About this Report About this Report
Message from the Notes References
Chairman
This Report the first Environmental Social and Governance (ESG) Report released For ease of presentation Shenzhen Kaizhong Precision Technology Co. Ltd. is referred
by Shenzhen Kaizhong Precision Technology Co. Ltd. discloses the Company's to as "Kaizhong Precision" and "the Company" in this Report.About Kaizhong practices and performance in environmental social corporate governance (ESG) and
Precision other responsible areas to all stakeholders. How to obtain this Report
This Report is available in both simplified Chinese and English. In case of any
Preparation basis differences between the two versions the simplified Chinese version shall prevail.Sustainability Governance The electronic version of this Report is available on the Company's official website
This Report refers to the Global Reporting Initiative (GRI)'s Sustainability Reporting (http://www.kaizhong.com) the Shenzhen Stock Exchange (http://www.szse.cn)
Standards and the Self-Regulatory Guidelines of the Shenzhen Stock Exchange for and the CNINFO website (http://www.cninfo.com.cn).Listed Companies No. 3 - Preparation of Sustainability Reports and aligns with the
United Nations Sustainable Development Goals (SDGs).Corporate Governance Contact information
Scope If you have any suggestions for this Report you can contact us through the
following methods:
Organization: Shenzhen Kaizhong Precision Technology Co. Ltd. and its subsidiaries.Innovation and Operation Address: No. 1 Guihua 4th Road Longtian Neighborhood Pingshan District
Period: January 1 2024 to December 31 2024 with time extended for some content. Shenzhen
Release cycle: This Report is an annual report. Email: ESG@kaizhong.com
Envirnoment Source
The financial data in this Report are derived from the 2024 annual financial report
and other data are derived from the Company's internal documents and actual
Society
records of operations. The financial data in this Report are in RMB. In case of any
inconsistency with the Company's annual financial report the latter shall prevail.Appendix
01About this Report Message from the Chairman
Faced with the dual challenges of intensifying Improve corporate governance and consolidate the Deepen green development and implement "dual carbon"
global climate challenges and escalating foundation for development commitment
Message from the resource demands and under the strategic Sound corporate governance is the fundamental guarantee for Achieving green and low-carbon development is not only
Chairman guidance of the state's promotion of high-quality the sustainable development of an enterprise. We continued a global consensus but also one of our responsibilities. In
economic development we have consistently in 2024 to optimize our governance structure and strengthen 2024 we significantly reduced energy consumption per unit
placed environmental protection and social internal control and comprehensive risk management systems of output value and carbon emission intensity through a
responsibility at the forefront of corporate ensuring corporate compliance in operations. Attaching great package of measures including process innovation energy-
development. In 2024 the Company integrated
About Kaizhong importance to the protection of the rights and interests of saving equipment upgrades and energy management system ESG concepts into strategic decision-making
Precision stakeholders such as shareholders employees customers and optimization. We accelerated the construction of green
and operational practices. While providing suppliers we have been striving to build a mutually beneficial factories in an all-round way increasing the proportion of
customers wi th integrated solut ions for and win-win ecosystem. By incorporating ESG concepts into the renewable energy utilization and building an efficient and
core precision components we vigorously decision-making process we have improved our sustainable low-carbon production and operation system. Meanwhile we
promoted the construction of a sustainable development management and created greater comprehensive worked closely with supply chain partners to jointly promote
Sustainability Governance development management system in an all- value for all stakeholders. the construction of green supply chains contributing to
round way continuously improved the corporate the realization of the country's "dual carbon" goals through
governance mechanism accelerated the green Adhere to innovation-driven development and strengthen practical actions.and low-carbon transformation and actively core advantages
fulfilled our social responsibilities. We consistently regard innovation as the core driving force for Commit to social responsibility and share in collective
progress
Corporate Governance In retrospect we achieved in 2024 remarkable development. In 2024 the Company continued to increase its
results in technological innovation green and R&D investment focusing on breakthroughs in key technologies As a responsible corporate citizen we always integrate
low-carbon development digital transformation of intelligent manufacturing and green manufacturing while social responsibility into the genes of corporate development.corporate governance and fulfillment of social maintaining its technological leadership in the field of precision In 2024 we continued to improve our employee career
responsibility. These achievements should be components. On the one hand we seized the opportunities development system and to create a fair and inclusive
attributed to the wisdom and hard work of all in new energy vehicles intelligent connected vehicles and growth platform; we actively participated in public welfare Innovation and Operation
employees and also to the strong support of other industries and carried out in-depth cooperation with top undertakings such as community building and education
partners and all sectors of society. On behalf of international customers to jointly develop solutions for high- support; meanwhile we also deepened cooperation with
the Board of Directors I would like to express performance precision components; on the other hand we the government industry associations and other parties to
my sincere gratitude to all peers and partners actively promoted the innovative application of new materials jointly promote the healthy and sustainable development of
for their long-term support for the development and new technologies to inject green momentum into industrial the industry. Looking ahead we will continue to uphold the Envirnoment
of Kaizhong Precision! upgrading. In terms of digital transformation we actively concept of sustainable development with improved corporate
accelerated the construction of a digital factory system that governance as a guarantee technological innovation as an
integrates intelligent manufacturing systems industrial big data engine and green transformation as a direction and work
platforms and Internet of Things technologies forming a virtuous hand in hand with all stakeholders to jointly create greater
Society cycle of "data-driven R&D - intelligently-optimized production" economic environmental and social value. We firmly believe
and providing all-round support for the transformation of high- that with the joint efforts of us all and the sustained support of
end precision manufacturing towards intelligence and greenness. partners and all sectors of society the Company will usher in
a more brilliant tomorrow!
