established an EU Battery Regulations Taskforce to facilitate supervisors middle and senior management and employees in key positions. They further explicitly prohibit any form of

the implementation of measures in 2024 and 2025. We conducted the 2023 Annual Compliance Training for all employees with fraudulent practice that harms the legitimate economic interests of Farasis Energy or seeks improper economic benefits.a training duration of 55 minutes. We organized compliance training specifically for the management. We have developed the Gift Management Measures to clarify the specific commercial behavior for approving sensitive

transactions (such as gifts and travel) ensuring that gifts play their due role in business interactions. We effectively manage

gifts and cash gifts received from external institution.Creating a Good Atmosphere of Integrity Our Audit Department formulates an annual audit plan to conduct routine audits every year for high-risk business processes in various departments such as procurement fund management asset management and etc.We conduct various forms of integrity and compliance education and trainings for our employees such as issuing holiday

guidelines and decisions regarding the disciplinary actions for employee misconduct through our OA system and also by

In 2023 the key regulatory focuses of our anti-fraud work include unauthorized or illegal appropriation and misappropriation of publishing monthly ethical conduct posters through our corporate WeChat as part of our ongoing internal integrity and

corporate assets for personal gain false records misleading statements or material omissions in financial accounting reports compliance training program.and information disclosures abuse of authority by directors supervisors managers and other senior management and For anti-corruption trainings and warnings targeted at contractors and suppliers we conduct internal anti-corruption training

collusive fraud by related institutions or personnel. and send notifications to suppliers on prohibiting gift-giving during holidays. Our Supply Chain Department takes the lead in

We have established an anti-fraud framework to define the responsibilities of each level. We stipulate that departments should signing anti-corruption agreements with them prioritizing business cooperation and conducting due diligence on suppliers.support anti-fraud efforts and establish and improve fraud prevention management systems. In future we will conduct anti-corruption training for suppliers introduce our internal integrity system and internal audit and

supervision system to suppliers and advocate a fair just win-win and clean business environment.The Board of Directors urges the management to build an anti-fraud culture and enhance the anti-fraud internal control

system; the Board of Directors and the Audit Committee spearhead anti-fraud activities and direct and oversee anti-

fraud operations.Audit Committee of Board of Directors

The management is responsible for establishing improving and implementing internal controls to reduce the chances

of fraud. It also should take proper and effective remedial measures for fraud behaviors and be accountable for the

occurrence of fraud. Heads of subsidiaries branches and departments are primarily responsible for anti-fraud efforts

Management at respective units or departments.Audit and Internal Control Department: As a standing organization in charge of anti-fraud work it is responsible for

anti-fraud work in Farasis Energy and our subsidiaries.Human Resources Department: It is responsible for penalizing employees who bear leadership and direct

responsibility for fraudulent practices according to the approved opinions. This department should handle the

salary bonuses labor remuneration and labor relations of employees involved in fraud. It should conduct anti-

fraud training legal and regulatory education as well as integrity and moral education for new employees.Supply Chain Management Center: It is responsible for informing Farasis Energy 's whistleblowing channels to

all suppliers according to relative policies and signing integrity agreements with all suppliers. It also administers

rewards and punishments for suppliers based on the approved treatment suggestion.Legal Compliance Department: It is responsible for reviewing cases and evidentiary materials transferred by the

Audit and Internal Control referring fraudulent cases that meet the criteria for case-filing to judicial authorities and

initiating legal proceedings against individuals involved on behalf of Farasis Energy.Finance Center: It is responsible for promptly transferring any clues of fraud discovered during financial

management to the Audit and Internal Control Department. Before the conclusion of a fraud case it freezes all

payments of the individual responsible for the case. It assists in recovering economic compensation related to

fraud cases.Audit and Internal Control Department

Human Resources Department

Supply Chain Management Center

Legal Compliance Department

Finance Center35 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 36

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

Acceptance of External Supervision

Proportion of operation Proportion of operation premises Proportion of suppliers and

premises subject to corruption subject to internal audits on contractors participating in anti-

risk assessment business ethics issues corruption and anti-bribery training We have established a sound whistleblowing system optimizing the whistleblowing and complaint system as well as the

100 100 100 whistleblower protection system. We have set up a hotline and clarified the procedures time limits and requirements for % % % handling complaints and reports ensuring that whistleblowing and complaints become an important route for us to effectively

obtain information.In Farasis Energy’s Code of Conduct for Compliance Operation we clearly define the rules for consultation whistleblowing and

handling of violations. We encourage any employee to promptly and actively consult or report to the compliance department

when he/she has doubts about the compliance of certain acts and difficulties in judging how to comply with our compliance

requirements under specific circumstances he/she finds violations of relevant laws regulations and our compliance

Total number of anti-corruption and anti-bribery training for directors and officers requirements by partners or colleagues or Farasis Energy or any individual is subject to external compliance investigations

inquiries or whistleblowing.In the Anti-Fraud Management System we explicitly encourage real-name whistleblowing. Employees and all social parties that

have direct or indirect business relationships with us can report suspected fraudulent practices to our Audit and Internal Control

2021 12 Time 2022 11 Time 2023 14 Time Department through various channels such as hotline e-mails letters or face-to-face meetings.

We keep whistleblowers’ identities contents of reports the information about investigators witnesses and investigations

confidential. All shall hold back or prevent any whistleblowers from reporting under any excuse or by any means or take

revenge on whistleblowers investigators witnesses or their relatives. The employees are rewarded as long as they report

noncompliance behaviors or offer compliance recommendations and thus avoid significant losses for us.Total number of anti-corruption and anti-bribery training for general employees

In the Ethical Conduct Management Procedures we explicitly require absolute confidentiality of the whistleblower information

and deem any revenge against employees as a result as the most serious disciplinary violation in Farasis Energy. If we discover

revenge against whistleblowers we take disciplinary measures such as education apology warning and dismissal as the case

may be. In case of a significant impact we investigate legal responsibilities according to law.

2021 12 Time 2022 11 Time 202314 Time

Reporting Channels

Total number of employees participating in anti-corruption and anti-bribery training

In case of any known or suspected violation of our compliance policies applicable laws

2021 3039 Person 2022 6114 Person 2023 5811 Person regulations or other requirements regardless of its severity any department employee or

business partner may consult or report to the relevant compliance department/authorities under

their real names or anonymously or through one of the following channels:

Proportion of employees participating in anti-corruption and anti-bribery training1 Hotline: 0797-7329850

E-mail: compliance@farasisenergy.com.cn

202163.78%202285.59%202388.68%

1 Due to the presence of shift workers at the production and operation sites the implementation and organization of integrity compliance training cannot

ensure that all employees are fully covered.37 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 38

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

Fair Dealing Advertising and Competition Structure and Functions of Farasis Energy Tax SSC

● The Group’s tax-related system ● The Group’s tax evaluation and

and process standardization self-inspection

We strictly comply with applicable laws regulations and international standards on anti-monopoly or anti-unfair competition Tax ● The Group’s tax forecast and ● The Group’s related-party

including the Anti-monopoly Law of the People's Republic of China Anti-unfair Competition Law of the People's Republic Management analysis report transaction management

of China and Anti-unfair Competition Law of the People's Republic of China. We have developed the Anti-monopoly and Team ● Tax-related audit coordination ● Tax policy research and

Compliance Management Measures adhering to the principles of "fairness justice and win-win cooperation" to create a fair and risk response training

business environment. ●

Tax The Group’s tax planning

We effectively identify and objectively evaluate customer requirements and refrain from using unfair means or engaging in Management ● ●

vicious competition to attract customers. When accepting orders we adhere to the Order Review and Control Procedures Department

Tax calculation for sites Deferred income management

Tax

● Tax declaration for sites for sites

and we do not conceal our existing business capabilities or provide any false information ensuring business integrity and for Domestic Declaration ● Operations Team ● Tax settlement for sites Maintenance of relations with

transparency. tax authorities for sites

In 2023 we did not encounter major incidents of suspected monopoly or unfair competition. ● Invoice certification and issue ● Filing and declaration of nontrade

Bill ● Export rebate management foreign exchange payment

Management

● Management of government ● Tax-related investigation onsite

Embracing the Era of Tax Transparency Team subsidy materials coordination

Tax

●

Management Collection of declaration materials from overseas related companies

Perfecting Tax Compliance Management Department for ● Overseas tax policy research and planning

International ● Response to audits of overseas related companies

Operations ● Coordination on tax-related matters of overseas legal entities

Farasis Energy acts in strict compliance with all applicable tax laws and regulations in terms of tax declaration tax payments

tax accounting and business decisions as well as daily operations. Our goal is to build a tax management team that is honest

trustworthy professional and intelligent. This team makes tax decisions reasonably controls tax risks improves management

efficiency and effectively supports business operations. Enhancing Tax Officials’ Professional Skills

Our Headquarters has established a Tax Shared Service Center (SSC) to centrally manage tax-related business and designated

full-time tax accountants to each key subsidiary’s finance department for local tax-related matters. Since its establishment We continuously enhance the systematic management of the entire process related to tax matters and strengthen the

Tax SSC has released tax-related internal control management systems such as the Invoice Management System System competency training of tax professionals. In 2023 we participated in a series of training seminars hosted by professional

for Managing Related-party Transactions and Tax Management System. It updates the above systems according to the organizations closely following and actively studying the latest fiscal and tax regulations issued by the government to ensure

improvement of applicable tax laws and regulations. compliance of our tax-related operations. These training seminars covered topics such as "BEPS 2.0 Dual-Pillar International

Tax Rules" "Management of Transfer Pricing Risks" "Insights into Tax Incentives for Stabilizing Employment" "Discussions on

In 2023 Tax SSC established and improved the Group’s tax-related electronic database centrally managing tax information and

Supply Chain Trade Barriers" "Reform of the Offshore Passive Income Exemption System in Hong Kong" and "Updates on the

fiscal data for each legal entity to facilitate tax data analysis and external audit coordination.Policy of Additional Deductions of Research and Development Expenses".Tax SSC39 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 40

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

02 Our Progress:Every employee bears in mind our mission of "provide clean energy build an intelligent

world". Farasis Energy actively address climate change. We strive to improve our

management of energy water resources wastewater waste gas and solid waste thus to

explore and provide eco-friendly green products and services.Showcasing Determination on Our Performance:

Green Development through We completed the ISO 14064 certification for our annual corporate carbon emissions by a third-party certification agency for two consecutive years.Low-carbon Practices For three consecutive years specific products have passed the third-party certification of"carbon neutral production”.The Ganzhou site achieved 100% renewable energy use in 2023 and was certified to

ISO14068 standard.

100% of sites have officially passed the ISO 14001 environmental management system

[Feature] Embracing New Trends in Green Development certification.Advancing Efficient Resource Utilization We invested CNY 8.338 million in environmental protection and energy conservation

Committed to Natural Ecosystem Conservation projects.We store and treat 100% of solid and liquid hazardous waste according to regulatory

requirements.All sites managed wastewater waste gas and solid waste effectively and we did not

receive any environmental complaints or punishments from regulators.41 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 42

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

● We have established an EU Battery Regulations Taskforce to assess the impact of the EU battery

Green development represents an imperative solution to overcome resource and environmental regulations (including substances restricted by the EU) on our mass-produced products and new

constraints explore positive business transformation and achieve both sustainability and high- projects and formed targeted countermeasures to ensure the normal progress of related projects.quality growth. It is a general trend of globalization. We are committed to this vital task harnessing ● We extend the calculation of our product carbon footprints and invite third-party companies for data

innovative and responsible green practices to support carbon neutrality and usher in a new era of Counter- accounting and calibration ensuring data accuracy.eco-friendly development. measures

● We actively participate in the drafting and formulation of industry energy and carbon-related standards

such as the Implementation Guide for Energy Efficiency Benchmarking of Battery Industry the Carbon

Emission Accounting Standard for the Whole Life Cycle of Power Battery and the T SQIA 062-

Response to Climate Change 2023 Technical Requirements for Carbon Footprint Assessment of Rechargeable Industrial Batteries

establishing a comprehensive industry carbon emission accounting standard.Embracing the novel development philosophy we view carbon peaking and carbon neutrality as Technology

critical drivers for enhancing the quality of our development. Leveraging international standards like

ISO 14064 ISO 14067 ISO 14068 and the GHG Protocol we adopt scientific and standardized

approaches to managing greenhouse gas emissions product carbon footprints and carbon Risk ● The increasing demand for low-carbon technologies may give rise to more advanced and emerging battery

neutrality in specific production processes. We actively promote the establishment of an energy Description technologies bringing uncertainty to the development and competition of our battery technologies.management system aligned with ISO 50001 embracing the latest trends in green development.●

Financial The cost of research and development for low-carbon technologies increases.Implementing Climate Governance Impact ● The introduction and retrofit of intelligent equipment and facilities result in higher costs.● We advance the construction of intelligent plants and continuously invest in solar PV power generation

We have integrated climate risk control and climate opportunities into our operational processes projects. Introducing intelligent equipment throughout the cell and module manufacturing process we

establishing a comprehensive mechanism for risk identification and response. This has significantly integrate conventional industrial control technology with Internet IT technology industrial IoT technology

strengthened our governance capacity and adapt to climate change. Counter- and big data technology.measures ● We promote the industrialization of our super pouch solution (SPS) for large pouch power batteries

which is expected to increase the system volume packaging efficiency by over 30% and reduce the

number of structural components in the battery system by 50%. We have already developed and applied

this solution to multiple passenger vehicle projects.Transition

Risks

Policy and Regulation Risks Market

● The carbon emissions trading market officially launched in 2021. Our ● More companies have started to pay attention to Scope 3 emissions from externally purchased goods

carbon emissions exceed the benchmark set by the Chinese government Risk and services. The requirements for low-carbon footprint and sustainably certified products are also

for the inclusion of the electricity industry in the national carbon market Description rising since customers’ demand for low-carbon products and procurement choices become increasingly

pilot program. There is a possibility that we may be included in the carbon stringent.Risk emissions control system in the future.Description ● The EU officially adopted the EU Battery and Waste Battery Regulations in

●

August 2023. Given that Europe is an important overseas market for our Financial Sales decline due to the failure to meet customers’ demand for low-carbon products.company the introduction of the Regulations may have a certain impact on Impact

our exported products.● We strengthen our green research and design increase the proportion of NMP recycling and reduce the

use of glue in our module design to facilitate easier recycling and disassembly.● The cost of carbon emissions varies with the fluctuations of market carbon

●

Financial price. Counter- We advance the process of using circular packaging for our raw materials and replace cartons and

Impact measures disposable PVC pallets for our PCBA parts with recyclable plastic boxes and PVC pallets.● The cost of battery carbon footprint accounting increases.● We increase the proportion of renewable energy and the Ganzhou Site has achieved 100% renewable

energy use in 2023 strengthening low-carbon manufacturing capacity.[Feature] Embracing New Trends in Green Development43 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 44

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

Green and Low-carbon Manufacturing

Physical

Risks

Intense natural factors We establish professional and stable energy conservation organizations at both Group and site-levels. By introducing the ISO

50001 system we establish an energy management mechanism and continuously conserve energy reduce emissions and

optimize the energy structure.● Extreme weather disasters such as floods and heat waves can potentially impact our production damage

Risk critical production processes and equipment and even affect the health and safety of our employees and In 2023 we completed the ISO 14064 certification for our annual corporate carbon emissions by a third-party certification

Description workplaces. agency for the second year. We continuously increase the proportion of renewable energy consumption through PV power

procurement of green certificates and participation in green power transactions.In Ganzhou the PV project with a total installed capacity of 5.99 MW was initiated in 2022 and connected to the grid in 2023.Financial In 2023 the PV power generation reached 4.9639 million kWh. At the same time Ganzhou Site actively participates in market-

●

Impact Typhoons floods and droughts lead to decreased capacity. based green power trading purchasing and consuming 17883000 kWh of green power and purchased international green

certificates for the remaining electricity to achieve 100% use of renewable electricity.● We obtain ISO 14001 environmental management system certification and improve our management of The last phase (8.1 MW distributed PV system) in the Zhenjiang Site was officially connected to the grid for power generation

fire safety facilities hazardous waste special equipment construction and sewage treatment plants. in January 2023. The current PV system in the site has an installed capacity of 31.5 MW with 32.166 million kWh of PV power● We actively establish the ISO 50001 system to advance both technological and management-based generation in 2023. Meanwhile in the Zhenjiang Site the specific production line has delivered specific products of “Carbonenergy conservation efforts. Neutral Production” for three consecutive years.Counter-

measures ● We have also established an emergency command center to standardize and normalize the management With a focus on “green transformation” we vigorously promote the green upgrading and renovation of production equipment

of accidents such as fires typhoons and floods. creating green and energy-efficient plants. We not only oversee and regulate the power consumption of air conditioning

● We enhance logistics efficiency by optimizing routes to reduce the number of dispatch and develop systems road lighting fixtures landscaping elements and other essential facilities across our production facilities warehouses

coordinated shipping plans. By changing the original shipment address from an external warehouse to and administrative offices but we also strive to maximize the energy efficiency and conservation benefits of our production

direct shipment from the factory we further reduce the environmental impact of our logistics operations. equipment.Type of Climate

Opportunities Description Financial Impact Financial Impact

Low-carbon * Vehicle electrification * The sales * We increase investment in research and

products and is a crucial path for the increase. development including market research

services transportation industry to prototype design and testing and the

achieve emission reduction development of new technologies or processes.and electric vehicles have * We upgrade equipment tools and technologies

become the primary solution for and implement quality control measures to

the industry to reduce carbon enhance product quality and performance.emissions.Use of energy * Investing in and developing solar * The operating * We constantly optimize our energy structure and

from low- PV power generation not only costs decrease. increase the proportion of renewable energy use.emission reduces the carbon emissions * The asset values In 2023 the Ganzhou Site has achieved 100%

sources generated by our electricity increase. renewable energy use through green power trading

consumption but also lowers the photovoltaic power generation green certificate

cost of purchasing carbon credits trading and other measures and the Zhenjiang Site

such as CCER and I-REC. has achieved the renewable electricity usage ratio

of 45% through photovoltaic power generation and

green certificate trading.Investment costs for energy-saving renovation

Low-carbon * Upgrading the equipment in * The production * We promote energy-saving technological projects

production plants or production processes costs decrease. transformation and implement energy-saving

process for energy efficiency not only * The asset values projects such as energy-saving transformation

improves the overall energy increase. of rotary dehumidifiers air compressor 451.07 10000 CNY

efficiency of production but also grid connection and refrigeration system

reduces energy procurement transformation. The annual investment cost of

and usage thereby lowering energy-saving renovation projects reached CNY

direct operating costs. 4.5107 million.45 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 46

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

Key Energy Conservation Projects in 2023

Greenhouse Gas Emissions

424786.38

987510.47 Site Project Benefits

371657.34

874815.60

256293.00

● We carried out the waste heat recovery transformation ● It is expected to save CNY 229000 per unit per

of the regenerative air of the rotary dehumidifier to year in revenue after the equipment modification

recover the heat for fresh air preheating. is completed.

455577.62418505.90367329.06

● We carried out special inspection of air leakage in the ● It is expected to save about CNY 221000 in

228049.67 Ganzhou Site compressed air system of the factory and dealt with it energy consumption costs of air compressors.

28242.50 6280.48 4328.28 in time to reduce air leakage waste.

● For the high-temperature surface of local equipment ● We saved about CNY 89000 in power costs.

