Contents

Resilient Foundation:

Empowering Steady

01 02 Development through About This Report 01 About LiuGong ESG Management Governance Excellence 03

Message from the Chairman 03

05 / Company Profile 09 / ESG Strategy 18 / Responsibility Focus:

Implementing Risk Control through

Message from the President 04 08 / ESG Performance Highlights in 11 / ESG Management Three Lines of Defense Forging

2025

14 / Communication with Stakeholders Robust Compliance Barriers for

LiuGong

15 / Management of Material Topics

20 / Standardization of Corporate

Governance

23 / Protection of Investors’ Rights

and Interests

24 / Adherence to Business Ethics

Ecological Stewardship: Innovation Integration:

Powering Green and Stabilizing Industrial Chains Shared Prosperity:

Intelligent Manufacturing 04 and Refining Quality to Boost I 05 Anchoring Responsibility Innovation ndustries for Sustainable Growt 06

28 / Responsibility Focus: Driving 46 / Responsibility Focus: Creating Value 64 / Responsibility Focus: Strengthening

Transformation with Digital through Product Excellence Setting Foundations through Global

Intelligence Creating Green and Safety and Sustainability Benchmarks Presence Building a Distinctive

Smart Machinery Factories in Construction Machinery Talent Development Ecosystem for

LiuGong

30 / Response to Climate Change 48 / Innovation-Driven Development

35 / Environmental Compliance 53 / Creation of Responsible Supply 66

/ Support for Employee Growth

Management Chains 76 / Rural Revitalization

Future Outlook 80 40 / Resource Management 57 / Pursuit of Craftsmanship Quality

77 / Contribution to Society

44 / Protection of Ecosystem and 62 / Data Security and Privacy Protection

Annex 81 Biodiversity01 PAGE About This Report

About This Report

Introduction

This is the third Environmental Social and Governance (ESG) Report issued by Guangxi LiuGong Machinery Co. Ltd. (“the Company”) following 16 previous Social Responsibility Reports. In the principles of objectivity

standardization transparency and comprehensiveness this report provides a detailed disclosure of the Company’s concepts practices and performance in environmental social and governance for the year 2025.Reporting Scope

Reporting Period: This report covers the period from January 1 2025 to December 31 2025. To improve the comparability and completeness of this report some statements and data are retrospective and extended

where appropriate.Scope of Organization: Unless otherwise specified this report primarily focuses on Guangxi LiuGong Machinery Co. Ltd. including its headquarters and subsidiaries. The scope of data disclosure aligns with that of the

Company’s consolidated financial statements. Any content beyond this scope will be explained within this report.Release Cycle

This Environmental Social and Governance (ESG) Report is released on an annual basis.02 PAGE About This Report

Preparation Basis Data Sources andShenzhen Stock Exchange “Self-Regulatory Guidelines for Listed Companies No. 1 - Standardized Operation of Main Board ExplanationsListed Companies” The financial data in this report are sourced from the 2025 Annual Report

Shenzhen Stock Exchange Self-Regulatory Guidelines for Listed Companies No. 17 - Sustainability Report (for Trial Implementa- of Guangxi LiuGong Machinery Co. Ltd. and other information and data

tion) come from statistical summaries of data from relevant departments or

public documents. This report doesn’t contain any false records

Research on Compilation of ESG Reports by Central SOE-Controlled Listed Companies issued by the State-owned Assets misleading statements or material omissions. Unless otherwise specified

Supervision and Administration Commission of the State Council all amounts in this report are expressed in RMB.Sustainability Reporting Standards of the Global Reporting Initiative (“GRI Standards”)

China Enterprise Reform and Development Society Guide to Corporate Sustainability Reporting in China(CASS-ESG 6.0)

Task Force on Climate-related Financial Disclosures (TCFD) Recommendations Access and Feedback

Sustainable Development Goals (SDGs) of the United Nations

Sustainability Accounting Standards Board (SASB) Standards This report is released in both Chinese and English versions. For any

discrepancy between the Chinese and English versions the Chinese

version shall prevail. You may access and download the electronic version

Definition of this report on the websites of Shenzhen Stock Exchange (http://ww-

w.szse.cn/) cninfo (http://www.cninfo.com.cn/) and the official website of

For the ease of expression and readability the following terms are used in this report: Guangxi LiuGong Machinery Co. Ltd. (https://www.liugong.com/) and the

Company’s WetChat Official Account.Term Interpretation

LiuGong the Company LiuGong Machinery or we Guangxi LiuGong Machinery Co. Ltd. For any report-related comments or suggestions please feel free to contact

LiuGong Group Guangxi LiuGong Group Co. Ltd.LiuGong Changzhou Machinery us:

LiuGong Changzhou Machinery Co. Ltd.LiuGong Changzhou or LiuGong Excavator

Guangxi LiuGong Machinery Co. Ltd.LiuGong Loader Plant

(Loader Manufacturing Plant) No.1 Liutai Road Liuzhou Guangxi

LiuGong Driveline LiuGong Liuzhou Driveline Co. Ltd. 545007

OVM Liuzhou OVM Machinery Co. Ltd.Hydraulic Components Branch of 0772-3886509

Zhongyuan Hydraulic or Zhongyuan Machinery

Guangxi Zhongyuan Machinery Co. Ltd. stock@liugong.com

Zhongheng Leasing Zhongheng International Leasing Co. Ltd.Jiangsu LiuGong Jiangsu LiuGong Machinery Co. Ltd.Anhui LiuGong Anhui LiuGong Crane Co. Ltd.03 PAGE Message from the Chairman

Message from the Chairman

Zheng Jin 2025 is the final year for the “14th Five-Year Plan” of LiuGong. In the face of a complex environment shaped by global industri-Party Secretary and al chain restructuring and rapid industry transformation we anchor our vision to “be the world leading equipment and technol-ogy solutions provider” and adhere to our strategy of “Total Solution Total Intelligence and Globalization”. Through the deep

Chairman of LiuGong integration of ESG principles across all aspects of our operations we have achieved closed-loop improvement and high-qual-

Group and LiuGong ity development in areas such as corporate governance green transformation technological innovations and value sharing.Machinery

Upholding Strategy Guidance and Strengthening Honoring Environmental Commitments and

Governance Foundation: Creating Shared Value:LiuGong always upholds Party leadership throughout LiuGong strives to achieve the national goals of “carboncorporate governance fosters the deep integration of peaking and carbon neutrality” and adopts green

Party building with production and operation practices development as a core strategy of the Company. Rooted

and achieves high-quality development through in our core equipment manufacturing businesses we

exceptional Party building efforts. We continuously refine prioritize high-end intelligent and green transformation

our modern corporate systems with Chinese characteris- strengthen breakthroughs in critical technologies and

tics optimize our corporate governance structure and drive the commercialization of innovation achievements

strengthen the construction and standardized operation and make sustainability the distinctive foundation for the

of the Board of Directors. We also deepen investor high-quality development of LiuGong. We also actively

relations management and information disclosure and fulfill our social responsibilities support the growth and

effectively safeguard the legitimate rights and interests development of our employees advance public welfare

of investors. Our high-standard corporate governance initiatives and create a value ecosystem that enables

provides a solid foundation for our risk mitigation shared success with employees customers partners

opportunity capture and long-term value creation. and communities. These efforts demonstrate the

responsibility and commitment that define LiuGong as a

leading national equipment manufacturer.Looking ahead

LiuGong still have a long way to go. Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New

Era we will continue to anchor the vision to “be the world leading equipment and technology solutions provider”. We will

advance green transformation with great determination deepen innovation-driven development with concrete

measures and ensure stable and sustainable development with enhanced governance. Together with our customers

partners and stakeholders worldwide we will jointly open a new chapter of win-win cooperations that deliver positive

impacts on the economy the environment and society and contribute to global sustainable development.04 PAGE Message from the President

Message from the President

In 2025 adhering to the strategy of “Total Solution Total Intelligence and Globalization” LiuGong fully integrated ESG

principles into all business processes such as production operation R&D manufacturing marketing and customer service.We steadily advanced the implementation of ESG initiatives improved our systems through practice achieved results

through dedicated efforts and fulfilled our solemn commitment to sustainable development with concrete actions.Luo Guobing

Advancing Green Mission and Shaping Sustainable Strengthening Innovation-Driven Development and

Foundation. Forging National Industrial Strength. Deputy Party SecretaryWe extend green principles throughout the entire product Centered on our R&D strategy of “technology leadership Vice Chairmanlifecycle formulate and rigorously implement green quality leadership TCO leadership and application and President ofdevelopment plans and establish an energy and leadership” we continuously increase R&D investment

environmental management system covering the entire tackle core technological challenges and achieve a series LiuGong Machinery

value chain to continuously advance clean production of breakthroughs in new energy construction machinery

energy conservation consumption reduction and large and high-end equipment intelligent construction

resource recycling. During the Reporting Period LiuGong solutions etc. We vigorously promote the upgrading ofwas recognized as a “Green Supply Chain Management intelligent manufacturing build smart factories andEnterprise” by the Ministry of Industry and Information empower quality enhancement and efficiency transforma-

Technology of the People’s Republic of China and some tion through digitalization. We also establish a global

of our subsidiaries were included in the lists of provincial service system to effectively safeguard customers’ rights

and municipal green manufacturers. and interests through rapid response and closed-loop

management and forge LiuGong’s high reputation and

Empowering Employee Development and Fulfilling Social global competitiveness.Responsibility.Guided by a people-centered development philosophy we

safeguard employees’ legitimate rights and interests and Embarking on a New Journey and Creating a Better

continuously refine talent development systems and Future.incentive mechanisms. Through platforms such as In 2026 we will deepen our ESG management systems

“LiuGong University” we support employees in their address development gaps and strengthen our

growth and development to unlock innovation and competitive advantages. We will also accelerate the

creativity across LiuGong. As a state-owned enterprise market adoption of green technologies and products

we actively engage in initiatives such as rural revitaliza- advance intelligent manufacturing and digital transforma-

tion education support and community development to tion and continuously enhance employee care and

fulfill our social responsibilities and our commitment to community engagement programs. These efforts will help

social well-being. us gain strong momentum to achieve high-quality

development and promote sustainable growth across the

industry.05 PAGE About LiuGong

About LiuGong

Introduction Mission Vision

Empower People with Intelligent To be the World Leading

Guangxi LiuGong Machinery Co. Ltd. was established in 1958 and is headquartered in Liuzhou Guangxi.Listed on the Shenzhen Stock Exchange in 1993 LiuGong is the first listed company (Stock Code: 000528) Green Machinery Equipment and Technology

in China’s construction machinery industry and in Guangxi Zhuang Autonomous Region and has significant Solutions Provider

influence in the construction machinery sector.LiuGong mainly focuses on the research and development manufacturing sales and service of construction

machinery building machinery agricultural machinery engineering vehicles and related components. The

Company is the industry leader in product diversification categories and total solutions. LiuGong firmly Vision

believes that “all outstanding equipment exists solely to meet customer needs”. Therefore our products

adopt a human-centered and user-friendly design to support the smooth execution of customers’ engineering Mission

projects while consistently delivering superior performance. The Company ranks 18th1 among global

construction machinery manufacturers and leads similar providers in China for the sales and market share Corporate

of its earthmoving machinery. Culture

As of 2025 with 25 manufacturing facilities over 15000 employees 12 R&D bases as well as a sales Spirit

network covering over 180 countries and regions LiuGong has become a globally leading provider of Core

equipment and technology solutions at the forefront of technology production and supply logistics. Values

1Yellow Table 2025 International Construction Magazine of KHLGroup

Core Values Spirit

Putting Customer First and Self-Reliance; Pragmatism;

Driving the Future by Innovation Openness and Inclusivity;

Striving Forward and Creating Long-Term Strategic Vision;

Value through Cooperation Unwavering Commitment to

Mission06 PAGE About LiuGong

Milestones in 2025

Overseas performance continues to make LiuGong achieved new progress in

breakthroughs. The total number of large-scale electrified and intelligent

on-site participants and intended orders products and relevant technologies and

at the 11·26 Global Customer Festival accelerated the commercialization of

reached a record high. scientific and technological achieve-

ments.According to the recognition results of

Zheng Jin Party Secretary and Chairman “National Master Craftsmen in 2025”

of LiuGong Group and LiuGong announced by the All-China Federation of

Machinery attended and delivered a Trade Unions Pang Qiwen Chief

speech at the Symposium on the Technician and Manufacturing Director of

Economic Situation with Experts and LiuGong Driveline became the first

Entrepreneurs chaired by Premier Li LiuGong employee honored as a

Qiang of the State Council. “National Master Craftsman” which

marked a historic breakthrough of

LiuGong in the cultivation of national-level

skilled talent.LiuGong Machinery completed the New Energy & Intelligent Global

re-election of the 10th Board of Directors Innovation Center officially opened and

and senior management team. serves as the headquarters of LiuGong

Machinery.07 PAGE About LiuGong

Honors

The 7th 2025

Guangxi Zhuang Autonomous Top 50 Global Construction Top 500 Chinese Enterprises in

Region Chairman Quality Award Machinery Manufacturers Creditworthiness

People’ s Government of Organizing Committee of Global Top 50 Construction China Enterprise Reform and Development Society

Guangxi Zhuang Autonomous Region Machinery Summit China Construction China Association of Cooperative

Machinery Magazine Trade Enterprises

Third Prize of Guangxi Scienceand Special Prize of Guangxi Patent Second Prize of Machinery

Technology Progress Award Award – Hydraulic Control Method and Industry Science and Technology

State-owned Assets Supervision and Administration System for Excavators Progress Award

Commission of Guangxi Zhuang Autonomous Market Supervision Administration (Intellectual Property Office) China Machinery Industry Federation

Region People’ s Government of of Guangxi Zhuang Autonomous Region Chinese Mechanical Engineering Society

Guangxi Zhuang Autonomous Region

Vice-Chairman Unit of the Industrial Chain and

Supply Chain Working Committee of China Vice-Chairman Unit of the Third Council of Top 10 Aerial Work Platform

Construction Machinery Association (2024–2029) Guangxi Machinery Industry Federation Manufacturers in China

China Construction Machinery Association; Industrial Organizing Committee of the T50 Summit of World

Chain and Supply Chain Working Committee Guangxi Machinery Industry Federation Construction Machinery Industry08 PAGE 走Ab进o柳ut 工LiuGong

ESG Performance Highlights in 2025

Operating Revenue Net Profit Attributable to Shareholders of the Listed Company Total Assets

Economic

Performance 331.44RMB 100 million 16.09RMB 100 million 494.53RMB 100 million

Environmental Total Green Electricity Trading Volume

Performance Governance Performance53747000kWh Proportion of Cash Dividends to Net

Percentage Percentage Profit Attributable to Shareholders in

Environmental Investment Photovoltaic Power Capacity of Female Directors of Independent Directors the Consolidated Financial Statements

2877RMB 10000 48422497kWh 18.18% 33.33% 40.02%

Number of Environmental Comprehensive Energy Consumption

Training Sessions per 10000 Yuan of Output Value

131Times 0.0114tce/10000 yuan

Social Performance

Pollutant Emission Comprehensive Water Consumption

Compliance Rate per 10000 yuan of Output Value Investment Total Investment in

100% 0.49 in R&D 14.23RMB 100 million Safety Training 79.03RMB 10000Cubic meters/10000 Yuan

Total Number of Total Investment in

Compliant Disposal Rate Carbon Dioxide Emissions per Granted Valid Patents 3604Items Rural Revitalization 1019.55RMB 10000

of Solid Waste Unit of Output

100% 0.0232 Total Investment in tCO2e /10000 yuan First Pass Yield 100% Social Welfare 1263.1RMB 1000009 PAGE ESG Management

ESG

Management

ESG Strategy

LiuGong has always positioned sustainable

development as a core strategic priority. In 2025

the Company broke new ground by adopting a

top-level design. We organized the formulation of

the 2030 ESG Strategic Plan of LiuGong in

alignment with industry trends and global

standards. The plan clearly defines the develop-

ment vision core objectives and implementation

pathways and provides fundamental guidance for

all our ESG initiatives. It is not only a forward-look-

ing arrangement against the market transformation

and the policy orientation of the 15th Five-Year

Plan but also a master framework for integrating

resources and driving innovations demonstrating

the Company’s firm commitment to sustainable

development.Upholding the ESG vision of “Safeguarding OurGreen Home and Building a Better Future forHumanity” and the ESG mission of “EmpoweringPeople with Intelligent Green Machinery” the

Company has established the “CREST” strategy

model around five strategic priorities.Based on current management realities prior research findings best practices and practical experience and in alignment with ESG indicator

requirements for state-owned listed companies LiuGong has defined detailed development goals time limits key actions and milestone events

for each ESG-related strategic priority and material topic which helps us to effectively track the implementation progress of our strategies.Ultimately we identified 47 development goals 142 key actions and 181 milestone events for the implementation of our ESG strategy.10 PAGE ESG Management

ESG Vision Safeguarding Our Green Home and Building a Better Future for Humanity

ESG Mission Empowering People with Intelligent Green Machinery

Customer First Striving as the Core Responsibility in Motion Excellence in Governance Towards Green

Strategic Collaborating to Innovation Drives the Building a Harmonious Solidifying the Foundation Transformation Co-creating

Priorities Create Valuen Future Society Together for Health the Earth’ s Blueprint

To build a synergistic To build a value network To build a responsible To establish a globally To establish a scientific and

"Five-Pronged Technolo- for win-win cooperation ecosystem featuring mutual leading health and standardized governance

gy" system to become a and create a sustainable prosperity and become a compliance governance system to help the Company

Overall Strategic trusted global provider of industry ecosystem benchmark in supporting the system and promote the achieve carbon peaking by

Targets equipment and technical construction of a harmonious steady development of the 2030 and carbon neutrality by

solutions society Company 2055

? Innovation-Driven ? Sustainable Supply ? Occupational Health and ? Standardized Governance ? Carbon Peaking and

Development Chain Safety ? Due Diligence Carbon Neutrality Initiatives

? Product Quality and ? Talent Training and ? Protection of Employees’ ? Compliance Management ? Green Manufacturing

Safety Development Rights and Interests ? Construction with Integrity ? Green Products

Material Topics ? Protection of ? Industry Development ? Contribution to Society ? Resource Utilization

Customers’ Rights and ? Rural Revitalization ? Circular Economy

Interests ? Ecosystem Protection11 PAGE ESG Management

ESG Management

ESG Governance System

LiuGong strives to establish a comprehensive ESG governance system. In 2024 the Company formulated the ESG Management System and established an ESG governance framework comprising the Board of

Directors the Strategy and ESG Committee the ESG Leading Group and the ESG Working Group to ensure the seamless integration of top-level decision-making and strategy research with actual execution. In 2025

based on the existing governance framework the Company further improved the ESG working mechanisms. The Board of Directors (the “Board”) and senior management actively advanced the management of ESG

topics and standardized workflows for topics including: anti-corruption anti-monopoly and fair competition climate change environmental management energy utilization R&D innovation product quality and occupa-

tional health and safety. These efforts ensure alignment with the Company’s ESG strategic development requirements.Board of The Board of Directors determines the Company's ESG development The Board of Directors regularly receives reports from the Strategy and

Directors direction strategy and objectives; reviews and approves the Company's ESG ESG Committee on key ESG matters and work progress to ensure the

management system and ESG Reports and handles significant ESG matters Company thoroughly implements its sustainable development strategy

etc. and continuously advances ESG objectives.Strategy The Strategy and ESG Committee under the Board of Director reviewed The Strategy and ESG Committee holds two meetings annually on

and ESG ESG-related matters of the Company and provided suggestions reviewed and ESG-related issues.Committee submitted the ESG Report to the Board and guided the daily implementation Regularly listen to reports on ESG work achievements and plans from

of ESG work. the ESG Leading Group;

Decision-Making Review progress and performance against ESG targets;

Level Approve the annual ESG report.ESG The ESG Leading Group led by the Company's Chairman Receive reports from the ESG Execution Group on ESG achieve-

Leading and CEO provides assurance and professional support for ments and plans;

Group the Strategy and ESG Committee in fulfilling its ESG-related Review major ESG matters and make timely decisions.Management Level duties.ESG The Functional Departments and Subsidiaries of The ESG Execution Group holds meetings once every two

Execution the Board Secretary serves as the main execution weeks to receive reports from the ESG Coordination Project

Group and coordination body for the communication Team on project progress and challenges and ensure timely

related to ESG work. updates of project information.。

Functional The functional departments and subsidiaries of Headquarters departments and subsidiaries submit ESG work

Execution Level Departments the Company are the executing units of ESG data report progress and challenges in work improvement to

and Subsidiaries work and are responsible for putting the ESG the ESG Coordination Project Team and share ESG best

tasks into practice. practices daily to facilitate cross-departmental collaboration.12 PAGE ESG Management

ESG Risk Management

LiuGong has integrated ESG risk management into the overall risk management process and established the ESG Risk Monitoring System to assess monitor and address relevant risks. During the Reporting Period

in accordance with IFRS S1 and IFRS S2 issued by the International Sustainability Standards Board (ISSB) as well as applicable guidelines in China the Company advanced ESG disclosure and management practices

around the four core pillars of governance strategy risk management and metrics and targets. We conducted due diligence to comprehensively identify and assess ESG risks across all business processes including

climate change pollutant emissions occupational health and safety supply chain management and product quality. The Board of Directors bears the ultimate oversight responsibility for ESG matters particularly ESG

risk management to ensure the safe stable and sustainable development of the Company.Establishment of ESG Systems ESG Management Manual