Appendix Chairman Zhang Haoyu
02About Kaizhong Precision
About this Report
Message from the About the Company
Chairman
Shenzhen Kaizhong Precision Technology Co. Ltd. ("Kaizhong Precision" stock code: 002823) is a national high-tech enterprise and a leading enterprise in the commutator industry.As a professional in the customization and development of various high-tech commutators collector rings connectors and other precision components the Company specializes in
precision components business and focuses on the development of three core EV technologies (battery motor and electronic control systems) intelligent driving systems automotive
About Kaizhong Precision lightweighting solutions. Our products are widely used in fields of automotive electrification and intelligent driving hydrogen energy energy storage rail transit aviation communications
About the Company consumer electronics health care smart home and office smart equipment photovoltaic power generation equipment etc.Recognition and honors
A glimpse of 2024 The Company possesses proprietary intellectual property rights and capabilities in the R&D design and manufacturing of precision stamping/bending molds plastic injection molds
automated precision machining lines and automated inspection systems. With a fully integrated industrial chain we deliver integrated solutions for high-end precision components
to global clients. Relying on advanced manufacturing technology and first-class product quality the Company has earned wide recognition from many well-known customers through
continuous innovation.Sustainability Governance
Sales and R&D centers and production bases
Corporate Governance Countries of key accounts
Germany
Innovation and Operation Changsha
Shanghai Heyuan
Dongguan JapanHuizhou
Shenzhen Hong Taiwan region
Envirnoment Kong
The Company i s headquar te red in
Society Shenzhen Guangdong Province China
and has multiple sales and R&D centers
and production bases in Huizhou Heyuan
Appendix Dongguan Changsha Shanghai Hong
Kong Taiwan region Germany and Japan.
03The Company's development history
About this Report
2022
Message from the
Chairman 2019
Keshun was awarded
Acquired Keshun the title of "Specialized
Insulation Materials Refined Characteristic
and Innovative Enterprise
About Kaizhong Precision 2016 in Guangdong Province"
About the Company 2013
Recognition and honors 2003 Listed on the
A glimpse of 2024 Shenzhen Stock
Passed QS9000 The production and sales Exchange (stock
certification volume of commutators code 002823);
ranked first in the world
Entered the automotive Acquired VOGT a Sustainability Governance
supply chain Slip rings and multi-layer German company
insulated wires were put
into mass production
2023
Corporate Governance
2021 Awarded the title
of "National Green
2018 Commutators were Factory"
recognized as "Individual
Innovation and Operation Huizhou Industrial
Headquarters was Champion Product in Park was put into
moved to Shenzhen Manufacturing" by the production
2015 Pingshan Ministry of Industry and
1999 Information Technology
Envirnoment 2006 NEV "Three- Changsha Industrial
Kaizhong Commutator electric System" & Park was put into
Heyuan Industrial Park
production was put into productionLimited was established Became suppliers for Autonomous Driving
well-known clients such
Passed ISO9001 Connectors were put Acquired SMK a Society as BOSCH Valeo
certification into mass production German companyDenso Mabuchi etc.Appendix
04About this Report Recognition and honors
Message from the
Chairman
About Kaizhong Precision
About the Company
Recognition and honors
A glimpse of 2024 National Green Factory High-tech enterprise certificate Innovative Enterprise in Excellent supplier in China's new
Guangdong Province energy vehicle industry
Sustainability Governance
Corporate Governance
China Patent Excellence Award Intelligent Manufacturing Maturity Exemplary Enterprise in Labor Individual Champion Honorary Certificate of
Assessment (Level 3) Certificate Law Compliance and Integrity Product in Manufacturing Shenzhen Renowned Brand
Innovation and Operation
Research and technology centers Academician expert workstation Innovation and Practice Bases
Research Center of the Mechanical Industry Micro Academician Expert Enterprise Workstation Postdoctoral Innovation and Practice Base
Envirnoment Commutator Engineering in Guangdong Application Demonstration Base National Mold Key
Technology Research Center of Micro Commutator Laboratory Industry-University-Research Base
Engineering of Guangdong Province Microforming Technology Experimental Base Beijing
Society
Engineering Technology Research Center in Guangdong Research Institute of Mechanical and Electrical Technology
Shenzhen Enterprise Technology Center Mold Experimental Base Huazhong University of Science
and Technology
Appendix Heyuan Engineering Technology Center
05Financial Performance
About this Report
A glimpse Revenue RMB Net profit attributable to shareholders RMBMessage from the
Chairman
of 2024 3049.6076 million 170.1108 million
About Kaizhong Precision
About the Company Governance Performance
Recognition and honors
A glimpse of 2024 Board diversity Investor relations management Anti-graft and anti-corruption Information security and privacy
protection
Independent directors account for Cninfo responded to 100% Information security training
33.33% 97 completion rate: Sustainability Governance inquiries of employees received anti-
corruption training 100%
Female directors Cash dividends: Rate of employees signing major information
account for 108.3 anti-bribery commitment:
0
Corporate Governance RMB million
44.44% 100% security incidents
Innovation and Operation Operational Performance
R&D innovation Product quality Customer service Supply chain management
240 The rate of suppliers signing Envirnoment The annual average number Customer complaint of PPM (product defects per handling rate: 100% the Integrity Cooperation
authorized and valid patents million) was 100% of suppliers conducted Commitment of Suppliers: 0.08 environmental and social impact assessments 100%Society
R&D investment: 0 Customer satisfaction: Conducted ESG With training for suppliers
Appendix RMB76.0642 of suppliers million product recall 98.5% 100%2 participating in it
06About this Report People-oriented Performance Environmental Performance
Message from the Environmental protection
Chairman Employee recruitment
Labor contract signing rate: Newly recruited female Environmental protection 462 employees accounted for investment:
About Kaizhong Precision 100% ethnic minority employees 33.18% RMB 9.9911 million
About the Company
Recognition and honors
A glimpse of 2024 Employee turnover rate: Social insurance Greenhouse gas emissions
6.28% coverage rate: 9 Total greenhouse gas emissions:
100% disabled employees 107195.93 tCO2e
Sustainability Governance
Employee communication and care Staff training and development Occupational health and safety Carbon intensity:
0.0091 tCO2e/ RMB mn
Corporate Governance Employee Conducted
satisfaction: 40
91.78% 1411 Red Cross first aid workersemployee training sessions Water resource management
Innovation and Operation
Water resource recycling rate:
Satisfaction with organizational The average training
atmosphere: time per employee was 108 24%