2021 2022 2023 the insulation cotton was wrapped to reduce heat loss

Unit: tCO e and saved the energy consumption of air conditioning 2

and refrigeration in the workshop.Total emissions of Scope 1 Total emissions of Scope 2 Total emissions of Scope

greenhouse gas greenhouse gas (location-based) 3 greenhouse gas

Total emissions of greenhouse gas (Scopes 1 and 2)

● We implement an energy consumption management ● It achieves automatic reading of energy

plan for production lines and promote the installation consumption meters and early warning conducts

of basic energy meters at production lines in cell a detailed analysis of production line energy

73.22 130.16 module plants. consumption evaluates equipment status and

75.49 energy usage and monitors equipment energy

65.61 consumption and degradation. These efforts

36.66 significantly enhance the energy management

22.6160.08

36.12 of our production line equipment.

8.070.54

0.26 22.35 ● We connect the air compressors of the pilot line to ● It is expected to save CNY 855000 in power

the grid and reduce the number of air compressors costs annually.

2021 2022 2023 started after the grid connection thus reducing power

consumption.Unit: tCO2e/CNY 1 million of operating income ● We implement the stepped utilization of steam ● The predicted total added income for the next

condensate and transform the air conditioning boxes three years is about CNY 7.1796 million.Emission intensity of Scope 1 Emission intensity of Scope 2 Emission intensity of of seven dehumidifiers in a step-by-step manner

greenhouse gas1 greenhouse gas Scope 3 greenhouse gas Zhenjiang to utilize the heat of condensate and reduce steam

Greenhouse gas emission intensity (Scopes 1 and 2) Site consumption.● At the power station on the site we carry out an ● It is expected to save 10.32 million kWh of

Energy Management energy conservation project for the central air- power annually and about CNY 7.22 million in PV power generation/kWh conditioning intelligent control system. By integrating a power costs.

16.69 chilling station control system we incorporate variable

8.88 37129897.405.72 frequency drives and sensors in the hardware and

9625760.00 21040600.00 install intelligent control software to achieve automatic

10288 93987 control of the main chiller system.

58412 ● We use 18W high-efficiency energy-saving LED lights ● It is expected to save CNY 0.45 million in power

in plants to replace the original 18W/22W lights of costs.inferior brands with a lifespan of up to 30000 hours.

2021 2022 2023 2021 2022 2023 ● We combine the loads of two transformers in the high- ● It is expected save CNY 0.7 million in power

voltage distribution room into one transformer for costs.Unit: tce/CNY 1 million of operating income economical and efficient operation and deactivate low-

load transformers to reduce no-load losses.Total energy consumption Energy consumption intensity2

In future we will based on the development and planning of our main business timely formulate a carbon peaking and carbon

1 Emission intensity of Scope 1 greenhouse gas = Total emissions of Scope 1 greenhouse gas ÷ CNY 1 million of operating income the same below. neutrality strategy and targets that align with international mainstream initiatives and standards such as SBTi. We will explore

2 Energy consumption intensity = Total energy consumption ÷ CNY 1 million of operating income

projects such as carbon offset and forestry carbon sink.47 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 48

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

R&D and Application of Green Products Collaboration with Partners to Promote Green Development

Seeking technical innovations to promote green development we focus on three major areas to advance the R&D and Farasis Energy actively participated in the drafting and formulation of industry energy and carbon-related standards such as

application of green products. the Implementation Guide for Energy Efficiency Benchmarking of Battery Industry the Carbon Emission Accounting Standard

for the Whole Life Cycle of Power Battery and the T SQIA 062-2023 Technical Requirements for Carbon Footprint Assessment

of Rechargeable Industrial Batteries to strengthen its competitiveness in energy and carbon peaking and carbon neutrality

business.Case

Developing single- Enhancing specific energy Expanding product Promote wireless charging new energy vehicles and practice green mobility

cell No Thermal industrializing cells with a cycle life and improving

Propagation to capacity of 400 Wh/kg and economy. The 19th Asian Games grandly opened in Hangzhou on September 23 2023. During the Games JMEV's "Yi" with a

further improve safety developing prototypes with a wireless charging system appeared at the State Grid Hangzhou Xiaoshan Asian Games Village Charging Station. This

performance. capacity of 500 Wh/kg. first pure electric coupe of JMEV adopts Farasis Energy's high-performance NMC pouch power battery to achieve

an ultra-high discharge rate enabling 5.8s super dual-motor acceleration and 170 kW powerful performance and

contributing to the rapid development of China's new energy vehicles.Case

SPS Helps to Further Increase the Capacity of New Sites

To accelerate the implementation of the new technology of SPS to meet customer product needs we will invest in the

Ganzhou 30 GWh New Energy Battery Project (Phase I) and the Guangzhou 30 GWh Power Battery Manufacturing

Site Project (Phase I). We will build core high-quality power battery capacity based on our latest SPS technology in JMEV “Yi” State Grid Hangzhou Xiaoshan Asian Games Village Charging

these projects with a total investment of about CNY 4.3 billion. Station

SPS products feature advantages such as high performance low cost and high adaptability. The manufacturing of cells

and battery systems exhibits characteristics of high efficiency low investment and environmental friendliness. In terms

of driving range charging efficiency cost reduction efficiency enhancements and compatibility with vehicle models

these products can better meet customer needs enhance service efficiency reduce production costs and accelerate Case

capacity implementation thus improving our economic benefits and supply capabilities. Supporting Green Aviation with Innovative Battery Technology

Innovation in Cells Innovation in Systems Air mobility and transportation have been significant sources of high carbon emissions in the transportation industry in

The industry's first module-free pouch integration The industry's first module-free pouch integration

technology technology response to which Farasis Energy has been strengthening technology input to advance the R&D progress of electric

● Leading chemical materials and all-tab design ● Horizontal arrangement of cells with a volume aircraft and ensure technology security. The safety of the NMC pouch battery cell launched by Farasis Energy is

ensuring the superiority of cells utilization rate of 75%

● Fully compatible with all chemical material ● One type of cell compatible with all series of superior to the relevant national standards and requirements and has passed safety tests required in standards such

systems passenger vehicles

● 2.2C-6C ultra-high charging/discharging rate ● Lightweight design with a reduction of system as FAA AC-20-184/RTCA DO-311. The battery system adopts "immersed" management and comprehensively monitors

● Charging for 10 minutes with a range of 400 km components by 50%

available ● Proprietary thermoelectric separation technology the battery pack. It can achieve no open flames within 24 hours

● Semi-solid and solid electrolytes significantly for great safety protection

enhancing intrinsic safety ● AI BMS3.0 cloud-ground big data in combination after thermal propagation is triggered. Furthermore the AI BMS

with intelligent control

● Composite use of high-efficiency liquid cooling can have a dual backup design that ensures normal operation

plates and heat conduction sheets increasing

heat dissipation efficiency by 4 times even in case of failure. In terms of safety materials the phase

Innovation in Recycling Innovation in Manufacturing change material independently developed by Farasis Energy

The industry's first module-free pouch integration The industry's first module-free pouch integration is characterized by ultra-low thermal conductivity high specific technology technology

● Innovative direct recycling technology heat capacity high phase change enthalpy and light weight ● Significant improvement in the investment return of

● Utilization rate of recycled cathode materials pouch cells

increased to over 99% and its strong heat absorption efficiency can reduce the surface ● Reduction of equipment investment by 50%

● Direct and complete restoration of the original temperature of thermal propagation cells to below 100°C for

chemical and physical composition of high-quality ● Reduction of plant area by 60%

cathode materials while maintaining their crystal ● Reduction of manufacturing costs by 35%

structures more than five minutes.● Reduction of energy consumption costs by 30%49 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 50

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

Combination of Optimization Measures

In 2023

Water consumption Water consumption intensity Total consumption of recycled water

Farasis Energy exercises scientific management and provides green energy

to protect the environment and build a better life with its environmental Certificate CN11/30688.00 Tonne/per Tonne

management system continuously improved. The management system of 2032662.75 123.67 611234.60 Farasis Energy (Ganzhou) Co. Ltd.Farasis Energy (Zhenjiang) Co. Ltd. Tonne CNY 1 million of operating

Farasis Energy has established environmental objectives targets and Unified Social Credit Code: 913607006984663896 Business Registration Address: West Side of Caidie Road and North Side of Jinling West Road Ganzhou Economic income

Technology Development Zone Ganzhou City Jiangxi Province P.R. China

Business Operation Address: West Side of Caidie Road and North Side of Jinling West Road Ganzhou Economic

management programs as well as procedures and systems including the Technology Development Zone Ganzhou City Jiangxi Province P.R. China has been assessed and certified as meeting the requirements of

ISO 14001:2015

Environmental Factor Identification and Evaluation Management Procedures For the following activities

Design and manufacture of lithiumion batteries

Management Procedure of Water Gas and Noise Pollution Waste Management Sustainable Packaging

Procedure Management Procedure for Energy Resources Environmental

This certificate is valid from 23 June 2023 until 22 June 2026 and remains valid subject to satisfactory surveillance audits.Management Scheme Management System of Sewage Treatment Station Issue 2. Certified since 22 June 2011

Multiple certificates have been issued for this scope the main certificate is numbered CN11/30688.00

Certified activities performed by additional sites are listed on subsequent pages.Management System for the Simultaneous Design Construction and Operation Farasis Energy incorporates environmental considerations into its daily

of Occupational Health Facilities in Project Construction and EHS Responsibility packaging and transportation logistics management and keeps optimizing

Management Procedure. Through continuous monitoring and periodic review and improving packaging to improve loading rates and reduce logistics costs.Authorised by

Jonathan Hall

Farasis Energy optimized hazardous waste management sewage treatment Global Head - Certification Services Farasis Energy increases packaging recycling mainly by using recyclable

SGS United Kingdom Ltd

Rossmore Business Park Ellesmere Port Cheshire CH65 3EN UK

station management and etc. with cases including regular on-site inspections t +44 (0)151 350-6666 - www.sgs.com packaging materials such as material racks plastic boxes and pallet collars

by the safety and environmental audit team established by the EHS Department and reduces the use of disposable packaging such as cartons wooden boxes

and the customer noise reduction around the stereoscopic warehouse of the foam boxes and plastic wrap. In 2023 with packaging recycling considered at

Ganzhou factory and special inspections organized by the EHS Management This document is an authentic electronic certificate for Client’ business purposes use only. Printed version of the electronic certificate are permitted and will be considered as a copy. the packaging design stage Farasis Energy eventually realized the transition This document is issued by the Company subject to SGS General Conditions of certification services available on Terms and Conditions | SGS. Attention is drawn to the limitation of liability indemnification and jurisdictional clauses contained therein. This document is copyright protected and any unauthorized alteration forgery or falsification of the content or

appearance of this document is unlawful.Department which effectively improved the EHS management performance. Page 1 of 2 from paper packaging to recycled packaging. Among its products we

packaged PCBA parts with recyclable plastic boxes and recyclable vacuum-

The proportion of the Farasis Energy ‘s sites with ISO 14001 environmental management system certification reaches 100% formed trays avoided single-piece packaging for battery packs harness parts

and the sites fully implement the requirements of ISO 14001:2015 issued by the International Organization for Standardization. and module end plates and promoted multi-piece packaging to reduce the

use of plastic resources.Furthermore the sites strengthen environmental protection training covering environmental protection laws and waste

management requirements for all new employees. In 2023 100% of employees received environment-related trainings. In the meantime Farasis Energy launched a packaging recycling project to

reuse and recycle packaging from suppliers with iron racks plastic boxes

For more information about environment management please refer to our Environmental Management Statement. and other circular packaging currently used as outer packaging for domestic

customers.Ganzhou Site1

Advancing Efficient Resource Utilization Proportion of recyclable packaging used2 Recyclable packaging used Carton used

56.76 % 56408 Set 42966

Farasis Energy continues to deepen green management adopts energy and resource control measures and systemically

optimizes management.Zhenjiang Site

Proportion of recyclable Recyclable packaging Carton Wooden crate

Water Resources Management packaging used3 used

2.30%1447157086843577

All sources of water for Farasis Energy are from municipal water supplies. In terms of water resource management we use

steam thermal energy to replace electricity for heating with steam condensate recovery devices added to recover condensate

and steam for reuse and reduce the waste of water and steam resources. P ackaging material data comes from the incoming volume of Ganzhou and Zhenjiang site. The recyclable packaging at Ganzhou site consists of material

racks while that of Zhenjiang site consists of material racks plastic boxes and pallet collars. Zhenjiang site increased the use of small packaging with

export volume in 2023 replacing the original large packaging and leading to an increased carton packaging and decreased proportion of recyclable

In 2023 Farasis Energy was not involved in water resource impacts caused or facilitated by water withdrawal consumption packaging consumed.and discharge or directly produced by its operations products or services through business relationships. 2 Proportion of recyclable packaging used at Ganzhou site = recyclable packaging consumed ÷ (consumption of recyclable packaging + paper box

consumed)

3 Proportion of recyclable packaging used at Zhenjiang site = recyclable packaging consumed ÷ (paper box + wooden box + consumption of recyclable

packaging)51 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 52

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

Waste Gas Management

Farasis Energy emits waste gas generated during its production and operation after treatment by the waste gas treatment

facilities to meet standards and monitors waste gas regularly. We regularly inspect and maintain waste gas treatment devices

and as required by regulations regularly monitors the organized emissions of VOC exhaust funnels in the factory area and

unorganized emissions of VOCs at the factory boundary.In terms of preventing air pollutant emissions Farasis Energy's NMP (N-methyl pyrrolidone) waste gas recovery and treatment

system adopts a "condensation + three-layer water spray" recovery process with treatment efficiency of above 98% and we

emit other waste gases externally through workshop ventilation treatment facilities. We regularly detect factory boundary noise

and reduce the impact of noise on the surroundings through methods such as wall sound insulation and range attenuation.In terms of reducing dust and particulate matter emissions Farasis Energy's areas that generate dust are mainly the mixing

process areas where we use negative pressure feeding technology to reduce dust generation and emit dust according to

standards after treatment by dust removal equipment.In 2023 Farasis Energy’s organized NMP waste gas emissions met the emission standard required in the Emission Standard of

Pollutants for Battery Industry (GB30484-2013) with NMP waste gas less than or equal to 50 mg/Nm3.Committed to Natural Ecosystem Conservation

Farasis Energy fully complies with all applicable environmental laws and regulations and industry standards such as the Law of

the People's Republic on Prevention of China and the Control of Environmental Pollution Caused by Solid Waste Atmospheric

Pollution Prevention and Control Law of the People’s Republic of China Integrated Emission Standard of Air Pollutants

and Emission Standard of Pollutants for Battery Industry as well as local laws regulations and implementation rules and

regulations.Management of Wastewater Waste Gas and Solid Waste Total waste gas emissions Waste gas emission intensity

85717.35 10000 m3 5.22 10000 m3/CNY 1 million of operating income

For wastewater waste gas noise and solid waste generated during production and operations we have a management system

in place and conducts regular monitoring to ensure that wastewater waste gas and noise are discharged or emitted and solid

waste is disposed of according to standards. Farasis Energy also has an environmental self-monitoring program in place and 1342.60

entrusts a qualified third-party monitoring agency every year to regularly monitor wastewater waste gas and noise.Wastewater Management 793.10

The wastewater generated from sites includes domestic sewage and production wastewater. We separate rainwater and sewage

for drainage in which domestic sewage and production wastewater are collected and treated till they meet discharge standards

before being discharged to meet the requirements of the Emission Standard of Pollutants for Battery Industry.

104.60104.00

Total wastewater discharge Wastewater discharge intensity Volatile organic compounds Nitrogen oxides Particulate matters Sulfur oxides

(VOCs) emissions (NOx) (PM) (SOx)

279046.00 Tonne 16.98 Tonne/per CNY 1

million of operating income Unit: Kilogram53 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 54

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

Waste Management

Case

Farasis Energy collects the generated solid waste by Exploring NMP Recycling to Reduce Product Environmental Impact

categories and first transfers non-hazardous waste

to a dedicated waste bin for storage management N-methyl pyrrolidone (NMP) is a solvent commonly used in lithium-ion battery production to dissolve lithium compound

before handing the waste to a qualified waste disposal and polymer electrolyte so that the binder fully comes into contact with other substances and is evenly distributed.company for disposal. For hazardous waste Farasis Lithium-ion batteries account for more than 70% of NMP product applications and the recycling of NMP not only helps

Energy has a management plan for hazardous to reduce costs but also plays a positive role in the product's environmental footprint.waste declaration in place linking waste generation

storage and outbound transfer to the environmental Farasis Energy recovers NMP volatilized from the cathode coating process through our NMP recovery device and

protection information management system and we the recovered NMP is returned to its original manufacturer. The NMP manufacturer then uses distillation equipment to

commission a qualified disposal agency for compliant purify and process the waste liquid so as to ensure that the parameters of the purified NMP are consistent with those

disposal of all wastes. Furthermore we strictly comply Posting of waste classification markings synthetic new ones and supplies them back to Farasis for reusing in our production lines.with national laws regulations and standards for

hazardous waste management regularly supervise

and inspect the management of hazardous waste

warehouses and urge rectification.For recyclable wastes such as scrap metals and

waste cartons Farasis Energy commissions agencies

with technical capabilities to carry out comprehensive

ut i l izat ion according to indirect procurement

management methods and bidding management Biodiversity Protection

procedure. Posting of hazardous waste classification markings

7922.69 Tonne 0.48 Tonne/per CNY 1 715.91 Tonne 0.04 Tonne/per CNY 1 382.73 10000 CNY Farasis Energy complies with relevant laws regulations and policies such as the Law of the People’s Republic of China on

million of operating income million of operating income Environmental Impact Assessment Opinions on Further Strengthening Biodiversity Protection Soil Pollution Prevention and

Control Law of the People’s Republic of China and Regulation on Groundwater Management as well as local laws regulations

and implementation rules and regulations.Currently Farasis Energy has no operational sites owned leased adjacent to protected areas and areas of high biodiversity

value outside protected areas. In 2023 Farasis Energy had no significant impacts of activities products and services on

biodiversity.Total general General waste Total hazardous Hazardous waste Environmental

waste intensity waste intensity protection costs55 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 56

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

03 Our Progress:Farasis Energy one of the world's earliest companies to specialize in the NMC pouch battery

technology has successively passed performance certification by the United States Council

for Automotive Research the Federal Consortium for Advanced Batteries and the Sandia

National Laboratories by virtue of its advanced scientific research capabilities and high-

Accumulating Strength and performance and high-safety products with the quality of its pouch batteries recognized and affirmed by electric aircraft enterprises OEMs and other customers.Seizing Industrial Opportunities Our Performance:

1483 R&D employees accounting for about 22.6% of all employees.

155 patents applied for this year with a total of 485 patents applied for; 80 patents

granted this year with a total of 293 granted patents.

51 quality-related procedure documents added and updated this year with more than

200 matching three-level system documents updated and added.