Clarifies ESG topic management processes and relevant internal/external governance mecha-

From the strategic importance of sustainable development nisms and promotes the sustainable development and compliant information disclosure of the

LiuGong systematically organizes and integrates ESG-related Company.processes responsibilities and control requirements and has

established a “1+N” ESG management framework. Centered on

the ESG Management Manual and supported by specialized ESG Information Management System

documents such as the ESG Information Management System Standardizes processes for collecting analyzing and compiling ESG information and ensures

and the ESG Risk Monitoring System this framework clarifies the Company can have a comprehensive accurate and timely access to relevant information

implementation standards responsibility boundaries and during daily operations.operational mechanisms for each dimension thus laying a solid

institutional foundation for the deep integration of ESG

principles into corporate operations and management. ESG Risk Monitoring System

ESG Assessment Mechanism Establishes a risk monitoring mechanism and safeguards the robust implementation of the

Company's ESG strategy.The Company integrates ESG performance evaluation and

oversight mechanisms into existing performance management Stakeholder Communication System

systems in alignment with corporate strategy and industry

characteristics. Key ESG indicators are incorporated into the Standardizes stakeholder identification and communication processes and enables continuous

KPI contracts signed with executives and comprehensively monitoring and improvement through systematic mechanisms to enhance sustainability

cover critical areas such as work safety environmental performance.protection and compliant operations. The Company assesses

the completion of ESG indicators in the annual assessment

and the assessment results are applied to determining the Topic Materiality Assessment System

performance-based compensation of the Management. Clarifies the materiality assessment process of ESG topics accurately identifies material topics

Simultaneously differentiated metrics and assessment cycles that affect the sustainable competitiveness of the Company and the core concerns of internal and

based on job responsibilities are established for all employees external stakeholders.to effectively drive the integration and implementation of ESG

principles across departments and business units.13 PAGE ESG Management

ESG Capability Enhancement

To strengthen the foundation of ESG management and enhance the professional capabilities of all employ-

ees the Company actively establishes a systematic training framework during the Reporting Period.Sustainability-related training courses are launched at the Capital Markets Institute of LiuGong University

and third-party experts are invited to provide specialized ESG strategy training for the Management and

employees across departments. The Company introduces best practices from industry benchmarks

clarifies optimization pathways for ESG management in all business processes and comprehensively

improves ESG management professionalism. In addition global ESG policies are interpreted to help

employees accurately understand the latest domestic and international regulatory requirements and

industry development trends thereby solidifying the foundation for compliant operations and strategic

planning. In 2025 the Company offered a total of 10 ESG training sessions including 4 specialized

trainings and 6 thematic trainings with the number of participants exceeding 300 person-times.Training Session for the ESG Execution Group ESG-Themed Training Session for

the Board of Directors

Recognition and Awards in ESG

Through outstanding ESG practices LiuGong continues to deepen the integration of intelligent manufacturing and green development setting a benchmark for sustainable development in China's equipment manufac-

turing industry. During the Reporting Period the Company leveraged the ESG framework to empower high-quality development and achieved a significant upgrade in ESG ratings: the WIND ESG rating rose from BB

in 2024 to A and the Sino-Securities ESG rating advanced to AA. The Company's case of “Empowering Green Transformation with Intelligence to Build a New Manufacturing Paradigm” was selected as an outstanding

case by the Ministry of Ecology and Environment and recognized as a “Best Practice Case in Sustainable Development” by the China Association for Public Companies further demonstrating LiuGong’s remarkable

achievements in ESG governance.Outstanding Case in the 2025 Corporate

Wind ESG Rating: A (2025) Sino-Securities ESG Rating: AA (2025) ESG Case Collection of the Ministry of

Ecology and Environment

2025 Best Practice Cases in

E-Board “100 Value” in 2025 2025 ESG Model Enterprise Sustainable Development for

at 14th China Finance Summit

Listed Companies14 PAGE ESG Management

Stakeholders Demands and

Communication

Expectations Channels and LiuGong's ActionsMethods

Communication with Stakeholders

Cost-effective Products Client Visits and Control product quality

Communications and safety

Attaching great importance to the expectations and demands of stakeholders LiuGong has formulated the Supplying High-Quality Meetings Protect customers’ rights

Stakeholder Communication System to systematically regulate and manage the communication with Service and interests

interested or affected parties. These efforts help the Company understand stakeholders’ reasonable Protection of Launch global customer WeChat Interaction

expectations and needs and actively address their key ESG concerns. Customers Customers’ Privacy festivalsHotline Service

Organizational Activities

Information Disclosure

Stakeholders Demands and Communication Expectations Channels and Methods LiuGong's Actions

Transparent and Honest Enhancement of Project Build responsible supply

Legal Compliance Daily Work Reporting and Serve major national Cooperation Cooperation chains

Management Communication strategies Support the development

Meetings and Exchange Contribute to rural of small and

Proactive Tax Payment Advancement of Daily Activities revitalization Mutual Support medium-sized

Governments CommunicationSupport for Local Special Summary Reports enterprises up and down

Development the supply chain

Win-Win Development Offer dealer training

Standardize company

Information Disclosure Investor Hotline Partnersgovernance Convene an annual

Reduction of Operational Strengthen information meeting of distributors

Risks Performance Briefings disclosure Strengthen industry

Economic Value exchanges and Manage investor relations

Creation Product Exhibitions cooperation

Roadshows and Counter Maintain profitability

Shareholders Roadshows growth Reduction of

and Investors Investor Research Environmental Impact Adherence to Environmen- Help to save energy

Reception from Operations tal Information Disclosure and reduce emissions

Network and Communica-

tion such as irm.cnin- Enhancement of Green Participation in Manage environmental

fo.com.cn Development Capacity Environmental Protection compliance

Forums and Exchanges

Protection of Basic Regular Employee Provide a healthy and safe

Rights and Interests of Improve resource Congress working environment Environment Environmental AdvocacyEmployees utilization efficiency

Protection of Establishment of Diverse

Safeguard the human Develop green industries

Employee’ s Communication

rights of employees

Occupational Health Channels Implement green office

Broad Career Establish a comprehen- practices

Employees Development Regular Training sive compensation and

Opportunities benefit system

Participate in public

Balance between Work Conduct diversified

Employee Activities Community Support Public Welfare Activities welfare and charitable

and Life training

activities

Smooth career

Support for Community Community Engagement Organize volunteer

advancement paths Communities Development activities

Organize employee care

Information Disclosure

activities15 PAGE ESG Management

Management of Material Topics

Step 1: Learn about company background

Assessment Process and Methods

Analyze the background of the Company based on global macro trends China's industry development trends the industry in which the

With reference to the Shenzhen Stock Exchange Company operates and the Company’s business model and identify the Company’s stakeholders and the impacts risks and opportunities

Self-Regulatory Guidelines for Listed Companies No. the Company faces.

17—Sustainable Development Reports (for TrialImplementation) (hereinafter referred to as the “theGuidelines”) and based on the characteristics of the

industry and the business realities of the Company

we conducted a comprehensive assessment of the Step 2: Conduct preliminary topic screening

Company’s performance in relevant topics to see

whether they have a material impact (i.e. impact Use the 21 topics outlined in the Guidelines as the foundation for the topic list refer to international mainstream sustainability reporting

materiality) on the economic social and environmen- standards such as GRI and consider related topics from domestic and international peers align with the Sustainable Development Goals

tal aspects. We also assess whether each topic will (SDGs) of the United Nations establish 2025 ESG topic library consisting of a total of 27 topics. During the Reporting Period the Company

have a material effect (i.e. financial materiality) on the updated and optimized material ESG topics integrated risk management and tax compliance into compliance management included the

business model operations development strategy “Protection of Shareholders’ Rights and Interests” into corporate governance and added “Due Diligence” as a new material topic.financial situation cash flow financing methods and

costs value chain of the Company. Through such

materiality assessment and with reference to the

relevant requirements of the international mainstream

sustainability reporting standards the Company

Step 3: Assess topic materiality

conducted the materiality assessment of the topics in

the topic library the specific implementation steps are

as follows:

* Impact Materiality Assessment

We identified the potential or actual positive and negative impacts of each topic on the external environment society and the economy.Through questionnaire-based surveys on stakeholders combined with expert judgment we identified topics with impact materiality.* Financial Materiality Assessment

Recognize and assess risks and opportunities under each relevant topic and identify topics with financial materiality through the analysis

of impacts dependencies and other factors in combination with expert judgment and risk identification and evaluation lists from

departments.16 PAGE ESG Management

Step 4: Identify and approve material topics

Create a list of topics with impact materiality and financial materiality and ensure that the relevant topics are disclosed transparently balanced and comprehensively in the report.Identification Results of Material Topics

Pollutant Emissions Product Safety and Quality

Waste Disposal Occupational Health and Safety

Energy Utilization Innovation-Driven Development

Responsible Supply Chain Response to Climate Change

Environmental Compliance Management

Protection of Customers’ Rights and Interests

Circular Economy

Information Security and Privacy Protection

Water Resource Utilization

Compliance Management

ESG Governance

Communications with Stakeholders

Standardization of Corporate Governance

Protection of Employees’ Rights and Interests

Ethics of Science and Technology Rural Revitalization Talent Training and Development

Ecosystem Protection Contribution to Society Anti-Commercial Bribery and Anti-Corruption

Equal Treatment of Small and Due Diligence

Medium-Sized Enterprises Anti-Unfair Competition

I m p a c t M a t e r i a l i t y

F i n a n c i a l M a t e r i a l i t y17 PAGE Resilient Foundation: Empowering Steady Development through Governance Excellence

Resilient Foundation:

Empowering Steady

Development through

Governance Excellence

Our Philosophy

LiuGong continuously improve governance structure and opera-

tion mechanisms strengthens risk management and internal

control effectively protect investors’ rights and interests and

foster a culture of integrity. These efforts provide a solid founda-

tion for our sustainable and high-quality development and

long-term value creation.Our Actions

We sandardize corporate governance adhere to compliant

operations strengthen investor relations management and build

an integrity framework.SDGs Responded18 PAGE Resilient Foundation: Empowering Steady Development through Governance Excellence

Responsibility Focus

Implementing Risk Control through Three Lines of Defense Forging Robust Compliance Barriers for

LiuGong

With comprehensive compliance as the cornerstone LiuGong continues to establish a modern risk governance system that supports global development. In 2025 we further deepened our compliance governance

structure centered on the “three lines of defense” and regularly conducted activities such as compliance risk identification and assessment compliance reviews compliance inspections closed-loop rectification of

compliance risks and compliance culture development. These efforts helped us foster an industry-leading compliance ecosystem and lay a solid foundation for the steady and long-term development of the Company

in a complex environment.Strengthening the Foundation of Compliance Governance Board of Directors

In building the compliance governance system LiuGong has gone through the

following three stages: forming compliance organizations standardizing compliance Compliance Management Committee

operations and establishing compliance standardization systems. The Company has

initially formed a modern and international compliance governance system that

serves as an industry benchmark. A “three lines of defense” framework under the

unified leadership of the Compliance Management Committee of the Board of Compliance Management Execution Committee

Directors has been established to clarify responsibilities at all levels and form a

compliance governance pattern that features clear accountability and coordinated Compliance Office

collaboration.At the institutional level the Company has formulated a series of documents Weakness requiring continuous Professionalization Enhancement and

including the Standardized Management Manual of Compliance System the empowerment coordinated supervision

Compliance Manual and the Compliance Management System to establish a

multi-layered framework that encompasses operational management protocols for Leading Departments for Compliance Oversight

the compliance system and guidelines for key compliance areas thereby ensuring Business and Functional Units Compliance Management Departments

effective implementation and continuous optimization of compliance manage-

ment. First Line of Defense Second Line of Defense Third Line of Defense

The Company has established a sound internal audit system and implemented

internal audit management policies. The Audit Committee under the Board of

Directors undertakes the oversight and evaluation of internal control as well as the All Employees of the Company

communication supervision and verification of both internal and external audits. The

Company conducts internal audits in accordance with the annual audit plan to ensure

compliant operations and effective internal controls. In 2025 the Company carried out Compliance Governance Structure of LiuGong

a total of 29 audit projects.19 PAGE Resilient Foundation: Empowering Steady Development through Governance Excellence

Deepening Comprehensive Risk Management Fostering a Culture of Compliance among All Employees

LiuGong integrates risk management deeply into corporate strategy and daily The Company has incorporated compliance culture development training and education into the

operations and continuously promotes the systematic improvement and effectiveness Standardized Management Manual of Compliance System and regularly offers systematic tiered and

of risk management systems. The Company has formulated policies such as the Risk categorized legal and compliance training sessions for employees. Through case analysis policy interpre-

Identification and Control Procedure and the Risk Evaluation and Graded Control tation and scenario-based teaching the Company continuously strengthens employees’ compliance

Procedure to standardize risk identification and assessment activities. The Compli- awareness and risk identification capabilities solidifying the ideological and behavioral foundation for

ance Committee takes overall responsibility for risk management. The affiliated stable corporate operations. During the Reporting Period the Company offered 32 legal training sessions

Compliance Management Execution Committee is responsible for organizing and for 1100 participants with a total training duration of 48 hours.promoting the assessment of compliance risks the evaluation of compliance manage-

ment and relevant continuous improvements. The Compliance Management Office

regularly organizes annual risk assessments for all business units along with

functional departments in the headquarters. Additionally the Company has

established a legal and compliance organization responsible for vertical management

and unified leadership to ensure the effective control of legal and compliance risks.To strengthen tax risk management the Company has formulated the Tax Manage-

ment Policy and related operational guidelines. Through annual tax health checks for

subsidiaries internal learning and external training the Company systematically

evaluates and promotes issue rectification to ensure stable operations in a complex

tax environment. To prevent improper related-party transactions and safeguard the

legitimate rights and interests of the Company and all shareholders the Company has

established and improved internal control systems for related-party transactions. All Thematic Training on Construction Legal and Compliance Training

related-party transactions must adhere to the principles of integrity fairness Engineering Contracts at OVM at Anhui LiuGong

openness and impartiality.In 2025 the Company conducted a comprehensive compliance risk assessment

across all units/business divisions covering 20 key areas and 336 compliance risk

monitoring indicators including corporate governance bidding management HSE

product compliance and personal information protection for employees. This helped

us gain a detailed compliance risk map to accurately identify compliance risks and

continuously promote closed-loop rectification. The Company continuously tracked

the results of the 2024 compliance risk assessment and completed the rectification of

all 29 high-risk issues. The rectification rate for high-risk issues reached 100%

ensuring the Company’s steady and sustainable development.Compliance Training at LiuGong’ s Compliance Training at

Changzhou Base Jiangsu LiuGong20 PAGE Resilient Foundation: Empowering Steady Development through Governance Excellence

Standardization of Corporate Governance

Governance Framework Operation Mechanisms

The General Meeting of Shareholders is the supreme authority of the Company. LiuGong strictly regulates the convening holding and voting procedures of General Meeting of

The Board of Directors is accountable to the General Meeting of Shareholders General

Meeting of Shareholders in accordance with the Rules of Procedure for the General Meeting of Sharehold-

and has five special committees under it: the Strategy and ESG Committee the Shareholders ers and other regulations ensuring that resolutions are made by shareholders in a fair and

Nomination Committee the Audit Committee the Remuneration and Appraisal transparent manner. During the Reporting Period the Company held 4 shareholders’ meetings

Committee and the Compliance Management Committee. Each committee including 1 annual general meeting of shareholders and 3 extraordinary meetings of sharehold-

performs its functions and powers in accordance with the Articles of Association ers at which 22 proposals were reviewed and approved.and the respective working rules of the committees. The Company has completed

the cancellation of the board of supervisors and the corresponding supervisory

functions and powers are exercised by the Audit Committee in accordance with

the law.Board of During the Reporting Period the Board of Directors comprised 12 members convened 10

Directors meetings (including 4 extraordinary sessions) approved 65 resolutions (with a resolution

follow-up rate of 91%) and reviewed 27 reports. The specialized committees under the Board

Strategy and ESG General Meeting of Directors convened 24 meetings and reviewed 38 proposals. Two meetings of the indepen-

Committee of Shareholders dent directors were held at which 4 proposals were reviewed.During the Reporting Period the Company continued to enhance the internal governance

system revised and disclosed a total of 27 regulations with governance effectiveness steadily

Nomination Committee enhanced. Through standardized and efficient governance practices the Company received

honors from the China Association for Public Companies.as follows.Board of

Audit Committee

Directors

Remuneration and 2025 2025

Appraisal Committee Best Practice Case in Board Best Practice Case in Board Offices

Operations for Listed Companies for Listed Companies

Compliance Management Management

Committee Team

Organization Chart of LiuGong21 PAGE Resilient Foundation: Empowering Steady Development through Governance Excellence

Key Performance

Diversity During the Reporting Period independent directors constituted 33.33% of the

Board 80% of the Remuneration and Appraisal Committee 60% of the Audit

The composition of the Board of Directors is determined by future operational develop-

ment needs and diversified selection criteria taking into account industry experience Committee and 60% of the Nomination Committee.educational background professional skills international experience gender and other

factors. The Board consists of 6 internal directors (including 1 employee director) 2

external directors and 4 independent directors. Among these there are 2 female

directors accounting for 18.18% of the total. Board members possess diverse profession-

al backgrounds and work experience spanning critical domains such as legal compliance

investment finance audit internal control corporate governance internationalization

and construction machinery. This diversity provides a crucial foundation for the Board of

Directors to make scientific and efficient decisions.Independence

The Company has established the System of Work of Independent Directors and the

Special Meeting System of Independent Directors providing a more standardized

operating platform for independent directors. This promotes the performance efficiency

of independent directors and enhances the standardized operational level of the On-Site Visits by Independent Directors at Subsidiaries

Company. To maintain independence independent directors conduct annual self-assess-

ments of their independence and submit the results to the Board of Directors. The Board

of Directors evaluates the independence of incumbent independent directors and issues Effectiveness

a special opinion every year which is disclosed at the same time as the annual report.During the Reporting Period independent directors engaged in specialized communica-

tions with the Company's functional departments to gain an in-depth understanding of The Company has formulated and implemented the Measures for the Administration of Directors which

the Company's operation and management realities and provide targeted professional clearly define directors’ qualifications performance requirements and evaluation systems complement-

advice. The Company also organized independent directors for 4 on-site visits to ed by incentive measures to effectively motivate directors to fulfill their duties. Additionally 4 specialized

conduct to key subsidiaries/business lines enabling them to understand subsidiary training sessions were offered to continuously enhance directors' professional capabilities. At the

operations and development plans. This deepened their comprehension of the meetings of the Board of Directors directors actively provided professional opinions and formed 81

Company's overall business prepared them thoroughly for subsequent deliberations on resolutions of which 20 were incorporated into a special oversight mechanism for continuous follow-up

important proposals and strengthened the scientific and rational nature of major and implementation. This strengthened the oversight over subsidiaries’ operations and strategic

decisions and continuous improvement of standardized governance. A total of 12 execution ensured the quality of financial information and effectively enhanced corporate governance

subsidiary-related proposals were approved at the meetings of the Board of Directors. and risk management effectiveness.22 PAGE Resilient Foundation: Empowering Steady Development through Governance Excellence

Case Study: Leveraging the Governance Effectiveness of the

Board of Directors and Providing Professional Empowerment for

Core Management Improvement Case Study: Practices in Systematic Enhancement of Subsidiary Governance

At LiuGong the Board of Directors offered specialized financial training To consolidate the foundation of overall corporate governance and build a vertically integrated and effective

sessions based on its governance capabilities and the professional expertise governance system LiuGong focused on improving the quality and efficiency of subsidiary governance and

of independent directors to empower the operation and development of the implemented classified and precise management and control. According to different equity structures in

Company. On December 24 the Company specially invited independent enterprises such as joint ventures holding subsidiaries wholly-owned subsidiaries and equity-participat-directors to deliver a training session on “Comprehensive Competence and ing companies the Company employed differentiated management processes and control standards toDecision-making Capabilities” for senior executives heads of functional promote standardized and efficient board operation at more than 20 subsidiaries. During the Reporting

departments and all chief financial officers. The training featured two core Period we completed the reforms of supervisory boards for 45 subsidiaries improved the primary oversight

courses delivered by independent directors. The courses focused respectively and duty performance system and effectively strengthened the effectiveness of governance oversight.on managerial soft skills—such as emotional intelligence and financial

management thinking—and on core business fundamentals including value LiuGong prioritizes enhancing the professional capabilities of governance personnel at subsidiaries. The

creation and risk control. These courses offered both theoretical and practical Company has offered 8 specialized training sessions for directors supervisors and board secretaries (275

value. This training effectively enhanced the capabilities of the core team participants in total) to comprehensively strengthen the professional competence of the grassroots

laying a solid foundation for the Company’s high-quality development and governance team.highlighting the professional value of the Board of Directors.Special Guidance Meeting on Board Specialized Training on Board

Training on “Comprehensive Competence and Decision-Making Capability”

Operation for Subsidiaries Operation for Subsidiaries

Delivered by Invited Independent Directors

Remuneration Management System Improvement

Through the formulation of the Policy on the Allowance for Directors and Supervisors and During the Reporting Period in accordance with the new Company Law and securities regulatory requirements

the Remuneration for Senior Management LiuGong has established a standardized LiuGong revised and issued 27 governance systems including the Articles of Association Rules of Procedure for the

incentive mechanism and a remuneration system. To guide long-term value creation the General Meeting of Shareholders Rules of Procedure for the Board of Directors Management System for Resignation

Board of Directors has explored the implementation of medium- and long-term market-ori- of Directors and Senior Management and Related Party Transaction Management System. The Company has continu-

ented incentive methods such as equity incentives and employee stock ownership plans. ously improved its corporate governance system and strengthened standardized operation.The Company also strictly complies with regulations for listed companies and regularly

discloses relevant remuneration information to ensure transparency and standardization in

management.0223 PAGE Resilient Foundation: Empowering Steady Development through Governance Excellence

Protection of Investors’ Rights and Interests

Information Disclosure Shareholder Returns

The Company has formulated and improved the Information Disclosure Policy Voluntary Information Disclosure Policy and Management LiuGong has formulated and implemented a shareholder return

System for the Suspension and Exemption of Information Disclosure. In accordance with the Decision on Establishing a Responsibility plan to share development achievements based on sustained

Implementation Plan for the Annual Information Disclosure Evaluation List of the Shenzhen Stock Exchange issued by the Board of Directors and stable operating performance and a competitive dividend

the Company has benchmarked against the SZSE information disclosure evaluation criteria clarified management responsibilities policy. Since 2001 the Company has distributed cash dividends

established a regular communication mechanism strengthened communication and collaboration among major business units standardized for 25 consecutive years fulfilling its value commitment to

related party transaction procedures and integrated the concept of information disclosure compliance into all links of the entire value chain shareholders through a long-term stable and predictable return

so as to ensure the timely accurate and complete disclosure of the Company's financial position operating results material events and other mechanism.information.During the Reporting Period the Company's annual information disclosure evaluation grade was Class A.Cash Dividend Distributed by the Company

Investor Relations Management in the Past Three Years

Cash Dividend per 10 Shares( RMB)

LiuGong has formulated the Investor Relations Management System clarifying that the Chairman bears primary responsibility while the

Board Secretariat coordinates the management of investor relations. The Company actively expands diversified communication channels 2023 2.00

including regularly holding performance briefings and organizing investors to pay field visits and also maintains timely interaction on CNINFO

(irm.cninfo.com.cn)and through investor hotlines to ensure the open transparent and effective communication with investors. The Compa- 2024 2.73

ny's management attaches great importance to investor relations. During the Reporting Period the Company organized more than 280 2025 3.25

investor exchange activities both online and offline including "Shareholders Come" "2025 BICES Thematic Exchange" "1126 Global

Customer Festival" with more than 2800 investor communications and 158 investor inquiries were effectively answered through CNINFO Total Cash Dividend(RMB 10000)

(irm.cninfo.com.cn) with a response rate of 100%.