3.95 points (out of 5 points) 82.76 hours employees holding safety Envirnoment management certificates
Waste management
Production safety investment:
Society
RMB1.0845 million 54.24%
of waste is recycled
Appendix
07About this Report
Message from the
Chairman
About Kaizhong
Precision01
Sustainability
Governance
Sustainability Sustainability
Management
Responding to
Targets G SDGso’ vernance
Stakeholder
Communication
Analysis of suKbsatainztihve issues ong Precision integrates the concept of sustainable
development into its strategic decision-making and daily
operations committed to making continuous progress in the
fields of environmental social and governance (ESG). In order
to effectively fulfill its commitments to various stakeholder
Corporate Govegrnraonuceps the Company continued to optimize its sustainable
development governance structure and built a management
system covering the entire value chain. Through regular
strategic evaluation and dynamic adjustment mechanisms the
Company regularly reviewed and continuously optimized its
Innovation and Ospuersattiaoinnable development strategies and policies to ensure that
various commitments were transformed into quantifiable and
traceable practical results while promoting the harmonious
Envirnomecntoexistence of the enterprise society and the environment and
seizing sustainable development opportunities in the new era.Society * Sustainability Management
* Responding to SDGs’ Targets
Appendix* Stakeholder Communication
* Analysis of substantive issues
08Sustainability
About this Report
Management Sustainable development management policy
Message from the
Chairman
The Board of Directors of Kaizhong Precision attaches
About Kaizhong Sustainable development is a core component of great importance to the global ESG development
Precision Kaizhong Precision's business management philosophy t rends and changes in the macroeconomic
and an important cornerstone for us to achieve long-term
value growth. The Company always places sustainable environment incorporating sustainable development
development at a strategic level continuously improves management into the core of strategic decisions.Sustainability its ESG management system and strengthens the Board Through continuous communication with internal and
Governance of Directors' supervision and decision-making functions external stakeholders combined with the Company's
on sustainable development issues. We established a
Sustainability strategic roadmap operating realities and feedback
Management scientific and efficient sustainable development gover-
nance structure formulated clear management policies from all parties we systematically identified risks
Responding to SDGs’ and closely centered on the Company's strategic goals and opportunities in the ESG field and dynamically
Targets and business development directions to dynamically adjusted management strategies to ensure that ESG
Stakeholder optimize sustainable development plans to ensure their concepts and practices always kept pace with the
Communication foresight feasibility and effectiveness. development of the times.Analysis of substantive
issues Through systematic management and continuous im-
provement the Company is committed to deeply integrat- Under the supervision and guidance of the Board of
ing the concept of sustainable development into every Directors we established a normalized assessment
aspect of corporate operations promoting the coordinat- mechanism for ESG risks and opportunities deeply
ed growth of economic environmental and social values integrating sustainable development into strategic
Corporate Governance and creating a more sustainable future for stakeholders. decisions and business operations and promoting
the steady improvement of the Company's long-term
value.Innovation and Operation
Envirnoment
Society
Appendix
09Sustainable development management system
About this Report
During the reporting period Kaizhong Precision formulated the ESG Management System and established an ESG Incorporate ESG
Message from the management system with a complete structure clear hierarchy clear rights and responsibilities and efficient operation and management into operational
Chairman provided unified leadership decision-making and organization for the implementation of related work. management decisions
About Kaizhong
Precision Sustainability governance structure T h e C o m p a n y h a s i n t e g r a t e d E S G
management into its strategic and operational
management decision-making system. For
As the leadership and decision-making body for ESG work the Board of Directors is responsible matters involving major project investment
Sustainability Board of for determining the Company's ESG development direction and goals reviewing and approving decisions social benefit assessment should
Governance Directors major issues such as the Company's ESG governance structure and important systems and be an important basis for decision-making
Sustainability reviewing the Company's ESG report.Management by the Company's Board of Directors and
management. The Company encourages
Responding to SDGs’
Targets investors to integrate ESG factors with
Stakeholder As the research and guidance body for ESG work the Strategic Committee of the Board of o ther impor tant factors when making
Communication Strategy Committee Directors is responsible for studying and making recommendations on major issues such financial forecasts and valuations and to
Analysis of substantive of the Board of as ESG strategic planning and goals the construction of the ESG management system comprehensively consider and adjust various
issues Directors supervising and inspecting the implementation of ESG work and reviewing and submitting the variables when making investment decisions.Company's ESG-related reports to the Board of Directors.Corporate Governance
Composed of senior officers of the Company relevant persons in charge of relevant functional
departments and subsidiaries the ESG Working Group of the Strategic Committee of the Board
ESG Working Group of Directors is responsible for implementing the Company's ESG development strategy and
of the Strategy goals organizing and arranging various executive units to implement ESG work understanding
Innovation and Operation Committee of the the demands opinions and suggestions of stakeholders analyzing substantive issues and
Board of Directors executing the information collection preparation and disclosure of ESG reports. Meanwhile it
also summarizes the problems and achievements in ESG work and provides feedback on ESG
Envirnoment work to the Strategy Committee of the Board of Directors and offers suggestions.Society
ESG units composed Assume the main responsibility within the scope of duties be responsible for implementing ESG
of various departments work tasks in accordance with the Company's overall plan and report on the implementation
Appendix and subsidiaries of the status regularly.Company
10Responding to SDGs’ Targets
About this Report
Message from the
Chairman Kaizhong Precision takes actions on highly important substantive issues hoping to benefit mankind's common sustainable development goals through corporate value creation. In