Creating Cutting-edge Technology 987 customer complaints with a closure rate of 95.85%.Overall Consolidation of Quality Management

Fully Protecting the Rights and Interests of Customers

Perfecting Information Security Management57 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 58

About This Message from About Farasis Farasis Energy ESG Shaping Corporate Governance with Showcasiing Detterrmiinattiion on Grreen Devellopmentt Accccuumuullaattiinngg Sttrreennggtthh aanndd Seeiizziinngg Managing with Due Diligence and Seeking Stimulating Talent Vitality with Benefiting Society Through Kindness

Report the Chairman Energy in 2023 Governance Compliance Concepts tthrrough Low--carrbon Prracttiices IInndduussttrriiaall Oppppoorrttuunniittiieess Common Development High-Quality Environment and Actions Appendix

Creating Cutting-edge Technology Case

Regular Cooperation with Global Higher Education Institutions

In 2023 Farasis Energy launched a collaboration with Tsinghua University in the field of safety technology development

Product Research and Innovation for vehicle power batteries with collaboration projects covering power battery system thermal runaway propagation and

thermal management technologies power battery anode lithium-plating detection and fast charging control technology

power battery safety early warning fault diagnosis and life monitoring technology solid-state battery technology

and power battery intrinsic safety and design technology which has achieved notable results. The collaboration has

Farasis Energy has been adhering to the development principle of focusing on technology R&D first before pursuing capacity established a thermal propagation characteristic parameter database for our all cell series and built a module-level

enhancement in the context of convergence of power battery technologies. Farasis Energy has been making systematic efforts heat-gas-electricity simulation coupling model with accuracy of 80% or higher which reaches the industry's leading

in cells system structure innovation and the life cycle management system to ensure its deep involvement in global competition. level and provides a direction for the future development of sulfide solid-state batteries.In 2023 Farasis Energy integrated global resources to build a global R&D team of 1483 members with R&D employees

accounting for 22.6% and the number of core technicians reaching 11 which provides support for stimulating Farasis Energy’s

new quality productive forces. Forward-looking and Leading Technology Reserve

Farasis Energy is one of the earliest companies in the industry to establish the ternary chemical system and pouch power

Globalized Open Innovation System battery structure as the direction of power battery R&D and industrialization. Its core technical team is developing cutting-

edge technologies for future battery development and has made technological breakthroughs in the areas of semi-solid/solid-

state lithium-ion battery technology sodium-ion battery technology high energy density power battery cell technology and new

chemical and electrochemical energy storage technologies.In 2023 Farasis Energy restructured its R&D system and built R&D institute and Engineering institute dual-systems. This meansthe R&D institute is responsible for frontier technology R&D and transformation while the Engineering institute is responsible Under the technology development concept of “one generation in production one generation in reserve one generation infor product development product management and industrialization and realized flexible integration of advantageous R&D development” Farasis Energy industrializes its technical reserves and reserves multiple core technologies of next-generation

resources in China United States and Germany. power batteries.Farasis Energy's Engineering institute has been recognized by authoritative institutions for its work quality and standard and This solution has entered the stage of industrialization and is expected to improve the

has been assessed as a "Jiangxi Province New Energy Vehicle Lithium-ion Power Battery Enterprise Technology Center" volumetric cell-to-pack ratio by more than 30% and reduce the number of structural

"Jiangxi Province New Energy Vehicle Power Battery Engineering Technology Research Center" and "Jiangxi Province High Super pouch solution components in the battery system by 50% compared to conventional technology and

Specific Energy and High Safety Power Lithium Battery Engineering Research Center". (SPS) significantly lower costs. We have already developed and applied this solution to multiple

Moreover Farasis Energy fully utilizes external top resources and conducts R&D cooperation with international scientific passenger vehicle projects;

research institutions well-known organizations and industry top experts in power batteries including international top research

institutions in lithium-ion battery such as Argonne National Laboratory Lawrence Berkeley National Laboratory Berkeley Farasis Energy’s first global sodium-electric model equipped with the first-generation

University Stanford University Tsinghua University Tongji University Harbin Institute of Technology Beijing Institute of Sodium-ion technology sodium-ion battery has rolled off the production line and we expect costs to be development and

Technology and Jiangsu University as well as international well-known enterprises such as BASF DuPont and 3M to ensure application significantly lowered after the second-generation sodium-ion batteries mature and are put

the positive shift of products from "available" to "favorable". into mass production which will support the rapid promotion of new energy vehicles;

Development of

lithium-ion batteries Farasis Energy independently and innovatively developed lithium-ion batteries for energy

for energy storage and storage and medium and heavy commercial vehicles have completed the pilot test and

medium and heavy

In 2023 commercial vehicles verification and are feasible for industrial applications;

R&D investment Our product has entered the stage of industrialization with LFP cells having an energy

Development of density of over 200 Wh/kg and industry-leading cycle life. When combined with SPS

power batteries with

7.49 R&D expenses long cycle life technology the product can support a range of 600 km on a full charge for complete CNY 100 million of total operating vehicles.

revenue

4.56 % Development of high- This product is currently in development and has energy density and cost advantages Increase in R&D expenses performance LMFP

battery over LFP batteries.

25.25 % Going forward Farasis Energy will continue to make breakthroughs in semi-solid/solid-state lithium-ion battery technology

sodium-ion battery technology high energy density power battery cell technology new chemical and electrochemical energy

storage technologies and cathode and anode material R&D technology.59 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 60

Steady Advancement of Process Innovation

Customized This system integrates advanced technologies and concepts in the fields of automation informatization

i-Factory MES and digitalization and serves as a manufacturing management platform that combines automatic

Farasis Energy highly encourages employees to innovate by taking various measures and issues special rewards to inventions system information collection and process visualization.with major technological breakthroughs assessed by its Patent Review Committee as S-level patents.We urge all employees to participate in process innovation which has led to notable results in cell and module process Group

improvement. In 2023 Farasis Energy reduced costs by more than CNY 65 million through module process innovation. enterprise We have fully integrated the ERP system and systems such as MES WMS and PLM to realize information-

resource based digital and intelligent management of the whole process.planning (ERP)

system

Product This integrated R&D management platform has functions including new product development design

lifecycle

Twin-screw slurry preparation Optimization of pack simulation analysis process planning and manufacturing simulation optimization to realize design management

system for anodes disassembly process collaboration optimize products and production processes and fully ensure continuous optimization of (PLM) system product service and product use feedback.High-speed slurry preparation Optimization of tightening

system for cathodes process BI intelligent The platform enables scalable model building and extends to all levels of management in the company

decision-making ensuring real-time grasp and tracking of operation status by managers and achieving real-time perception

and analysis

Rolling slitting and die-cutting Optimization of air tightness platform of and response to work effectiveness.integration test process

Laser welding equipment Cooper bar voltage drop test Farasis Energy has achieved the integration and optimization of the whole process of R&D management procurement

development process management production management energy management environmental protection and safety logistics and warehouse

management supply chain management sales management and etc. through intelligent factory construction which promotes

its intelligent manufacturing transformation and upgrading and significantly improves the production efficiency.Shortening of self-discharge Optimization of charge and

standing time discharge tests Integrated Molding from Raw Materials Cells to Pack

Advanced configuration in the industry with 800

Testing Packagin

g robots in use; automated manufacturing of cells with

Inspection Assembl

ing

Automation an automation rate of up to 98.5%

Full realization of MES system with information

traceable for 20 years

Informatization

Digitalization for Excellent Development Introduction of the IoT and big data into the intelligent

manufacturing system to realize intelligent detection

g Rolling and slitting Coating

Mixing

Stackin Intellectualization intelligent logistics intelligent judgment intelligent

processing and intelligent storage

Farasis Energy has built an information system covering R&D procurement production quality logistics and other business

processes focusing on digital production digital quality digital logistics and digital maintenance to build a digital factory in an all-

round way.We have introduced intelligent equipment to the whole process of cell and module manufacturing to

Equipment realize integrated molding of pouch lithium-ion power batteries and we employ digital technologies in

hardware the equipment manufacturing process to realize intelligent detection intelligent judgment intelligent

level processing and intelligent storage.We have integrated conventional industrial control technology with IT Industrial IoT technology and

Equipment big data technology to complete the integrated control of the intelligent devices industrial system and

softwarelevel information system connecting and achieving intelligent management of the whole process of “rawmaterials → cells → module PACK → warehousing → sales”.Interior View of Intelligent Manufacturing at Zhenjiang Site

Cell process innovation project

Module process innovation project61 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 62

Intellectual Property Protection We strengthen publicity and training on intellectual property protection. By working with local protection centers external

specialist agencies and industry associations we carry out trainings and seminars on intellectual property protection and

promote IPR-related legal knowledge to enterprises and the employees to enhance their legal and risk awareness.Optimizing Intellectual Property Management In 2023

we applied for 155 patents with a total of 485 patents as accumulated. There’re 80

granted patents this year with a total of 293 granted patents patents as accumulated.In 2023 focusing on R&D and marketing tasks Farasis Energy adjusted the ownership of the intellectual property management

department and assigned dedicated personnel to conduct standardized management. We were awarded the titles of National Intellectual Property Advantage Enterprise and

Ganzhou Intellectual Property Advantage Enterprise.Indicator incentives

In terms of workflow Contribution to Industry Progress

Organizational structure While improving our innovation mechanism we have actively participated in the formulation of industry-related standards and

promoted the industry development and progress through good practices and knowledge sharing.Sponsors Name

To boost the quality of Alliance of Technological Innovation New Energy Vehicle Waste and Used Power Battery - Logistics

patent applications and in Compulsory Resources Recycling Information Traceability Management Requirement

encourage more active IndustryWe established and

improved an intellectual participation we offered Industrial Alliance of Technological Innovation New Energy Vehicle Waste and Used Power Battery - Evaluation for

We restructured the in Compulsory Resources Recycling Logistics Service Qualityproperty management R&D personnel higher standardsIntellectual Property levels of patent rewards Industrysystem to form an “internalDepartment from the Legal drive” and embedded in the industry as index China Industrial Association of Power Product Category Rules (PCR) for Power and Energy Storage

Compliance Department to incentives. Sources SGS Batteriespatent work throughout the

the Engineering Institute R&D lifecycle especially

forming a research-centric in the R&D process to

organizational structure; promote R&D for patents; China Electronic Energy Saving Standard for Pouch Lithium-ion Power Batteries

Technology Association

China Electronic Energy Saving Guidelines for Carbon Footprint Evaluation of Lithium-ion Battery

Technology Association Products

China Electronic Energy Saving Requirements of the Greenhouse Gas Emissions Accounting -

Technology Association Lithium-ion Battery Enterprise

China Electronic Energy Saving Test Methods for Energy Efficiency of Lithium-ion Battery Products

Technology Association

China Industrial Association of Power Implementation Guide for Energy Efficiency Benchmarking of Battery

Sources Industry - Part 1: General Rules

Implementation Guide for Energy Efficiency Benchmarking of Battery

We are further committed to continuously improving the efficiency of intellectual property work optimizing the whole process of Group Industry - Part 2: Battery Product

patent management and realizing a rapid increase in patent term. We invested more professional intellectual property talent standards Implementation Guide for Energy Efficiency Benchmarking of Battery

resources to keep intellectual property working more closely with the R&D. Industry - Part 3: Cathode Material

Implementation Guide for Energy Efficiency Benchmarking of Battery

Industry - Part 4: Anode Material

Implementation Guide for Energy Efficiency Benchmarking of Battery

Optimizing Intellectual Property Management Practices Industry - Part 5: Separator

China Energy Conservation Association Carbon Emission Accounting Standard for the Full Life Cycle of

China Society of Technology Economics Power Battery

China Automotive Battery Innovation Specification and Dimension of Power Battery Module for Electric

Alliance Vehicles

Farasis Energy has taken a number of measures to prevent and control intellectual property risks. On the one hand we Guangdong Technical Committee for General Technical Requirement for Portable Energy Storage Power

strengthen the monitoring and analysis of external information and keep abreast of market dynamics and competitors; on Standardization of Power Batteries Supply

the other hand we enhance the supervision and inspection of internal management to secure the compliance and legality of Shenzhen Quality Inspection Association Technical Requirements for Carbon Footprint Assessment of

intellectual property rights. Rechargeable Industrial Batteries63 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 64

Overall Consolidation of

Quality Management

Since its establishment Farasis Energy has attached great

importance to quality management and put product safety and

quality first. We have passed the ISO 9001 and IATF 16949 quality

system certification and UN38.3 CQC ETL and other product

certifications characterizing the quality management mode and

method of Farasis Energy.Intensive Quality Management

With the rapid iteration of technological development and the continuous improvement of customer requirements we're Closed-loop Implementation of Improvement Measures

managing the quality management system dynamically. In 2023 we updated the quality manual annually added and updated

51 procedure documents and updated and added more than 200 third-level system documents to secure the product quality

improvement. In the case of continuous improvement of the management system we effectively promote the implementation of quality

improvement measures.We fully implemented IATF16949 quality management system including optimizing the control process of quality management

using quality management tools to prevent product quality hazards and risks and improving the systematic total quality At Zhenjiang site we built a failure analysis room of about 500 square meters which was put into service in August 2023

management. basically realizing the failure analysis and validation inside and outside the factory. Since it was put into use the analysis room

has effectively supported the failure analysis and greatly reduced the duration of customer complaint analysis. It provides data

We continued to strengthen the construction of internal audit system and set up the company-level professional internal audit support for risks such as foreign objects and R-angle damage in the process and helps the Quality Management Department

team for special audits during the year including but not limited to the new production site put into operation PPAP pre-audit improve its business in multiple dimensions.key customer visit pre-audit and joint and special multiple-site audit to ensure the implementation of quality management in all

aspects. At Ganzhou site we set up a series of key performance indicators for regular monitoring and evaluation including product

yield rate product safety accident rate and customer satisfaction. We conducted quality audits made in-depth analysis of the

We introduced external professional resources with SGS BV TUV VDA and other world-renowned third-party organizations to problems found and carried out closed-loop quality management through the quarterly case sharing session on key issues and

escort the improvement of the corporate quality management level. the quarterly QCC results conference. In 2023 the first time capacity (FTC) rate of PACK in Ganzhou Site exceeded 99% which

is at the leading level in the industry.Case Building a Quality Culture with Full Participation

Digital Solutions Help the Implementation of Quality Management throughout the Life Cycle The fundamental guarantee for continuous quality improvement comes from the improvement of quality awareness and active

participation of all employees. In 2023 we built a quality culture with full participation through training and cultural promotion.In 2023 we introduced the QMS collaborative platform covering the whole product life cycle and realized the The Group organized company-level VDA 6.3&6.5 training in August 2023 covering personnel from relevant departments of the

full implementation of the product life cycle quality management concept in practice involving design quality quality system. A total of 80 trainees obtained the VDA 6.3&6.5 internal auditor qualification enhancing the effect of our product

incoming quality process quality after-sales quality and change management. quality supervision.Technically QMS integrates WMS MES ERP OA and PLM and realizes data statistical analysis risk At Ganzhou site the cumulative number of participants in the "Quality Month" reached 1004 throughout the year. Ten quality

profile application of lessons-learned project status management report presentation and other functions lectures invited industry experts research institute doctors and internal trainers and attracted more than 1000 participants. We

through the structured functional design. We comprehensively improved the quality business process control organized a quality essay contest and received 74 quality essays in total demonstrating employees' commitment to quality and

capabilities and helped improve both product quality and service quality. dedication. We launched quality incentive activities by setting the Monthly Quality Star Award (individual) Monthly Quality Star

Award (team) and Monthly Quality Prevention Contribution Award. The number of annual quality incentive award recipients

reached 1043 person times and the cumulative incentive material bonuses were about CNY 160000.65 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 66

Case Fully Protecting the Rights and Interests of

Publicity Posters for Full Quality Participation Customers

Customer first is not just a slogan but a philosophy an attitude and an action. It is woven into every aspect and detail throughout

the work process of Farasis Energy.Constructing a Rapid Response Mechanism

We strive to build a rapid response mechanism. For the quality problems on the client side we have formed communication

channels like real-time online Teams meeting reporting between departments and customers regular weekly meeting reporting

system SCQ special quality reporting and 8D Steering meeting.Through various forms of reporting we report the progress of customer complaint quality problem analysis and improvement

measures timely to customers solve client quality problems quickly and effectively and improve product quality to customer

satisfaction.Following up Customer Complaints in Closed Loop

We set up a sound customer complaint and follow-up process and standardize the process of handling customer complaints

involving Quality Department After-sales Service Department Material Control Department Process Department Research

Institute and other important departments. These efforts are fundamental to solving relevant problems to improve the product

quality and to increase customer satisfaction.Product Safety and Recall

In terms of product recall we conduct test analysis and formulate disposal measures for vehicle power batteries within the scope Classification of customer Customer feedback Containment measures

of our recall in accordance with the Administrative Regulations on Recalls of Defective Automobile Products the Measures for complaint and communication

the Implementation of the Administrative Regulations on Recalls of Defective Automobile Products and the Regulations on the confirmation

Analysis and Management of Product Recall Parts and level out to all projects in time. We had no recalls in 2023. Root cause

analysis

With multiple efforts our product quality performance gained recognition from a number of OEMs and third-party agencies. and long-

term action

formulation

Failure cause analysis and Entry and requisition of

temporary measures customer returned products

Annual Quality National

Annual Contribution Quality Leading National Quality

Excellent Award of Enterprise in and Integrity

Quality Award Supply chain the New Energy Benchmarking

Partners Industry Enterprise Statistical analysis and continual Horizontal deployment and Statistical analysis and

improvement of customer returned standardization of long-term continual improvement of

products measures customer return products

Procedure for Handling Client Complaints67 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 68

Depending on the severity of customer complaints about quality problems we manage the problems by levels. The company

president shall respond to serious quality problems and problem escalation within 4 hours. Perfecting Information Security Management

Farasis Energy actively embraces digital transformation makes information security a priority in this process and

strengthens management continuously to ensure the steady progress of digital transformation.

987 946 Consolidating the Safety Management System

Closure rate of

customer complaints

95.85 1 Optimizing the Organizational Management Structure %

To standardize information security management we've established the Information Security Committee with General Manager

Total customer Number of as the top manager of the Committee; the vice General Manager of the IT Department as the representative of the information

complaints complaints closed security administrators and managers of relevant departments as members. In 2023 we further optimized the vertical

management system and improved the horizontal governance system such as process structure PMO and information security.Unit: No. During the year the Information Security Committee functioned properly. It reviewed the suitability conformity and effectiveness

of the information security management system reported the implementation of information security management system

policies and target indicators and reviewed and discussed the problems found in the operation of the information security

management system to further improve management system standards.Constantly Improving After-sales Service Director of the Information Security Committee

In 2023 we improved the way of service satisfaction survey by turning the after-sales service satisfaction survey directly to car- Deputy Director of the Information Security Committee

owners and enhanced the credibility and validity of the survey results to provide a basis for the evaluation of after-sales service

quality. Based on the survey results we tracked and optimized the existing after-sales service model and time-to-service to

facilitate Farasis Energy 's after-market brand building.Case

Strengthening the Collaboration between Automobile Enterprises to Improve the Efficiency

of After-sales Service

We co-developed the licensing service station in consultation with GAC customers. Subject to the troubleshooting

requirements of GAC products repairs used to be available in few designated locations only. It's often necessary

to replace the whole package by inter-provincial transfer. In 2023 Farasis Energy and GAC jointly explored the

optimization plan decided to co-develop the service outlet licensed by both sides and granted a maintenance license

to the outlet. Since then GAC product maintenance can be conducted at nearby maintenance outlets without shipping

to other provinces and cities. This greatly optimizes the efficiency of customer demand response.