202339024

202453617

Investor Meeting 2025 BICES 64402.49

on Customer Day Thematic Exchange 2025

Proportion to Net Profit Attributable to Shareholders

of the Listed Company in Consolidated Financial

Statements(%)

202344.97

Investors’ Visit On-site Visits 2024 40.40

to Listed Companies for Investors

2025 40.0224 PAGE Resilient Foundation: Empowering Steady Development through Governance Excellence

Adherence to Business Ethics

Anti-Bribery and Anti-Corruption

Integrity Management System

LiuGong has formulated institutional documents such as the Guidelines for Anti-Corruption and Compliance Management and the

Measures for the Management of Legal and Compliant Organizations to strengthen anti-corruption compliance management and regulate

the conduct of relevant personnel and suppliers. The Party Committee of the Company is primarily responsible for improving the Party's

work style and promoting clean governance with the Secretary of the Party Committee fulfilling the duties as the “first responsible person”.The Company's Commission for Discipline Inspection assumes the supervisory responsibility and actively assists the Party Committee in

improving the Party's work style and coordinating anti-corruption work. In 2025 the signing rate of the commitment to business ethics

(including integrity) reached 95%.Regarding the anti-corruption management of suppliers the Company has incorporated integrity clauses into supplier contracts

established a negative indicator assessment and evaluation mechanism for suppliers’ integrity and compliance proactively supervised

suppliers regulated their business ethics conduct advocated the establishment of sound compliance management structures formulated

and implemented anti-corruption policies and built an integrity-based supply chain.Anti-Corruption Risk Management

LiuGong has established a full-process anti-corruption management system and implemented the Integrity Risk Prevention and Control

Manual. The Company conducts special risk assessments mainly against high-risk areas such as sales bidding and tendering contracts

and finance and formulates targeted prevention and control measures to systematically manage integrity risks and safeguard corporate

reputation and asset security. Whistleblowing Channels:

To effectively safeguard the legitimate rights and interests of employees customers partners and the public the Company has Whistleblowing Hotline: 0772-3887690

established a whistleblowing mechanism for reporting violations. We implement a series of measures to prevent detect and combat all

forms of illegal and non-compliant activities. We encourage all stakeholders to supervise and report violations strictly protect whistleblow- Whistleblowing Email: lghgb@liugong.com

ers’ information and impose serious penalties for any disclosure of such information. Retaliation in any form is strictly prohibited. For

every complaint and report received the Company promptly conducts investigations. Upon verification strict accountability measures will

be taken against the responsible departments and individuals. The handling process follows the principles of objectivity fairness and

prudence and decisions are made based on facts and evidence to uphold the seriousness and fairness of the system.25 PAGE Resilient Foundation: Empowering Steady Development through Governance Excellence

Construction of a Culture of Integrity

The Company has established the “five-dimension” integrity culture brand built a matrix of integrity LiuGong regularly carries out the “Transparent Procurement Month” integrity-themed series

culture brands carried out collective integrity interviews and offered specialized training sessions on activities for suppliers and invites all suppliers to participate in integrity-themed calligraphy and

integrity education and mandatory training for high-risk personnel to prevent corruption risks. During the painting Party-building and specialized training on anti-corruption aiming to build a clean and

Reporting Period 100% of directors participated in anti-commercial bribery and anti-corruption training transparent ecosystem within LiuGong’s supply chain system.with a total training duration of 45 hours; 100% of management personnel participated with a total

training duration of 52 hours; and 4242 employees participated with a total training duration of 65

hours. Case Study: Specialized Anti-Corruption Training for LiuGong’s Global

Suppliers in 2025

Case Study: Work Conference on Strengthening Party Governance Integrity

Building and Anti-Corruption Efforts In November 2025 the Global Supplier Conference of LiuGong was held in

Liuzhou gathering over 600 global supplier partners. The conference featured a

specialized anti-corruption training for suppliers. The conference publicized

LiuGong’s supply chain system integrity and compliance management require-

In March 2025 LiuGong convened the 2025 Conference on Strengthening Party ments and advocated for the joint construction of a clean compliant and healthy

Governance Integrity Building and Anti-Corruption Efforts and conducted collective global supply chain system for LiuGong contributing value to the achievement of

integrity interviews for employees. The conference organized all participants to collectively the Company’s long-term strategic targets.watch an educational film about typical cases and invited a senior judge from the Criminal

Tribunal of the People’s Court of Liunan District to conduct specialized training on the

prevention of duty-related crimes.Specialized Anti-Corruption Training for Suppliers

Specialized Training on Duty-Related Crimes26 PAGE Resilient Foundation: Empowering Steady Development through Governance Excellence

Anti-Monopoly and Anti-Unfair Competition

LiuGong strictly complies with laws and regulations related to anti-monopoly and anti-unfair competi-

tion and has formulated the Guidelines for Anti-Monopoly Compliance Management and the Guidelines Case Study: Interpretation of Key Revisions to the New Anti-Unfair

for Anti-Unfair Competition Compliance Management. The Legal and Compliance Department of the Competition Law of the People’s Republic of China and Relevant Alerts

Company is responsible for coordinating anti-monopoly and anti-unfair competition initiatives. Further- of Compliance Risks

more the Company adheres to responsible marketing and comprehensively supervises the

compliance of marketing activities to jointly maintain market order. In 2025 the Company offered two

training sessions on responsible marketing for 110 (person-times) participants. In July 2025 LiuGong offered a live-stream course on the interpretation of key

revisions to the new Anti-Unfair Competition Law and relevant alerts of compli-

LiuGong has systematically established a risk prevention and control system for anti-unfair competition ance risks to enhance the understanding of the changes in the new Anti-Unfair

covering key business scenarios such as marketing promotion data application and trade secret Competition Law and ensure proactive and effective compliance across the orga-

protection. In response to core risks such as false advertising commercial bribery illegal data acquisi- nization.tion and trade secret leakage the Company has formulated specific measures including compliance

review of promotional content full traceability of benefit exchanges lawful authorization for data

acquisition and strict personnel confidentiality management. By establishing a compliance system

framework conducting special training carrying out regular risk inspections and participating in

industry self-discipline initiatives we have formed a long-term mechanism for continuous improvement

to comprehensively safeguard a fair competition environment. During the Reporting Period no major

litigation events related to unfair competition or anti-monopoly occurred in the Company.The Company attaches great importance to the cultivation of an anti-monopoly culture. The Compli-

ance Management Department closely monitors updates to the Anti-Monopoly Law of the People’s

Republic of China and other relevant laws and regulations and invites external law firms to improve the

anti-monopoly awareness of all employees. In 2025 the Company offered one training session on

anti-monopoly and fair competition for 20 participants with a total training duration of 1.5 hours.Training on Anti-Unfair Competition27 PAGE Ecological Stewardship: Powering Green and Intelligent Manufacturing Innovation

Ecological Stewardship:

Powering Green and

Intelligent Manufacturing

Innovation

Our Philosophy

We implement the primary responsibi l i ty for ecological

environmental protection and integrate ecological and

environmental protection requirements into the Company’ s

development strategy and corporate governance process.Focusing on green environmental protection economy and

intelligence we continuously promote the industry's low-carbon

transformation and actively participate in ecological civilization

construction pollution control resource conservation and other

related work.Our Actions

We address climate change improve the environmental

management system manage pollutants and waste enhance

resource efficiency practice the circular economy principles and

protect ecosystems.SDGs Responded28 PAGE Ecological Stewardship: Powering Green and Intelligent Manufacturing Innovation

Responsibility Focus

Driving Transformation with Digital Intelligence Creating Green and Smart Machinery Factories

Guided by the “carbon peaking and carbon neutrality” goals LiuGong deeply integrates green development principles into the entire production and manufacturing process. In 2025 the Company optimized production

processes by applying green technologies empowered low-carbon operations through digital transformation in manufacturing and improved resource efficiency through circular economy practices. By coordinating and

advancing the greening of production methods the Company achieved multiple win-win outcomes including pollution reduction environmental improvement and resource conservation.Deepening the Application of Green Processes

During the Reporting Period the Company continued to promote green manufacturing and applied green processes in key fields such as foundry material cutting welding machining assembly and painting so as to

reduce pollution lower the labor intensity of employees and improve the working environment realizing a "greener" production mode and establishing a green intelligent factory. In 2025 with its outstanding performance

in green manufacturing energy conservation carbon reduction and resource recycling the Company was successfully selected into the "Green Factory" list issued by the Ministry of Industry and Information Technology.This national-level honor is not only an authoritative recognition of LiuGong's long-term implementation of the green development strategy but also demonstrates the Company's exemplary role in promoting the green

transformation of industry.Pollution Reduction Improvement of Working Environment Reduction of Employee Workload

Conduct research and improvements on casting A large number of welding robots have been invested to replace Deploy sanding machines in material

sand properties to reduce the overall scrap rate of manual welding reducing the amount of manual welding and the cutting areas to replace manual grinding;

castings; labor intensity of workers; smoke and dust control has been

carried out to eliminate direct emissions; In the casting and pouring area AGVs

Adopt the lost foam to reduce casting dust have replaced fuel-powered forklifts for

emissions; Torque-controlled tools have been fully adopted to replace molten iron handling;

pneumatic wrenches improving tightening accuracy and reducing

Promote the application of electrostatic spraying noise with 100% coverage of torque-controlled tools in key In the assembly area AGVs/RGVs have

to improve coating utilization; processes; replaced fuel-powered forklifts for material

distribution;

Replace traditional paint coating with powder Adopt robotic spray painting to replace manual spraying on new

coating to improve coating utilization rate and production lines of loaders excavators and hydraulic In the assembly area automatic tightening

reduce VOC emissions; components; machines filling machines and other

equipment have been applied to replace

In the processing of major structural components Introduce the automated warehouse to realize automated sorting manual work for tightening and filling

of the Company such as loaders and excavators in new factories of loaders and excavators. operations.dry cutting has been realized to reduce the

discharge of cutting fluid.29 PAGE Ecological Stewardship: Powering Green and Intelligent Manufacturing Innovation

Intelligent Manufacturing Projects of LiuGong

Accelerating Digital Transformation in Manufacturing

Digital Process Platform

With the digital project development as a breakthrough point the Implementation Highlights

Company empowers the low-carbon transformation of manufacturing Process efficiency is significantly enhanced through the establishment of 3D model review workflows and the

processes reduces energy consumption minimizes resource waste optimization of EBOM approval procedures.and enhances operational efficiency through process digitization

simulation optimization data application and IoT platform construction. Close alignment has been achieved between process tasks and design workflow nodes.The formulation and implementation of BOM construction standards have enhanced the consistency rate between

E/MBOM. For pilot products the consistency rate increased by 4%–7% reducing the occurrence of multiple codes for

Practicing Circular Economy Principles a single item. The complexity of material management is reduced and the MBOM compilation efficiency has been

increased by approximately 20%.LiuGong actively practices the principles of the circular economy and Enhancement of Process Simulation Application Capabilities

fully utilizes waste components and parts for remanufacturing. In 2025

the Company reused and sold 1300 tons of used parts reducing Implementation Highlights

carbon emissions by 5408 tCO2e. The simulation and optimization in machining logistics and other projects reduce equipment idle time and logistics

LiuGong continuously increases investment in remanufacturing congestion thereby lowering energy consumption and material waste.operations and possesses full-process capabilities of recycling Digital achievements like 3D work instructions and cross-border simulation demonstrations reduced paper drawings

dismantling and cleaning used parts and of remanufacturing complete and international travel lowering carbon emissions and resource consumption.units and components for loaders and excavators. Following on-site

audits by experts from the Ministry of Industry and Information Process simulation has been embedded in the fixed asset investment project initiation stage to optimize equipment

Technology (MIIT) LiuGong became one of the first enterprises to meet layout and capacity configuration avoid repetitive construction and resource redundancy and effectively implement

the Specifications for Remanufacturing Industry of Mechanical and the green development strategy.Electrical Products. In May 2025 the Company successfully passed the

follow-up regulatory inspection by the MIIT again. Enhancement of Data Application Capabilities

Implementation Highlights

Key components of welding robot systems are manufactured in-house to break foreign technology monopolies.Stable and autonomous equipment operation under controllable conditions significantly optimizes equipment

energy consumption.Construction of LiuGong Intelligent Manufacturing IoT Platform

Implementation Highlights

Upon launch this company-wide industrial IoT platform unifies equipment data standards enhances

Remanufacturing Plant of LiuGong connectivity and data application efficiency and optimizes energy management.30 PAGE Ecological Stewardship: Powering Green and Intelligent Manufacturing Innovation

LiuGong aims to improve the utilization of renewable resources and reduce waste and pollution thus contributing to

sustainable economic and social development. LiuGong has established internal policies including the Component

Circular Packaging Management Procedure and the Guidelines for Green and Lean Packaging Design of Procured

Components. In the procurement process the Company prioritizes materials products and services that have lower

environmental impact higher resource utilization recyclability or biodegradability.As a leading enterprise in the construction machinery industry LiuGong launched the “fuel-to-electricity” business

and achieved significant emission and carbon reduction through the wide promotion of electrified equipment. The

business has evolved from the “fuel-to-electricity” conversion of mining trucks to a full-value-chain green solution

covering R&D product portfolio energy replenishment solutions and intelligent systems. Its core value lies in the

deep integration of cost reduction carbon reduction efficiency improvement and intelligent coordination. In 2025

the Company completed the “fuel-to-electricity” conversion of 67 sets of complete machines reducing carbon

dioxide emissions by 8080 tons.Fuel-to-Electricity Conversion

Response to Climate Change

Governance

LiuGong places high importance on climate change management and has incorporated it into strategic planning. The Company continuously refines its climate governance and oversight systems and establishes an

ESG Management System Working Group to manage climate-related risks and opportunities. The Board of Directors serves as the highest decision-making and accountability body for climate governance with the

Strategy and ESG Committee responsible for formulating overall climate governance strategies and targets and supervising climate-related risks and opportunities. The ESG Leading Group composed of all senior

executives is responsible for coordinating and promoting the implementation of climate governance initiatives. The Company has formulated and issued the Climate Change Management System clearly defining the

responsibilities of 14 departments and organizations including the Board Secretariat the Health Safety and Environment Office and the Supply Chain Center. We also standardize processes for climate risk

identification risk management carbon emissions management and climate information disclosure.During the Reporting Period the Company engaged third-party experts to provide carbon management training. Covering five core modules (low-carbon context carbon inventory CDP climate questionnaire etc.) the

training provided detailed practical guidance on corporate carbon accounting emission reduction project implementation and carbon management system establishment. By integrating case studies of benchmark

enterprises and compliance requirements the training helped LiuGong clarify the carbon management pathway while enhancing the ESG competitiveness and low-carbon development capabilities.31 PAGE Ecological Stewardship: Powering Green and Intelligent Manufacturing Innovation

Strategy

In accordance with TCFD recommendations the Company identifies and assesses climate-related risks and opportunities and takes reasonable and effective measures to ensure stable operations.Type of Risk/Opportunity Description of Risk/Opportunity Likelihood of Occurrence2 Impact Duration

3 Expected Financial Impact Countermeasures

Establish a sound emergency management mechanism formulate

Extreme weather events (such as emergency plans and conduct regular emergency drills.heavy rainfall and typhoons) may Impact on raw material

Acute cause disruptions to production supply and product Implement reinforcement and protection measures for important

Risk facilities and supply chains Medium Short term transportation can result equipment and buildings;

affecting normal operations. in cost increases and

revenue decreases. Stay informed about the supply of raw materials and establish a supply

chain risk management mechanism.Physical

Risks

Global warming-induced sea level

rise triggers natural disasters like Develop products adapted to extreme climates;

heatwaves and droughtsaffecting This impacts factory Chronic production efficiency Develop emergency response plans for high temperatures and

Risk equipment performance and Low Medium and

lifespan while increasing risks of resulting in a decrease in

monitor temperature and humidity in real time;

long term

employee heatstroke and water revenue. Implement water-saving measures to reduce water consumption.scarcity.Governments at home and abroad Failure to disclose relevant

may impose stricter requirements on environmental information Monitor and strictly comply with relevant domestic and international

Policy greenhouse gas (GHG) emissions. in a timely manner Short medium laws and regulations.Risk The EU’s carbon tariff mechanisms High according to relevant laws and long terms

and stricter emission standards regulations and policies Continuously track regulatory policy changes and strengthen

Transfor- expose enterprises to compliance may lead to increased fines climate-related information disclosure.mational risks. or impact export business.Risks

As the competition in the

electrification of construction Green technology research

Technolo- machinery intensifies the demand Short medium and development leads to Continuously promote technological innovation and optimize

High

gy Risks for new energy construction and long terms higher operating costs for industrial layout.machinery products is steadily the Company

increasing.32 PAGE Ecological Stewardship: Powering Green and Intelligent Manufacturing Innovation

Type of Risk/Opportunity Description of Risk/Opportunity Likelihood of Occurrence2 Impact Duration

3 Expected Financial Impact Countermeasures

Customer demand is changing to

Transfor- This impacts traditional

Market green and low-carbon and Short medium Communicate in a timely manner and understand customer needs;

mational machinery sales leading to a

Risks competition in the market is High and long terms

Risks decline in revenue. Launch electrified products.intensifying

Techno-

Green production and

logical Short medium Energy-saving and carbon-reducing technologies are used in the

energy-saving carbon reduction in High Reduce Operating Costs

Opportu- and long terms production process to reduce greenhouse gas emissions.production have become trends.nities

Opportu-

nities

Products The demand for new energy

Short medium Market share is expanding

and construction machinery products High Increase R&D on electrified products and launch new green products.and long terms and revenue is increasing.services is growing.

2Likelihood of occurrence refers to the frequency or probability of a risk/opportunity occurring primarily based on historical occurrence probability external scenarios progress in policy implementation and expert predictions. The likelihood of occurrence

ranges from "low" to "high".

3The Impact Duration refers to the different periods when different climate-related risks and opportunities will affect the Company. The Company categorizes the impact duration into short-term (0-1 year) medium-term (1-5 years) and long-term (over 5

years).Impact Risk and Opportunity Management

LiuGong establishes a climate change risk management process and identifies and assesses risks and opportunities arising from climate change in accordance with domestic and international climate policies and

standards. On this basis the Company in alignment with business planning develops reasonable risk management strategies and adjusts and updates them in a timely manner in response to changes in the external

environment to enhance resilience in addressing climate risks.Within the TCFD recommended disclosure framework and in collaboration with third-party professional institutions the Company identifies physical risks

Risk transition risks and opportunities based on the characteristics of the construction machinery industry (such as high energy consumption in production

Identification globalized supply chains and long product life cycles) and national/international environmental protection trends. This lays the foundation for subsequent

risk assessment and management.Climate

Change Risk Risk Based on risk identification the Company evaluates the likelihood impact duration and potential major financial impacts of climate change risks and

Management Assessment opportunities.Process

According to the results of the risk assessment the Company develops targeted risk response strategies and measures to effectively reduce the adverse

Risk

impacts of climate change risks on its operations and financial conditions. The Company also continuously monitors the risk situation and evaluates

Response

management measures to ensure the effectiveness of climate change risk management.33 PAGE Ecological Stewardship: Powering Green and Intelligent Manufacturing Innovation

Metrics and Targets4

Targets in 2025

LiuGong has defined the ESG strategy for the 15th Five-Year Plan period and set specific

decarbonization targets in the field of climate change including gradually increasing the

percentage of renewable energy in total organizational energy consumption achieving carbon

peaking by 2030 and carbon neutrality by 2055. The Company breaks these into phased targets Renewable energy accounts for CO2emissions per 10000 yuan of

for continuous tracking evaluation and updating with specific achievement paths planned and 30% of total energy consumption. output value decrease by 18%

implemented across production and operation processes supporting the Company in achieving compared with 2020.net-zero greenhouse gas emissions.