response to the United Nations Sustainable Development Goals (SDGs) the Company has been taking the following actions.About Kaizhong
Precision
Sustainability
Governance
Sustainability
Management
Continue to build and optimize Increase R&D benefits and Improve the environmental Promote high-quality employment Carry out charitable
Responding to SDGs’ the sustainable development continue scientific research management system
Targets Equal employment and non-discrimination
activities
management system innovation Continue to invest in Anti-harassment Contribute to rural
Stakeholder Promote board diversity Improve the quality environmental protection employment
Communication management system Prohibition of child laborStrengthen compliance Actively promote green and Carry out tree
Analysis of substantive operations Strictly implement product environmentally friendly Fight against forced labor planting activities
issues Actively communicate with quality testing and after-sales packaging materials Freedom of association and collective
investors service Build a complete water bargaining
Transparent information Organize and carry out quality resource recycling system Protect the rights of female workers
disclosure culture activities Carry out technical Provide a competitive salary system
Intelligent manufacturing transformation projects to
Corporate Governance Zero tolerance for corruption save energy and reduce Provide perfect benefits for employeesapplications
Protection of whistleblowers consumption Implement employee stock ownership
Customer relationship
Comprehensive protection of Set reasonable carbon plansmanagement and customer
information and data security satisfaction survey intensity targets Conduct employee satisfaction
Innovation and Operation Conduct responsible Climate Change Risk
surveys
marketing training Management Convene the Staff and Workers' Congress
Improve the supplier Strictly manage the three Employee Complaints and Handling
management system wastes to ensure that no Provide high-quality employee training
Envirnoment environmental accidents
Conduct environmental and coursesoccur
social impact assessments on Define a clear employee development
suppliers Awarded the title of National path
Green Factory
Society Declaration of non-use of
conflict minerals
Appendix
11Stakeholder Communication
About this Report
Message from the Kaizhong Precision attaches great importance to the rights and needs of stakeholders maintains two-way communication with stakeholders deeply understands their needs ensures
Chairman responses and improvements to important issues injecting positive impetus into the Company's sustainable development. Based on a deep understanding of the opinions of all parties
we have taken positive measures to respond to relevant needs integrated the concept of sustainable development into corporate culture and strategy and promoted the Company's
About Kaizhong sustainable development through communication with stakeholders. During the reporting period the Company selected out key stakeholder groups based on standard guidelines
Precision such as the Sustainability Reporting Standards (GRI Standards 2021) and recorded and responded to the issues of common concern of stakeholders. In the future the Company will
continue to deepen this practice and work with all parties to create long-term value.Sustainability Regular communication mechanism with stakeholders
Governance
Sustainability
Management
Responding to SDGs’
Targets
Stakeholder Categories of
Communication stakeholders
Shareholders Government Community
Analysis of substantive
issues and investors
and regulatory Customer Partners Employees and the
agencies masses
Legal and compliant Protect employees' rights and
Corporate Governance Corporate governance
Provide diversified
operations products Honest interests Sound community
Stakeholder Transparent financial Pay taxes according to law
cooperation Career development path and development
expectations information disclosure
Improve customer
service Transparent training plan Rural revitalizationRespond to national strategy
Strengthen risk procurementEnsure product quality Diverse equal and inclusive Social welfaremanagement Serve regional developmentInnovation and Operation Win-win working environment
Create economic value Green and low-carbon Information security and
Emissions and waste
development
development privacy protection
Ensure occupational health management
and safety
Envirnoment General Meeting Community communication
Performance briefings Information Disclosure Customer satisfaction Industry and construction
brokerage strategy Platform survey exchange Staff and Workers' Congress Support and volunteer
Society exchange meetings Regulatory information Customer events meeting
Communication reporting Employee complaint channels
activities
Periodic reports and technical seminars Supplier survey
channels announcements Visitor reception Regular training
Media interviews
Project visits and visit
Appendix On-site surveys phone Daily work reporting and benchmark case visits Business
Employee satisfaction survey Pollutant control
calls emails and investor communication technical training negotiation Energy conservation and
interaction platforms emission reduction activities
12Analysis of substantive issues
About this Report
Message from the
Chairman During the reporting period Kaizhong Precision based on the national macro-policy orientation domestic and international social responsibility standards research industry
benchmarking and combined with the Company's business development strategy operating management and issues of concern of stakeholders conducted an analysis of substantive
About Kaizhong issues through identification assessment and confirmation work processes and selected out 25 substantive ESG-related issues for 2024 actively responding to stakeholder demands.Precision The Company ranked substantive ESG-related issues by importance based on "importance to the Company's development" and "importance to stakeholders" which helped determine
the focus and priority of sustainable development management work this year and set long-term ESG goals and specific objectives.Sustainability
Governance Steps for assessing substantive issues
Sustainability
Management
Responding to SDGs’
Targets
Stakeholder
Communication Benchmarking and Stakeholder Assess the importance
Analysis of substantive screening of issues communication of the issues
issues
Based on the Company ' s bus iness The Company keeps a close eye on social Conduct an analysis of substantive issues
development and ESG management status needs and policy trends including regulatory to identify the issues most relevant to the
referring to the latest national sustainable requirements sustainable development sta- Company’s sustainable development.development policies mainstream domestic tus and capital market trends committed to Based on the interests of stakeholders
Corporate Governance and international sustainable development maintaining communication and exchanges we evaluated the relevance of the issues
standards and benchmarking against with stakeholders through multiple channels of concern to the Company's development
the disclosure practices of outstanding establishing and maintaining necessary and the impact on stakeholders ranked the