1 Unclosed complaints from the U.S. and European customers concern the cycle of returning defective products to the selling country which affects the progress of problem analysis. Information Security Organization Structure

IT and Digitization Department

Quality Center

Manufacturing Management and EHS

Department

Legal Compliance Department

Human Resources Department

Finance Center

Ganzhou Site

Zhenjiang Site

Guangzhou Site

Yunnan Site

Ganzhou New Energy Site69 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 70

Perfecting the Supporting Mechanism Process Enhancing Safety Awareness of All Employees

Farasis Energy carries out information security mainly at three levels:

We integrate information security-related laws and regulations into the information security system construction and awareness

trainings so that all new employees have knowledge of information security laws and regulations.Terminal security: we install virus protection software and desktop management software. All office

terminals are managed by the AD domain controller in a unified manner and users are controlled by policies We handle incidents such as employee violations or leaks as per regulations and link them to employee KPIs and

to periodically change passwords lock screens and prevent illegal software installation; promotions.For new employees at the production line For new employees of functional departments

Data security: we establish the Data Network security: we deploy firewall

Protection Management Method for security devices at the network border The Human Resources Department organizes We conduct information security awareness

hierarchical management of data and and deploy online behavior devices 2-3 orientation training sessions every week training at least once a week. New employees

clarify information flow procedures and and IPS network intrusion prevention including information security awareness training have to sign in and pass the assessment.mechanisms to ensure information systems at the core level to resist DoS with training coverage of more than 98%. Training

security; (Denial of Service) and vulnerability requires sign-in and examination. The examination

attacks. totals 100 points and the passing score is 90

points. Those who fail must be reexamined.In 2023 we launched information security hardware and software systems e.g. office terminal industrial terminal antivirus

software bastion host file encryption WAF and IPS.With reference to the system construction standard of ISO 27001 we have established more than 30 information security

management procedures including the Information Security Management Manual the Information Security Incident Strengthening Information Security Audit

Management Procedure the Information Security Compliance Management System and the Data Protection Management

Method. In 2023 we updated 32 of them to provide a solid guarantee for information security.Assessing Information Security Risks

In 2023

We conduct regular information security risk assessments. We have established the Information Security Risk Assessment

Management Procedure which offers a complete process for information security risk assessment ranging from threat

Information security incidents occurred Number of attacks defended identification control measures and analysis risk assessment and analysis to risk treatment residual risk disposal and risk

4 control. For high-risk items we organize internal audits every year and report the problems found and corrective measures to 26843751 Time the Information Security Committee.

Strengthening Security Incident Response

Number of customer

Protection rate information leakage incidents

For information security incident response and management we’ve established the Information Security Incident Management

99.99 % 0 Procedure which has clear requirements on how to timely respond to information security incidents incident reporting and investigation. We have the Information Security Business Continuity Management Procedure available and conduct business

continuity drills at least once a year.In terms of incident reporting we’ve developed a failure escalation reporting procedure. Depending on the failure level we report

it to different levels of engineers and managers level by level to ensure efficient management.71 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 72

Third-party Data Security Management Battery Information Data Protection

To prevent unauthorized access or disclosure of third-party data we have established the Data Protection Management Method

to clearly stipulate the classification and flow of data. All our office terminals are equipped with file encryption software. To We attach importance to customers' requirements for information security of battery equipment and implement the information

send files for work reasons the employees shall submit an application for approval and the department head will authorize security management of battery keys on BMS (battery management system) device to strengthen battery information data

the decryption. Appropriate information security requirements is also available in the Information Security and Requirements protection. Our BMS used in products is certified to ISO 26262 ASILC.Management Procedure for Stakeholders. The Internet is isolated from the corporate Intranet by a boundary firewall and For the battery chip system we take the following actions to ensure information security:

employees can access the Internet only after submitting procedures.We are responsible for the identification review and management of the needs and expectations of stakeholders in line with

the Information Security and Requirements Management Procedure for Stakeholders. Stakeholders include but not limited to

(competent) government authorities industry associations customers suppliers employees and companies. We collect the

expected control list of their requirements annually for the development of their information security measures.Authentication and authorization Physical security: Physically protect the

management: Authenticate all software battery management system and delete

codes to ensure that only licensed exposed internal interfaces to prevent

Carrying out External Certification software versions are available;

hardware cracking;

We regard external certification as an effective means to strengthen information security management. With reference to ISO

27001 and TISAX system standards we have established a range of information security management systems such as the

Information Security Management Manual and the Information Security Risk Assessment Management Procedure. All the

manufacturing sites put into production obtained the TISAX AL2 certification label and the ISO 27001 information security Data encryption and backup: Encrypt Verification of the software validity:

management system is under planning. the BMS data and communication to Check the software before the system

In 2023 Farasis Energy was named the "Industrial Information Security Benchmarking Enterprise" of Ganzhou Economic and ensure data security; starts. Do not start the software if it is found to be tampered with illegally.Technological Development Zone Government after evaluated by the National Industrial Information Security Development

Research Center experts.Information Security Reporting and Feedback Channels We deploy a cryptographic system on all battery packs. It is composed of software and hardware systems and can generate a

unique password for each battery pack to improve the overall battery safety. After the battery pack is delivered to the customer

Reporting Channels Information Security Interface in case of serious safety accidents such as overvoltage undervoltage overcurrent and over-temperature in the power battery

BMS shall automatically lock the battery pack and prevent it from further use. We then ship the battery pack back to the factory

https://www.farasis.com/index/privacy Organization: Information Security Department for battery unlock and test analysis.Contact Details for Privacy Policy Email: pjning@farasisenergy.com.cn

Organization: Representative of information Tel: 0797-7329933

security administrators

Email: rongyu@farasisenergy.com.cn04 Our Progress:

While providing leading technology quality products and services for the global new energy

industry Farasis Energy cooperates with upstream and downstream enterprises to build

a mutually beneficial efficient and smooth industry value chain. This effort is to increase

the transparency of our supply chain to support the sustainable development of industry's

Managing with Due Diligence and collaborative ecological chain and to promote the high-quality development of the new energy industry.Seeking Common Development Our Performance:

Up to 282 suppliers and the scope of suppliers is primarily material suppliers and

suppliers with purchases greater than 10 million CNY.

100% of active cathode material suppliers covered by audits of supply chain due

diligence management system.A professional audit agency commissioned to carry out the annual supply chain due

All-round Supply Chain Management diligence management audit covering 19 critical mineral raw material suppliers including the on-site audit of sustainability related criteria.Enhancing Supply Chain Resilience

Sustainable Supply Chain Risk Management Farasis Energy Supplier Code of Conduct signed by 100% of target suppliers (based on internal supplier development and procurement control procedures).Responsible Mineral Management

As the end of December 23 100% of direct material buyers have been trained in

sustainable procurement.75 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 76

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

All-round Supply Chain Management

Depending on whether the purchased products and services make their way into the final products manufactured and sold

Farasis Energy splits the procurement business into direct and indirect material procurement.We have formulated the Supplier Development and Management Procedure to keep the suppliers’ quality of products and

services meeting our requirements. Before working with suppliers we sign with them the Confidentiality Agreement General

Terms of Procurement Supplier Code of Conduct Supplier Integrity Commitment Supplier Questionnaire and etc.For the collaborative process management we’ve formulated the Supplier Performance Evaluation and Appraisal to standardize

the supplier performance evaluation and appraisal process and to quantify the supplier performance evaluation indicators.Supplier performance evaluation is based on three parts: quality price and delivery. Suppliers are fallen into Tier 1 suppliers and

key non-Tier 1 suppliers according to the appraisal results and are then evaluated.Number of suppliers1: 282

143 Enhancing Supply Chain Resilience

103

We have developed the Emergency Preparedness and Response Management Procedure to respond to major environmental

and significant hazard incidents and abnormalities in the energy supply and to minimize the loss and hazard of major incidents.In terms of organizational structure we set up an Emergency Command Center whose members include the leader of the

Emergency Command Center (EHS Director concurrently) and members (directors or managers of departments). The leader

15 of the Emergency Command Center is responsible for the unified command and dispatching of the emergency scene and the

4 10 5 0 0 2 members are responsible for the implementation of emergency plans.

Northeast North East China South China Southwest Central Northwest Hong Kong Overseas For extreme weather we attach importance to typhoon and flood emergency preparedness and response since typhoons and

China China China China China Macao and floods may directly or indirectly affect the interruption of production line for supply chain raw materials sudden surge in material

Taiwan of demand and increased transportation costs.Unit: No. China

Total number of key suppliers2 Total number of Tier 1 suppliers3

Test and drills of emergency response plans

226245

Review of emergency response plans Resource assurance for emergency

Proportion of key Tier 1 supplier purchases preparedness and response

Total number of key Tier 1 suppliers4 to total procurement expenditure

226 84.05 % Emergency response Emergency response plans measures for specific

accidents

1 The scope of suppliers is primarily material suppliers and suppliers with purchases greater than 10 million CNY such as equipment and MRO excluding

logistics and professional services. Emergency Ex-post

2 Key suppliers are the Company’s Class A material suppliers and high-volume/non-replaceable suppliers in Class B/C. preparedness debriefing

3 Tier 1 suppliers are suppliers who directly supply products or services to the company.

4 Key Tier 1 suppliers are those key suppliers that supply directly to the company.77 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 78

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

Sustainable Supply Chain Risk Management Synergy of Upstream and Downstream Capacity

From February to March in 2023 we conducted energy carbon survey and technical exchanges with some key raw material

Supplier Code of Conduct suppliers in the annual carbon footprint verification obtained the actual product carbon footprint information from certain

suppliers and improved the preparation of existing carbon inventories.During the annual on-site audit of supply chain due diligence management we understood the suppliers’ work plans in

Based on our actual situation and business environment we update the Farasis Energy Supplier Code of Conduct which sets sustainability through on-site seminars and other forms and actively delivered the sustainability requirements from downstream

a series of sustainability requirements for suppliers in terms of labor human rights health and safety environment and business customers and terminal markets.ethics.Framework of the Farasis Energy Supplier Code of Conduct

In 2023

Proportion of direct materials Proportion of audited/assessed

purchasers trained in sustainable suppliers involved in improvement

procurement actions or capacity development

Labor Health and safety Environment Code of ethics Management system 100 100

Free choice of Occupational safety Environmental Company employment permit and reporting Corruption bribery commitment

and other illegal acts

Child labour and Emergency Management

young workers Pollution prevention preparedness and resource accountability and

conservation Money laundering responsibility Proportion of target suppliers

Working hours Work-related injuries assessed for corporate social

and diseases 1

Hazardous substance Protection of fair Legal requirements responsibility

Compensation and management competition and customer

welfare Industrial hygiene requirements %

Discrimination and Wastewater and solid Trade compliance 100

harassment Strong physical waste Risk assessment

work Information and management

Freedom of Exhaust emission disclosure

association and Machine protection

collective bargaining Intellectual property Improvement

Material limitation rights objective

Public health food

and accommodation Stormwater Fair dealing Training

management advertising and

competition

Health and safety Energy consumption Communication

communication and greenhouse gas Identity protection

emissions Responsible Mineral Managementand non-retaliation Employee feedback

policy and engagement

Responsible Audit and assessment

mineral sourcing As an industry practitioner we are fully aware of the potential risks of material adverse effects in the exploitation trading

Corrective action processing and export of mineral resources and are committed to our obligations to respect human rights not to fuel conflict

procedure and not to adversely affect the environment and society. Since 2018 Farasis Energy has become a member of the Responsible

Privacy Critical Mineral Initiative (RCI) continuing to improve the level and effectiveness of responsible mineral management with

Documentation and

records internationally harmonized standards and frameworks.Supplier In 2023 based on the laws and regulations of downstream customers and terminal markets and in compliance with the OECD

responsibility Best Practice Guidelines we updated and improved the Due Diligence Management Procedure for Responsible Mineral Supply

Chain basically completed the formulation of supply chain due diligence management system documents and the establishment

1 Target suppliers are those based on internal supplier development and procurement control procedures. of risk response processes and passed the audit of downstream customers.79 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 80

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

Risk Response Plan for Supply Chain Due Diligence Management Accepting the complaint or communication

The processing clerks are responsible Preliminary assessment

for recording the complaint and The clerks make a preliminary

communication in the complaint file. assessment of whether the complaint

and communication conform to the scope

of this complaint and communication

Complaint confirmation mechanism and communicate the relevant

Action items Tool name Frequency Within seven (7) business days information to corporate managers and

of receipt of the complaint and departments.communication the clerks provide a

written response to the complainant Complaint response

acknowledging receipt of the complaint The complaint investigation is conducted

Update supply chain map Supply chain map questionnaire Annually or when Farasis and providing steps and timing for immediately after receipt of the complaint.Energy ‘s supply chain changes resolving the complaint. The relevant personnel shall complete

the complaint-related investigation report

Update KYS/KYC data Understand your supplier/ Annually or when Farasis or action report and draw response

business partner questionnaire Energy ‘s supply chain changes Improvement action

conclusions within one month from the

Review chain of custody Review relevant documents When the partnership begins If the complainant is not satisfied with the date of commencement of the complaint.documents including purchase including purchase orders and in case of any changes investigation report or action measures

orders shipping records and shipping records and storage we shall conduct further investigation Monitoring and evaluation

storage records records and research to identify and implement The Supply Chain Management

the action plan that requires further Department reports to the Committee

Conduct risk assessment Supplier risk assessment template Annually or when Farasis development. If the complainant is still quarterly the complaints received

Energy ‘s supply chain changes unable to agree on improvement actions

resolutions and pending cases analyzes we may refer the complaint to a third party

Visit cathode material List of supplier field visits Annually or when Farasis the status and time frame for the resolution for mediation or engage external experts

manufacturers and refineries Incident reporting template Energy ‘s supply chain changes of complaints annually and evaluates for review and consultation. the effectiveness of complaint and

Update the risk mitigation plan Risk mitigation plan template Annually or based on the level communication mechanisms.of risk

Monitor supplier’s implementation Risk mitigation monitoring tools Annually or based on the level In 2023 Have undergone an ESG risk assessment in

of the risk mitigation plan of risk

the past 3 yearsDue diligence audit for

Conduct internal monitoring of Internal monitoring checklist and Annually or based on the level mineral supply chain 26

the implementation of Farasis report template of risk 17

Energy ‘s risk mitigation plan

199

Conduct supplier and stakeholder Meeting minutes template Regularly at least once a year

meetings Suppliers classified as

high ESG risk Suppliers Tier 1 Key non-Tier 1

We organize supply chain due diligence management training for employees involved in the procurement of critical mineral raw suppliers suppliers

materials. We often conduct such training annually to keep the knowledge structure regularly updated. During the annual supply 0 Unit: No.chain due diligence management audit we provide special due diligence management training for Tier-N suppliers with relatively

low due diligence system maturity identified in on-site audits.In 2023 our supply chain due diligence management system covered all active cathode material suppliers. We commissioned a

professional audit agency to carry out the annual supply chain due diligence management audit covering 19 critical mineral raw

material suppliers and carried out capacity building and rectification based on the audit results.To enhance communication and collaboration with affected areas upstream and downstream enterprises in the supply chain

government departments non-governmental organizations media and other stakeholders we have established and disclosed

the Complaint and Communication Mechanism for Supply Chain Management to build a dialogue and consultation platform for

the continuous improvement of our supply chain governance capability.During the reporting period we did not receive any complaints from the established open communication channels for

complaints.81 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 82

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05 Our Progress:

Farasis Energy always regards talent as its most valuable assets. We sign labor contracts

with all employees and make full contributions to social insurance to protect the legitimate

rights and interests of each employee. We value the introduction and training of talent recruit

and select talented people through a variety of channels and ways and offer a full range of

Stimulating Talent Vitality with vocational training and development opportunities. We attach importance to the safety of our employees in workplace protect their physical and mental health and provide them with a

comfortable and safe working environment. In 2023 Farasis Energy won the "Extraordinary

High-Quality Environment Employer Award" in 2023 by virtue of its excellent image of hirer's trademark and human resource management capability. This is a recognition of our outstanding achievements in

talent team construction and talent development.Our Performance:

A total of 6554 employees with female employees accounting for 27.34%.The suggestion box opened for 45 times and a total of 105 comments and suggestions

received online and offline with a response rate of 100%.Protecting Basic Rights and Interests of Employees

Creating a Fair Environment for Growth Employee satisfaction/ engagement up to 82%.Firmly Constructing a Safe and Healthy Line of Denfense

The second vesting period of the initial grant portion of the restricted stock incentive plan

Practicing Employer's Humanistic Care completed with the confirmation of 404 vesting officers in November 2023.

100% of the operation sites available certified by a third party to meet the ISO 45001

standard.83 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 84

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

Protecting Basic Rights and Interests of Employees

Total number of employees By gender in 2021

Protect Rights and Interests of Employees in Multiple Paths

Farasis Energy formulates and issues the Employee Manual which regulates the behavior of employees and provides guidelines for

daily work so that employees are fully aware of their rights and obligations. We strictly implement national policies on human rights 7113 6554

gender age and ethnicity and standardize labor management. In May 2023 Farasis Energy 's labor union set up a Labor Dispute

Mediation Committee to process conflicts in the bud better protecting the interests of employees and facilitating long-term development 4765 Male

of the enterprise. Percentage

of female 3430

Farasis Energy identifies and evaluates human rights-related topics in its daily operations or of external concern and formulated human employees

rights systems including the Remedial Management Procedure for Preventing the Employment of Child Labor and Remediation of

Child Labor the Management Procedure for the Protection of Underage Workers the Management Procedures for Labor Protection of 28.02 % Female

Female Workers the Management Procedures for the Prohibition of Forced Labor the Management Procedures for Complaints and 2021 2022 2023

the Prohibition of Abuse the Freedom of Association and Procedure for the Regulation of Negotiated Assemblies the Management 1335

Procedures for the Prevention of Discrimination and Sexual Harassment and the Management Procedures for Remuneration and

Benefits to protect human rights.Farasis Energy developed the Remedial Management Procedure for Preventing the Employment of Child Labor

By gender in 2022 By gender in 2023

Prohibition and remediation of Child Labor to prohibit all departments contractors and suppliers from recruiting minors under

of child 16. We check "three certificates" (ID card residence permit and health certificate) to ensure that the actual age

labor of the hired employees is at least 16 years old and meets the requirements of labor law and other relevant laws

and regulations. And we visit workshops to spot-check and verify the identity of employees at irregular intervals to

ensure that their age information is consistent with personnel information;

Farasis Energy established the Management Procedures for the Prohibition of Forced Labor to prohibit all forms Male Male

Prohibition of forced labor including freedom during rest time prohibition of forced overtime prohibition of subcontracting Percentage of Percentage of

of forced of prison laborers prohibition of withholding deposits or identification documents and lawful vacations and female employees 5016 female employees 4762

labor separations; 29.48 % 27.34 %

Female Female

Freedom of Farasis Energy’s labor union plays an important role in promoting the protection of employees’ rights and

association interests the building of corporate culture and the well-being of employees. Farasis Energy formulated the 2097 1792

and Freedom of Association and Procedure for the Regulation of Negotiated Assemblies and other Labor Union-

negotiated related policy documents and signed the Special Contract for Wage Collective Negotiation in Jiangxi Province

assemblies Special Collective Contract for Special Protection of Female Employees and Special Collective Contract for

Occupational Safety and Health.By level By age

Procedure and Policy System for Employee Management and Protection

66805913

Employee Management Employee Protection Safety Management 4351 32303200

3003

Job Grade Management Regulations Management Procedure for the Prohibition of Forced Labor Safety Accident 2230 2889

Management Regulations 2104

Employee Recruitment Management System Freedom of Association and Procedure for the Regulation of (including Work-related

Negotiated Assemblies 641

Measures for the Management of Charity Fund Injuries or Sudden

Management Procedure for the Prevention of Discrimination Illnesses)

414433599381590

Employee Welfare Management System 50 84 72 and Sexual Harassment Emergency Response

Employee Attendance Management System Remedial Management Procedure for Preventing the Plan for Special Events

Employment of Child Labor and remediation of Child Labor Involving Employees

202120222023202120222023

Employee Reward and Penalty Management

System Management Procedure for the Protection of Underage Unit: Person Unit: Person

Management & Staff Training Management System Workers Management1 Non-management ≤30 31-40

Production Operator Skill Training Management Management Procedures for Labor Protection of Female

Standard Workers 41-50 ＞ 50

Management Procedures for Complaints and Prohibition of

Abuse 1 The "management" refers to employees who are managers and above.85 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 86

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

Ensure Compliance in Recruitment

By academic qualifications

According to the Employee Recruitment Management System we have standardized recruitment processes such as

requirements elicitation selection of recruitment channels release of recruitment information recruitment execution and

5306 enrollment and etc. which defines the responsible person for each process node as well as the time to ensure the consistency

4684 and transparency of the recruitment process enhancing the recruitment experience of job seekers.