4Some targets in this ESG Report were systematically updated or adjusted based on the 2030 ESG Strategic Plan Achieved Achieved

which was officially formulated by LiuGong in 2025.Greenhouse Gas Emission Management

LiuGong actively implements the Science-Based Targets initiative (SBTi) promotes zero-carbon

factory construction comprehensively enhances green manufacturing capabilities and supports

the Company to upgrade toward high-end intelligent and green development. The CO2

emissions from the Company's units mainly arise from production processes such as component

cutting welding polishing cleaning machining assembly and vehicle transportation. The

Company continues to improve processes and adopts mixed-gas welding to reduce carbon

dioxide usage. 待提供 待提供

During the Reporting Period LiuGong achieved key breakthroughs in greenhouse gas

management and formally launched the full-value-chain carbon management system. The

Company completed its first organizational-level greenhouse gas inventory selecting LiuGong

Changzhou and LiuGong Loader Plant as pilots. Strictly following ISO 14064 greenhouse gas

verification standards the Company systematically clarified the emission boundaries sources

and quantified data for the pilot factories. This lays a solid data foundation for establishing a

routine carbon inventory mechanism and accurately identifying emission reduction potential. ISO 14064 Certification Certificate of ISO 14064 Certification Certificate of

LiuGong Changzhou LiuGong Loader Plant34 PAGE Ecological Stewardship: Powering Green and Intelligent Manufacturing Innovation

0.0297

0.03172.97

2.940.0232

Direct GHG Emissions (Scope 1)(tCO2e)

2.76

88432.39 98409.87 Indirect GHG Emissions (Scope 2)(tCO2e)

75877.26

76422.93 85384.85 Total GHG emissions (Scopes 1 and 2)(tCO e)

66170.982

9706.28 12009.46 13025.02 Total GHG Emissions per Million Yuan of Revenue(tCO2e)

Carbon Dioxide Emissions per Unit of Output(tCO2e /10000 yuan)

202320242025

LiuGong continues to expand the use of clean energy and is committed to reducing carbon 3135.01

dioxide emissions. The Company actively participates in green power trading. As of the end 1136.23

of 2025 the cumulative green power traded by the Company reached 82.9937 million kWh. 553.16 1453.72

Regarding PV power generation system construction 25.08 MW of new capacity was 4842.25

connected to the grid in 2025. The Company's cumulative PV installed capacity reached 696.91

53.85 MW with cumulative self-generated and self-consumed PV electricity totaling 61.772

million kWh over the years. In 2025 LiuGong’s PV power generation totaled 48.4225 million

kWh of which 31.3501 million kWh was self-generated and self-consumed and 53.747 2023 2024 2025

million kWh was externally purchased green electricity. Through these measures the

Company effectively reduced carbon dioxide emissions by 69865 tons making a significant Photovoltaic Power Capacity Photovoltaic Power Generation for

contribution to sustainable development. (10000 kWh) Self-Consumption

(10000 kWh)

Total installed capacity (MWp)

Self-generated and self-used photovoltaic electricity (million kWh) Situation of photovoltaic construction and green power application

Purchased green electricity（million kWh） (Including purchased green electricity)

Electricity cost savings (RMB 10000) 35.1%586

Proportion of green electricity in total electricity consumption 17.3%

9.4%176

0.3%2.3%2.7%3.2%

566873445354

7721729

31.4

50.5753.54.05.25.511.68

2019 2020 2021 2022 2023 2024 202535 PAGE Ecological Stewardship: Powering Green and Intelligent Manufacturing Innovation

Environmental Compliance Man-

agement

Environmental Management System

LiuGong has established a comprehensive environmental management system in strict compliance with the

Environmental Protection Law of the People’s Republic of China other national laws regulations and local

operational requirements. Each year the Company engages independent third-party certification bodies to

conduct supervisory audits of the system and a recertification audit is conducted every three years. By the end

of the Reporting Period LiuGong and its 17 subsidiaries had all passed the ISO 14001 Environmental

Management System certification. During the Reporting Period no major environmental accidents or

environmental violations occurred in the Company.LiuGong actively promotes clean production audits and implements environmental protection strictly in

accordance with clean production standards. The Company implements clean production plans formulates

annual environmental remediation project plans and completes them as required to ensure it can reach the

level of an advanced domestic clean production enterprise. Additionally LiuGong has actively applied for clean Environmental Management System Certification Certificate (Partial)

production enterprise status. We were awarded the title of Clean Production Enterprise of Guangxi in 2014 and

successfully passed re-examinations in 2018 and 2023.Governance

LiuGong has formulated environmental management systems such as the Air Pollution Management System

the!Water Pollution Management System and the Solid Waste Management System to clearly define the

responsibilities of each department and related personnel in pollutant emissions and the management of Environmental Environmental

5 RMB 10000 Protection Taxes Paid RMB 10000

corresponding environmental protection equipment and facilities. The Board of Directors and the Senior Investment

Management are responsible for strategic planning and guidance of environmental management. The 2023 4146 2023 19.87

Company and its subsidiaries have established the Health Safety and Environmental (HSE) Management

Committee which is responsible for overseeing water air and solid waste pollution prevention at all levels. 2024 4486 2024 20.84

Additionally LiuGong has established an Excellence Manufacturing Center staffed with dedicated

environmental management personnel and each subsidiary has designated full-time or part-time 2025 2877 2025 24.94

environmental management positions. Environmental management responsibilities are implemented at every

level to ensure efficient accountability.Furthermore the Company strengthens pollution prevention at the source standardizes procedures for 5The construction of new intelligent factories at LiuGong Loader Plant and LiuGong

handling and investigating environmental pollution incidents strictly prevents and mitigates environmental Changzhou in 2023 to 2024 along with large-scale investments in environmental

risks and advances ecological civilization construction. Environmental management is incorporated into protection equipment resulted in higher environmental expenditures.departmental performance assessments to enforce oversight and management responsibilities.36 PAGE Ecological Stewardship: Powering Green and Intelligent Manufacturing Innovation

Strategy

LiuGong systematically identifies and analyzes all kinds of environmental factors in production and operation as well as the risks and opportunities arising from these factors and formulates corresponding measures

to continuously improve the Company's environmental risk management capability.Type of Risk/Opportunity Description of Risk/Opportunity Likelihood of Occurrence Impact Duration Expected Financial Impact Countermeasures

With stricter environmental Stay updated and strictly comply with laws and regulations related to

regulations and higher pollutant pollutants and waste;

emission standards in overseas

Strengthen the maintenance and management of environmental protection

markets (e.g. EU and North Possible substantial fines and

Risk Policy Risk America) the Company must High Short term

equipment and standardize measures for the disposal of emissions;

litigation compensation

allocate additional funds for Conduct regular environmental hazard inspections and strengthen

technological upgrades and pollutant monitoring.pollution control.Continuously develop the remanufacturing business and strengthen the

Pollutant and waste emissions are recycling of used parts;

Techno-

reduced through equipment

Oppor- logical Medium and Vigorously promote the construction of green manufacturing system adopt

optimization technological Reduce Operating Costs

tunities Oppor- High long term green technology and reduce environmental pollution from the source;

transformation and other

tunities

methods. Make Continuous optimization of pollutant treatment technologies.Impact Risk and Opportunity Management

LiuGong has formulated the Risk and Opportunity Identification and Control Procedure requiring annual identification and assessment of environmental risks and opportunities. Based on the annual assessments the

Company determines the annual environmental protection work plan. During the Reporting Period the Company evaluated the effectiveness of all risk and opportunity measures. We will continue to track internal and

external environmental changes for dynamic adjustment and optimization.Metrics and Targets Targets in 2025

During the Reporting Period LiuGong updated its annual

Environmental pollution/penalty Compliance with the emission

environmental compliance management targets in

incidents standards for three wastes

accordance with the 15th Five-Year Environmental (wastewater waste gas solid waste)

Protection Plan ensuring all emission indicators remained Achieved and noise at boundary Achieved

within permitted limits while steadily advancing ecological

conservation and green sustainable development. 0 100%37 PAGE Ecological Stewardship: Powering Green and Intelligent Manufacturing Innovation

Promotion of Environmental Awareness

Indicator Unit 2023 2024 2025

In 2025 the Company offered 4 professional training programs for environmental

management personnel across all units covering topics such as: the Wastewater Number of Environmental Time 114 129 131

Treatment Technology and the Welding Fume Control Technology. Employees Training Sessions

were also organized to visit external wastewater treatment plants and hazardous Number of Participants in

waste collection units for on-site learning with a total of 306 participants. These Person-timeEnvironmental Training 7128 8594 9098

efforts effectively improved the environmental management personnel’s

professional knowledge and practical skills. Leveraging key observances such as Total Hours of Environmental

World Environment Day and National Ecology Day the Company launches Hour 206.5 213 242Training

environmental awareness campaigns company-wide to further consolidate the

collective commitment to ecological conservation.Environmental Emergency Drills

LiuGong has formulated the Emergency Response Plan for Environmental Incidents clarifying emergency rescue procedures and responsibility assignments to minimize personnel losses and social harm. Each

subsidiary conducts annual environmental emergency training and drills tailored to its specific environmental risks. During the Reporting Period LiuGong subsidiaries collectively conducted 47 environmental

emergency drills.Pollutant Emissions

2023

To ensure compliance with emission standards for pollutants such as exhaust

gases wastewater and noise at boundary the Company developed an Pollutant Emission Compliance Rate 100% 2024

environmental monitoring plan in accordance with pollutant discharge permit

management requirements. LiuGong's equipment and facilities operate normally. 2025

Wastewater exhaust gases and other emissions from all units are treated to meet

standards before discharge. Third-party monitoring agencies are commissioned 2023

annually to monitor wastewater exhaust gases and noise at boundary. No

violations were recorded and no adverse impacts were observed on employees or Synchronized Operation Rate of 2024

surrounding residents. In 2025 all units completed 249 monitoring sessions for Environmental Facilities 100%

exhaust emission outlets and 97 sessions for wastewater discharge outlets and 2025

rainwater monitoring. All monitored indicators met national and local pollutant

discharge standards.Compliance Rate of “Three 2023LiuGong strictly implements the “Environmental Impact Assessment System” and

the “Three Simultaneities” System. All new modified or expanded projects Simultaneities” in Environmental 100% 2024undergo mandatory environmental impact assessments and adhere to the “Three Protection for Construction ProjectsSimultaneities” construction requirements. 202538 PAGE Ecological Stewardship: Powering Green and Intelligent Manufacturing Innovation

Management of Wastewater Management of Waste Gases

The Company's subsidiaries operate 15 wastewater treatment stations primarily employing a The Company implements categorized and targeted treatment measures for different exhaust gases.three-stage combination technology of “oil separation + air flotation + contact oxidation”. After processing all pollutants meet national and local environmental emission standards injectingElectroplating wastewater is treated using a combination of “electrochemical methods + green momentum into regional air quality improvement.ultrafiltration + reverse osmosis”. All treated water is recycled for production use without external

discharge. During the Reporting Period the Company achieved a wastewater recycling rate of

2.27% over 4 times higher than that in 2024. Additionally the Company has installed online Measures for Waste Gas Management

wastewater monitoring equipment to conduct real-time dynamic monitoring of water quality

ensuring efficient wastewater management.Waste Gas from VOCs

Indicator6 Unit 2023 2024 2025 Control volatile organic compounds (VOCs) such as benzene toluene and xylene in paint by adopting powder coating and electrostatic spraying technologies;Upgrade existing treatment equipment with a combined technology process of “dryWastewater Discharges7 Ton 510833 481983 551455 filtration + activated carbon adsorption or zeolite rotor + catalytic combustion”.Wastewater Recycling Volume Ton 1517 2102 12496 Welding Fumes

Chemical Oxygen Demand

(CODcr) Ton 20.01 19.73 32.8

Replace manual welding with robotic welding and configure efficient cartridge-type

dust collection equipment for treatment.Five-day Biochemical OxygenDemand (BOD Ton） 4.34 2.82 9.6 Shot Blasting Dust and Casting Dust5

Use efficient bag-type dust collection equipment or cartridge-type dust collection

Suspended Solids Ton 17.17 15.13 10.4 equipment for treatment.Ammonia Nitrogen (NH3-N) Ton 4.18 3.88 5 Electroplating Chromic Acid Mist

0.56 0.28 2.06 Equip electroplating production line with an exhaust gas collection device and uses Total Phosphorus (P) Ton a three-stage spraying tower for treatment.

6Wastewater-related data statistics scope cover the Company’s headquarters and subsidiaries and the

following data for waste gases and waste solids is similarly applicable.

7The addition of new production lines for excavators Zhongyuan hydraulic component and excavator

wastewater treatment stations in 2025 led to increased total wastewater discharge some pollutants and

recovery volumes.39 PAGE Ecological Stewardship: Powering Green and Intelligent Manufacturing Innovation

Management of Wastes

Indicator Unit 2023 2024 2025

LiuGong has established internal management systems including the Solid Waste

Waste Gas Emissions8 Management System and the Standard for Pollution Control on Hazardous Waste Storage 10000 m3 1062664 1103023 1670479 which are implemented by all subsidiaries. All solid waste is classified and disposed of

according to law and hazardous waste is handed over to qualified units for proper

Nitrogen Oxide (NO ) 3.6 4.76 14.75 disposal. Additionally the Company regularly conducts training sessions on standardized X Ton solid waste management to continuously enhance employees' awareness of classification

and operational compliance.Sulfur Dioxide Ton 4.2 3.17 7.76

Indicator Unit 2023 2024 2025

Vo l a t i l e O r g a n i c

Compounds (VOC) Ton 32.66 34.68 115.6 Disposal Volume of

General Industrial Ton 39526 34364 39682

Particulate Matter (PM) Ton 50.72 56.54 45 Solid Waste9

Disposal Volume of

8Emissions data for 2024 and prior years are calculated based on manual monitoring records. By 2025 online monitoring TonDomestic Waste 6682 4001 3844

systems were largely installed across all units and emission data can be sourced from these systems.Hazardous Waste

Ton

Disposal 1505 1621 2447

Noise Management

LiuGong continuously optimizes production processes selects low-noise equipment employs electric torque Compliance Rate of Ton 100

wrenches during assembly utilizes torque-controlled tools and adopts low-noise KBK overhead crane systems Solid Waste Disposal 100 100

significantly reducing regional noise levels. For end-of-pipe treatment the Company implemented engineering

measures including vibration isolation noise absorption and sound insulation to effectively block noise 9From 2023 to 2024 LiuGong Changzhou Zhongyuan Hydraulic and Hubei OVM were in the

propagation. construction and trial operation stage with relatively low hazardous waste generation and disposal

volume. They began formal production in 2025 led to an increase in the disposal of general

industrial solid waste and hazardous waste.40 PAGE Ecological Stewardship: Powering Green and Intelligent Manufacturing Innovation

Resource Management

Resource Management System

Governance LiuGong strictly adheres to national and local laws and regulations including the Energy Conservation Law of the People’s Republic of China and the Water Law of the People's Republic of China.Energy management is conducted in accordance with the Energy Management Systems—Requirements with Guidance for Use (GB/T 23331-2020). The Board of Directors and the Senior

Management are responsible for strategic planning and guidance on energy management. The Energy Technology Office is set up within the Intelligent Manufacturing Research Institute of the

Excellence Manufacturing Center and serves as the Company’s headquarters-level energy management organization. In 2025 LiuGong restructured its energy management system and

established 46 documents covering energy management systems processes and standards across multiple dimensions including planning energy supply system construction energy

procurement energy system operation and maintenance and energy usage. In the same year (2025) the Company initiated carbon emission management in the manufacturing process and

published the Management Plan for Carbon Emission in Manufacturing Process and the Management System for Carbon Emission in Manufacturing Process as well as an Initiative for Energy

Conservation and Low Carbon to advocate for collective efforts of all employees toward carbon reduction and energy efficiency.The water resource management efforts of LiuGong are carried out in accordance with the Energy Management System.Strategy LiuGong conducts comprehensive analyses of its energy consumption structure utilization efficiency and external environmental changes to systematically identify potential risks and incremental

opportunities arising from policy shifts technological advancements and supply chain collaboration.Type of Risk/Opportunity Description of Risk/Opportunity Likelihood of Occurrence Impact Duration Financial Impact Countermeasures

Electricity and diesel fuel account for a significant Establish energy consumption management

Increase in energy

Market proportion of the Company's production and Short and targets;

Risk Medium costs and decline in

Risks operational energy consumption. Volatile energy prices medium term Continuously advance PV power generation and

profits

may impact production costs. green electricity trading.The integration of digital and intelligent technologies

Technolog- Increase in production

with energy management creates significant potential Carry out projects such as compressed air system

ical Short medium efficiency and

for efficiency gains. Developing emerging energy High energy-saving and coating line energy-saving;Opportuni- and long terms reduction of production

technologies and implementing energy-efficiency Actively advance digital infrastructure development.ties costs.Opportu- upgrades will enhance energy utilization efficiency.nities

Policy Reduction in Subsidies incentive measures and preferential loans

Opportu Medium and investment costs and introduced by the government encourage companies to High Pay attention to government policies.nities long term increase in income adopt clean energy or improve energy efficiency.sources41 PAGE Ecological Stewardship: Powering Green and Intelligent Manufacturing Innovation

Impact Risk and Opportunity Management Energy Utilization

The Company establishes an energy usage ledger to record and analyze energy The Company improves energy utilization efficiency by eliminating outdated technologies and high

consumption comprehensively identify and assess the risks and opportunities that energy-consuming equipment and promoting new energy technologies. In the production of components the

may arise in the process of energy utilization. The Company has deployed monitoring Company uses laser cutting machines dry cutting technology robot powder spraying robot welding and other

and protection systems to conduct real-time online surveillance of electrical equipment advanced green process technologies. In the production operation the Company effectively monitors the

operations ensuring long-term stable performance. We have also established an utilization rate of plates the amount of paint per unit area the amount of welding gas used for a single kilogram

energy management system for subsidiaries to enable real-time energy data collection of welding wire and other green process indicators to achieve low-consumption and energy-saving production.and consumption management.Energy Consumption of LiuGong

Metrics and Targets

Category Unit 2023 2024 2025

Based on strategic development needs LiuGong formulated the 15th Five-Year Plan Natural Gas 10000 m3 203.70 311.94 442.89

for Energy Operations in 2025 and set the five-year energy targets: increase the

proportion of renewable energy to 40% by 2026 with a subsequent increases of 5% Diesel Ton 1230.80 1175.35 645.10

each year; reduce CO2 emissions per 10000 yuan of output value by 3% annually and

regularly track the progress toward these goals. The Company continues to build a Gasoline Ton 7.93 5.90 1.91

standardized systematic energy management platform to achieve digital

information-based and intelligent control and management of energy. Fuel Liter 0 0 0

Liquefied petroleum gas Ton 0 0 0

Electric Power kWh 157928323 182558915 205960324

Targets in 2025

Heat GJ 10450 8954 6826

Renewable Energy

YOY Decrease in Decrease in Electricity Decrease in Energy tceConsumption 680 2410 10458

Energy Costs Per Consumption of Air Cost per Unit of Coating Proportion of Renewable

Unit of Working Time Compressors per Unit Area on Painting Lines %Energy Consumption 3 8 32.3

of Compressed Air

Total Energy Consumption tce 24248.98 28612.52 32385.98

3% 3% 3% Total Energy Consumption tce

per Million Revenue 0.88 0.95 0.98

Achieved Achieved Achieved Comprehensive Energy

Consumption per 10000 tce/10000 yuan 0.0108 0.0111 0.0114

Yuan of Output Value

Total Green Electricity

10000 kWh

Trading Volume 0 824.67 5374.742 PAGE Ecological Stewardship: Powering Green and Intelligent Manufacturing Innovation

Implementation of Energy-saving Renovation Education on Energy ConservationFocusing on the two major themes of “guaranteeing energy supply and LiuGong consistently centers its efforts on empowering all employees embedding energy conservation principles deeplyreasonable energy use” LiuGong has actively implemented energy-saving into the mindset and externalizing it into action. The Company regularly conducts training and promotional activities

renovation projects continuously optimized the process and accelerated the around energy efficiency guiding all employees to shift from “passive energy conservation” to “proactive energy creation”.promotion of relevant technologies. During the Reporting Period the Company During the Reporting Period the Company organized diverse training initiatives including National Energy Efficiency

made energy-saving improvements in projects such as the intelligent Publicity Week the 2025 Energy Technology Exchange Conference of the Manufacturing Technology Month and energy

transformation projects of LiuGong Changzhou and LiuGong Loader Plant the policy dissemination sessions. These efforts fostered a strong culture of energy conservation and low-carbon practices

renovation project of LiuGong Driveline and the projects of LiuGong’s contributing to the development of a Beautiful China.Excavator Smart Factory and Zhongyuan Hydraulic. Specifically the coating

line was changed from using electric heating to using efficient and clean natural

gas heating to improve thermal efficiency. Case Study: National Energy Efficiency Publicity Week