peers and the focuses of mainstream ESG sound relationships and understanding the issues in order of importance and identified
Innovation and Operation rating agencies in the capital market we opinions of various stakeholder groups on seven very important issues.comprehensively identified ESG issues sustainable development issues.related to the Company.Envirnoment
Society
Appendix
13High
About this Report List of substantive issues
Address climate Product quality and safety
change and manage Optimize customer service
carbon emissions
Equal employment and protection
Message from the Employee compensation
Sustainable supply chain of rights and interests
and benefits
Chairman Product R&D and innovation
Employee communication
and democratic management
Very important issues Emissions Occupational health and safetyAbout Kaizhong management
Precision Staff training and
Product quality and safety Business ethics and anti-Equal employment and protection of development Environmental corruption
Occupational health and safety rights and interests management system
Water resource
Optimize customer service Sustainable supply chain
Investor relations
management management Compliance operation and
Sustainability Product R&D and innovation Business ethics and anti-corruption Green action Energy use and risk management
Governance management
Industry development
Sustainability Resource utilization and cooperation Intellectual property protection
Management ESG governance
Antitrust and fair competition
Responding to SDGs’
Targets Community building
Stakeholder
Communication Rural revitalizationImportant issues
Analysis of substantive
issues Employee Energy use and Address climate change and Low Governance Environment Society High
compensation and management manage carbon emissions
benefits Importance to the CompanyEmployee Water resource management
Compliance operation communication and Intellectual property protection
and risk management democratic management
Corporate Governance ESG governanceEmissions Employee training and
management development Industry development and
cooperation
Environmental Investor relations
management system management
Innovation and Operation
Envirnoment
Secondary important issues
Society Green action Community building
Resource utilization Rural revitalization
Antitrust and fair competition
Appendix
14
Importance to stakeholdersAbout this Report
Message from the
Chairman
About Kaizhong
Precision02
Sustainability Governance
Corporate
Corporate Governance
Governance
Sound Corporate
Governance In today's complex and ever-changing business environment
Strengthen InteKgriatyi zhong Precision has always regarded sound corporate
Building governance as the fundamental guarantee for corporate
Information Secdureitvy elopment. Based on compliant operations the Company
and Privacy Proatedchtioenres to the bottom line of business ethics. By establishing
a sound supervision mechanism and continuously conducting
integrity education we are committed to creating a clean
corporate culture while maintaining a zero-tolerance attitude
Innovation and Otpoewraatiornds any form of corruption. The Company strictly adheres
to the principle of fair competition and while respecting every
competitor firmly resists unfair competition and monopolistic
practices. Through continuous self-innovation and pursuit of
Envirnoment
excellence we are committed to maintaining a healthy and
orderly market order and promoting the sustainable development
of the industry.Society
* Sound Corporate Governance
Appendix* Strengthen Integrity Building
* Information Security and Privacy Protection
15Sound Corporate Governance
About this Report
Message from the Kaizhong Precision continues to improve its corporate governance structure attaching great importance to the protection of
Chairman Management responsibilitiesinvestors' rights and interests. We have established a decision-making execution and supervision mechanism with clear rights and
responsibilities and efficient operation to ensure that the Company's business management is conducted in a standardized and
orderly manner laying a solid foundation for sustainable development. For detailed information on the current status of corporate As the Company's authority body the
About Kaizhong
Precision governance and the appointment of directors supervisors and senior officers please refer to Section 4 Corporate Governance of the General Meeting exercises the powers to
2024 Annual Report. decide the Company's business policies
and investment plans review and approve
the reports of the Board of Directors and the
Sustainability Governance Governance structure Board of Supervisors the Company's profit distribution plan and loss compensation
plan and amend the Company's Articles
In strict accordance with the Company of Association in accordance with the
Law of People's Republic of China the law to protect the rights and interests of
Corporate Securities Law of People's Republic Governance Structure shareholders.Governance of China the Governance Guidelines
for Listed Companies the Guidelines As the Company's decision-making body
Sound Corporate
Governance for the Articles of Association of Listed
responsible to the General Meeting the
Companies the Share Listing Rules of the Board of Directors exercises the powers
Strengthen Integrity Shenzhen Stock Exchange and the Self- to convene the General Meeting report
Building Shareholders' Meetingregulatory Guidelines of the Shenzhen on work decide on business plans and
investment programs formulate financial
Information Security Stock Exchange for Listed Companies
No.1 - Standardized Operation of Listed budgets and final accounts profit distribution and Privacy Protection
Companies on the Main Board Kaizhong Board of Supervisors and loss compensat ion plans adjust
Precision has built a mechanism of mutual registered capital plan major company
coordination and checks and balances Audit Committee restructuring set up internal management
among the power organs decision-making agencies appoint and remove senior officers
and formulate basic management systems in
Innovation and Operation bodies supervision institutions and Board of Directors
management. The governance structure accordance with the law to ensure scientific
features clear rights and responsibilities Strategy Committee and efficient corporate governance and
close cooperation and efficient operation. safeguard the interests of shareholders and
the Company.Envirnoment The corporate governance structure
consists of the General Meeting the Board Remuneration and As the Company's internal supervisory body
of Directors and its Strategy Committee Appraisal Committee the Board of Supervisors earnestly performs
Audit Committee Nomination Committee i ts supervisory duties supervises the
Society Remuneration and Appraisal Committee Company's legal operations financial status
and the Board of Supervisors to ensure
Nomination Committee and the legality of the performance of duties the standardization and independence of
Senior Management by directors and senior officers ensures the
Appendix strategic decisions. legality and compliance of the Company's
operations and promotes the Company's
healthy stable and sustainable development.