We audit recruitment information released in external channels and internal platforms to eliminate all illegal job expressions

3299 and ensure legality and compliance in recruitment interviews and enrollment. It also provides employees with opportunities for

career development and publicizes recruitment information internally and externally at the same time to ensure a transparent

recruitment process.

1451 1539 We follow the principle of equal pay for equal work and equal employment and treat candidates from Farasis Energy's system

1160 and the recruitment process regardless of gender age ethnic group religious belief disability and etc. to ensure the fairness of

the recruitment structure.

267315293

394138

We organize the study of internal laws and regulations as well as systems and procedures to avoid discriminatory behavior in

Doctoral and above Master Bachelor Others recruitment to raise awareness of obvious or potential discriminatory behavior and to strengthen the implementation of the

standard recruitment process.Unit: Person

We regularly review and improve recruitment systems and processes each year to ensure compliance with anti-discrimination

2021 2022 2023 laws and regulations including monitoring anti-discrimination efforts through the legal team. We will take immediate action to

correct any discriminatory behavior found.By post Annual new recruits

4882

4332 In 2021 In 2022 In 2023

Annual new recruits Annual new recruits Annual new recruits

2886229454135724

1483

11601433

617 600 By gender in 2021 By gender in 2022 By gender in 2023541

178181139

Management1 R&D Production Sales Number of new Number of new Number of new

female employees female employees female employees

Unit: Person 665 1565 1418

202120222023

Proportion of employees covered Proportion of employees covered Proportion of employees covered by

by formal collective agreements on by formally elected employee Labor Union or collective bargaining

working conditions representatives agreements at Ganzhou Site

Number of new male

100% 100 % 100 % employees Number of new male Number of new male employees employees

162938484306

1 A manager is an employee in the “managerial queue”.87 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 88

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In 2023

By type By level Number of internal referral Cost of hiring new employees Average recruitment cost

5599

5272 466 Person 1550013.01 CNY 1052.37 CNY

3002 Listen to Employees’ Resorts

2233

1445 We set up a channel for all employees to collect suggestions and complaints for Farasis Energy 's high-quality development and

774 reflect behaviors that are detrimental to Farasis Energy 's interests promptly. Employees can put forward suggestions through

61 141 125 283 181 176 the Labor Union or human resources center mailbox Corporate WeChat account or employee suggestion box including but not

limited to daily operation energy saving and consumption reduction revenue increase and expenditure reduction cost reduction

2021 2022 2023 2021 2022 2023 and efficiency increase and etc. The employees whose suggestions are adopted are rewarded according to the value of the

suggestions.Unit: Person Unit: Person

In 2023 Farasis Energy 's Labor Union opened the suggestion box 45 times offline jointly with the Audit Department online and

Social recruitment Campus recruitment White collar General employees offline received 105 suggestions on canteen food administrative management workshop management personnel management

and etc. The response rate of the suggestions reached 100% and won unanimous praise from the employees.We conducted an annual employee satisfaction/engagement survey for all employees on the current state of Farasis Energy 's

management leadership management style organizational atomsphere team division of labor and cooperation departmental

By age feedback company platforms and opportunities and communication at all levels. The final result of the survey was 81.8% with

an increase from 2022. Farasis Energy formulated improvement plans and measures from the incentive management system

strengthening the talent ladder optimizing organizational design and division of responsibilities and building the corporate

culture based on the results of the survey.

3728

3552 Employee satisfaction/ engagement survey results

80.1277.4081.80

1824202120222023

1733 Unit: %

1214 Case

951

Canteen Quality Improvement

In September 2023 the Labor Union promptly acted on

121 142 employee complaints about the canteen with related 123 6 7 30 departments by conducting employee communications

and a field visit on canteen operations. The Labor Union

Number of new Number of new Number of new Number of new proposed solutions based on the survey results to re-

employees aged ≤30 employees aged 31-40 employees aged 41-50 employees aged ＞ 50 tender the canteen supplier and replace that after two

months improving employees' dining experience. This

Unit: Person process solves the actual problems of the employees and 新食堂图片

2021 2022 2023 shows that we value the opinions of the employees and

are determined to improve their working environment.89 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 90

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

Diversity Equality and Inclusion Creating a Fair Environment for Growth

Farasis Energy complies with the multicultural backgrounds and cultural characteristics of job seekers encourages mutual Employee Training Channels and Methods

exchanges and cooperation of diverse backgrounds emphasizes a multicultural and inclusive corporate culture and provides

employees with diversified training and development opportunities to satisfy their career development needs. We formulated a talent development system covering Farasis Energy's regular employees part-time employees outsourced

employees and etc. in management competence enhancement professional competence enhancement basic competence

Farasis Energy is a globalized company with subsidiaries in many countries and regions. Farasis Energy actively seeks enhancement and learning guarantee and carries out enhancement training and lecturing activities on management ability and

employees with different backgrounds and cultures to enhance our ability to innovate and be competitive in the marketplace professional competence based on the current status quo and demand by in-house training or external training.even in different work scenarios. Farasis Energy organizes corporate culture activities encourages employees from different

cultural backgrounds to participate in internal cultural and work exchanges and enhances employees' sense of well-being at

work and corporate identity.Farasis Energy cooperated with universities and colleges to set up a Farasis Energy Class and

organized 12 periods of intensive training regular training and symposium for more than 200 fresh

For fresh college college students. In 2023 Farasis Energy launched the "Intensified Training for College Students to

students Farasis Energy" for 145 new college graduates including assessment intensified training internal

training external training symposiums and evaluation of outstanding college students;

By region Farasis Energy trained more than 6000 new employees with a participation rate of 100% and

a qualification rate of 100%; organized 12 company-level trainings by 52 hours and 6 courses

For new with a training attendance of 631 person times and a participation rate of 69%. Farasis Energy

6943 employees6376 accumulated 8 new apprenticeship training courses with a training attendance of 285 person

times a participation rate of 79% and 76 mentors and apprentices paired;

4622 Farasis Energy trains managers mainly in internal training supplemented by online platforms and

concentrates on the training of middle and senior managers. In 2023 Farasis Energy accumulated

For managers 2 periods of manager training and assessment from theoretical knowledge professional skills and

management skills with a training attendance of 154 person times;

177 Farasis Energy provides regular theoretical training new project introduction skills training

221141168

transfer skills training standard change skills training skills enhancement training and other

For production types of training for on-the-job production operators to keep adapted to changes and updates in

Chinese mainland Hong Kong Macao and Taiwan Overseas operators production lines and technology. Farasis Energy also encourages the training of multi-talented

Unit: Person workers and one employee can hold several positions;

202120222023

Farasis Energy piloted the online learning platform "Farasis Energy School" focusing on general

For all basic skills with the activity rate of employees therein reaching 80%. In 2023 Farasis Energy had

employees 32.54 hours of learning per capita for all employees.In 2023

20.00

17.48 Proportion of females Number of employees In 2023 Farasis Energy conducted management skills and professional skills training internally and externally with a training

in R&D positions with disabilities attendance of 28022 person times.

13.26 15.49 % 50 Person In 2023 Zhenjiang site

Proportion of females Proportion of Proportion of Proportion of employees from ethnic minorities

in management females in junior females in senior or disadvantaged groups Annual employee training coverage Total training hours of all employees

positions management management

(Manager level and above) positions positions %

(Supervisory level (Statutory senior 3.05 53.27 % 73999 hours

and above) managers)

Unit: %91 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 92

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

Case Farasis Energy abides by the Employee’s Personal Performance Commitment formulated by employees at the beginning of theyear and adopts the method of “Employee’s summary and self-assessment direct superior’s rating department head’s review“Farasis Energy Class” Cultivates Fresh Graduates for Farasis Energy and approval by the head of the first level of the department” to conduct employee’s performance appraisal and management.Farasis Energy carries out performance management every year to manage the formulation of Farasis Energy ‘s business

Farasis Energy cooperates with Gannan University of objectives and strategic decoding in a hierarchical and graded manner to realize the goal management of all employees.Science and Technology through "Industry-Academia-

Research" to set up Farasis Energy talent training site Farasis Energy developed a comprehensive performance communication system to fairly and equitably set the employee

and build the "Farasis Energy Innovation Class" to give performance goals. Appraisers and appraisees need to communicate and agree when setting performance objectives. The

full play to the enterprise and the university to serve the appraiser communicates with the appraisee about performance analysis results notification results application and etc.community and train high-quality applied composite and and helps the employee to find out the reasons for good or bad performance and to formulate an action plan improvement Our technicians and managers Internship stage

innovative talents to lead the development of the modern head to the school for classes debriefing measures and performance objectives for the next stage. Appraisees who disagree with the appraisal results have the right

industry. In the second semester of the third year the to appeal directly to the Human Resources Department or the department head within two working days of the performance

students of Farasis Energy Class receive enterprise + interview. If it fails the appraisee can re-appeal to a higher level until the issue is resolved with consensus.school dual teaching mode based on the industry-teaching

fusion cultivation to integrate the corporate culture

the development trend of the new energy industry the

production process of lithium batteries quality management Diversified Approach to Motivate Employee Growth

the English language of the intelligent manufacturing

profession career planning practice/visit teaching and Students come to the Specialized group

other teaching practice contents and comes to Farasis company for training building for students

Energy for internships in the fourth year which cultivates Farasis Energy formulated short- medium- and long-term option incentive programs to attract and retain outstanding talents and

high-quality technical talents for the industry. to enhance employee cohesion and competitiveness.We continue to invest more resources and strength in employee training and development build internal learning mechanisms

and education platforms and create a learning and growth atmosphere for a good corporate reputation. We adjust the annual salary We granted restricted stock incentives to 555 core

for core employees and employees as planned for the first time in 2021

Fair and Transparent Development Path commend annual excellent and reserved 3 employees for the incentive target. employees and teams with a Short-term The incentive plan covers five years from 2021 to

certain amount of bonuses; incentive 2025 with one vesting period per year. Individual

Farasis Energy provides employees with management technology operation and other rank ladders and encourages tThe annual bonus of different performance appraisal results are key in the total

employees to carry out in-depth development in the direction of non-management with different career planning paths to build departments relates to its Medium- and number of shares of restricted stock to be awarded

their career core competitiveness. Farasis Energy facilitated timely adjustment of career paths for employees in different ladders business performance; long-term and those who fail the appraisal receive no restricted

providing maximum flexibility for employees’ career development. incentive stock allocated during the vesting period. In November

2023 Farasis Energy completed the second vesting

Schematic Diagram of Dual Ladder Career System period of the initial grant portion of the restricted stock

incentive plan and announced the confirmation of

404 vesting officers with an aggregate of 6575195

shares to be vested.Managerial Technical

ladder ladder

Leader In 2023 Farasis Energy optimized the compensation and benefit system based on the salary and benefit improvement project Master

and developed a competitive compensation mechanism to improve internal employee satisfaction and external competitiveness

by reshaping our rank system and performance system.Manager Senior Dual ladder career system

Supervisor Backbone Dual career ladders (Managerial ladder and In 2023

technical ladder) for each type of position

Annual evaluation rate of Performance bonus Performance equity Performance pay

Intermediate individual performance system coverage system coverage system coverage

100 % 100 % 6.82 % %Entry 10093 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 94

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

Firmly Constructing a Safe and Healthy Line of ● The EHS department of Farasis Energy organizes at least one hazard identification every year

carries out risk evaluation formulates control measures and programs for the risk items and

Denfense follows up the implementation of the control measures and programs;

Hazard Identification ● We sign a safety duty system document for all employees at the beginning of each year and urges

Health and Safety Mechanism Construction and Risk each department to implement the safety responsibility. In 2023 100% of sites adopted employee

Evaluation health and safety risk assessments.1

Our main manufacturing sites and their supporting office area have passed the ISO 45001 system third-party certification

including Farasis Energy (Ganzhou) Co. Ltd. and Farasis Energy (Zhenjiang) Co. Ltd.. 100% of Farasis Energy's operational ● We review the target indicators at the beginning of each year revises and releases new EHS

sites in production meet the requirements of the ISO 45001 standard by certification from a third party. Since the initial ISO management objectives updates the target indicators for safety and environmental accidents

45001 system certification in 2016 Farasis Energy has continued to improve OHS management system and synchronously organize the annual work safety summary meeting for managerial employees and above and sign the Commitment to Work Safety Responsibility on the spot;

updated its management standards and documentation system for the new version of the ISO 45001:2018 standard.Objectives &

Farasis Energy's Safety Production Management Committee with 71 members is a decision-making body for work and Compliance ● Every new employee must receive training on the all-staff work safety responsibility system and

production safety under the leadership of the company president. It implements comprehensive leadership management and Programs sign the Commitment to Work Safety Responsibility.supervision of the safety production of the company's affiliated units through various functional departments.Ganzhou and Zhenjiang manufacturing sites established Safety Production Management Committees and EHS management ● Site employees conduct management activities in an orderly manner according to Farasis

departments as well as full-time safety management personnel responsible for production safety environmental management Energy's rules and regulations and implements operation approvals following the process with

occupational health and fire safety. The site Safety Production Management Committee consists of the heads of site special operations being licensed and special equipment annual inspection qualified;

departments and coordinates the health and safety efforts at each site.● We strictly control 8 major hazardous operations such as fire operation limited space operation

work at height and hoisting operation in the factory perform the application of hazardous

Group-level Safety Production Management Committee head operation permit tickets in advance set up special guardians on the spot and implements safety Operation control measures;

Control

●

Group-level Safety Production Management Committee executive deputy head External construction personnel may not enter the plant area without examination and approval of the Notification of Safety Risks the safety training records and the Safety Agreement with

Outsourced Company that have been signed or affixed with a seal.Group-level Safety Production Management Committee office

●

Member of group-level Safety Production Management Committee We established a hazard identification and management system to carry out daily inspections

monthly inspections and special safety inspections;

Hazard Identification ● We established an improvement and continuous improvement mechanism and organized to

and Improvement rectify promptly the problems found in internal inspections external inspections internal audits

Ganzhou site Safety Production Zhenjiang site Safety Production management reviews and evaluations.Management Committee Management Committee Others

1 The activated factories conducted risk assessments for hazard identification including Farasis Energy (Ganzhou) Co. Ltd. and Farasis Energy (Zhenjiang)

Safety Management Organizational Structure Co. Ltd. excluding companies in the process of engineering construction and installation of equipment in the factory due to the lack of production and

operation.95 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 96

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

Ganzhou and Zhenjiang sites set up annual safety and health targets and Farasis Energy organizes an annual review of their Safety Accident Emergency System

target indicators and revises and releases new annual health and safety management targets.Farasis Energy established accident emergency plans and disposal programs such as the On-Site Disposal Program for

Achievement of Targets for 2023 Exceeded NMP Exhaust Concentrations the Critical Incident Management Program for the Cell Production Department and

the accident disposal and management systems such as the Safety Accident Management Regulations (including Work-related

Injuries or Sudden Illnesses) the Safety Accident Disposal and Emergency Liaison Chart and the Control Procedures for

Nonconformity Accident Investigation Reporting and Handling.Ganzhou site’s annual target Zhenjiang site’s annual target

0 fatal accidents with work safety 0 fatal accidents with work safety

responsibility responsibility

Emergency response plans Emergency Drills Contingency Reserve Accident Report

0 incidence of 0 incidence of occupational We formulate company-level We regularly We regularly manage We provide a

diseases and department-level accident organize drills for all and inspects emergency clear definition occupational diseases emergency response plans and departments according materials. based on the

emergency response programs to the emergency plan level of the

for possible accidents with the and disposal program. accident and

0 departmental level mainly for quickly activate security incidents emergency response programs. the emergency

preparedness

and response

Retrospective Education Accident Investigation Efficient Treatment levels including

0 security incidents requirements

Cumulative rate of lost-time We maintain accident We protect the first We started the on-site on the reporting

accidents per million man- statistics and files and conduct scene of the accident emergency response department/

hours ≤1 regular accident reviews and organize relevant program immediately after person and investigations. investigation and the accident and sent the timeline.analysis of the cause injured to the hospital at

0 Annual hazard identification and makes rectifications. soonest. general economic loss

and management of due

accidents

rectification rate ≥ 95%

Occupational Health Management

Farasis Energy formulates occupational health management systems such as the Responsibility System for Prevention

and Control of Occupational Disease Hazards the Occupational Disease Hazard Warning and Notification System and the

Occupational Disease Hazard Emergency Rescue and Management System informs employees of occupational disease

hazards arising in their work according to the law and signs a Letter of Informatization of Occupational Disease Hazard Factors

ISO with employees.Farasis Energy strictly implements the “simultaneous design construction and operation” of occupational health protection

facilities monitors and tests occupational disease hazards conducts occupational health checkups before during and after

employment establishes and improves employees’ occupational health guardianship files and regularly updates the declaration

Proportion of premises Proportion of employees represented on formal joint Proportion of operating of occupational disease hazards to ensure their occupational health.assessed for employee business management and labor health and Safety facilities certified to ISO

health and safety risks Production Management Committees 45001 All sites complete the “simultaneous design construction and operation” of pre-evaluation of occupational health design

of protection facilities and evaluation of control effects of construction projects as well as the testing and evaluation of

100% 100 % 100 % occupational disease hazards as required and organize occupational health checkups for employees in corresponding positions

before during and after their employment.Farasis Energy conducts pre-employment occupational health checkups for new employees to be hired employees transferring

For more information on corporate governance please refer to the Statement of Occupational Health and Safety

to be exposed to occupational disease hazards and employees to be engaged in jobs with special health requirements. The EHS

Management.Management Department of the production sites formulates an implementation plan for occupational health checkups based on

the occupational disease hazards to which employees are exposed and regularly arranges occupational health checkups.97 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 98

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Case

Health and Safety Culture Promotion and Implementation

The week from April 25th 2023 to May 1st 2023 was the 21st national educational event for the Law on the Preventionand Control of Occupational Diseases with the theme “Improvement of the Working Environment and Conditionsto Protect Employees’ Physical and Mental Health”. Ganzhou site carries out promotions on chronic diseases and

occupational health health clinic and etc. posts the results of occupational disease hazards testing on the site

conducts special inspection of occupational health replaces any damaged occupational hazards warning cards on site

and proceeds noise testing in hazardous places to enhance the awareness of occupational health protection of the

site’s employees and the management level.June 2023 was the 22nd national Safe Production In September 2023 Ganzhou site carried out theMonth themed “Everyone Concerns about Safety & Ankang Cup Knowledge Contest adopting the systemResponds to Emergencies”. Ganzhou site organized of the online preliminary round and offline quarter-final

the promotion of the Work Safety Law knowledge with the enthusiastic participation of all departments

training and award-winning safety knowledge WeChat achieving success.quiz. Zhenjiang site EHS organized the promotion andapplication of the “Comprehensive Fire Safety LearningPlatform” and the activities of “Interesting Quiz onSafety Knowledge” and “Finding Mistakes Together” to

enhance the safety awareness of employees.Safety Training and Cultural Promotion and Implementation

Farasis Energy develops an annual safety training plan every year and carries out three-level safety education and trainings for

new employees. Each department develops departmental annual training plan and organizes its implementation.Farasis Energy rigorously implements a three-level work safety education and training mechanism which requires all

newcomers (including dispatched workers and interns) to accept safety training at plant level workshop level and shift level and

master essential safety knowledge and skills before starting work. Farasis Energy regularly conducts knowledge and hands-on

training for fire protection occupational health and safety training and special equipment safety training.November 9th 2023 was the 32nd National Fire Prevention Day themed "Prevention First & Life First" Ganzhou site

carried out the "Fire Prevention Competition" concerning how to wear fire-resistant combat suits and positive-pressure

air breathing apparatuses smoke masks and how to use carbon dioxide fire extinguishers and fire hose connections.Zhenjiang site posted promotional banners throughout the plant and organized the First Forklift 6S Contest on