In addition to routine energy conservation management for air compressors and

coating lines the Company prioritized energy efficiency initiatives for foundry

melting furnaces and transmission heat treatment furnaces in 2025. This

involved implementing measures such as scheduling centralized production In the National Energy Efficiency Publicity Week (from June 23 to 29 2025) the Company headquarters

optimizing insulation/furnaces improving product yield rates and enhancing displayed event themes and energy-efficiency promotion videos on the electronic screen at the factory

equipment maintenance. These measures were formalized into management gate and the LED screen on the first floor of the headquarters office building. This ensured visitors were

documents achieving a 17% year-on-year reduction in electricity consumption informed about the themes of the Energy Efficiency Publicity Week and the Low-Carbon Day enhancing

per kilogram of parts for transmission heat treatment furnaces and a 6% employees' awareness of energy efficiency. During the National Energy Efficiency Publicity Week

year-on-year decrease in electricity consumption per ton of parts for casting subsidiaries conducted on-site inspections targeting energy waste thoroughly examining electricity

melting furnaces. The Company also implemented 41 on-site energy-efficiency water and compressed air usage in production areas to promptly address any instances of waste.modifications and optimizations collectively saving 13.48 million kWh of

electricity.Implementation of Energy-Efficient Transportation

LiuGong adopts a low-carbon transportation solution changing the mode of

automobile transportation to a combination of land and water transportation

which significantly reduces logistics and transportation costs while reducing

carbon emissions. The Company gradually replaced fuel-powered forklifts with

new transport tools like AGVs/RGVs and electric forklifts particularly for indoor

material delivery operations. By the end of 2025 fuel-powered forklifts had National Energy Efficiency Publicity Week

been completely phased out for indoor distribution in the assembly plants of

both loaders and excavators.43 PAGE Ecological Stewardship: Powering Green and Intelligent Manufacturing Innovation

Water Resource Utilization Green Office

LiuGong implements various water-saving measures based on its production characteristics continuously LiuGong guides employees to actively participate in green office practices by

improving the water resource reuse rate. Subsidiaries manage water use through methods such as water promoting paperless workflows optimizing resource allocation and establishingbalance testing water supply network inspection troubleshooting and leak sealing. In addition the casting classified recycling systems creating a culture where “everyone practices green officeand heat treatment processes in the production process of subsidiaries use cooling water towers and pools and integrates low-carbon concepts into all work”.to recycle water resources.Water Saving

Use foot-operated water valves sensor faucets and other

2025 Water Conservation Measures water-saving devices.

Regularly conduct training on water-saving.LiuGong Changzhou conducts monthly leak inspections on the main water pipelines in the factory area.In late June one leak was detected and promptly repaired.Electricity Saving

An external contractor was commissioned to inspect water supply management at the new factory of Strictly control the temperature of air conditioning in summer

the after-sales company and repair 5 leak points. Following repairs monthly water consumption and winter.decreased by 1340 tons. Ensure that lights are turned off when leaving offices and

A leak detection agency was commissioned to inspect the water supply and fire protection pipelines firmly prevent lights from being “always-on”.within the International Industrial Park and it identified and repaired 2 leaks in fire protection pipelines

and one leak in a fire protection water tank supply pipe. Paper Saving

Promote paperless office practices and continue to drive the

construction of information systems.Advocate double-sided printing to reduce paper waste.Water Resource Utiliza-

tion of LiuGong 2023 2024 2025

Waste Sorting and Recycling

Strictly follow relevant regulations to carry out waste sorting

Total Freshwater

1681284 1400371 1568544 and collect and treat wastes such as used batteries and pen Consumption(Ton) refills in a centralized manner.

Total Water

Consumption(Ton) 1534946 1294362 1382352 Completion and Commissioning of Innovation

Center

Comprehensive Water

Consumption per 10000 yuan of 0.68 0.50 0.49 Complete the green building of the Innovation Center and put

Output Value(m3/10000 Yuan) it into operation and pass the LEED Platinum Certification.44 PAGE Ecological Stewardship: Powering Green and Intelligent Manufacturing Innovation

Protection of Ecosystem and Biodiversity

LiuGong systematically advances ecological and environmental protection actively developing and manufacturing electrical and new-energy products integrating advanced energy-efficiency and

emission-reduction technologies and reducing dependence on fossil fuels. Electric products emit no exhaust gases or noise and minimize potential impacts on terrestrial/aquatic ecosystems and

animal/plant habitats during downstream project construction. The Company strengthens control of the three wastes recycles scrap steel and other wastes and ensures that hazardous wastes

such as paint and used activated carbon are 100% disposed of by compliant organizations without causing any contamination to surrounding soil and groundwater. During the Reporting Period

the Company did not conduct production or business activities in ecologically sensitive or fragile areas and no incidents damaging biodiversity occurred in the Company.45 PAGE Innovation Integration: Stabilizing Industrial Chains and Refining Quality to Boost Industries

Innovation Integration:

Stabilizing Industrial

Chains and Refining

Quality to Boost Industries

Our Philosophy

We adhere to an innovation-driven development philosophy

strengthen collaboration between R&D and the supply chain

upholds safety and quality standards optimize customer

service fortify data security and empower the sustainable and

high-quality development of the Company.Our Actions

We insist on R&D and innovation protect intellectual property

rights strengthen supply chain management conduct responsi-

ble purchasing treat SMEs equally guarantee quality assur-

ance optimize customer service and protect information securi-

ty and privacy.SDGs Responded46 PAGE Innovation Integration: Stabilizing Industrial Chains and Refining Quality to Boost Industries

Responsibility Focus

Creating Value through Product Excellence Setting Safety and Sustainability Benchmarks in

Construction Machinery

LiuGong systematically integrates the principles of safety sustainability and accessibility into the entire product R&D and design process. In 2025 driven by technological innovation the Company built a multi-layered

protection system for product safety implemented low-carbon requirements in green design and addressed diverse market demands for product accessibility. Through comprehensive product design upgrades we have

achieved a deep integration of product value with industrial and social responsibility providing solutions for high-quality development in the industry.Deepening Product Safety Design

Safety remains the top priority in LiuGong's product design and manufacturing process. Through a multi-tiered intelligent safety technology system the Company comprehensively safeguards equipment operation

operator safety and the working environment fulfilling its dual commitment to product safety and social responsibility. The products of LiuGong Aerial Work Platforms demonstrate the following core safety features:

Redundant Safety Design Intelligent Active Protection

Sensors and boom-balancing An optional active safety protection system utilizes radar detection Case Study: LiuGong AEM's Lateral Tilt Angle Adaptive Technology

valves feature dual redundant and audible/visual alerts to identify personnel or obstacles within

configurations for enhanced the operation area in real time and triggers automatic shutdown to

reliability and safety. effectively prevent collision and crushing risks. In the field of aerial work equipment

safety and efficiency are core to ESG

Smooth Control Technology practices. LiuGong AEM has developed

The boom features speed reduction at extreme positions and scissor lifts are equipped with proportional an innovative lateral tilt angle adaptive

lowering valves across all models ensuring smooth movements minimal shaking and improved operational technology for its LS1412H model. By

stability and comfort. integrating a mechanical shaft angle

sensor with a horizontal tilt sensor this

Adaptive Working Condition Safety technology dynamically optimizes the

The lateral tilt angle adaptive technology dynamically adjusts the permissible tilt range based on platform safety performance of the equipment. It

height enhancing equipment adaptability and safety in complex working conditions. automatically adjusts the maximum

allowable lateral tilt angle based on the

platform's lifting height significantly

Comprehensive Warning System enhancing equipment stability under

Equipped with low-battery voice alarms anti-collision alerts and fault pre-diagnosis systems the system complex working conditions and

provides early risk warnings through voice prompts remote monitoring and intelligent diagnostics to minimize ensuring the safety of operators.unexpected downtime. LS1412H47 PAGE Innovation Integration: Stabilizing Industrial Chains and Refining Quality to Boost Industries

Implementing Green Case Study: Integrated Green Mining Solutions Case Study: Continuous Innovation in Digital and Intelligent

Product Design Enabling Unmanned Coordination Products and AI Enabling Autonomous Path Planning

In 2025 LiuGong applied green design In September 2025 LiuGong launched a large intelligent green In September 2025 the 856HE MAX unmanned electric loader of

principles across the full product R&D mining solution integrating electric excavators mining trucks LiuGong was successfully delivered. Inheriting the core advantages

process focusing on the low-carbon and mobile power supply vehicles and other complete equipment of LiuGong’ s electric loader products it features a vehicle-grade

unmanned transformation of construction sets paired with the “LiuGong Brain” AI system to achieve high-performance domain controller integrates a multi-source fusion

machinery. A complete green product full-process unmanned mining operations. The 135-ton 9135FE perception system for 360° real-time environmental monitoring and

matrix covering multiple scenarios and electric excavator works in coordination with fully electric mining uses laser SLAM and inertial navigation fusion for high-precision

technical paths was developed to fulfill trucks. Using 5G + centimeter-level positioning technology the positioning. AI dynamic obstacle avoidance algorithms enable fully

ESG environmental responsibility and system achieves 24-hour continuous production increases autonomous path planning in complex scenarios without any manual

sustainable development goals. Now the operational efficiency by 25% and reduces carbon emissions by intervention.Company has developed over 150 70%.new-energy products across 14 product

lines including loaders excavators and

mining trucks alongside more than 100

digital technology developments. The

electrification strategy has progressed

from exploration to full leadership with

scenario-based solutions such as large

intelligent green mines enabling fully

unmanned and low-carbon coordinated

operations.

9135FE Electric Excavator 856HE MAX Unmanned Electric Loader

Enhancing Product Accessibility

Leveraging global footprint and local presence LiuGong has established a highly accessible and adaptable product and service ecosystem comprehensively enhancing customer value across channels service

assurance and product compatibility. The Company maintains a global network of over 500 dealers and more than 1300 service centers with business coverage in over 180 countries and regions which ensures rapid

response under the “global resources local service” model. In terms of service LiuGong integrates full-process support including product selection leasing and after-sales services and proactively implements on-site

maintenance in remote areas effectively addressing equipment accessibility and long-term usability challenges. In terms of products LiuGong offers a diversified equipment portfolio spanning over 30 product lines

introduces flexible solutions like operational leasing and provides technical support tailored to customers of varying scales. This significantly lowers usage barriers addresses diverse market needs and systematically

enhances both product accessibility and customer value.48 PAGE Innovation Integration: Stabilizing Industrial Chains and Refining Quality to Boost Industries

Innovation-Driven Development

R&D Innovation Management

Governance

R&D System Investment in R&D

LiuGong has established a comprehensive R&D innovation management system encompassing LiuGong's R&D Investment in the Last Three Years

multiple dimensions such as innovation strategy innovation culture resource allocation process

management knowledge management and performance incentives. Led by the Global R&D Center Investment in R&D (RMB 10000) Proportion of Total R&D Investment to Operating

this system enables closed-loop management spanning corporate strategy product strategy Revenue(%)

product development and product discontinuation. The Company has developed R&D management

policies including the R&D Innovation Management Manual the Annual R&D Project Planning 2023 104703.59 3.80

Management Procedure and the Measures for the Management of Innovation Incentives. We have

also developed an efficient and collaborative LiuGong Development Process (LDP) that covers 6 2024 123797.89 4.12

sub-processes including complete machines components and technology development effectively 2025

improving R&D quality and efficiency. 142330.41 4.29

The Company’s R&D innovation organization includes four major R&D centers: R&D platform

overseas R&D product line R&D and component R&D. Each line has clear responsibilities and R&D Team

works together to promote the Company’s technological innovation and product upgrades.LiuGong has built a systematic talent development mechanism focusing on cultivating core technical

leaders and implementing tiered categorized specialized training to support long-term technological

competitiveness. During the Reporting Period the Company had 2361 R&D personnel including top

R&D experts having senior overseas R&D backgrounds and work experience with world-leading

construction machinery manufacturers.Organization Structure for R&D Innovation

R&D Personnel Structure

R&D Platform Overseas R&D Product Line R&D Component R&D Number of RD Person- Proportion of R&D Personnel to Number of Core Technical

nel (person) Total Workforce (%) Personnel (person)

Organization Chart for R&D Innovation 2325 15.46 103449 PAGE Innovation Integration: Stabilizing Industrial Chains and Refining Quality to Boost Industries

Strategy

By evaluating innovation risks and opportunities LiuGong identifies industry technology trends mitigates R&D uncertainties and converts market opportunities into product competitiveness and financial returns

supporting the implementation of the “Full Intelligence” strategy.Type of Risk/Opportunity Description of Risk/Opportunity Likelihood of Occurrence Impact Duration Expected Financial Impact Countermeasures

European and American countries restrict Chinese Establish a comprehensive product regulatory management

products from entering their markets through

Regu- organization.regulations such as battery regulations REACH Medium and Decrease in

Risk la tory regulations cybersecurity functional safety P-FAS High long term operating revenue Conduct research and compliance checks on relevant

Risks regulations and anti-dumping/countervailing duties regulations to ensure exported products meet local

as well as trade policies. requirements.Leveraging a rich electric product portfolio and Actively expand into new markets and customer bases.Marke t systematic solutions such as “Smart Mine” LiuGong

O p p o r - Medium and Increase in operating

Oppor - expands into high-value emerging markets and High Accelerate the deployment and development of electric

tunities long term revenue

tunities customer groups with a rigid demand for green technologies and core electric components to build an

construction and intelligent sites. electrification industrial ecosystem.Impact Risk and Opportunity Management

LiuGong strengthens core competitiveness and empowers industrial upgrading through new technology and product R&D. By implementing forward-looking strategic planning and systematic risk management we

precisely capture development opportunities to achieve a steady and sustainable growth.Risk Identification Risk Assessment Risk Monitoring Risk Management

The Company defines project goals and The Company conducts quantitative risk The Company establishes a standardized The Company strengthens full-process

scope determines key areas for risk assessments determines specific values and sound R&D project initiation and R&D management effectively controls the

identification and collects and analyzes and ranges for risks such as the tracking mechanism improves execution risks related to new product development

customer needs industry markets probability of occurrence and impact capabilities and closely monitors project regulates R&D activities and continuously

competitors and information on new degree generates a risk matrix and ranks development progress. improves the Company’s independent

products and technologies to improve risks by impact and likelihood. innovation capabilities.the accuracy and comprehensiveness of

risk identification.50 PAGE Innovation Integration: Stabilizing Industrial Chains and Refining Quality to Boost Industries

Metrics and Targets

Targets in 2025

Focusing on breakthroughs in core technolo-

gies LiuGong established clear technological Innovation Mechanism/Sys- Cooperation Project with District-level Platform Scientific and Technological

innovation targets during the Reporting tem: Universities: Established: Achievements:

Period continuously tracking progress to

support sustainable development through 1 Achieved 3 Achieved 1 Achieved 5 Achievedsustained technological leadership.R&D Innovation and Achievements Transformation

Support for R&D Innovation

The Company established the Strategic New Product R&D Expense Support Management System enabling flexible short- medium- and long-term incentives. Performance and compensation are linked to strategic

target achievement stimulating intrinsic motivation for independent innovation. Additionally LiuGong has established a Technology Innovation Award. Each May the Company holds a Technology Innovation Conference

to recognize teams with outstanding R&D contributions and individuals with major technological breakthroughs by granting them honors and rewards. During the Reporting Period the Company issued R&D innovation

incentive bonuses amounting to RMB 43363800.Short- Medium- and Long-Term Incentive Measures

Short Term Medium and Long Term

Implement equity incentives stock option incentives and executive Releases annual performance bonus plans while introducing R&D

term-based incentives. project awards to retain core technical talent and exploring incremental

gross profit incentives.Construction of R&D Platform

LiuGong has established a three-tiered R&D structure forming a global collaborative innovation platform headquartered in Liuzhou

and extending across China India the United States and other countries. As a national high-tech enterprise the Company possesses

13 national technological innovation platforms. During the Reporting Period LiuGong Driveline was recognized as a national-level

Specialized and Sophisticated “Little Giant” enterprise. The “Guangxi LiuGong Shenzhen Intelligent Research Institute” was approvedas a Sci-Tech Innovation Pilot Zone in Guangxi Autonomous Region; the “Guangxi Low-Carbon Intelligent Engineering EquipmentMajor Pilot Platform” was approved under Guangxi’s Innovation-Driven Development Special Project; and the “Guangxi High-EndEquipment Manufacturing Artificial Intelligence Joint Innovation Center” is currently in the public announcement phase.High-Tech Enterprise Certificate51 PAGE Innovation Integration: Stabilizing Industrial Chains and Refining Quality to Boost Industries

R&D Achievements and Progress Promotion of Industry Development

LiuGong driven by technological innovation leverages the dual engines of “intelligence + green” Standard Development

to achieve continuous breakthroughs in electrification intelligence digitalization and large-scale

machinery. We have built an innovative product matrix and technical standards system covering LiuGong actively participates in the formulation of international and domestic technical standards. During

all scenarios. As these achievements have been deeply applied in key sectors such as new the Reporting Period LiuGong contributed to 15 standards including 7 national standards (2 led by

energy ports and mining the Company has become an important benchmark for new quality LiuGong) 5 industry standards and 3 group standards. Additionally LiuGong is an important member of

productive forces in high-end equipment manufacturing. multiple industry and technical associations. In 2025 LiuGong as the Secretariat of the Electric Earthmov-

ing Machinery Subcommittee organized reviews for 2 standards; participated in 3 international meetings;

Science and Technology Awards Obtained by LiuGong in 2025 and attended 4 industry exchange meetings.Industry Cooperation

LiuGong has established a systematic R&D innovation industry cooperation model integrating external

resources to form a symbiotic ecosystem driven by scenarios and values. This approach propels techno-

logical and product upgrades leading the digital and intelligent transformation of the construction machin-

ery industry.Case Study: Signing of the Strategic Cooperation Agreement among China

Northern Vehicle Corporation Ltd. Guangxi LiuGong Machinery Co. Ltd. and

BEIBEN Trucks Group

Key Technologies and Industrial Applications for

Energy-Efficiency Defoaming of Hydraulic Fluids Development and Application of Key

in Construction Machinery Technologies for Unmanned Loaders

On September 25 LiuGong signed a strategic cooperation agreement with China Northern

2025 Mechanical Industry Science and 2025 Mechanical Industry Science and Vehicle Corporation Ltd. and BEIBEN Trucks Group. The three parties will leverage industry

Technology Award Technology Award and channel advantages to deepen collaboration in infrastructure mining and supply chain

Second Prize Second Prize sectors expand overseas aftermarket cooperation and achieve resource sharing and mutual

benefits.Development and Industrialization of the Key Technologies and Applications of

First-Generation New Energy Electric 90-Ton Hydraulic Mining Excavators

Drive Wheel Loaders

Signing Ceremony of the Strategic Cooperation Agreement

2025 Mechanical Industry Science and Guangxi Science and Technology

Technology Award Progress Award

Second Prize Third Prize52 PAGE Innovation Integration: Stabilizing Industrial Chains and Refining Quality to Boost Industries

Science and Technology Ethics

LiuGong is primarily engaged in the R&D manufacturing and service of construction machinery and related intelligent equipment. In activities such as intelligent product development and industrial data application the

Company complies with laws and regulations including the Law of the People's Republic of China on Science and Technology Progress. We strictly adhere to technological ethics requirements concerning data security

and privacy protection and conduct scientific and technological innovation and operations in accordance with regulations. During the Reporting Period no violations of science and technology ethics occurred in the

Company.Protection of Intellectual Property Rights

Intellectual Property Management Protection of Intellectual Property Rights Intellectual Property Training

In strict compliance with the Patent Law of the People’s LiuGong has established a “six-in-one” IPR To further strengthen employee awareness of IPR protection

Republic of China and other relevant laws and regulations management system covering registration and management LiuGong conducts training on patent search

LiuGong has established systems such as the Measures for authorization dispute resolution customs (including database operation and search strategies) and

the Management of Legal Risks Related to Intellectual supervision administrative enforcement and patent mining and layout. Case-based teaching methods are

Property Rights and the Measures for the Management of proactive litigation. The Company continuously used to improve patent search capabilities for engineers and

Patent to regulate the application maintenance use transfer promotes the transformation of IPR manage- designers helping them monitor industry technology trends

licensing and dispute handling of patents trademarks ment from compliance-focused to value-orient- and avoid patent infringement risks in product and technology

copyrights and other intellectual property rights (IPR). The ed operations achieving a strategic upgrade development.Patent Management Committee has been established to from passive defense to proactive layout. Strict

promote the Company’s patent management and protection confidentiality measures are implemented for

efforts. The Secretariat of the Patent Management technical materials involving trade secrets with

Committee handles daily affairs and committee members employees signing non-disclosure agreements

including the Global R&D Center the Legal and Compliance and non-compete agreements to prevent IPR

Department and subsidiaries such as LiuGong Loader Plant leakage. Through patent searches and

and Liuzhou LiuGong Excavators Co. Ltd. ensure analysis risk patents are identified patent

implementation of all tasks and continuously advance the IPR layout plans are formulated and design-around

management and protection for the Company. Among strategies are implemented to avoid infringing

subsidiaries Zhongyuan Machinery and OVM have obtained others' IPR.IPR management system certification. Intellectual Property Training53 PAGE Innovation Integration: Stabilizing Industrial Chains and Refining Quality to Boost Industries