16Professionalization of the Board of Directors Board diversity
About this Report
The Board of Directors operates with clearly defined responsibilities upholding a strong sense of accountability and The Company adheres to the principles of "employing
Message from the professionalism. Through rigorous execution of duties the Board of Directors leverages professional expertise forward- people based on their talents" and "board diversity".Chairman looking vision and diligent commitment to provide wisdom and scientific decision support for the Company's strategic When appointing directors we fully consider multiple
planning operation management risk control and other key areas to ensure the efficient operation of the corporate factors such as candidates' gender age cultural
governance structure and to protect the legitimate rights and interests of investors. As of the end of the reporting period background education level professional knowledge
About Kaizhong
Precision the Company's Board of Directors had 9 members including 6 non-independent directors and 3 independent directors
and skills major experience and years of service
with independent directors accounting for 33.33%. committed to building a scientific efficient diverse
and inclusive governance structure. Currently the
The Company's Board of Directors has established the Strategy Committee the Audit Committee the Nomination Company has 4 female directors accounting for
Sustainability Governance Committee and the Compensation and Appraisal Committee. Meanwhile we have formulated rules of procedure 44.44% fully reflecting the concept of gender equality
for each special committee to define the personnel composition responsibilities and powers and decision-making diversity and inclusiveness. The members of the Board
procedures of each committee. During the reporting period each special committee faithfully performed its respective of Directors come from a variety of fields including
duties in accordance with the actual situation of the Company and its own rules of procedure with a serious responsible industry technology law finance and accounting with
diligent and honest attitude and provided scientific and professional opinions and references for the decision-making of comprehensive professional knowledge and skills.Corporate the Board of Directors. This diverse professional background provides rich
Governance perspectives and deep wisdom for the Company's
decision-making and effectively guarantees the scientific
Sound Corporate operation and efficient decision-making of the Board of
Governance Percentage of Independent Directors on Special Committees of the Board of Directors Directors.Strengthen Integrity
Building
Information Security Strategy Committee Audit Committee
and Privacy Protection Percentage of Female Directors
on the Board of Directors
There are 4 There are 3 directors in
directors in total of which The Company has total of which 67%
Innovation and Operation independent directors are independent directors female directors
account for 25% 4
Envirnoment
Nomination Committee Remuneration and
Appraisal Committee
Accounting for
Society There are 3 directors in There are 3 directors in 44.44%
total of which 67% total of which 67%
Appendix are independent directors are independent directors
17Investor relations management Investor returns
About this Report
In order to strengthen the communication between the Company and investors and potential investors enhance investors' In order to establish a scientific continuous and
Message from the understanding of the Company protect the legitimate rights and interests of investors especially small and medium-sized stable shareholder return mechanism increase the
Chairman investors and continuously improve the level of corporate governance Kaizhong Precision in strict accordance with the transparency and operability of profit distribution policy
Company Law of the People's Republic of China the Securities Law of the People's Republic of China the Guidelines decisions and effectively protect the legitimate rights
for Investor Relations Management of Listed Companies and the Share Listing Rules of the Shenzhen Stock Exchange and interests of public investors the Company has
About Kaizhong and other relevant laws and regulations normative documents and the Company Articles of Association as well as its formulated the Shareholder Return Plan for the Next
Precision actual situation has formulated the Investor Relations Management System and the Investor Visit Reception Management Three Years (2023-2025) in accordance with the China
System. These systems have defined the organizational structure and responsibilities of investor relations management Securities Regulatory Commission's Notice on Further
and improved the content and methods of investor relations management demonstrating the great importance that the Implementation of Matters Concerning Cash Dividends
Sustainability Governance Company attaches to the maintenance of investor relations. of Listed Companies the Guidelines for the Supervision
of Listed Companies No. 3 - Cash Dividends of Listed
Investor communication channels Companies and the Self-regulatory Guidelines of the Shenzhen Stock Exchange for Listed Companies No. 1
- Standardized Operations of Listed Companies on the
Corporate The Company has established a Main Board and other relevant laws regulations and Types of investor inquiries
Governance multi-channel all-round communica- the Company Articles of Association taking into account
tion platform to improve the efficien- the short-term and long-term interests of shareholders
Sound Corporate cy of interaction with investors and
Governance During the reporting period the Company responded to 97 inquiries on
to ensure the continuity and stability of the Company's
provide investors with high-quality the cninfo platform of the Shenzhen Stock Exchange. profit distribution policy. During the reporting period
Strengthen Integrity services. The Board of Directors has the Company distributed a total of RMB108.3 million in
Building a board secretariat under it which is dividends.responsible for coordinating informa- Market and competition Shareholders' equity
Information Security
and Privacy Protection tion communication and exchanges
with investors and communicating 17.53% 37.11%
with investors on issues of concern
through the Company's official web- During the reporting period
site investor hotline email and the
Innovation and Operation cninfo platform of the Shenzhen Products and services Financial status
Stock Exchange. In addition the
Company has established and im-
proved channels for communication 19.56% 8.25% The Company distributed a total of
with investors. Through on-site sur-
Envirnoment RMB million in dividends
veys telephone conferences perfor- 108.3
mance briefings and online collective
reception days for investors we have Information disclosure Business management
Society helped investors gain an in-depth un-
derstanding of the Company's opera-
tions and development and listened 5.16% 12.37%
Appendix carefully to investors' opinions and
suggestions on the development of
the Company.