November 23rd to improve the safety and stability sense of forklift drivers enhance the performance and capacity of

Safety drills Number of safety forklift trucks strengthen the awareness of safe driving and improve the standard of work performed by employees.training sessions

42 Time 631 Time Number of

Coverage of employees

safety training participating in

% safety training

Number of participants in Coverage of supplier 100

supplier safety training safety training 11474 Person

1762 Person 100 %99 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 100

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

Practicing Employer’s Humanistic Care Advocate work-life balance

Welfare Guarantee for All Employees Farasis Energy integrated competition corporate culture and cooperation with fun sports games as the carrier to create a sports

event enhance the sense of belonging of employees to Farasis Energy enrich employees’ cultural life in their spare time

Farasis Energy built a robust welfare system covering all employees balancing their work and life and practicing the spirit of stimulate the enthusiasm of the team release the pressure of work and cultivate their sense of competitiveness.“Care and Concern” for employees.Farasis Energy set up the Employee Care Committee to organize free medical check-up services for

Health employees regularly established the Employee Care Construction Program and the Employee Care

care Plan as mostly concerned by employees which includes 98 measures covering employee welfare

remuneration infrastructure and corporate culture and promoted the “We Care” program.Farasis Energy provides comprehensive social insurance including pension medical care

unemployment occupational injury and maternity insurance and improves the medical insurance

Basic system to establish a multi-level medical insurance system. Farasis Energy has purchased

benefits employee commercial insurance benefits since October 2022 and renewed them in 2023 covering

additional benefits such as accidental injury insurance sudden illness critical illness outpatient and

hospitalization.Farasis Energy guarantees employees' statutory holidays including paid annual leave marriage

Statutory leave maternity leave parental leave breastfeeding leave and etc. If the child is under 3 years old

holidays the parents have 10 days of parental leave per year each based on a medical certificate of birth or a Fun Games

household register.Farasis Energy provides employees with accommodation meals shuttle bus holiday benefits and

Employee irregular working hours for non-production operation employees to flexibly arrange the balance of life

life and work. The Administration Department uniformly and standardly manages employee dormitory to

ensure standardized use of electricity orderliness and harmonious roommate relationships.Employee Farasis Energy organizes colorful employee activities such as team building fun sports family day

activities birthday party and etc.Employee Supports

Farasis Energy’s Labor Union regularly helps employees in need

offers educational assistance to employees’ children and sets up a

charity fund to respond to emergencies medical assistance or family

difficulties. Following the principle of helping people in urgency rather

than people in poverty the charity fund sent approximately CNY 150000

of charity money to more than 20 families in 2023.The Labor Union regularly updated “Accurate Documentation ofEmployees in Need” and solved their practical problems which

enhanced their sense of belonging to Farasis Energy and made them

feel happier at work and in everyday life.The First National Fitness Games in Ganzhou Economic and Technological Development Zone

Sending Warmth to Employees in Need101 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 102

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

06 Our Progress:

Farasis Energy actively fulfills its social responsibility and enthusiastically participates in

public welfare undertakings. In 2023 our visits to poverty families of women with "two

cancers" holiday visits to elderly citizens who’re living alone care for left-behind children

care on "June 1" International Children's Day Student Assistance Activity in Sanjiang

Benefiting Society Through Township purchase of poverty relief products and support for employees in need and etc. won positive and reputable social and public comments.Kindness and Actions Our Performance:

The total amount of donations and materials for the year was about CNY 1784800;

The employment assistance workshops of us helped 12 needy families offering 12 jobs

and donated materials worth more than CNY 1.29 million (including salary benefits

insurance and etc.);Farasis Energy organized the activity “Bringing Love Home - Warming Children to ProtectTheir Growth” sending warmth and Spring Festival souvenirs to 25 children and families;

Community Charity

Employee Volunteering Farasis Energy was honored as "The Fourth among Leading Private Enterprises in

Fulfillment of Corporate Social Responsibilities in Jiangxi Province" at the conference of

the Top 100 Private Enterprises in Jiangxi in 2023.103 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 104

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

Community Charity Caring for Left-behind Children

In January 2023 the Labor Union and Women’s CommitteeIn 2023 Farasis Energy kept in mind its social responsibilities and obligations vigorously promoted the voluntary spirit of of Farasis Energy organized the series activities “Sendingdedication love mutual assistance and progress and actively participated in public welfare activities while expanding its scale. Warmth - Voluntary Care Warms Winter Tour” and the“Bringing Love Home - Warming Children to Protect TheirGrowth” at the “Children’s Love Harbor” in Xiejiao Village

Sanjiang Town Ganzhou Economic and Technological

Development Zone to send warmth and Spring Festival

Rural Revitalization souvenirs to 25 children and families.On June 1st 2023 International Children’s Day Farasis Energy’s volunteers went to Xiangjiang Road Primary School in

Ganzhou City to offer their best wishes and present the exclusive customized gift boxes.In 2023 Farasis Energy specially In August 2023 Farasis In December 2023 Farasis Energy

purchased farm products as welfare for the Energy carried out

Spring Festival totaling more than CNY activities to purchase CNY purchased 750 kilograms of navel Support Education

300000 to win the "Anti- 40000 of oranges amounting to CNY 5250 to effectively help the fruit farmers as per the

poverty War" for the realization of rural watermelons from Gansu call of the district party committee and the On August 31st 2023 Sanjiang Town held the 2023 Caring Scholarships and Student Grants Conference inviting Farasis

revitalization. farmers to solve the problem district government. Energy to attend and speak as a representative of the caring enterprises that support education. Since the establishment of the

of unsalable agricultural Ganzhou Economic and Technological Development Zone Sanjiang Town Education Assistance Association in 2022 Farasis

products. Energy has been donating to Sanjiang Town for two consecutive years with a cumulative total of CNY 97400.The employment assistance workshops of Farasis Energy helped 12 needy families offering 12 jobs and donated Employee Volunteering

materials worth more than CNY 1.29 million (including salary benefits insurance etc.) by the end of 2023. In 2023 Farasis Energy organized 9 volunteer activities. In

January 2023 Farasis Energy's employee volunteers visited

19 low-income and disadvantaged families of women with

"two cancers" in Xiejiao Village Sanjiang Town Ganzhou

Economic Development Zone and sent their New Year's

blessings and love to them. Farasis Energy's two volunteer

teams in Ganzhou and Zhenjiang went to the Zhen'ai

Retirement Center and Xingrui Home Care Service Center

to send good wishes and greetings for the Spring Festival.On the occasion of the Dragon Boat Festival in 2023 the

Ganzhou volunteer team of Farasis Energy went to Zhen'ai

Retirement Center and sent good wishes and gifts for the

festival to elderly citizens who lived alone and the Center’s

working staffs.Volunteer activities Number of volunteers participating in the activities

9 Session 72 Person times

Employment Assistance Workshop display board at Farasis Energy105 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 106

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

Appendix Compliance training

Indicator Unit 2021 2022 2023

Proportion of operation premises subject to corruption risk assessment % 100 100 100

ESG Performance Table Proportion of operation premises subject to internal audits on business ethics issues % 100 100 100

Total number of anti-corruption and anti-bribery training for directors

and officers Time 12 11 14

Governance and Economic Performance Total number of anti-corruption and anti-bribery training for general

employees Time 12 11 14

Total number of employees participating in anti-corruption and anti-

bribery training Person 3039 6114 5811

Business performance Proportion of employees participating in anti-corruption and anti-bribery

training1 % 63.78 85.96 88.68

Indicator Unit 2021 2022 2023 Proportion of suppliers and contractors participating in anti-corruption

and anti-bribery training % 100 100 100

Social contribution per share1 / - 0.34 -0.19

Operating income CNY 100 million 35.00 115.88 164.36

Board of Directors

Annual tax CNY 100 million 0.38 0.69 0.71 Indicator Unit 2021 2022 2023

Operating cost CNY 100 million 36.17 107.18 153.11 Number of Board of Directors held Time 14 20 17

Total assets CNY 100 million 209.37 321.27 301.47 Number of shareholders’ meetings held Time 4 5 3

Number of Board of Supervisors held Time 12 17 12

Number of directors Person 11 11 11

By independence

Number of independent directors Person 4 4 4

Litigation and violations Number of non-independent directors Person 7 7 7

Indicator Unit 2021 2022 2023 By gender

Number of male directors Person 8 11 11

Number of corruption lawsuits initiated and concluded

against the company No. 0 0 0 Number of female directors Person 3 0 0

Professional backgrounds of independent directors

Number of corruption lawsuits initiated and concluded

against the employees No. 0 0 0 Number of independent directors with an industry background Person 0 1 2

Number of reports generated by anti-corruption Number of independent directors with a professional background in risk No. 0 0 1 management Person 3 3 3reporting procedures

Number of independent directors with a background in accounting or

Number of internally recognized corruptions No. 0 0 1 finance Person 2 2 2

Others

Cases related to antitrust/anti-competition No. 0 0 0

Average attendance of the Board meetings % 100 100 100

Cases related to discrimination or harassment No. 0 0 0 Proportion of the minimum number of meetings required to be attended

by members of the Board of Directors of the number of meetings held % 100 100 100

Cases related to insider trading No. 0 0 0 during the year

Restrictions on the number of independent/non-executive directors

Cases related to conflicts of interest No. 0 0 0 holding concurrent positions in domestic listed companies No. 5 5 3

1 Social contribution per share =earnings per share + (total tax + employee expenses + interest expenditure + public welfare input - social cost) ÷ Total 1 Due to the presence of shift workers at the production and operation sites the implementation and organization of integrity compliance training cannot

capital stock at the end of the period ensure that all employees are fully covered.107 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 108

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

Environmental Performance1

Environmental indicators Emissions and waste

Indicator Unit 2021 2022 2023 Indicator Unit 2021 2022 2023

Taxes and fees related to Waste engine oil Tonne 1.16 2.00 9.33

environmental protection2 CNY 715000.00 86400.00 92910.00

Refrigerating fluid Tonne 0.42 0.51 0.08

Environmental pollution incidents No. 0 0 0

Discarded package Tonne 7.70 194.67 186.87

Environmental investment3 CNY 10000 90.33 374.09 382.73

Waste curing agent Tonne 0 0.16 5.51

Investment in energy-saving

renovation projects CNY 10000 - 801.6 451.07 Residual slurries Tonne 76.74 255.60 210.93

Waste alcohol Tonne 2.00 13.30 6.45

Greenhouse Gas Emissions4 Spent activated carbon Tonne 0 0.32 2.23

Indicator Unit 2021 2022 2023 Waste filters Tonne 0 0.40 0.40

Total emissions of greenhouse gas (Scopes tCO e 256292.17 424786.38 371657.34 Wastewater treatment sludge Tonne 0.00 0.00 106.501 and 2) 2

Total emissions of Scope 1 greenhouse gas tCO2e 28242.50 6280.48 4328.28 Waste glues Tonne 13.54 0.68 151.58

Waste organic solvent Tonne 0.05 0.09 0.07

Total emissions of Scope 2 greenhouse gas tCO2e 228049.67 418505.90 367329.06

Tonne/per CNY 1 million

Total emissions of Scope 3 greenhouse gas tCO2e 455577.62 874815.60 987510.47

Hazardous waste intensity of operating income 0.03 0.04 0.04

Greenhouse gas emission intensity5 tCO2e/CNY 1 million of 73.22 36.66 22.61 Wastewateroperating income

Total wastewater discharge1 Tonne 632496.00 776113.00 279046.00

Tonne/per CNY 1 million

Emissions and waste Wastewater discharge intensity of operating income 180.71 66.98 16.98

Indicator Unit 2021 2022 2023 Waste gas

Waste Total waste gas emissions

2 10000 m3 74841.62 73709.92 85717.35

Volatile organic compounds

Total general waste Tonne 9701.19 10370.08 7922.69 (VOCs) emissions Kilogram 2197.66 927.60 1342.60

General waste intensity Tonne/per CNY 1 million of operating income 2.77 0.89 0.48 Nitrogen oxides (NOx) Kilogram 3276.00 - 104.60

Total hazardous waste Tonne 111.18 500.70 715.91 Particulate matters (PM) Kilogram 149.76 - 104.00

Waste electrolyte Tonne 9.57 32.98 35.95 Sulfur oxides (SO

x) Kilogram 0 - 793.10

Waste gas emission intensity 10000 m /CNY 1 million of operating income 21.38 6.36 5.22

1 Unless otherwise stated the statistical scope of environmental performance data is Farasis Energy's two major sitbases in Ganzhou and Zhenjiang. 1 During the reporting period we checked the data of previous years retrospectively and revised the data of “total discharge of wastewater” for 2021 and

2 2021 and 2022 data are for the Zhenjiang site and 2023 data for both the Ganzhou and Zhenjiang sites. 2022 (original data: 635796 tonnes and 843763 tonnes) disclosed in the 2022 Environmental Social and Governance (ESG) Report and revised

3 D uring the reporting period we checked the data of previous years retrospectively and revised the data of “investment in environmental protection” simultaneously the data of “wastewater discharge density” for 2021 and 2022.

for 2022 (original data: CNY 3.816 million) disclosed in the 2022 Environmental Social and Governance (ESG) Report. Farasis Energy investment in 2 During the reporting period we checked the data of previous years retrospectively with data from Ganzhou and Zhenjiang sites being calculated by

environmental protection mainly includes hazardous waste treatment hazardous waste appraisal hazardous waste warehouse expansion and renovation the actual measurement method and revised the data of “total emissions of waste gas” for 2022 (original data: 214147200 m3) disclosed in the 2022

environmental testing radiation monitoring etc. Environmental Social and Governance (ESG) Report and revised simultaneously the data of “waste gas emission density” 2022.

4 The 2021 Scope 3 total greenhouse gas emissions data are derived from internal estimates and therefore the carbon sources identified in the carbon 3 W e regularly test pollutant emissions and no sulfur oxides (SOx) were detected at Zhenjiang site in 2021 and no related pollutants were generated in

inventory and even the raw data obtained are incomplete. 2022 and 2023 data are derived from ISO14064 verified certification data. 2022 due to boiler shutdown. The Ganzhou site did not produce nitrogen oxides (NOx) particulate emissions (PM) or sulfur oxides (SOx) from 2021 to

5 Emission intensity of greenhouse gas = Total emissions of greenhouse gas ÷ CNY 1 million of operating income. 2023.109 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 110

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

Energy Management Social Performance

Indicator Unit 2021 2022 2023

Employee Portrait

Total energy consumption1 tce 58412 102882 93987

Indicator Unit 2021 2022 2023

Energy consumption intensity2 tce/CNY 1 million of operating income 16.69 8.88 5.72 Total number of employees1 Person 4765 7113 6554

Proportion of renewable electricity

usage % 22.0 27.0 58.0 By gender

Male Person 3430 5016 4762

Water Resources Management

Female Person 1335 2097 1792

Indicator Unit 2021 2022 2023

By region

Water consumption3 Tonne 1654218.50 2388865.80 2032662.75

Chinese mainland Person 4622 6943 6376

Tonne/per CNY 1

Water consumption intensity million of operating 472.62 206.15 123.67 Hong Kong Macao and Taiwan Person 2 2 1

income

Overseas Person 141 168 177

Total consumption of recycled

water4 Tonne 498249.50 737501.80 611234.60 By level

Management2 Person 414 433 641

Packaging materials5

Non-management Person 4351 6680 5913

Indicator Unit 2021 2022 2023

By age

Ganzhou Site

≤30 Person 2230 3230 2889

Carton used No. 41474 58611 42966

31-40 Person 2104 3200 3003

Recyclable packaging used Set 17018 53709 56408

Proportion of recyclable packaging 41-50 Person 381 599 590

used6 % 29.09 47.82 56.76 >50 Person 50 84 72

Zhenjiang Site

By academic qualifications

Carton No. 8492 40800 570868

Doctoral and above Person 39 41 38

Wooden crate No. 1251 21813 43577

Master Person 267 315 293

Recyclable packaging used No. 12540 33821 14471

Bachelor Person 1160 1451 1539

Proportion of recyclable packaging

used7 % 56.28 35.07 2.30 Others Person 3299 5306 4684

1 T he total energy consumption accounting method is mainly based on General Rules for Calculation of the Comprehensive Energy Consumption (GB/T By post

2589-2020) with all data calibers include electricity steam natural gas equivalent discounts and photovoltaic discounts of 0.

2 Energy consumption intensity = Total energy consumption ÷ CNY 1 million of operating income Management3 Person 541 617 600

3 During the reporting period we checked the data of previous years retrospectively and revised the data of “total water consumption” for 2021 and 2022

(original data: 1063482 tonnes and 1994922 tonnes) disclosed in the 2022 Environmental Social and Governance (ESG) Report adjusted the name to R&D Person 1160 1433 1483

“water consumption” and revised simultaneously the data of “water consumption density” for 2021 and 2022.

4 During the reporting period we checked the data of previous years retrospectively and revised the data of “total consumption of recycled water” for 2021 Production Person 2886 4882 4332

and 2022 (original data: 472621 tonnes and 595969 tonnes) disclosed in the 2022 Environmental Social and Governance (ESG) Report.

5 Packaging material data comes from the incoming volume of Ganzhou and Zhenjiang site. The recyclable packaging at Ganzhou site consists of material Sales Person 178 181 139

racks while that of Zhenjiang site consists of material racks plastic boxes and pallet collars. Zhenjiang site increased the use of small packaging with

export volume in 2023 replacing the original large packaging and leading to an increased carton packaging and decreased proportion of recyclable

packaging consumed. During the reporting period we checked the data of previous years retrospectively and revised the data of "carton used" "Recyclable

packaging used" and "proportion of recyclable packaging used" at Ganzhou site for 2022 (original data: 55263 pieces 45517 sets and 45.2%) disclosed

in the 2022 Environmental Social and Governance (ESG) Report.

6 R ate of recyclable packaging consumed at Ganzhou site = recyclable packaging consumed ÷ (consumption of recyclable packaging + paper box 1 The total number of employees includes full-time equivalents within and outside of China.

consumed)

7 The “management” in the ESG Performance Table refers to employees who are at the manager level and above. Rate of recyclable packaging consumed at Zhenjiang site = recyclable packaging consumed ÷ (paper box + wooden box + consumption of recyclable

packaging) A manager is an employee in the “managerial queue”.111 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 112

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

Diversity and Inclusion Occupational health and safety

Indicator Unit 2021 2022 2023 Indicator Unit 2021 2022 2023

Proportion of females in management positions (Manager % 12.56 13.69 13.26 Third-party Health and safetylevel and above)

Proportion of females in junior management positions Lost-time injury rate - 0 0 0

(Supervisory level and above) % 19.87 19.21 17.48

Proportion of females in senior management positions Total number of lost-time accidents No. 0 0 0

(Statutory senior managers) % 20.00 20.00 20.00

Number of recordable work-related injuries Person 0 0 0

Proportion of females in R&D positions % 14.64 16.84 15.49

Number of work-related deaths Person 0 0 0

Proportion of employees from ethnic minorities or

disadvantaged groups % - 3.56 3.05 Number of participants in supplier safety training5 Person 29 1404 1762

Number of employees with disabilities Person 39 66 50 Coverage of supplier safety training % 100 100 100

Occupational health and safety

Employee Recruitment

Indicator Unit 2021 2022 2023

Health and Safety

Annual new recruits Person 2294 5413 5724

Lost-time injury rate1 - 0.74 0.91 0.88

Number of work-related accidents No. 8 15 13 By gender

Number of recordable work-related injuries2 Person 8 15 13 Number of new male employees Person 1629 3848 4306

Number of work-related deaths Person 0 0 0 Number of new female employees Person 665 1565 1418

Total number of hours lost due to work-related injuries3 Hour 2411.00 7342.50 1507.50 By age

Safety drills4 Time 28 46 42

Number of new employees aged ≤30 Person 1214 3552 3728

Number of safety training sessions Time 448 483 631

Number of new employees aged 31-40 Person 951 1733 1824

Number of employees participating in safety training Person times 16626 17690 11474

Number of new employees aged 41-50 Person 123 121 142

Coverage of safety training % 100 100 100

Proportion of premises assessed for employee health and Number of new employees aged >50 Person 6 7 30

safety risks % 100 100 100

By type

Proportion of employees represented on formal joint

business management and labor health and Safety % 100 100 100

Production Management Committees Social recruitment Person 2233 5272 5599

Proportion of operating facilities certified to ISO 45001 % 100 100 100 Campus recruitment Person 61 141 125

By level

White collar Person 283 181 176

1 Lost-time accident rate = lost-time injuries ÷ total hours worked x 1000000 General employees Person 774 1445 3002

2 D uring the reporting period Farasis Energy traced and checked the data of previous years and the work-related accidents did not cover traffic accidents

on the way to and from work and revised the “recordable work-related injuries” data in 2021 and 2022 (the original data were 11 and 14 respectively) Number of internal referral1 Person 1057 1626 466

disclosed in the 2022 Environmental Social and Governance (ESG) Report.