Indicator 2023 2024 2025 Supplier Management Process

Total Number of Granted Valid Patents (Item) 2882 3235 3604 Admission

The Purchasing Department seeks potential suppliers based on development projects

Total Number of Granted Valid Invention 882 1020 1077 and organizes a potential supplier audit (EVA1000 audit) for suppliers passing the initial Patents (Item)

review. Once passing such an audit the suppliers will be added to the list of qualified

suppliers.Total Number of Granted Valid Utility Model

Patents (Item) 1819 1977 2219

Total Number of Granted Valid Design Patents 181 238 308 Supplier admission now requires ISO14001 / ISO45001 certification and ongoing (Item) compliance tracking requirements.Cumulative number of software copyrights

(Item) 227 285 358

Grading

Total number of published papers (Item) 2032 2159 2286

Suppliers are classified into five grades (A B C D and E) for effective management.Creation of Responsible Supply Review

An HSE scoring module has been incorporated into the evaluation process for potential

Chains suppliers with a “safety veto” criterion established alongside additional safety qualifica-tion standards for supplier admission.Supply Chain Management

Second-party audits now include verification of ISO 14001 certifications conflict minerals

Governance LiuGong has established the Supplier Management Procedure the Supplier Performance investigation and control status and green packaging utilization rates with dedicated

Evaluation Management System and the Supplier Yellow-Red-Green-Black List Manage- safety scoring criteria established for suppliers.ment Standard which define standards and processes for supplier sourcing qualification

review and admission assessment. A quantified performance evaluation system is used

to assess and grade suppliers enabling dynamic control of supply chain risks and Exit

performance.The Company talks with unqualified suppliers on their performance evaluation informs

LiuGong has established a clearly defined supply chain management structure led by the them of performance-impacting factors communicates on the next improvement

Procurement Department. This cross-functional collaboration mechanism involves direction and applies for a procurement freeze in the OA system.multiple departments with SQE responsible for process audits and supplier continuous

improvement. The Supplier Performance Management System has been updated to incorporate penalty

mechanisms for serious environmental and safety violations including score deductions

Lugong implements quality assessments based on the EVA 1000-4000 four-dimensional and potential disqualification from the supplier roster.supplier evaluation system enabling full lifecycle quality evaluation of suppliers and

driving continuous improvement in their products and services.54 PAGE Innovation Integration: Stabilizing Industrial Chains and Refining Quality to Boost Industries

Supplier Audit Unit Entity

Number of suppliers certified under Number of suppliers certified under Number of suppliers certified Number of suppliers suspended Number of prospective suppliers

quality management systems environmental management systems under occupational health and due to non-compliance rejected due to non-compliance

safety management systems

7297456800

Strategy

LiuGong incorporates supply chain sustainability into strategic management. By identifying ESG impacts risks and opportunities and implementing optimization measures the Company enhances supply chain

resilience and transparency striving to build a stable efficient and green modern supply system.Likelihood of

Type of Risk/Opportunity Description of Risk/Opportunity Impact Duration Expected Financial Impact Countermeasures

Occurrence

Key raw materials are susceptible to geopolitical factors

Raw Implement supplier diversification and localization strategies and trade policies which may lead to supply disruptions

Ma- Medium and

Increase in operating

establish safety stock for critical materials validate alternative

Risk cost fluctuations and production delays impacting Medium

terial long term

costs and decrease in

materials and sign long-term framework agreements with core

LiuGong's production plans and market supply. operating income

Risks suppliers to stabilize supply.By promoting green procurement requiring suppliers to Develop a green supply chain development plan incorporate

Devel reduce energy consumption and emissions and environmental indicators into the supplier performance evaluation

opment collaborating on green packaging and circular logistics system collaborate with suppliers to improve energy efficiency

Oppor- Medium and Reduction in operational

of Green LiuGong reduces the environmental footprint across the High and consumption reduction and publish the following: Green

tunities long term costs increased revenue

Supply entire supply chain meets customer and market Lean Packaging Design for Procured Components; and

Chain demand for low-carbon products and seeks support Packaging Review Process for Procured Components

from green policies.55 PAGE Innovation Integration: Stabilizing Industrial Chains and Refining Quality to Boost Industries

Impact Risk and Opportunity Management Metrics and Targets Targets in 2025

LiuGong has established HSE evaluation standards and integrated them To strengthen supply chain

throughout the full lifecycle management of suppliers identifying and risk prevention capabilities Number of Suppliers Completion of Green Signing Rate of

assessing supply chain risks and mitigating their impact. Simultaneously and implement supply Participating in Supply Chain Integrity Commit

the Company capitalizes on opportunities such as digital transformation chain risk management Environmental Certification by the ment and Confiden

and cost optimization to enhance supply chain efficiency and flexibility. market research and Training Supply Chain Center tiality Agreement

supply chain material risk

management the > 80% 100%

Company has established

Risk Identification corresponding metrics and Achieved Achieved Achieved

targets:

The SPM organizes and completes the identification and

information collection of potential risks of qualified suppliers

including historical data of supplier management and external The Company prioritizes developing the professional and compliance capabilities of supply chain personnel through regular

information obtained through surveys and intelligence training sessions. During the Reporting Period the Company launched the "Transparent Procurement Month" initiative and

gathering. offered open training sessions on the Guidelines for Anti-Corruption and Compliance Management to actively foster a fair

impartial and transparent procurement culture.Risk Assessment

The scaling method is used to estimate the occurrence

probability and possible impact of each risk.Risk Monitoring

For identified risks and their consequences root cause

analysis is conducted risk monitoring and response measures

are standardized and emergency response plans are

developed.Risk Management

SPM develops risk response plans implements mitigation

measures and employs either a seven-step methodology or

Six Sigma approaches for execution. “Transparent Procurement Month” Recognition Meeting56 PAGE Innovation Integration: Stabilizing Industrial Chains and Refining Quality to Boost Industries

Supplier ESG Management Implementation of Responsible Procurement

LiuGong integrates ESG principles into supply chain management. Through advocacy LiuGong actively implements responsible procurement

training contractual agreements and collaborative empowerment the Company by establishing the Procurement Control Procedure

drives suppliers to improve sustainability performance and jointly build a responsible requiring supply chain personnel to sign the Commitment

supply chain ecosystem. In October 2025 the Company released the Supplier Code to Integrity incorporating monitoring and anti-corruption

of Conduct establishing behavioral constraints for suppliers regarding human rights clauses in Purchase Contract of Industrial Goods and

environmental protection and social responsibility. We also require suppliers to sign regularly conducting integrity-focused training to ensure

the Agreement on Safety and Environmental Production and the Commitment to procurement decisions are fair and transparent.Health Safety and Environmental Protection offer on-site safety training for suppliers

and guide and drive suppliers to meet the requirements of ESG systems. The Company promotes green supply chain manage-

ment by selecting environment-friendly materials and Procurement Personnel Integrity Commitment

green suppliers and digitizes procurement management

based on the SRM system. During the Reporting Period

LiuGong conducted a self-assessment of the green

Key Performance: supply chain and successfully passed a third-party

verification. On January 23 2025 LiuGong was officially

During the Reporting Period the signing rates of both Agreement on Safety recognized as a Green Supply Chain Management

and Environmental Production and the Commitment to Health Safety and Enterprise by the Ministry of Industry and Information

99% Technology.Environmental Protection are .

SRM System Function Framework

In 2025 the Company released the LiuGong ESG Assessment Questionnaire to Equal Treatment of Small and Medium-Sized Enterprises

suppliers and collected feedback on ESG implementation from 520 suppliers. Based

on the ESG regulations and laws in China Europe and the US a baseline survey of Adhering to the principles of equality and mutual benefit

suppliers was conducted from 10 key perspectives. LiuGong provides technical and financial support to

SMEs across the supply chain. As a “chain leader” the

On September 15 2025 the Company held the 2025 LiuGong Supplier Quality

Company helps over 2000 upstream and downstream

Conference themed “Enhancing Quality and Efficiency for Win-Win Collaboration”. Li

companies form a “supply chain integration model” and

Haifu Director of the Supply Chain Center presented our ESG principles to 120

regional industrial clusters where enterprises achieve a

attendees shared the Company’s achievements in ESG and offered specialized ESG

combined industrial scale exceeding RMB 10 billion.training for suppliers. The training interpreted the Supplier Code of Conduct and ESG

During the Reporting Period LiuGong had no overdue

management requirements calling on all suppliers to collaboratively build a transpar-

payments to SMEs.ent green and responsible sustainable supply chain ecosystem. Specialized Training on Regulations for

Safeguarding Payments to SMEs57 PAGE Innovation Integration: Stabilizing Industrial Chains and Refining Quality to Boost Industries

Pursuit of Craftsmanship Quality

Product Quality Management

Governance

LiuGong has established a Quality Committee and implemented a Chief Quality Officer (CQO) accountability mechanism which explicitly grants the CQO veto power over product quality and safety and holds them

accountable for product safety. The Company has formulated the Quality Incentive and Accountability System and the Managers’ Quality Performance Assessment Method to clearly define each employee’s responsibili-

ties and KPIs regarding product quality and establish a rigorous quality control and safety inspection mechanism. During the Reporting Period no quality or safety incidents or complaints occurred in the Company.LiuGong and its subsidiaries have passed ISO9001 & GB/T19001 quality system certification. Among others mobile cranes and forklift products have been awarded with the Production License of Special Equipment;

and truck cranes have passed the China Compulsory Certification. The Company has implemented the ISO10012 Measurement Management System and passed the AAA-level certification for the measurement

management system.Special Equipment China National Compulsory Product Quality Management System Measurement Management

Production License Certification Certification System Certification58 PAGE Innovation Integration: Stabilizing Industrial Chains and Refining Quality to Boost Industries

Strategy

LiuGong establishes the quality strategy based on the ESG strategy internal and external environment and industry competition. Strategic initiatives are decomposed across three dimensions: system construction

capability building and competitiveness enhancement. The Company identified and assessed risks and opportunities related to product quality and safety improving product quality and market competitiveness to meet

customer needs.Type of Risk/Opportunity Description of Risk/Opportunity Likelihood of Occurrence Impact Duration Expected Financial Impact Countermeasures

Design manufacturing or supply chain material issues

Product Decrease in operating

may lead to batch-level product quality defects resulting Medium and Strengthen critical process control and inspection improve

Risk Quality Low income and increase in

in customer claims sharply increased costs and brand long term quality traceability systems and strictly enforce supplier

Risk operating costs

value erosion. quality management.By building excellent and replicable quality manage-

ment capabilities LiuGong enhances customer Benchmark against global best practices continuously

Opportu- Marke t confidence and brand loyalty through stable product invest in upgrading quality management systems cultivate Medium and Increase in operating

nities O p p o r quality. This enables LiuGong products to stand out in High talent and build a quality-driven culture and strive to long term revenue

tunities high-end domestic and international markets securing achieve the strategic targets of elevating global quality

premium pricing and expanding market share. competitiveness.Impact Risk When planning the quality management system internal and Each department implements risk management according to the

and Opportunity external factors affecting the organization and its environment as planned measures. These measures should be commensurate

Management well as stakeholder needs and expectations are considered. Each with the potential impact of risks and opportunities on the

department is responsible for identifying and determining the conformity of products and services. Action plans are developed

LiuGong prioritizes impact of internal and external factors and planning measures to P (Plan) D (Do) by leveraging strengths to enhance positive impacts and taking

quality risk address risks and realize opportunities. preventive or mitigating actions to address weaknesses.management by

implementing the PDCA

PDCA cycle and The audit and internal control departments regularly organize During the Company’s review process if the effectiveness of the

establishing a inspections of major risks and the implementation of preventive response measures is insufficient or there are differences from

comprehensive actions by relevant departments evaluating the effectiveness of C (Check) A (Act) the expected goals the responsible units must take corrective

management actions taken. The strategic operations departments periodically and preventive actions. The Company’s audit and internal

system covering hold business review meetings with relevant units to assess the control department is responsible for organizing changes and

risk mitigation and favorable impact of measures addressing internal and external revisions to the risk prevention objectives which must be

opportunity factor changes on the Company’s strategy operational results and approved by the Company’s management.realization. achievement of expected objectives.59 PAGE Innovation Integration: Stabilizing Industrial Chains and Refining Quality to Boost Industries

Metrics and Targets

Targets in 2025

LiuGong has clearly established ambitious

strategic goals in strengthening product quality

management and customer service manage- Deepening Excellence in Performance Advancing Service Quality Integration to

ment and is committed to building an excellent Management to Drive Operational Achieved Drive Rapid Response and Improvement Achieved

quality management system. Quality Improvement for Market Quality Issues

Product Quality Management Measures

Deepening Quality Culture The Company promotes and transmits LiuGong's quality culture concept to customers distributors suppliers and

employees through forms such as information disclosure exhibitions visits meetings communication activities and

internal quality-focused activities.During the Reporting Period we upgraded LiuGong’s “0123433” quality

culture released the LiuGong Quality Culture Handbook routinely conducted

quality audits addressed quality issues in the “Four Do Not Let Go” principle

held evaluations of trusted quality teams/individuals and advanced the Stakeholders Quality Culture Transmission Methods

implementation of quality culture with multiple approaches.Quality Month activities advanced quality evaluations slogans/bill-

Employees boards/mobile/OA promotion quality competitions skills contests

quality education and training etc.Supplier conference excellent supplier sharing supplier empower-

Suppliers

ment co-creation and win-win projects etc.Promotion and Implementation of

Quality Culture Handbook Quality Excellence Recognition

Distributor conferences distributor empowerment distributor visits

Distributors

meetings and communication activities etc.Customers Information disclosure exhibition publicity customer visits etc.Quality Leadership Training Training for Inspector Skill

Certification60 PAGE Innovation Integration: Stabilizing Industrial Chains and Refining Quality to Boost Industries

Key Performance:

During the Reporting Period the Company offered over 300 quality training sessions for 32317 (person-times) internal employees with a total training duration of 1392 hours.Enhancing Product Quality

The full product manufacturing process of LiuGong covers key stages To safeguard product quality and safety LiuGong has established systems including the Equipment Management System the

including incoming material inspection subassembly on-line assembly Equipment Inspection Management System and the Special Equipment Repair Management Process. We rigorously implement

process inspection debugging and final inspection before warehousing. a quality assurance framework for production equipment management and conduct regular preventive maintenance and

The Company has established supporting management systems such as inspections to ensure efficient and stable operation of production equipment.the Incoming Material Inspection and Testing Procedure the Complete

Machine Inspection and Testing Procedure and the Process Inspection and LiuGong has established a comprehensive product safety and recall management mechanism. For automotive crane products

Testing Procedure. We strictly enforce the “Three Don’ts” quality principle falling under the scope of the Regulation on the Administration of Recall of Defective Auto Products the Company strictly

(do not accept non-conforming products do not manufacture non-conform- implements the Rules on the Administration of Recall of Auto and Crane Products and builds a full-process system from defect

ing products and do not pass non-conforming products) to ensure robust identification to recall execution. For product lines not subject to mandatory recalls under applicable rules and regulations the

quality control across the entire supply chain. The Company utilizes over Company proactively initiates recalls for sold products for technical upgrades or repairs in accordance with the Regulations on

41000 measuring instruments including five-axis large coordinate measur- Technological Upgrade of Domestic Products and the Mandatory Repair Control Procedure for Products on International Markets.

ing machines gear measuring centers valve bore online measurement This effort aims to eliminate potential risks and fulfill product responsibility. The Company continuously monitors product

units electric torque-controlled tightening systems direct-reading spectrom- performance and customer feedback through a quality information feedback system covering the entire product lifecycle. Once

eters and online cleanliness inspection devices to ensure our capabilities in any anomaly potentially affecting safety or critical performance is detected we will immediately initiate an investigation and

the measurement of key part dimensions and product characteristics. assessment and decide whether to initiate a recall based on relevant results and established procedures. In addition all LiuGong

Additionally third-party testing agencies are commissioned to conduct type products are fully traceable. The Company uses SAP and MES systems for quality inspection control closed-loop management

testing further ensuring product quality compliance. of manufacturing process quality issues and file management for complete machines.Key Performance:

During the Reporting Period the Company achieved a first pass yield of 100%

and a product recall rate of 0%.61 PAGE Innovation Integration: Stabilizing Industrial Chains and Refining Quality to Boost Industries

Protection of Customers’ Rights and Interests

Key Performance:

Customer Service Management System During the Reporting Period the Company offered

7 specialized training sessions on the response to

LiuGong has established systems such as the Customer Inquiry and Complaint Handling Procedure and the Quality

Complaint Management Measures. We have built a global customer service network that clearly defines responsi- customer complaints for 416 participants with a

bilities at all levels and a closed-loop handling mechanism. Through coordinated pre-sales in-sales and after-sales total training duration of 21 hours. One assess-

processes customer needs are efficiently addressed enhancing service solution quality and customer satisfaction.ment was conducted for this training achieving a

100% pass rate.

Response Mechanism for Customer Complaint

The Company operates 1090 service outlets nationwide and provides customers with multiple repair request

channels including hotline WeChat and the “Smart Butler” APP. Based on systems like the Customer Inquiry and

Complaint Handling Process the Company has established a closed-loop complaint management mechanism. Customer Satisfaction

Complaints are assigned through the DMS system with dedicated follow-up personnel conducting handling and

customer callbacks. If dissatisfaction persists the complaint is rerouted until resolution. Major complaints are

tracked and rectified by the International Business Center. LiuGong has established systems including the Customer Satisfaction

Measurement Procedure and the Customer Satisfaction Index (CSD) Measure-

ment Method and conducts satisfaction assessments for end-users and dealers

Training on Customer Service through questionnaires face-to-face interviews and phone calls. From February

2025 the Company conducted a monthly comprehensive survey on customer

LiuGong emphasizes the capability building of its customer service team through multi-level multi-dimensional satisfaction and 12472 (or 19.2% of the total) customers have participated in

training including policy promotion professional courses skill retraining and overseas technical training improving the survey Simultaneously the Company implemented a satisfaction

the overall competency of internal and external service personnel and strengthening the global service network. self-assessment setting a target score of 85. The actual average score

achieved was 81.73 with a completion rate of 96.15%. In total over 100 product

improvement suggestions were submitted to the back end and R&D and quality

departments and many of these suggestions have been adopted into the

Case Study: Training Course on Resolving Complaints ?: Handling Complaints to product design improvement scheme.Outpace the Growth of Customer Awareness of Rights

Protection of Customer Privacy

Customer service personnel from headquarters were arranged to participate in a course named“Resolving Complaints ?: Handling Complaints to Outpace the Growth of Customer Awareness of The Company has established systems such as the Customer File ManagementRights” organized by Caibo (China) Customer Management Institute. After the course they offered System and the Customer Information Request Process and strictly enforces

training to all service personnel in the Company worldwide. 132 participants attended the training with confidentiality requirements to safeguard customer information security. During

a total training duration of 4 hours. the Reporting Period no negative incidents involving customer privacy breaches

occurred in the Company.62 PAGE Innovation Integration: Stabilizing Industrial Chains and Refining Quality to Boost Industries

Data Security and Privacy Protection

Information Security Management System Emergency Incident Management

In strict compliance with laws and regulations concerning information security LiuGong formulated and The Company has established the Emergency Response System for IT Anomalies and

implemented systems such as the Provisions on the Management of Network Security Protection and the corresponding contingency plans. We create a systematic response process to ensure that in the

Information Security Incident Management System and established the Information Technology Manage- event of information system anomalies or other emergencies prompt actions can be taken to

ment Committee to coordinate daily security operations technical protection and employee security protect data security and control risks. Each year the Company participates in cybersecurity

awareness training. attack-and-defense drills organized by local government agencies to assess and strengthen the

effectiveness of the emergency response system effectively safeguarding corporate reputation

Normalized Security Governance Measures and user trust.Daily Monitoring of Information System Operations

Identification of Information Security Risks

The Secondary Process and the Information Technology Center monitors the daily operation

of information systems and reports any abnormalities identified.LiuGong has built an information security risk identification system that combines technical tools with

manual management. By deploying automated security monitoring tools conducting regular network

vulnerability scans and penetration tests cooperating with external agencies for security audits and Information Reporting

collecting employee-reported potential security issues the Company proactively identifies potential

security threats. The Process and Information Technology Center classifies the reported incidents and the

Information Security Group under the Information Technology Management Committee

confirms the classification.Security Technology and Capabilities

LiuGong has formulated the Management Measures for Trade Secrets classifying trade secrets into three Emergency Activation

levels - core important and internally disclosed secrets - based on data sensitivity and implementing The Information Security Group under the Information Technology Management Committee

corresponding technical protection measures for each level. The Company employs advanced encryption issues the emergency response activation order.technologies to safeguard sensitive data and conducts regular system vulnerability scans and remediation

to ensure the security of information assets and support stable business operations. LiuGong has

developed a data lake system to centralize the collection of product operation and business data clearly Emergency Response

defining basic management processes for data ownership sharing and utilization. The Process and Information Technology Center handles the situation according to the

emergency plan and the system administrators of the Secondary Process and Information

Technology Center takes emergency response measures.Information Security Training

Emergency Response Summary

Through regular information security training LiuGong enhances employees’ security awareness continu-

ously consolidates and optimizes the Company’s information security protection system and effectively The Process and Information Technology Center conducts a cause analysis and summarize

responds to emerging and complex security threats thereby comprehensively improving overall informa- the experience and reports to the Information Security Group under Information Technology