18About this Report Compliance management Internal control
Message from the Kaizhong Precision regards compliance management as In strict accordance with the Basic Norms for Internal Control and its supporting guidelines the Company has formulated Chairman
the cornerstone of the Company's stable development. the Internal Control Management System established and improved an effective internal control system set up three
The Company integrates compliance requirements lines of defense for risk management and internal control and carried out internal control management work in an all-
About Kaizhong into various business and management processes round way.Precision committed to building a complete and efficient risk
management and internal control system enhancing risk
awareness and response capabilities and ensuring the
accuracy and transparency of information disclosure.Sustainability Governance
Support the implementation of internal control systems integrate risk
Transparent disclosure The first line management into daily work and manage risks in the actual operation of of defense Business Units each business
Corporate The Company always adheres to the principles of
Governance "fairness justice and openness" to regulate information
Sound Corporate disclosure and protect the legitimate rights and interests
Governance of investors. In accordance with the Information
Disclosure Management Measures for Listed Companies
Strengthen Integrity the Listing Rules of the Shenzhen Stock Exchange and
Building other relevant laws and regulations and the Company
Information Security Articles of Association the Company has formulated Through internal audit the Company reviews the effectiveness and
and Privacy Protection and strictly implemented the Information Disclosure The second adequacy of the Company's internal control and risk management and
Management System and the Internal Reporting line of defense Audit supervises the implementation of improvement measures
System for Major Information which have defined Department
the information disclosure procedures responsible
parties and confidentiality requirements ensuring that
Innovation and Operation information disclosure is true accurate complete and
timely while faithfully fulfilling information disclosure
obligations. The Company's documents for regular or ad
hoc disclosure are published in designated media. All
Envirnoment disclosed content is open and transparent and is subject
to supervision by regulators and investors. Meanwhile
the Company also enhances the sense of responsibility Organize the establishment and improvement and effective implementation
of directors supervisors and senior officers through The third line the Board of of the internal control system inspect and supervise the effectiveness
Society internal training to ensure compliance with information of defense
Directors the Board of the implementation of the internal control system and promote the
of Supervisors and
disclosure. In the future we will continue to improve construction of internal control culturethe Management
our information disclosure system serve investors with
Appendix higher transparency and responsibility mechanisms and
create greater value for the sustainable development of
the Company and society.
19About this Report
Message from the
Chairman
About Kaizhong
Precision
Sustainability Governance
The Company carried out the internal control evaluation work in an orderly manner in stages covering Risk management
preliminary preparation data collection on-site testing report preparation and communication to ensure the
comprehensiveness importance and objectivity of the internal control evaluation. The Company conducts an
internal financial and non-financial audit of its major wholly-owned subsidiaries every year conducts special audits
Corporate We have established a risk management committee to organize
Governance every quarter and publishes the Internal Control Self-Appraisal Report on schedule to ensure the implementation coordinate and supervise the implementation of the Company's
of the Company's internal control management system.Sound Corporate risk management work. This system ensures that we can
Governance promptly identify evaluate and take effective countermeasures
Strengthen Integrity to safeguard the Company's long-term development and the
Building The Audit Department conducted training on the Basic Norms for Internal Control interests of investors when facing various risks. Meanwhile the
Information Security Company has established a major risk warning mechanism and
and Privacy Protection an emergency response mechanism for emergencies defined
The Audit Department organized in September 2024 a training on the Basic Norms for Internal Control and risk warning standards formulated emergency plans for possible
its supporting guidelines aiming to convey external regulatory requirements to the Company's personnel major risks or emergencies specified responsible personnel and
involved in the design implementation execution and supervision of internal control and to provide relevant
standards and inspection results. The training content covered the background application guidelines standardized handling procedures to ensure that emergencies
Innovation and Operation evaluation guidelines and differences in audit guidelines of the Basic Norms for Internal Control and its are handled promptly and properly.supporting guidelines.In addition we have also established a comprehensive risk
The training emphasized the importance of the internal control system pointing out that the Company's indicator platform incorporating key metrics including customer
Envirnoment internal control system should cover all management work and ensure that all decisions and activities supply chain legal affairs and EHS (Environment Health
are carried out under a sound internal control system. In addition the training also covered the core
requirements of regulatory laws including formulating and improving internal control systems and manuals and Safety) incidents into the platform for management using
establishing an internal control self-appraisal mechanism conducting internal control evaluations and this as a basis to assess each department and enhance their
Society issuing evaluation reports. sense of responsibility and risk prevention capabilities. Through
a complete risk management system and digital tools the
Through this training employees gained a better understanding of the establishment and operation of the
internal control system and how to improve the Company's management efficiency and risk prevention Company can accurately identify and efficiently respond to risks Appendix
capabilities through internal control. continuously optimizing its internal governance level and laying
a solid foundation for sustainable development.