3 D uring the reporting period Farasis Energy traced and checked the data of previous years and the work-related accidents did not cover traffic accidents Cost of hiring new employees CNY 3922459.53 1465796.72 1550013.01

on the way to and from work and revised the data of “total working hours lost due to work-related injuries” in 2021 and 2022 (the original data were 3824

hours and 2808 hours respectively) disclosed in the 2022 Environmental Social and Governance (ESG) Report.

4 During the reporting period we checked the data of previous years retrospectively and revised the data of “safety drills” for 2022 (original data: 49 times) Average recruitment cost CNY 2901.23 1174.52 1052.37

disclosed in the 2022 Environmental Social and Governance (ESG) Report.

5 The scope of data statistics in 2021 is the Ganzhou site and the safety training data of some suppliers cannot be traced. The scope of data statistics in 1 A decrease in the number of blue-collar internal referrals at Zhenjiang site leads to a decrease in total data for 2023.

2022 and 2023 is the two sites in Ganzhou and Zhenjiang. 2 A verage recruitment cost = total annual recruitment cost ÷ cumulative annual number of recruits.113 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 114

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

Vocational or skill-related training Protection of Employees’ Rights and Interests

Indicator Unit 2021 2022 2023 Indicator Unit 2021 2022 2023

Total training hours of all employees Hour - 61503 73999 Coverage of social insurance % 100 100 100

Average training hours3 Hour - 7.12 11.29 Coverage rate of occupational health check-up % 100 100 100

By gender Number of labor disputes No. - 4 5

Average training hours for male employees Hour - 7.37 11.94

Average training hours for female employees Hour - 6.50 9.57 Labor Union Management

Indicator Unit 2021 2022 2023

By level

Proportion of employees covered by formal collective % 100 100 100

Average training hours for management Hour - 6.88 10.96 agreements on working conditions

Average training hours for general employees Hour - 7.15 11.33 Proportion of employees covered by duly elected employee representatives % 100 100 100

Annual employee training coverage4 % - 89.41 53.27 Proportion of employees covered by Labor Union or

collective bargaining agreements in Ganzhou Site % 100 100 100

By gender

Coverage of male employees % - 89.72 54.20 Performance and Remuneration

Coverage of female employees % - 88.67 50.78 Indicator Unit 2021 2022 2023

By level Annual evaluation rate of individual

performance % 100 100 100

Coverage of management % - 98.12 68.49

Performance bonus system coverage % 80.12 77.4 100

Coverage of general employees % - 88.33 51.62

Performance equity system coverage % 12.11 7.04 6.82

Average amount spent on training and development of

full-time employees CNY - 138.15 193.82 Performance pay system coverage % 100 100 100

Total employee-related costs (salaries +

benefits)1 CNY 768798280.07 1183257464.27 1220790737.64

Protection of Employees’ Rights and Interests

Indicator Unit 2021 2022 2023

Party Building

Employee satisfaction/ engagement survey results % 80.12 77.40 81.80

Indicator Unit 2021 2022 2023

Employee satisfaction/ engagement survey coverage % 100 100 100

Number of general Party branch(es) No. 1 1 1

Signing rate of labor contracts % 100 100 100

Number of Party branches No. 2 2 4

Number of Party members of the year Person 59 99 99

3 Average training hours for employees = total training hours ÷ total number of employees; average training hours for employees by type = total training

hours for employees in that type ÷ total number of employees in that type the same below. At the end of 2022 we carried out a trial run of digital Number of new members of the year Person 26 40 30

transformation of our training work synchronized with the digital transformation of training data and the digital transformation of training forms with

incomplete statistics of some data during the trial run and the training budget tilted towards digital transformation projects. After the trial operation in 2023

the digital transformation of training work was basically completed and it is expected that there will be a significant shift and improvement in the number of Number of Party member activities Time 14 20 23

hours of employee training in the year 2024.

4 Annual employee training coverage = number of employees who participated in training and were on duty during the year ÷ total number of employees; Number of people covered by Party member activities Person times 53 86 93

Annual employee training coverage by type = number of employees in that type who participated in training and were on duty during the year ÷ total number

of employees in that type the same below. During the reporting period Farasis Energy's cost reduction and resource investment priorities resulted in a

decrease in training coverage in 2023. As the company's digital training platform has not yet been fully and officially launched some of the actual training 1

that has been carried out and offline training can not be included in the statistics. The statistics come from the salary bonus welfare social insurance and provident fund of all employees.115 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 116

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

Supplier Management Supplier Management

Indicator Unit 2021 2022 2023 Indicator Unit 2021 2022 2023

Number of suppliers1 No. 269 244 282 Proportion of key Tier 1 supplier purchases to total

procurement expenditure1 % 70.41 98.40 84.05

By region number of suppliers that have undergone an ESG risk

assessment in the past 3 years No. - 10 26

Northeast China No. 4 3 4 Number of Tier 1 suppliers that have undergone an ESG risk

assessment in the past 3 years No. - 4 9

North China No. 7 8 10 Number of key non-Tier 1 suppliers that have undergone an

ESG risk assessment in the past 3 years No. - 6 17

East China No. 142 124 143

Number of suppliers classified as high ESG risk No. 0 0 0

South China No. 97 90 103

Scientific and professional competence

Southwest China No. 3 4 5

Indicator Unit 2021 2022 2023

Central China No. 12 13 15 Cumulative granted patents No. 157 213 293

Northwest China No. 1 0 0 Cumulative patent applications No. 267 330 485

Annual granted patents No. 37 56 80

Hong Kong Macao and Taiwan of China No. 0 0 0

Annual patents applications No. 54 81 155

Overseas2 No. 3 2 2

R&D investment CNY 100 million 5.41 5.98 7.49

Proportion of targeted suppliers signing Supplier Code of

Conduct3 % - - 100 Increase in R&D expenses % 45.62 10.51 25.25

Proportion of target suppliers assessed for corporate social % - 100 100 R&D expenses of total operating revenue

2%15.465.164.56

responsibility

Number of core technician Person 6 11 11

Proportion of purchasers trained in sustainable procurement % - 100 100

Average number of years for launching all new products3 Year 1.17 0.83 1.33

Proportion of audited/assessed suppliers involved in

improvement actions or capacity development % - 100 100 Module process innovation project to reduce costs CNY 66117000 5972760 65708000

Number of due diligence audits for mineral supply chain No. - 10 19

Customer Base Size and Service4

Total number of key suppliers4 No. 223 213 226 Indicator Unit 2021 2022 2023

Total number of Tier 1 suppliers5 No. 248 217 245 Total customer complaints5 No. - 747 987

Number of complaints closed No. - 736 946

Total number of key Tier 1 suppliers6 No. 223 213 226

Closure rate of customer complaints6 % - 98.53 95.85

1 Proportion of purchases from key Tier 1 suppliers in total procurement expenditure = annual purchases from key Tier 1 suppliers for material procurement

÷ total annual purchases within the scope of supplier data statistics.

2 The share of R&D expenses was diluted as shipments led to a significant increase in the Group’s revenue.

1 The scope of suppliers is primarily material suppliers and suppliers with purchases greater than 10 million CNY such as equipment and MRO excluding 3

logistics and professional services. The company counts the projects N that are closed each year and calculates the time T1T2...SOP for each project and the average value is (T1+T2+...). ...TN the average value is (T1+T2+... +TN)/N.

2 Overseas suppliers are not included in the statistics of Voron Technology’s overseas entities such as FEE FEU and SIRO. 4 T he scope of data statistics is the company’s two sites in Ganzhou and Zhenjiang. During the reporting period we checked the data of previous years

3 Target suppliers are those based on internal supplier development and procurement control procedures. retrospectively and revised the data of “total numbers of customer complaints” and “customer complaint closure rate” for 2022 (original data: 779 cases

4 Key suppliers are the Company’s Class A material suppliers and high-volume/non-replaceable suppliers in Class B/C. and 97%) disclosed in the 2022 Environmental Social and Governance (ESG) Report.

5 Tier 1 suppliers are suppliers who directly supply products or services to the company. 5 The statistics of total customer complaints come from the number of projects initiated by customer complaints.

6 Key Tier 1 suppliers are those key suppliers that supply directly to the company. 6 C ustomer complaints closure rate = number of closures for the year ÷ total number of complaints. Unclosed complaints from the U.S. and European

customers concern the cycle of returning defective products to the selling country which affects the progress of problem analysis.117 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 118

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

Benchmarking Index for No. 1 of Shanghai Stock Exchange for Self-

Information Security regulatory Guidelines of Listed Companies—Regulation of Operations

Indicator Unit 2021 2022 2023

Indicator Contents Where to Find

Proportion of sites with TISAX AL2 certification % 100 100 100

Pursuing economic benefits and protecting the interests of shareholders; protecting the legitimate

Information security incidents occurred No. 30 24 4 8.1 rights and interests of creditors and employees; treating suppliers customers and consumers with integrity; practicing the concept of green development and actively engaging in environmental ESG Governance

Number of attacks defended Time 47561101 79268502 26843751 protection community construction and other public welfare undertakings.Protection rate % 99.99 99.995 99.99 In business activities should follow the principles of voluntary fair equal pay honesty and credit Continuously Improving

abide by social morality business ethics and accept the supervision of the government and the Governance Structure

Number of customer information leakage incidents No. 0 0 0 8.2 public; shall not rely on exaggerated propaganda false advertising and other improper ways to Adhering to Integrity and profit; Shall not engage in illegal activities such as bribery and smuggling to obtain undue benefits.; Compliance in Operation

Loss caused by violation of relevant laws and regulations CNY 10000 0 0 0 shall not infringe on the trademark rights patents and copyrights of others and other intellectual Creating Cutting-edge

property rights; shall not engage in unfair competition. Technology

Based on the industry in which it operates and its own business characteristics the company shall

form a social responsibility strategic plan and working mechanism that is in line with the company’s

reality. The company’s social responsibility strategic plan should at least include the company’s

Rural Revitalization 8.3 business ethics code employee protection plan and career development support plan technology ESG Governance

investment and research and development plan for rational use of resources and effective

Indicator Unit 2021 2022 2023 protection of the environment social development funding plan and mechanism arrangement for

implementing managing and monitoring the social responsibility plan.Funds CNY 10000 100 128 109

The social contribution value per share disclosed in the annual social responsibility report is

Non-monetary (goods or materials) CNY 10000 1.6 41.9 35.33 calculated by adding to the basic earnings per share created by the company for shareholders

the amount of value created for other stakeholders such as taxes created by the company for

No. of employee assisted through Employment Assistant 8.4 the state wages paid to employees interest paid on loans to banks and other creditors and the ESG Performance Table

program Person 16 14 12 amount of external donations made by the company and deducting other social costs incurred by

the company due to environmental pollution etc. to form the value added per share created by the

company for the society.SSE Corporate Governance Panel sample companies listed on the Exchange companies listed both

domestically and internationally and financial companies shall disclose their social responsibility

Community Welfare reports (hereinafter referred to as social responsibility reports) at the same time as their annual 8.5 reports. The Exchange encourages other listed companies in a position to do so to disclose non- -

Indicator Unit 2021 2022 2023 financial reports such as social responsibility reports at the same time as the annual report.If a company discloses a social responsibility report the board of directors shall consider it

separately and disclose it on the website of the Institute.External donation CNY 10000 - 16.22 2

Construction and implementation of social responsibility systems regarding employee protection Protecting Basic Rights and

Non-monetary (goods or materials) CNY 10000 2.1 12 13.15 environmental pollution commodity quality community relations etc. Interests of Employees

Number of employee volunteers Person - - 15 Embracing New Trends in

8.6 Problems and shortcomings in the fulfillment of social responsibility and the gaps with these Green Development

guidelines along with their reasons.Volunteer activities Session 7 8 9 Overall Consolidation of

Quality Management

Number of volunteers participating in the activities Person times 53 59 72 Improvement measures and specific time schedule. Community Charity

Listed companies should establish a system for the selection and appointment of employee

directors and employee supervisors in accordance with the provisions of the Company Law and the

articles of incorporation to ensure that employees enjoy full rights in corporate governance; support

8.7 labor unions in carrying out their work in accordance with the law listen to employees’ opinions Protecting Basic Rights and

on matters of immediate interest to them such as wages benefits labor safety and health social Interests of Employees

insurance etc. through democratic forms such as employee congresses and labor union meetings

and care for and pay attention to reasonable needs of employees.Comply with environmental protection laws and regulations and industry standards. Committed to Natural Ecosystem Conservation

Develop and implement the company’s environmental protection plan. Embracing New Trends in Green Development

8.8

Embracing New Trends in

Green Development

Efficient use of natural resources such as energy water and raw materials.Advancing Efficient

Resource Utilization119 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 120

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

Indicator Contents Where to Find Indicator Contents Where to Find

Committed to Natural Ecosystem

Compliant disposal of pollutants. Newly announced environmental laws rules regulations and industry policies may Adhering to Integrity and Compliance in Conservation have a significant impact on the Company’s operations. Operation

Committed to Natural Ecosystem 8.10

Construction and operation of effective pollution control facilities. Other significant events related to environmental protection that may have a significant Conservation impact on the trading price of the company’s stock and its derivatives. Not Applicable

Embracing New Trends in Green Development

Full payment of taxes and fees related to environmental protection. The listed company shall regularly assign a person to check the implementation of the

ESG Performance Table environmental protection policy and shall correct any behavior that does not comply

with the company’s environmental protection policy and take appropriate remedial

Enhancing Supply Chain Resilience measures. Embracing New Trends in Green

Safeguarding the supply chain environment. 8.11 Development

Sustainable Supply Chain Risk Management When a company experiences a significant environmental pollution incident it

should promptly disclose the causes of the environmental pollution its impact on the

company’s performance the extent of the environmental impact and the rectification

Embracing New Trends in Green Development measures the company intends to take.Advancing Efficient Resource Utilization Committed to Natural Ecosystem

Other environmental protection responsibilities that should be fulfilled. Committed to Natural Ecosystem The name of the company’s pollutants the mode of emission the concentration and Conservation

Conservation total amount of emission exceeding the standard and total amount. ESG Performance Table

ESG Performance Table

Embracing New Trends in Green

The company’s environmental protection policy annual environmental protection DevelopmentEmbracing New Trends in Green Development Construction and operation of the company’s environmental protection facilities.objectives and effectiveness. 8.12 Committed to Natural Ecosystem

Conservation

Advancing Efficient Resource Utilization

Total annual resource consumption of the company.ESG Performance Table Company environmental pollution accident emergency plan. Committed to Natural Ecosystem Conservation

Embracing New Trends in Green Development

Company’s environmental investment and environmental technology development.ESG Performance Table The measures taken by the company to reduce pollutant emissions and future work Committed to Natural Ecosystem arrangements. Conservation

Committed to Natural Ecosystem

Types quantities concentrations and destinations of pollutants discharged by the Conservation Compliance with product safety laws and regulations and industry standards. Overall Consolidation of Quality

company. Management

ESG Performance Table

Embracing New Trends in Green Development Establish a safe and reliable production environment and production process.Overall Consolidation of Quality

Construction and operation of the company’s environmental protection facilities. Management

8.98.13

The treatment and disposal of waste generated by the company in the production Committed to Natural Ecosystem Establish product quality and safety assurance mechanisms and product safety Overall Consolidation of Quality

process the recycling and comprehensive utilization of waste products. Conservation accident emergency response programs. Management

Voluntary agreements with environmental authorities to improve environmental Not Applicable Other production and product safety responsibilities should be performed.Overall Consolidation of Quality

behavior. Management

Protecting Basic Rights and Interests of

The company was rewarded by the environmental protection department. Not Applicable

Establishing management systems for hiring and firing employees compensation and Employees

Embracing New Trends in Green Development benefits social insurance working hours etc. and measures to deal with violations. Creating a Fair Environment for Growth

Advancing Efficient Resource Utilization Practicing Employer's Humanistic Care

Other environmental information voluntarily disclosed by enterprises. Committed to Natural Ecosystem Establish a working environment and supporting safety measures to prevent Firmly Constructing a Safe and Healthy

Conservation occupational hazards. Line of Denfense

ESG Performance Table 8.14 Conduct necessary employee knowledge and vocational skills training. Creating a Fair Environment for Growth

The company has new reform expansion of construction projects with significant Not Applicable

environmental impact and other major investment behavior. Protecting Basic Rights and Interests of

Employees

The company is investigated by the environmental protection department for Creating a Fair Environment for Growth

environmental violations or is subject to significant administrative or criminal Other employee rights protection responsibilities that should be fulfilled. Firmly Constructing a Safe and Healthy

penalties or is subject to a decision by the relevant people’s government or Not Applicable Line of Denfense

government department to impose a deadline for treatment or to suspend relocate

or close down production. Practicing Employer's Humanistic Care

8.10 The company is involved in significant litigation or its major assets are seized Listed companies should strictly abide by the code of scientific ethics respect the spirit Not Applicable

seized frozen or pledged or mortgaged due to environmental issues. of science adhere to the proper values social responsibility and code of conduct and

fully leverage the positive effects of science and technology. Creating a Fair Environment for Growth

The company shall avoid research development and use of science and technology Overall Consolidation of Quality

Our Zhenjiang site is the major air emission that endangers the natural environment life and health public safety ethics and Management

The company or its major subsidiaries are listed as key emission units by the state unit and has been disclosed in the 2023 8.15 morality and shall not engage in research and development and business activities

environmental protection department. Perfecting Information Security Annual Report. that violate the fundamental rights of individuals or harm the public interest of society. Management

Companies that develop or use innovative technologies in life sciences artificial Embracing New Trends in Green

intelligence information technology ecology and environment new materials and Development

other areas of scientific and technological innovation should follow prudent and sound

principles and fully assess their potential impact and reliability.121 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 122

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

GRI Standards Index GRI Standard Indicator Contents Sustainable Development Goals Where to Find

2-20 Process to determine remuneration -

2-21 Annual total compensation ratio -

Guideline Farasis Energy reported the information cited in this GRI Content Index during the period

Message from the Chairman

2-22 Statement on sustainable development strategy

January 1 2023 through December 31 2023 by reference to the GRI Standards. ESG Governance

Adhering to Integrity and

Standard references GRI 1：Basis 2021 2-23 Policy commitments SDG-16 Compliance in Operation

Supplier Code of Conduct

Adhering to Integrity and

2-24 Embedding policy commitments Compliance in Operation

GRI Standard Indicator Contents Sustainable Development Goals Where to Find Supplier Code of Conduct