Management Committee.tion security capabilities.IT Abnormal Event Handling Process63 PAGE Shared Prosperity: Anchoring Responsibility for Sustainable Growth

Shared Prosperity:

Anchoring Responsibility

for Sustainable Growth

Our Philosophy

We always prioritize employee occupational health and safety

practices fair and transparent compliance employment and

build a global talent pipeline. We also actively fulfill our social

responsibilities by supporting rural revitalization through prag-

matic initiatives and strive to achieve a harmonious unity of

employee growth corporate advancement and societal devel-

opment.Our Actions

We ensure occupational health and safety protect employees'

rights and interests provide welfare and care for employees

strengthen democratic management and focus on employee

training and development.SDGs Responded64 PAGE Shared Prosperity: Anchoring Responsibility for Sustainable Growth

Responsibility Focus

Strengthening Foundations through Global Presence Building a Distinctive Talent Development Eco-

system for LiuGong

Talent is the core engine of LiuGong’s globalization journey. In 2025 the Company continued to refine a LiuGong-specific talent cultivation mechanism. From innovating training management models and driving

organizational efficiency transformation through the launch of AI knowledge assistants to building a multi-tiered international talent pipeline for the activation of internal talent potential establishing an overseas branch

in Indonesia and co-building a training hub for local value creation in West Africa LiuGong has achieved leapfrog development in talent development by advancing from the training of internal workforce to the construc-

tion of global talent ecosystem.Innovating Training Management Models

As a vital platform supporting the Company's strategic implementation and talent development LiuGong University has expanded its existing 13 professional colleges to include two new business

colleges: Pre-stressing and Excavators. The Company has over 400 internal trainers. LiuGong University has cumulatively launched over 2500 courses covering multiple dimensions including

leadership professional skills and general competencies.In 2025 the Company focused on building a unified knowledge management system to extract organizational experience and empower employee growth. During the Reporting Period the

knowledge management platform was made accessible to all employees enabling knowledge accumulation sharing and value transformation through digital means. The platform has currently

accumulated over 9000 knowledge entries facilitating over 785000 learning sessions and effectively improving employee productivity. Simultaneously the Company innovated the knowledge

management model by cultivating 22 internal knowledge extractors producing 50 high-quality knowledge outputs throughout the year fully launching the AI knowledge assistant and creating a

closed-loop management system for knowledge accumulation sharing and value transformation thus making knowledge a core engine for driving organizational efficiency.Building an International Talent Pipeline

Aligned with LiuGong's 15th Five-Year Plan strategic requirements the Company continues to implement key training programs covering employees at all levels solidifying the foundation for interna-

tional talent. During the Reporting Period LiuGong advanced the “Jiaolong Program”. We selected high-potential fresh graduates for a 12-month targeted development program aiming to cultivate

them into junior management talents with strong job competencies who upon meeting performance standards will be assigned overseas to reserve new talent for international operations. For

existing management the Company formally launched the Specialized Training Program for International Business Directors in December 2025. Tailored to the challenges of international operations

this program employs a tiered training-on-the-job model with customized curricula. The inaugural session focused on strategic analysis and change management empowering managers to advance

their capabilities and ensure effective implementation of corporate strategy in overseas markets.65 PAGE Shared Prosperity: Anchoring Responsibility for Sustainable Growth

Case Study: LiuGong Signed a Four-Party Cooperation Memorandum to

Establishing the First Overseas Branch Campus Deepen Talent Development in Ghana

While expanding markets LiuGong emphasizes creating local value. Through technology and

knowledge transfer the Company collaborates with educational institutions in Indonesia

Thailand Vietnam and other countries to systematically cultivate localized talent. To accelerate In May 2025 LiuGong Liuzhou Vocational and Technical College the Ghana Technical

talent localization the first overseas branch campus of LiuGong University was officially opened University Alliance and JA PLANT POOL (a dealer of LiuGong) signed a four-party coop-

in Indonesia on December 9 2025 marking a new chapter in the establishment of a compre- eration memorandum. This represents further in-depth collaboration between LiuGong and

hensive global talent development system. During the Reporting Period the Indonesia branch Ghana in education and localization. The signing underscores LiuGong's commitment not

has already launched the inaugural corporate culture course and appointed 10 local cultural only as an equipment provider but also as a dedicated partner in talent development

ambassadors. This initiative deeply integrates local culture with LiuGong's philosophy aiming to social responsibility and overseas market cultivation supporting the advancement ofcultivate a cohort of local talent who “master technology understand business and embrace education in Africa.culture” thus providing a solid talent foundation for LiuGong's deepened development in

Southeast Asia.Inauguration Ceremony of the Indonesia Branch of LiuGong University Signing Ceremony of Cooperation Memorandum

Additionally the Company has partnered with vocational institutions in Liuzhou local universi-

ties in Ghana and dealers to establish a talent development system planning to establish a

“Training Hub in West Africa”.66 PAGE Shared Prosperity: Anchoring Responsibility for Sustainable Growth

Support for Employee Growth

Occupational Health and Safety

Safety and Health Management System

Governance

LiuGong has established 63 HSE system documents including

the Occupational Health Safety and Environmental Management

System and the Work Safety Standardization Management

Manual. At the organization level the Health Safety and

Environmental Management Committee oversees safety matters

at the organization level with subsidiary companies at all levels

also establishing their own Health Safety and Environmental

Management Committees. At the execution level the Company

has established an independent department—the Excellence

Manufacturing Center (Health Safety and Environment)—to

exercise authority over occupational health and work safety Occupational Health and Safety Management System Certification Certificate (Partial)

management.LiuGong's occupational health and safety management system

was first certified in 2003. Every year an independent third-party In fulfilling the enterprise’s primary responsibility for work safety and the work safety duties of the primary person in charge the Chairman

certification agency conducts system supervisory audits and a and Party Secretary of LiuGong as well as the general managers of all subsidiaries sign and publicize work safety commitment letters

re-certification (certificate renewal) audit is carried out every three annually. In addition the Company has established a sound work safety assessment mechanism. Target responsibility letters for work safety

years. During the Reporting Period LiuGong and its 17 are signed at all levels from senior executives to ordinary employees each year. Professional safety personnel conduct work safety

subsidiaries obtained occupational health and safety manage- performance evaluations in accordance with relevant assessment standards which are incorporated into the monthly or annual comprehen-

ment system certification. sive personal performance appraisal.Strategy

The Company has established the Risk and Opportunity Identification and Control Procedure organizing the identification and assessment of occupational health and safety risks and opportunities annually. In 2025 a

total of 47 occupational health and safety risks and opportunities were identified with corresponding mitigation measures developed.67 PAGE Shared Prosperity: Anchoring Responsibility for Sustainable Growth

Type of Risk/Opportunity Description of Risk/Opportunity Likelihood of Occurrence Impact Duration Expected Financial Impact Countermeasures

Once an occupational health or safety production

Continuously implement the Dual Prevention Mechanism

accident occurs the business of the Company may

Operational Increase in operational strengthen risk management and ensure effective execution

Risk be interrupted and a large amount of funds are High Short term

Risk costs/fines of control measures through hierarchical hazard inspection

required to handle the accident restore the site and

and remediation.carry out subsequent rectification.Through occupational health management the

Develop a digital platform for work safety refine risk warning

Company can more effectively prevent and control

Opportu- Management Short medium Reduction in expense and emergency response mechanisms and enhance the

potential hazards in the work environment improve High

nities Efficiency and long terms expenditure precision and operational efficiency of occupational health

employee productivity and avoid large-scale financial

and safety management.expenditures.Impact Risk and Opportunity Management

The Company has developed the Risk Evaluation and Hierarchical Control Procedure and the Regulation on the Management of Hazard Identification and Evaluation. The main safety risk management methods and

processes include risk point identification and classification job risk identification assessment and classification formulation of risk control measures hierarchical risk management risk notification and execution of

risk measures.Risk Grading and Control Review of Hazard Sources Hazard Identification and Management Emergency Plan

The Company classify risks preliminari- In 2025 the Company organized updates The Company has established and The Company has developed the

ly into four levels based on the severity and reviews of hazard sources identifying implemented the Hazard Investigation Emergency Management System and

of potential accident consequences: a total of 102015 hazard sources of which and Management Work Plan and the Comprehensive Emergency Plan for

Level 1 Level 2 Level 3 and Level 4 896 were reduced and 3887 eliminated. organized comprehensive inspections on Accidents improving the emergency

(levels with decreasing hazards). work safety every quarter to identify and management system and enhancing the

Accident consequences are catego- promptly rectify hazards at all levels. In ability to respond to risks and preventrized into four levels: “Major Risk High 2025 we organized four rounds of hazard accidents. During the Reporting PeriodRisk General Risk Low Risk” investigations uncovering no major the Company conducted 759 emergency

represented by red orange yellow and accident hazards but identifying 652 drills to improve employees’ emergency

blue respectively. general accident hazards all of which response capabilities and ensure their

were rectified at a 100% rate. safety.68 PAGE Shared Prosperity: Anchoring Responsibility for Sustainable Growth

Case Study: Emergency Response Drills Metrics and Targets

Actively responding to the national occupational health and work safety plan LiuGong formulated the

Strategic Plan for Health Safety and Environmental Protection in 2021-2025 outlining a five-year

On December 3 2025 to further enhance employees’ fire safety awareness and improve

roadmap for key initiatives and establishing annual health safety and environmental protection plans.their ability to respond to sudden fires LiuGong conducted a fire emergency evacuation

The Company sets occupational health and safety performance indicators annually.drill at the office building of the New Energy & Intelligent Global Innovation Center. This

marked the first emergency evacuation drill conducted since LiuGong's headquarters

relocated to its new premises. The drill successfully evacuated all 1129 persons from the

office building within 2 minutes and 12 seconds. LiuGong will continue to strengthen fire

safety measures by regularly organizing similar drills to build a robust defense for employ-

ee health and safety.Key Performance:

During the Reporting Period the Company recorded 6 safety incidents with a total of 6

work-related injuries an injury rate of 0.03% a fatality rate of 0% and an injury

rate per million working hours of 18.83% resulting in 401lost workdays due

to work-related injuries.Emergency Response Drills

Targets in 2025

No Serious or Frequency of No Fire Incidents No New Occupational Hazard Rectification Compliance Rate at Occupational Health

Fatal Incidents Lost-Time Incidents Diseases Rate Upon Expiry Toxic and Hazardous Examination Coverage

Operation Points

≤0.561100%≥97%100%

Achieved Achieved Achieved Achieved Achieved Achieved Achieved69 PAGE Shared Prosperity: Anchoring Responsibility for Sustainable Growth

Safety Production Management Protection of Occupational HealthLiuGong always prioritizes safe production adheres to the principle of “Life First Safety For workplaces with occupational disease hazards LiuGong takes effective protective measuresForemost” and implements multiple safety management measures to ensure work safety. to ensure that hazard levels comply with national occupational hygiene standards.Digital Management Platform

Occupational Disease Hazard Factor Detection

The iHSE Intelligent Management Platform officially went live in 2025

marking LiuGong’s safety governance entering a new stage of systematiza- The Company conducts annual on-site occupational hazard monitoring and a triennial

tion and intelligence. occupational hazard assessment. In 2025 the occupational hazard assessment and

on-site monitoring of dust toxins and noise achieved a compliance rate of 98.3%.Safety Production Standardization

Dedicated personnel perform regular equipment maintenance monthly Personal Protective Equipment

supervision checks and closed-loop rectifications while maintaining ongoing

communication with regulatory authorities. All subsidiaries have achieved

100% compliance through work safety standardization assessments. The Company currently has 516 sets of occupational health equipment and facilities and

10 categories comprising 115 types of protective equipment.

Safety Inspections

The Company strictly enforces safety regulations including the Hazardous

Chemical Management System and conducts comprehensive specialized Occupational Hazard Notification

inspections across all stages of hazardous chemicals management including

storage usage and emergency response. Additionally regular inspections Additionally 2152 occupational health warning signs and hazard notification cards are

and targeted checks are carried out to ensure that fire safety management is deployed with annual updates of occupational hazard monitoring data for each position.effectively implemented.Stakeholder Safety Management

Occupational Health Checkups

The Company strictly adheres to the Contractor Health Safety and

Environmental Management System and signs work safety agreements with Targeted inspections are arranged based on the occupational characteristics of different

all contractors. We undertake projects for the development of contractor roles. Employees found to have occupational contraindications or related health

safety management systems and implement differentiated safety training and impairments during medical examinations are reassigned from their original posts in

access mechanisms. accordance with regulations.70 PAGE Shared Prosperity: Anchoring Responsibility for Sustainable Growth

Education on Occupational Health and Safety

Key Indicators Unit 2023 2024 2025

Through the Health Safety and Environmental College LiuGong promotes the training on

occupational health and safety at all levels and achieves effective results.Total Investment in

RMB 10000

Safety Training 85 85 79.03

Training in 2025

In May the Company organized health safety and environmental

competency training for department directors covering 53 directors. Safety Education and

Safety Training for In July training for enterprise leaders and safety management SessionTraining Sessions 20903 21120 22680

Mid-to-Senior personnel was held focusing on a comprehensive interpretation of

Management the new Law of the People’s Republic of China on Work Safety. A

total of 507 participants received training strengthening certified

compliance management. Number of

Participants in Safety

Person-time

Education and 418072 422681 582019

In March HSE internal auditor certification training was conducted Training Sessions

certifying 92 dual-system internal auditors with 32 participants

Professional attending the HSE internal auditor advanced training course. In April

Training for Safety experts on national work safety standardization conducted

Management professional capability enhancement training for heads and technical Total Hours of Safety

Personnel personnel of safety equipment and process departments across Education and Hour 459879 468350 553349

units with 254 participants. Training

Occupational In April the Company organized emergency first aid training Coverage Rate of

Health Education including instruction and hands-on exercises with 250 participants. Safety Education and % 100 100 100

Training

From May to June LiuGong carried out the Work Safety Monththemed “Everyone Talks Safety Everyone Knows EmergencySafety Education Coverage Rate of Response—Identify Safety Hazards Around You” including 17 events Safety Risk Protection %

for All Employees 100 100 100such as the Firefighter Emergency Rescue Skills Competition Training

involving 13260 participants.71 PAGE Shared Prosperity: Anchoring Responsibility for Sustainable Growth

Compliant Employment

Protection of Employees’ Rights and Interests

In 2025 the Company further strengthened human resources functions by adding the Human Resources Policy and Compliance module and establishing a comprehensive lifecycle system covering recruitment

onboarding compensation development and separation. Key policy documents include the Employee Handbook and the Code of Conduct for Global Employees. During the Reporting Period LiuGong achieved 100%

labor contract signing rate and a 100% social insurance coverage.

1. Diversity Equality and Inclusivity 2. Protection of the Rights and Interests of Female Employees

In line with the commitments of the Universal Declaration of Human Rights and internationally The Special Collective Agreement on the Protection of Female Employees’ Rights and Interests is

recognized human rights and labor standards the Company has developed and published the included in the collective contract system. A Female Employees’ Committee under the Trade

Global Human Rights Policy of Guangxi LiuGong Machinery Co. Ltd. This policy clearly defines Union is dedicated to protecting the legal rights and special interests of female employees. In

14 key areas including the prohibition of discrimination harassment forced or compulsory labor 2025 LiuGong was awarded the “Four-Good” Advanced Collective for Standardized Female

child labor and the promotion of diversity and inclusion. The Company safeguards employees’ Employee Organization Construction 2024. During the Reporting Period women accounted for

equal rights and cultural identity through measures such as implementing an age verification 16% of management personnel; 115 employees took maternity leave with a 100% return-to-work

mechanism during recruitment conducting specialized human rights policy training for global rate; 576 employees took parental leave with a 100% return-to-work rate.management promoting localized practices in various regions setting up barrier-free facilities

and nursing rooms and distributing festival gifts to ethnic minority employees.To advance a culture of diversity equity and inclusion (DEI) LiuGong has integrated corporateculture management functions into the HR system and established the “LiuGong HR Communica-tion” a global employee communication platform to ensure full coverage of culture and informa-

tion. DEI principles have also been incorporated into the LiuGong HR “15th Five-Year” Strategic

Plan permeating the entire talent lifecycle of selection development utilization and retention. In

2025 LiuGong issued the Cultural Training Standards Manual appointed 5 director-level internal

trainers integrated diversity and inclusion concepts into various training programs and conducted

9 specialized training sessions covering over 1000 core employees throughout the year.

Video Editing Course Fun Sports Meeting72 PAGE Shared Prosperity: Anchoring Responsibility for Sustainable Growth

Talent Attraction and Recruitment

2025 Employee Composition10

0.09%2%

LiuGong adheres to a recruitment philosophy of

“Fairness Transparency and Diversity” and strictly 8% 21%

implements the Employee Recruitment Management

System establishing standardized recruitment

processes. The Company ensures compliance at key

points through technology integration and AI review

and emphasizes interviewers’ professionalism and 92% 79% 79%

impartiality. Systematic training and certification are

conducted using the LiuGong Interviewer Handbook Number of Employees (by Region) Number of Employees (by Gender) Number of Employees (by Employee Level)

ensuring objectivity and standardization in both Chinese Mainland 92% Male 79% Senior Management 0.09%

process and personnel. Overseas Regions 8% Female 21% Middle Management 2%

Recruitment channels cover mainstream online Individual Contributors 98%

platforms (such as Liepin and Zhilian Zhaopin) on-site 0.18%

job fairs headhunter partnerships and internal referral

13%

systems. In 2025 the Company participated in a 18% 29% 24% 46% 9%

special recruitment event for veterans recruited 4%

diverse groups including persons with disabilities

established talent development partnerships with over

20 universities nationwide and successfully hired 27%

more than 300 fresh graduates. Differentiated 29% 20% 36% 45%

recruitment strategies are implemented across Number of Employees (by

Number of Employees (by Profession) Number of Employees (by Age)

regional markets. For example in North America job Academic Qualification)

descriptions use gender-neutral language and

recruitment information is distributed through diverse Production 2 9 % Sales 20% Under 30 (exclusive) Years Old 24% Doctoral Degree 0.18%

talent channels to reach a broader candidate pool. Technology 2 9 % Finance 4% 30 (inclusive) to 40 (exclusive) Years Old 36% Master’s Degree 9%

During the Reporting Period the Company had a total

of 15036 employees including 3302 employees from Administration 18% 40 (inclusive) to 50 (exclusive) Years Old 27% Bachelor’s degree 45%

ethnic minority groups 108 employees with

46%

disabilities 1837 dispatched workers and 0 part-time 50 Years Old or above 13% College Degree or Below

employees.