Acceptance of External

GRI 2: General Disclosures 2021 Supervision

Perfecting Information

2-1 Organizational details About Farasis Energy 2-25 Processes to remediate negative impacts Security Management

Responsible Mineral

2-2 Entities included in the organization’s sustainability reporting About This Report Management

ESG Performance Table

2-3 Reporting period frequency and contact point About This Report

Acceptance of External

2-4 Restatements of information ESG Performance Table Supervision

Perfecting Information

2-5 External assurance Third Party Assurance 2-26 Mechanisms for seeking advice and raising concerns SDG-16 Security ManagementReport Responsible Mineral

2-6 Activities value chain and other business relationships About Farasis Energy Management

ESG Performance Table

Protecting Basic Rights and

2-7 Employees SDG-8 SDG-10 Interests of Employees

Adhering to Integrity and

Compliance in Operation

ESG Performance Table Advancing Efficient

All-round Supply Chain Resource Utilization

2-8 Workers who are not employees SDG-8 Management Committed to Natural

ESG Performance Table 2-27 Compliance with laws and regulations Ecosystem Conservation

Continuously Improving Overall Consolidation of

Governance Structure Quality Management

2-9 Governance structure and composition SDG-5 SDG-16 ESG Governance Perfecting Information

ESG Performance Table Security Management

ESG Performance Table

2-10 Nomination and selection of the highest governance body SDG-5 SDG-16 Continuously Improving Governance Structure 2-28 Membership associations -

2-11 Chair of the highest governance body SDG-16 - 2-29 Approach to stakeholder engagement ESG Governance

Continuously Improving

2-12 Role of the highest governance body in overseeing the SDG-16 Governance Structure Protecting Basic Rights and management of impacts Collective bargaining agreements SDG-8 Interests of Employees

ESG Governance 2-30

ESG Performance Table

Continuously Improving

2-13 Delegation of responsibility for managing impacts Governance Structure GRI 3: Material Topics 2021

ESG Governance

3-1 Process to determine material topics ESG Governance

2-14 Role of the highest governance body in sustainability reporting ESG Governance

3-2 List of material topics ESG Governance

2-15 Conflicts of interest SDG-16 Adhering to Integrity and Compliance in Operation 3-3 Management of material topics ESG Governance

Continuously Improving

2-16 Communication of critical concerns Governance Structure GRI 201: Economic Performance 2016

ESG Governance

201-1 Direct economic value generated and distributed SDG-8 SDG-9 ESG Performance Table

2-17 Collective knowledge of the highest governance body ESG Governance

201-2 Financial implications and other risks and opportunities due to SDG-13 Embracing New Trends in 2-18 Evaluation of the performance of the highest governance body - climate change Green Development

2-19 Remuneration policies - 201-3 Defined benefit plan obligations and other retirement plans

Practicing Employer's

Humanistic Care123 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 124

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GRI Standard Indicator Contents Sustainable Development Goals Where to Find GRI Standard Indicator Contents Sustainable Development Goals Where to Find

201-4 Financial assistance received from government - 302-2 Energy consumption outside of the organization SDG-7 SDG-8 SDG-12 SDG-13 -

GRI 202: Market Presence 2016 Embracing New Trends in

302-3 Energy intensity SDG-7 SDG-8 SDG-12 Green Development

202-1 Ratios of standard entry level wage by gender compared to

SDG-13

local minimum wage SDG-1 SDG-5 SDG-8 -

ESG Performance Table

202-2 Proportion of senior management hired from the local SDG-8 - 302-4 Reduction of energy consumption

SDG-7 SDG-8 SDG-12 Embracing New Trends in

community SDG-13 Green Development

GRI 203: Indirect Economic Impacts 2016 302-5 Reductions in energy requirements of products and services SDG-7 SDG-8 SDG-12 SDG-13 -

203-1 Infrastructure investments and services supported SDG-5 SDG-9 SDG-11 Community Charity GRI 303: Water and Effluents 2018

203-2 Significant indirect economic impacts SDG-1 SDG-3 SDG-8 Community Charity Advancing Efficient

Resource Utilization

GRI 204: Procurement Practices 2016 303-1 Interactions with water as a shared resource SDG-6 SDG-12 Committed to Natural

Ecosystem Conservation

204-1 Proportion of spending on local suppliers SDG-8 -

303-2 Management of water discharge-related impacts SDG-6 Committed to Natural

GRI 205: Anti-corruption 2016 Ecosystem Conservation

Adhering to Integrity and 303-3 Water withdrawal SDG-6 -

205-1 Operations assessed for risks related to corruption SDG-16 Compliance in Operation

ESG Performance Table 303-4 Water discharge SDG-6 -

Adhering to Integrity and

205-2 Communication and training about anti-corruption policies and

Advancing Efficient

Compliance in Operation

procedures SDG-16 303-5 Water consumption SDG-6 Resource Utilization

ESG Performance Table ESG Performance Table

205-3 Confirmed incidents of corruption and actions taken SDG-16 ESG Performance Table GRI 304: Biodiversity 2016

GRI 206: Anti-competitive Behavior 2016 Operational sites owned leased managed in or adjacent to

304-1 protected areas and areas of high biodiversity value outside SDG-6 SDG-14 SDG-15 Committed to Natural

206-1 Legal actions for anti-competitive behavior anti-trust and

Ecosystem Conservation

monopoly practices SDG-16 ESG Performance Table

protected areas

304-2 Significant impacts of activities products and services on GRI 207: Tax 2019 biodiversity SDG-6 SDG-14 SDG-15

Committed to Natural

Ecosystem Conservation

207-1 Approach to tax SDG-1 SDG-10 SDG-17 Embracing the Era of Tax 304-3 Habitats protected or restored SDG-6 SDG-14 SDG-15 -Transparency

IUCN Red List species and national conservation list species

207-2 Tax governance control and risk management SDG-1 SDG-10 SDG-17 Embracing the Era of Tax 304-4 SDG-6 SDG-14 SDG-15 -Transparency with habitats in areas affected by operations

207-3 Stakeholder engagement and management of concerns related SDG-1 SDG-10 SDG-17 Embracing the Era of Tax GRI 305: Emissions 2016to tax Transparency

Embracing the Era of Tax Embracing New Trends in 207-4 Country-by-country reporting SDG-1 SDG-10 SDG-17 Transparency 305-1 Direct (Scope 1) GHG emissions SDG-3 SDG-12 SDG-13 Green DevelopmentSDG-14 SDG-15

ESG Performance Table

GRI 301: Materials 2016

Embracing New Trends in

Advancing Efficient 305-2 Energy indirect (Scope 2) GHG emissions SDG-3 SDG-12 SDG-13 Green Development

301-1 Materials used by weight or volume SDG-8 SDG-12 Resource Utilization SDG-14 SDG-15 ESG Performance Table

ESG Performance Table

Advancing Efficient 305-3 Other indirect (Scope 3) GHG emissions SDG-3 SDG-12 SDG-13 SDG-14 SDG-15 -

301-2 Recycled input materials used SDG-8 SDG-12 Resource Utilization

ESG Performance Table Embracing New Trends in

305-4 GHG emissions intensity SDG-13 SDG-14 SDG-15 Green Development

301-3 Reclaimed products and their packaging materials SDG-8 SDG-12 Advancing Efficient Resource Utilization ESG Performance Table

GRI 302: Energy 2016 305-5 Reduction of GHG emissions SDG-13 SDG-14 SDG-15 -

Embracing New Trends in

SDG-7 SDG-8 SDG-12 305-6 Emissions of ozone-depleting substances (ODS) SDG-3 SDG-12 -302-1 Energy consumption within the organization Green DevelopmentSDG-13

ESG Performance Table125 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 126

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

GRI Standard Indicator Contents Sustainable Development Goals Where to Find GRI Standard Indicator Contents Sustainable Development Goals Where to Find

Committed to Natural Firmly Constructing a

305-7 Nitrogen oxides (NOx) sulfur oxides (SOx) and other significant SDG-3 SDG-12 SDG-14 Ecosystem Conservation 403-3 Occupational health services SDG-8 Safe and Healthy Line of

air emissions SDG-15 Denfense

ESG Performance Table

403-4 Worker participation consultation and communication on

Firmly Constructing a

GRI 306: Waste 2020 occupational health and safety SDG-8 SDG-16 Safe and Healthy Line of Denfense

Firmly Constructing a

306-1 Waste generation and significant waste-related impacts SDG-3 SDG-6 SDG-11 Committed to Natural 403-5 Worker training on occupational health and safety SDG-8 Safe and Healthy Line of SDG-12 Ecosystem Conservation Denfense

SDG-3 SDG-6 SDG-8 Committed to Natural Firmly Constructing a 306-2 Management of significant waste-related impacts SDG-11 SDG-12 Ecosystem Conservation Safe and Healthy Line of

403-6 Promotion of worker health SDG-3 Denfense

Committed to Natural Practicing Employer's

306-3 Waste generated SDG-3 SDG-6 SDG-11 Ecosystem Conservation Humanistic CareSDG-12 SDG-15

ESG Performance Table

403-7 Prevention and mitigation of occupational health and safety

Firmly Constructing a

impacts directly linked by business relationships SDG-8 Safe and Healthy Line of

Committed to Natural Denfense

306-4 Waste diverted from disposal SDG-3 SDG-11 SDG-12 Ecosystem Conservation Firmly Constructing a

ESG Performance Table 403-8 Workers covered by an occupational health and safety

Safe and Healthy Line of

management system SDG-8 Denfense

SDG-3 SDG-6 SDG-11 ESG Performance Table306-5 Waste directed to disposal SDG-12 SDG-15 - Firmly Constructing a

Safe and Healthy Line of

GRI 308: Supplier Environmental Assessment 2016 403-9 Work-related injuries SDG-3 SDG-8 SDG-16 Denfense

ESG Performance Table

308-1 New suppliers that were screened using environmental criteria - Firmly Constructing a

Safe and Healthy Line of

Enhancing Supply Chain 403-10 Work-related ill health SDG-3 SDG-8 SDG-16 Denfense

Resilience ESG Performance Table

Sustainable Supply Chain

308-2 Negative environmental impacts in the supply chain and actions Risk Management GRI 404: Training and Education 2016

taken

Responsible Mineral

Management 404-1 Average hours of training per year per employee SDG-4 SDG-5 SDG-8 SDG-10 ESG Performance Table

ESG Performance Table 404-2 Programs for upgrading employee skills and transition SDG-8 Creating a Fair Environment assistance programs for Growth

GRI 401: Employment 2016 404-3 Percentage of employees receiving regular performance and career development reviews SDG-5 SDG-8 SDG-10 ESG Performance Table

Protecting Basic Rights and

401-1 New employee hires and employee turnover SDG-5 SDG-8 SDG-10 Interests of Employees

GRI 405: Diversity and Equal Opportunity 2016

ESG Performance Table 405-1 Diversity of governance bodies and employees SDG-5 SDG-8 Protecting Basic Rights and Interests of Employees

401-2 Benefits provided to full-time employees that are not provided to

temporary or part-time employees SDG-3 SDG-5 SDG-8

Practicing Employer's

Humanistic Care 405-2 Ratio of basic salary and remuneration of women to men SDG-5 SDG-8 SDG-10 ESG Performance Table

401-3 Parental leave SDG-5 SDG-8 - GRI 406: Non-discrimination 2016

Protecting Basic Rights and

GRI 402: Labor/Management Relations 2016 406-1 Incidents of discrimination and corrective actions taken SDG-5 SDG-8 Interests of Employees

402-1 Minimum notice periods regarding operational changes SDG-8 - GRI 407: Freedom of Association and Collective Bargaining 2016

Sustainable Supply Chain

GRI 403: Occupational Health and Safety 2018 Risk Management

407-1 Operations and suppliers in which the right to freedom of

Firmly Constructing a association and collective bargaining may be at risk

SDG-8 Protecting Basic Rights and

Interests of Employees

403-1 Occupational health and safety management system SDG-8 Safe and Healthy Line of

Denfense ESG Performance Table

GRI 408: Child Labor 2016

Firmly Constructing a Sustainable Supply Chain

403-2 Hazard identification risk assessment and incident investigation SDG-8 Safe and Healthy Line of

408-1 Operations and suppliers at significant risk for incidents of child

Risk Management

Denfense labor SDG-5 SDG-8 SDG-16 Protecting Basic Rights and

Interests of Employees127 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 128

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

Third Party Assurance Report

GRI Standard Indicator Contents Sustainable Development Goals Where to Find

GRI 409: Forced or Compulsory Labor 2016

Sustainable Supply Chain Independent Assurance Statement

409-1 Operations and suppliers at significant risk for incidents of

Risk Management

forced or compulsory labor SDG-5 SDG-8 Protecting Basic Rights and

Interests of Employees

GRI 410: Security Practices 2016

Introduction

410-1 Security personnel trained in human rights policies or procedures SDG-16 - TüV Rheinland (Shanghai) Co. Ltd. member of TüV Rheinland Group Germany (hereinafter “TüVGRI 411: Rights of Indigenous 2016 Rheinland” “We”) has been entrusted by the management of Farasis Energy (Ganzhou) Co. Ltd. (hereinafter

“Farasis” “the Company”) to conduct independent assurance of Farasis 2023 Environmental Social and

411-1 Incidents of violations involving rights of indigenous peoples SDG-2 - Corporate Governance (ESG) Report (hereinafter “the Report”). All contractual contents for this assurance

engagement rest entirely within the responsibility of Farasis. Our task was to give a fair and adequate judgment

GRI 413: Local Communities 2016 on the Report.Operations with local community engagement impact Community Charity The intended users of this assurance statement are stakeholders who have relevance to Farasis’ overall ESG 413-1 assessments and development programs Employee Volunteering performance and impacts of its business activities during year 2023 (1 January 2023 ~ 31 December 2023).Community Charity TüV Rheinland is a global service provider of Corporate Social Responsibility (CSR) & Sustainability Services in

413-2 Operations with significant actual and potential negative impacts on local communities SDG-1 SDG-2 over 65 countries having qualified professionals in the field of Corporate Sustainability Assurance Environment Employee Volunteering

Social and Stakeholder Engagement. We have maintained complete impartiality and independence during the

GRI 414: Supplier Social Assessment 2016 assurance engagement and we were not involved in the preparation of the Report contents.

414-1 New suppliers that were screened using social criteria SDG-5 SDG-8 SDG-16 Sustainable Supply Chain Risk Management Assurance Standard

414-2 Negative social impacts in the supply chain and actions taken SDG-5 SDG-8 SDG-16 Sustainable Supply Chain Risk Management TüV Rheinland undertook the assurance work in accordance with the AA1000 Assurance Standard v3

(AA1000AS v3) Moderate level of assurance.

GRI 415: Public Policy 2016

415-1 Political contributions SDG-16 - Scope & Type of Assurance

Our assurance engagement was carried out in accordance with the AA1000AS v3 Type 1 Moderate level on

GRI 416: Customer Health and Safety 2016 Farasis ESG performance information and data disclosed in the Report. The following assurance criteria were

Assessment of the health and safety impacts of product and Overall Consolidation of used in performing the assurance work: 416-1 service categories Quality Management * With reference to GRI Sustainability Reporting Standards (GRI Standards)

416-2 Incidents of non-compliance concerning the health and safety SDG-16 Overall Consolidation of * Shanghai Stock Exchange's Self-Regulatory Guidelines for Listed Companies No. 1 - Standardized impacts of products and services Quality Management Operation

GRI 417: Marketing and Labeling 2016 * The United Nations Sustainable Development Goals (UN SDGs)

* Adherence to the AA1000 AccountAbility Principles of Inclusivity Materiality Responsiveness and Impact.

417-1 Requirements for product and service information and labeling SDG-12 Overall Consolidation of Quality Management

417-2 Incidents of non-compliance concerning product and service SDG-16 Overall Consolidation of Assurance Methodology information and labeling Quality Management

417-3 Incidents of non-compliance concerning marketing SDG-16 Adhering to Integrity and

Our assurance activities included:

communications Compliance in Operation * Reviewing the company's management practices and processes to evaluate environmental social and

corporate governance system including ESG strategy corporate governance compliance management

GRI 418: Customer Privacy 2016 risk management stakeholder communication material issue analysis and ESG-related key

418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data SDG-16

Perfecting Information performance.Security Management * Conducting interviews with company management and managers responsible for gathering and

analyzing information on ESG performance.* Reviewing and examining ESG management practices and performance information and data to test the

accuracy of such information and data based on a sample basis and applied analytical procedures.* Collecting documentary evidence and assessing management representations to support adherence to

the AccountAbility Principles.Limitations

1129 Farasis Energy (Ganzhou) Co. Ltd. Environmental Social and Corporate Governance (ESG) Report 130

Report the Chairman Energy in 2023 Governance Compliance Concepts through Low-carbon Practices Industrial Opportunities Common Development High-Quality Environment and Actions Appendix

TüV Rheinland performed the assurance based on the scope of defined engagement agreement and on a processes. Supporting evidence shows that the company carried out compliance assessments on environmental

moderate level assurance under the AA1000AS for engagement. Information and performance data subject to and safety labor and employment anti-bribery and anti-fraud information security intellectual property and

assurance is limited to the contents of the Report. energy management and strengthened its supply chain due diligence process in 2023 to manage environmental

Our assurance work did not cover financial report and its financial data and other information not related to and social impacts on the company's operations and business.sustainability.Conclusions

Based on our methodology and activities performed within the scope of this assurance we can reach a

conclusion that no instances or information came to our attention that would be to the contrary of the statement Daniel Pan

made as below:

Corporate Sustainability Service Technical Manager * Farasis 2023 ESG report and its contents adhere to the AA1000 AccountAbility Principles. TüV Rheinland (Shanghai) Co. Ltd

* Farasis has implemented management processes including an energy and carbon emissions data Shanghai China 9 April 2024

management system to collect and aggregate key performance data related to material issues within the

reporting boundary while the company identifies evaluates defines and manages material issues.* The ESG-related information and performance indicators disclosed in this report have been evaluated

and supported by documentary evidence to truly reflect Farasis’ ESG management practice.TüV Rheinland shall not bear any liability or responsibility to a third party for perception and decision on Farasis

based on this Assurance Statement.Adherence to the AA1000 AccountAbility Principles

Inclusivity

Farasis has established a stakeholder engagement procedure. The company's identified key stakeholders include

employees governments and regulators shareholders and investors customers suppliers and partners

communities and social organizations. Supporting evidence demonstrates that the company conducted research

and analysis on ESG-related issues with these stakeholders in 2023 to understand their priorities and adjust

management strategies to respond appropriately.Materiality

Based on the interpretation of regulatory policies industry benchmarking stakeholder research results and the

company's development strategy Farasis identifies ESG issues for optimal management and analyzes and

defines material issues from the two dimensions of "importance to stakeholders" and "importance to the

company". As shown in the issue matrix diagram in the report high-importance issues include but are not

limited to product quality and safety employee rights protection product development and innovation and

employee health and safety.Responsiveness

Farasis conducts multi-channel communication and dialogue with key stakeholders on ESG-related issues and

responds to the concerns of relevant parties in a timely and appropriate manner. Communication methods

include regular information disclosure employee communication platform employee training supplier audit and

training industry association communication and cooperation complaint hotline and public welfare activities.The company updates or revises the supply chain due diligence policy supplier code of conduct supply chain

grievance and communication mechanism etc. and publishes them on the official website.This report discloses key performance indicators and data that key stakeholders are interested in covering

greenhouse gas (GHG) emissions other significant emissions and waste energy consumption water

management occupational health and safety employee management and supplier management and these data

disclosures are comparable.Impact

Farasis assessed the actual or potential impact of the company's own operations business activities and upstream

and downstream supply chains on economic environmental and social topics on material issues. The company

also integrates ESG issue management into the company's operational management and risk management

行情