10Number of Employees by Gender: The Company respects employees’ privacy and self-identification. By the end of the Reporting Period 56 employees did not provide

or chose not to disclose their gender so the sum of male and female employees is less than the total number of employees. These individuals are included into the total

number of employees.Number of Employees by Academic Qualification: The Company respects employees’ privacy. By the end of the Reporting Period 845 employees (mainly foreign

employees) did not declare their education level so the sum of employees by education is less than the total employee count. These individuals are included into the

total number of employees.73 PAGE Shared Prosperity: Anchoring Responsibility for Sustainable Growth

Remuneration and Benefits Management

Compensation Design Performance Management Welfare System

The Company has established the Compensation The Company’s performance evaluation follows the PDCA The Company’s benefits system includes statutory benefits

Management System providing institutional support for management principle and implements differentiated and supplementary corporate benefits. Statutory benefits:

compensation decision-making disbursement and assessment mechanisms for employees at different levels: The Company provides legally mandated social insurance

adjustment. We have developed a diversified compensa- Senior executives and director-level personnel are contributions including pension medical unemployment

tion and incentive structure based on position salary and evaluated annually based on performance values and work injury maternity insurance and housing provident fund

linked to performance appraisal incorporating short- personal capabilities using the Performance Responsibility and ensures employees enjoy paid annual leave marriage

medium- and long-term incentives honor rewards and Agreement as the basis. Employees below the director level leave maternity leave and other statutory holidays.employee benefits. Market salary benchmarking and are assessed on a monthly semi-annual or annual cycle Corporate benefits: The Company focuses on employees’internal position evaluations are conducted regularly to using target plans or fixed indicators. practical needs related to “clothing food housing andensure that the income of grassroots employees is not transportation” including single apartments health

lower than the local minimum wage standard. For performance feedback the Company has established a check-ups and medical insurance.routine employee performance feedback mechanism. At the

For performance incentives the Company provides a end of the assessment period employees receive feedback Collective agreements clarify working hours rest and leave

combination of short-term and medium- to long-term from their direct supervisors. If there is disagreement extended work time and compensation monthly payroll

incentives. Programs such as employee stock ownership between the evaluator and the employee the employee schedule daily overtime pay base and other negotiated

plans and stock options systematically support the may file an appeal within 5 working days of receiving the terms. In addition the Company implements a standardattraction motivation and long-term retention of core assessment results. This process includes two stages: working hours system and has established “core collabora-talent. During the Reporting Period the first tranche of the appeal and review. Appeals are organized and handled by tion hours” for flexible work scenarios of non-production

2023 Stock Option Incentive Plan met unlocking conditions supervisors at the relevant level while reviews are employees to ensure cross-regional collaboration efficiency.

with 915 eligible participants and a total of 19820252 conducted by the HR department responsible for auditing

stock options available for exercise. Meanwhile the and organizing the process. The Company strictly maintains

Company completed two phases of share repurchase the confidentiality of the appellant’s information and content

totaling approximately 55231000 shares intended for new and prohibits any form of retaliation ensuring the legal

stock incentives or employee stock ownership plans. rights of the employee filing the appeal are protected.Indicator 2023 2024 2025

Voluntary Turnover Rate of Key

Employees (%) 2.73 1.40 1.5074 PAGE Shared Prosperity: Anchoring Responsibility for Sustainable Growth

Enhancement of Democratic Governance

Diverse Communication Channels Appeals and Whistleblowing

LiuGong has built a diversified feedback mechanism that includes both institutional participation Regarding employee appeals and whistleblowing channels the Company has established a clear

platforms and daily communication channels. Employees can voice their concerns through platforms appeals mechanism in accordance with the Global Human Rights Policy. In addition the Company has

such as the Employee Congress and democratic consultation meetings as well as daily channels such set up multiple channels including a GM Mailbox supporting anonymous feedback an anti-harassment

as email and employee improvement proposals. The Company convenes at least one Employee whistleblowing hotline in North America and a legal aid lawyer hotline accessible to all employees.Congress annually to collect and address employee suggestions ensuring timely responses and Lawyers are regularly organized to visit grassroots units to conduct legal awareness activities ensuring

closed-loop management. employees’ legitimate rights are protected from multiple dimensions.Case Study: The Fourth Plenary Session of the 10th Employee Congress of Human Rights-Related Appeal Process at LiuGong

LiuGong

Step 1 of Appeal Report to the direct supervisor (N+1) of the employee involved in the violation.In January 2025 the Company held the fourth plenary session of the 10th Employee Con-

gress and the second plenary session of the 18th National Congress of the All-China

Federation of Trade Unions at the Auditorium of the Global R&D Center. The meeting

systematically reviewed the Company’ s operational achievements and strategic execution Step 2 of Appeal If Step 1 fails to resolve the issue effectively or the person involved is the direct

supervisor report to the N+2 supervisor of the employee involved.from the previous year and deployed the development goals and key tasks for the new

year. At the same time the meeting fully recognized the Employee Congress as a key

channel for corporate democratic management.If the first two steps fail to resolve the issue effectively or the above person is one

Step 3 of Appeal party to the appeal please report to the Human Resources Manager of the

organization where the employee works.If the first three steps fail to resolve the issue effectively or the above person is one

Step 4 of Appeal party to the appeal please report to the Human Resources Manager of the

organization where the employee works.If none of the above steps resolve the issue effectively or if all persons mentioned are parties

to the appeal employees may also report in writing or via email to the Compliance Office of

the Company.The designated email address for receiving appeals is lghgb@liugong.com

Employee Congress75 PAGE Shared Prosperity: Anchoring Responsibility for Sustainable Growth

Employee Satisfaction Survey

To continuously listen to employees’ voices and promote management improvement since 2025 LiuGong has upgraded the

traditional “Employee Engagement Survey” to the “Employee Insight Survey” covering all global employees. Focusing on seven

dimensions including strategic consensus corporate culture work experience and managerial leadership competence the Indicator Unit 2023 2024 2025

Company systematically collects and analyzes employee feedback experience and behavioral data to gain in-depth insights into

employee status needs and potential issues thereby providing a basis for optimizing management decisions and improving Employee Satisfaction % 81.0 86.5 92.8

organizational effectiveness.The Company has always attached great importance to the protection of female employees' rights

and interests and earnestly practiced the principle of gender equality. According to the results of employee insight surveys

female employees and male employees share highly consistent recognition in core dimensions such as strategic consensus and Survey Coverage for Person

Employees 14055 14218 13594

professional dedication. The overall satisfaction and sense of identity are excellent which fully reflects the effectiveness of a

diverse equal and inclusive workplace culture.Care for Employees

Employee Activities

The Company supports employees’ comprehensive development through diversified activities including the 5?28 and 11?26 Employee and Family Open Day events with over 5000 employees and family members

participating and the “Celebrate May 1 & Welcome May 4” commemorative conference. Attention is also given to retired employees to strengthen corporate cohesion.

5?28 Family Open Day 11?26 Family Open Day Legal Consultation for Retired Employees Art Performance on Double Ninth Festival

Care for Employees in Difficulty

Through holiday greetings targeted assistance programs and other forms the Company provides

financial support and emotional care to employees and their families in need. In 2025 the Company

extended care to approximately 42700 individuals including union members employees in difficulty

hospitalized staff employees relocated to northern bases domestic marketing staff in remote areas

personnel stationed in Antarctica and founding employees distributing care packages and aid totaling

approximately RMB 9.75 million; over 4500 frontline employees received high-temperature and

high-production support; rewards totaling RMB 110000 were given to 16 children of employees in

difficulty and 101 children admitted to undergraduate programs; medical mutual-aid subsidies of RMB Support for Employees in Difficulty on Visits to Founding Employees on

437500 were provided to 8750 employees. Spring Festival Spring Festival76 PAGE Shared Prosperity: Anchoring Responsibility for Sustainable Growth

Protection of the Mental Health of Employees Rural Revitalization

The Company integrates mental health assessment into the onboarding process and provides routine LiuGong developed the Guideline for Rural Revitalization actively exploring sustainable

psychological support services through full-time counselors in the Trade Union and expert consultations development pathways aligned with rural realities and demonstrating state-owned

every Tuesday and Thursday. From April to May 2025 the Company organized 136 training sessions enterprise responsibility. Focusing on key areas such as industrial empowerment talent

themed “Caring for Workers’ Mental Health”. In August the HSE Department in cooperation with support and ecological improvement the Company is committed to making solid contribu-

professional medical institutions officially established on-site health consultation platforms at the Liuzhou tions to agricultural and rural modernization. In 2025 LiuGong completed the re-election

and Changzhou bases further expanding the coverage of services. In addition LiuGong has established an of the rural revitalization resident work team appointed a new first secretary and resident

“online + offline” employee mental health service platform providing 22 sessions of free psychological team members to continuously strengthen the frontline support for rural revitalization. The

counseling and 30 hotline consultations and hosting 2 themed lectures on “Stress Management” and total investment in rural revitalization reached RMB 10.1955 million.“Emotion Regulation”.Case Study: Opening New Baking Facility to Help Villagers Gain

Fresh Opportunities for Prosperity

In August 2025 LiuGong officially launched an agricultural product baking

facility project in Si’ ou Village Doujiang Town Sanjiang Dong Autonomous

County Liuzhou City for the monk fruit baking operations by local villagers.Psychological Counseling Room Stress Relief Room

This effort addresses the challenges of short storage periods and high spoil-

age rates for local farmers' monk fruits significantly improving baking efficien-

cy and quality while promoting industrial development and increasing farmers'

incomes.Themed Lecture on Mental Health Mental Health Consultation Lectures

Employee Care for Northern Relocation Project

The Company formulated a Special Care Plan for Employees Involved in Northern Relocation Project with

a three-dimensional approach of “on-site experience + interactive promotion + democratic consultation” to

effectively enhance employees’ sense of gain recognition and belonging in the new park. A Women’s Care

Room was provided to coordinate arrangements for multiple pregnant employees to work in established

office areas; two rounds of free medical check-ups were organized to provide professional and considerate

healthcare services to nearly 1000 employees; courses on women employee’s health and care were

offered to help them balance work and life. This effectively addresses the practical difficulties of employees Assistance in Baking Monk Fruit

affected by the northern relocation.77 PAGE Shared Prosperity: Anchoring Responsibility for Sustainable Growth

Case Study: Consumption-Based Assistance to Ignite Rural Development Vitality Case Study: Implementation of the Donation Plan for Public Welfare Education Support in 2025

In 2025 LiuGong continued consumer assistance initiatives distributing red glutinous In 2025 LiuGong precisely implemented a public welfare donation plan for education

rice as employee benefits for 2026 Lunar New Year. LiuGong purchased 20000 kg of red support providing a total of RMB 111500 to high school and university students from

glutinous rice from Meisu Village. This effort will help to expand the planting area by 120 registered poverty-stricken households in Sanjiang Dong Autonomous County. This heart-

acres and increase villagers’ income by over RMB 300000 thus driving accelerated warming initiative vividly reflects LiuGong's long-standing commitment to supporting

development of Meisu Village’ s specialty industries through strong consumption education in Sanjiang County.momentum.Contribution to Society Case Study: LiuGong Clears “Lifelines” with Mechanical Power

LiuGong has deeply embedded social responsibility into corporate development actively giving back

to society through institutionalized efforts and concrete actions. The Company released the External

In June 2025 Sanjiang Dong Autonomous County in Liuzhou Guangxi faced severe

Donation Management System systematically standardizing the decision-making management and

flooding due to persistent heavy rainfall. Water levels exceeded warning thresholds roads

oversight processes for public welfare resources. This marks a new phase of systematic and transpar-

collapsed farmlands were submerged and communications were temporarily disrupted.ent social responsibility practices for the Company. In 2025 the Company with a total public welfare

Facing the severe flood situation LiuGong urgently mobilized nearby equipment rushed

donation up to RMB 12.631 million organized 59 volunteer activities engaging 2065 participants to

to the scene to clear silt and obstacles and repaired roads using mechanical power to

contribute 390 service hours.clear “lifelines” demonstrating LiuGong’ s strong capabilities and social responsibility.Public Welfare and Charity

LiuGong carries out pragmatic actions in education support community co-construction environmen-

tal protection disaster relief and other fields contributing to social harmony and sustainable develop-

ment.Flood Control and Disaster Relief at Frontline in Liuzhou Guangxi78 PAGE Shared Prosperity: Anchoring Responsibility for Sustainable Growth

Case Study: Donation of RMB 1 Million to Support Fire Rescue Case Study: Red Bond Enduring 18 Years Love Donation Fueling the Original Aspiration

and Recovery Efforts in Tai Po Hong Kong

In February 2025 LiuGong collaborated with the Guangxi Blood Center to organize a voluntary

blood donation event themed “Passing on Love with True Care” at the entrance of its head-

On the afternoon of November 26 a fire broke out in multiple residential buildings quarters factory alongside a “Certificate of Appreciation” awarding ceremony. Throughout the

at Wang Fuk Court in Tai Po Hong Kong causing significant casualties and wide year 486 employees participated in blood donation contributing a total of 167400 milliliters of

concerns among people across the nation. LiuGong responded with high priority blood.actively fulfilling its social responsibility by immediately activating its emergency

assistance mechanism. The Company urgently donated RMB 1 million to Hong

Kong to support disaster relief efforts including assistance for affected residents

and post-disaster recovery and reconstruction.Certificate of Appreciation Received by LiuGong from Guangxi Blood Center

Case Study: Nurturing Healthy Growth Shaping Bright Future

LiuGong remains committed to supporting youth development. In May 2025 LiuGong

partnered with 25 organizations including the Liuzhou Civil Affairs Bureau and Women'sFederation to launch the Children's Care Awareness Month Themed “Nurturing HealthyGrowth Shaping Bright Future” . We carefully prepared “cooling” gift packs and distributed

Charity Donation Plaque them to child representatives establishing a solid foundation for their growth through targeted

support.Representatives Presenting Children with “Cooling” Gift Packages79 PAGE Shared Prosperity: Anchoring Responsibility for Sustainable Growth

Global Responsibility Fulfillment

LiuGong engages in responsible investment and operations in countries and regions along the Belt and Road through actions such as supporting infrastructure development and promoting local employment striving to

achieve mutual benefits in economic returns and social value.Case Study: LiuGong Roller Supporting Municipal Road Reconstruction in

African to Build a Benchmark for Infrastructure Projects under the Belt and Case Study: Successful Closure of the Main Span of the Fifth Lao-Thai Friendship

Road Initiative Bridge

In April 2025 LiuGong Roller actively participated in African road renovation projects In June 2025 the main span of the Fifth Lao-Thai Friendship Bridge was officially

adding another benchmark project to China-Africa cooperation under the Belt and closed. OVM provided prestressed systems cable-stayed systems and construction

Road Initiative. Beyond providing robust equipment support for African infrastructure guidance services becoming a key force in bridge construction. The completion of this

LiuGong Roller demonstrates the strength of Chinese manufacturing and serves as a bridge represents a new model for implementing the Belt and Road Initiative in South-

vivid testament to friendly cooperation between China and Africa. east Asia.LiuGong Roller Working in the Sun Construction Site of Fifth Lao-Thai Friendship Bridge80 PAGE Future Outlook

Future Outlook As we enter the new development stage of the 15th Five-Year Plan LiuGong will uphold a higher political stance and stronger sense of mission steadfastly implement the new development philosophy and serve Guided by our core strategy of “Total Solution Total Intelligence and Globalization” we will systemati-

cally plan and steadily advance future ESG management efforts striving to write a new chapter in building a world-class enterprise.Continuously Improving Governance System Laying Strengthening the Core Role of Innovation to Drive Deepening Comprehensive Internationalization Practicing Green Development Commitments and

Foundation for High-Quality Development. Industrial Capacity Upgrading. and Enhancing Global Brand Influence. leading Low-Carbon Industry Transformation.LiuGong will uphold and strengthen the Party’s LiuGong will adhere to an innovation-driven LiuGong will integrate more deeply into the global LiuGong will steadfastly realize the “carbon peakingcomprehensive leadership continuously improve the development strategy continuously increase R&D industrial chain and consolidate traditional and carbon neutrality” goals embed green and

modern enterprise system with Chinese characteristics investment and focus on cutting-edge technology markets while vigorously expanding the Belt and low-carbon requirements throughout strategic

optimize corporate governance structures and enhance areas such as new energy intelligence and Road Initiative and emerging markets. We are decision-making and operational processes. We will

the strategic guidance and decision-making effectiveness digitalization and break through bottlenecks in key committed to providing comprehensive solutions further deepen green supply chain management and

of the Board of Directors. As a state-owned enterprise we core technologies. We will accelerate the iterative tailored to local needs and strengthening strategic collaborate with upstream and downstream partners to

will further deepen our reform efforts strengthen the upgrade of product electrification and intelligence cooperation with international partners. By reduce emissions. We will also continuously advance

integrated development of internal control risk and improve the green product portfolio. participating in international standard-setting and energy conservation consumption reduction and

management and compliance systems and elevate the Simultaneously we will deepen our intelligent optimizing our global service network we will clean production upgrades in our own operations

standardization and precision of operational manage- manufacturing transformation create more systematically elevate the international recognition while intensifying R&D and market promotion of

ment. We will also place greater importance on investor intelligent factories and benchmark production and reputation of the LiuGong brand achieving a eco-friendly products. This will provide customers with

relations management and value communication reward lines and build future-oriented global core leap from “going global” to “integrating into the full-lifecycle low-carbon solutions and spearhead ashareholder trust with steady performance and competitiveness through technological innovation global market”. green revolution in the construction machinery

transparent communication and solidify the governance and exceptional quality. industry.foundation for the sustainable development of the

Company.Let’s embark on a long journey with steadfast commitment. LiuGong will embrace an even more proactive stance deeply integrate ESG principles into our development. We will balance development with safety harmonize economic environmental and

social benefits and collaborate with all stakeholders to build a sustainable and prosperous future.81 PAGE Annex

Annex Indexes

S u s t a i n a b i l i t y R e p o r t i n g Shenzhen Stock Exchange Self-Regulatory

Guide to Corporate Sustainabi l i ty

Chapters and Sections Standards of the Global Reporting Guidelines for Listed Companies No. 17 -

Reporting in China (CASS-ESG 6.0)

Initiative (GRI Standards) Sustainability Report (for Trial Implementation)

Article 4

About This Report 2-2/2-3 P1.1/P1.2

Article 6

Message from the Chairman / P2.1 /

Message from the President / P2.1 /

Company Profile 2-1 P3.1/P3.3 /

Corporate Culture / P3.2 /

About LiuGong Milestones in 2025 / / /

Honors and Awards / / /

ESG Performance Highlights in 2025 201-1 A2 /

ESG Strategy 2-22 G1.1.11 /

G1.1.1/G1.1.2/G1.1.3/G1.1.4/G1.1.5/

ESG Management 2-14/2-17/2-18 Article 12

G1.1.6/G1.1.7/G1.1.8/G1.2.4

ESG Management

Article 9

Communications with Stakeholders 2-16/2-29 G1.3.1/G1.3.2

Article 53

Management of Material Topics 2-29/3-1/3-2/3-3 G1.1.9 Article 5

Responsibility Focus: Implementing Risk Control

through Three Lines of Defense Forging Robust 2-16 / /

Compliance Barriers for LiuGong

Resilient Foundation: Empowering

Steady Development through 2-9/2-10/2-11/2-12/2-13/2-19/2-

Governance Excellence Standardization of Corporate Governance / /27/207-1/207-2

Article 54

G2.1.1/G2.1.2/G2.1.3/G2.1.4/G2.1.5/

Adherence to Business Ethics 205-2/206-1 Article 52

G2.1.6/G2.1.7/G2.2.1/G2.2.2/G2.2.3

Article 5682 PAGE Annex

S u s t a i n a b i l i t y R e p o r t i n g Shenzhen Stock Exchange Self-Regulatory

Guide to Corporate Sustainabi l i ty

Chapters and Sections Standards of the Global Reporting Guidelines for Listed Companies No. 17 -

Reporting in China (CASS-ESG 6.0)

Initiative (GRI Standards) Sustainability Report (for Trial Implementation)

Article 20

Responsibility Focus: Driving Transformation with Article 27

E1.1.16/E1.1.19/E2.1.6/E3.1.2/E3.1.4/

Digital Intelligence Creating Green and Smart 305-5/306-4 Article 28

E3.1.5/E3.3.1/E3.3.2/E3.3.4/E3.3.5

Machinery Factories Article 35

Article 37

Article 11

Article 14

Article 20

E1.1.1/E1.1.2/E1.1.3/E1.1.4/E1.1.5/ Article 21

Response to Climate Change 201-2/305-1/305-2/305-4/305-5 E1.1.6/E1.1.7/E.1.1.8/E1.1.16/E1.1.19/ Article 22

E3.1.4/E3.3.3 Article 23

Article 24

E c o l o g i c a l S t e w a r d s h i p : Article 27

Powering Green and Intelligent Article 35

Manufacturing Innovation

Article 11

E2.1.1/E2.1.2/E2.1.3/E2.1.5/E2.1.6/

Article 29

E2.1.8/E2.1.9/E2.2.1/E2.2.3/E2.2.5/

Environmental Compliance Management 303-4/305-7/306-2/306-3/306-5 Article 30

E2.2.6/E2.2.7/E2.4.1/E2.4.2/E2.4.3/

Article 31

E2.4.4

Article 33

Article 11

E3.1.1/E3.1.2/E3.1.3/E3.1.4/E3.1.5/

302-1/302-3/302-4/302-5/303- Article 34

Resource Management E3.2.1/E3.2.2/E3.2.3/E3.2.4/E3.3.2/

3/303-5/305-5/306-2/306-5 Article 35

E3.3.6

Article 36

Protection of Ecosystem and Biodiversity 101-2/101-5 / /83 PAGE Annex

S u s t a i n a b i l i t y R e p o r t i n g Shenzhen Stock Exchange Self-Regulatory

Guide to Corporate Sustainabi l i ty

Chapters and Sections Standards of the Global Reporting Guidelines for Listed Companies No. 17 -

Reporting in China (CASS-ESG 6.0)

Initiative (GRI Standards) Sustainability Report (for Trial Implementation)

Responsibility Focus: Creating Value through

P ro d u c t E x c e l l e n c e S e t t i n g S a f e t y a n d

302-5/403-7 S2.1.13 Article 47

Sustainabi l i ty Benchmarks in Construct ion

Machinery

S2.1.1/S2.1.2/S2.1.3/S2.1.4/S2.1.5/

Article 11

Innovation-Driven Development / S2.1.6/S2.1.7/S2.1.8/S2.1.10/S2.1.11/

Innovation Integration: Stabilizing Article 42S2.1.12/S2.1.13

Industrial Chains and Refining

Quality to Boost Industries Article 11

Creation of Responsible Supply Chains 2-6/308-1/308-2/414-1/414-2 S3.1.1/S3.1.2/S3.1.3/S3.1.4/S3.2.1 Article 45

Article 46

S3.3.1/S3.3.2/S3.3.3/S3.3.4/S3.3.5/ Article 11

Pursuit of Craftsmanship Quality 416-1/416-2

S3.3.6/S3.4.3/S3.4.4 Article 47

Data Security and Privacy Protection 418-1 S3.4.1/S3.4.2 Article 48

Responsibility Focus: Strengthening Foundations

through Global Presence Building a Distinctive 404-2 S4.3.1/S4.3.2/S4.3.3/S4.3.4 Article 50

Talent Development Ecosystem for LiuGong

2-23/401-2 /401-3 /403-1 /403- S4.1.1/S4.1.3/S4.1.4/S4.1.6/S4.1.9/ Article 11

Shared Prosper i ty: Anchor ing Support for Employee Growth 2/403-3/403-4/403-5/403-7/403- S4.1.11/S4.1.12/S4.2.1/S4.2.2/S4.2.3/ Article 49

Responsibi l i ty for Sustainable 9/403-10/405-1 S4.2.4/S4.2.6 Article 50

Growth

Article 38

Rural Revitalization 203-1/203-2 S1.1.1/S1.1.2/S1.1.3/S1.1.4/S1.1.5

Article 39

Article 38

Social Welfare 203-1 S1.2.1/S1.2.2/S1.2.3/S1.2.4/S1.2.5/S1.2.6

Article 40

Future Outlook / A1 /

Indexes / A3 Article 57

Annex

Feedback Form / A6 /84 PAGE Annex

Annex Feedback Form

Multiple Choice (Please check √ in the appropriate box)

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performance in environment society and governance further enhance our sustainable

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