20Strengthen Integrity Building
About this Report
Message from the Kaizhong Precision operates in good faith and in accordance with the law continuously
Chairman improves the construction of its business ethics system and actively promotes the Training on anti-fraud and anti-commercial bribery
construction of an honest culture committed to creating an honest and clean working
environment.About Kaizhong
Precision On November 22 2024 the Company issued a notice on organizing a company-
wide study on the Anti-Fraud and Anti-Commercial Bribery. The training was
Business ethics conducted both online and offline. Online training was delivered via the Kaizhong
Sustainability Governance E-Learning Platform covering all employees with registered accounts while
offline training was specifically arranged for production line employees. The
Consistently believing in the values of "integrity and honesty" Kaizhong Precision is training content included the types of fraud common crimes and preventive
committed to establishing and maintaining high standards of business ethics in strict measures aiming to enhance employees' legal compliance awareness and anti-
accordance with the Company Law of the People's Republic of China the Anti-Unfair fraud capabilities. The training achieved extensive coverage and remarkable
Competition Law of the People's Republic of China the United Nations Convention against results and equipped employees with methods to identify fraudulent activities
Corporate Corruption and other relevant laws and regulations.Governance and effective response strategies laying a solid foundation for fostering a
transparent and ethical work environment within the Company.Sound Corporate We have formulated and promulgated a series of systems such as the Code of Business
Governance Conduct and the Anti-Fraud and Whistleblowing Management System to ensure that
employees' behavior complies with ethical standards and legal requirements adhering to
Strengthen Integrity the bottom line of "zero tolerance" for fraud and corruption.Building
Information Security The Company has set up multiple reporting channels including mailboxes e-mails
and Privacy Protection telephones letters etc. to encourage all stakeholders to report and expose all kinds of
violations of business ethics.Innovation and Operation
Reporting Channels
Envirnoment
Email box of General Manager or email box of the Audit
Department: audit@kaizhong.com
Society
Hotline: 0755-66852689 extension 6353
Appendix Training site
21Whistleblower protection system
About this Report
Attaching great importance to the protect ion of
whistleblowers the Company has formulated the Anti-
Message from the
Chairman Fraud and Whistleblowing Management System
which clearly defines the protection requirements for
whistleblowers with a "zero tolerance" attitude including
About Kaizhong strictly prohibiting the disclosure of whistleblower
Precision information allowing anonymous or pseudonymous
reporting and strictly protecting whistleblower information
in all links such as registration acceptance investigation
and custody. It is strictly prohibited to retaliate against
Sustainability Governance whistleblowers and any form of retaliation will be subject
to criminal prosecution in accordance with national laws
and regulations.Antitrust and fair competition
Corporate
Governance During the reporting period Guided by its core value of integrity the Company strictly abides by the Anti-Unfair Competition Law of the People's
Sound Corporate Republic of China the Model Provisions on Protection of Anti-Unfair Competition the Anti-Monopoly Law and other
Governance domestic and foreign laws regulations and relevant standards. The Company has formulated the Code of Business
The number of anti-corruption and Ethics and Conduct which incorporates anti-trust and unfair competition provisions. It explicitly prohibits employees from
Strengthen Integrity anti-bribery reporting incidents was
Building using illegal means to obtain trade secrets or confidential information from third parties and strictly forbids monopolistic
0 practices bribery fraud or any other forms of unethical competition in business operations. Meanwhile the Company Information Security adheres to fundamental principles throughout its production and operational processes causing no damage to other
and Privacy Protection enterprises' business reputation or public image; undermining no creditworthiness of competitors or their business
activities; and refraining from misleading the public. These commitments collectively demonstrate our dedication to
maintaining a fair and equitable market competition landscape.All employees participated in In addition the Company requires suppliers to respect and comply with all applicable fair trade competition and
Innovation and Operation anti-corruption and anti-fraud training antitrust laws and regulations and not to engage in any anti-competitive discussions or enter into any anti-competitive
100% agreements including illegal manipulation of prices market share customer allocation or other illegal restrictive practices at any level of the production or distribution chain.
Envirnoment
All employees signed the
Society anti-bribery commitment During the reporting period
100%
Appendix The Company did not face any litigation regarding unfair competition
22Information Security Information security management
About this Report
and Privacy Protection In order to comprehensively protect information and data security Kaizhong Precision organizes security vendors
Message from the to conduct security testing activities on the Company's main IT systems every year. A 10-person team consisting
Chairman
Kaizhong Precision implements the information security of the Company's network administrator system administrator security equipment engineer and supplier
management policy of "ensuring information security meeting technical experts conducts vulnerability scanning and ransomware risk investigation on the Company's main
About Kaizhong customer needs implementing risk management and achieving
IT systems. By deploying security probes XDR and other equipment in the data center the team can discover
continuous improvement" attaches great importance to vulnerabilities and weaknesses in the system and perform targeted patching operations on the system to Precision
information security and privacy data protection and strives to improve the security and stability of the system.protect the rights and interests of employees and customers. By In order to enhance the Company's emergency response capabilities for information security incidents
formulating a series of information security management systems
Sustainability Governance standardize the process for handling information security accidents improve fault recovery efficiency shorten such as the Information Security Management Manual the fault recovery time and ensure production continuity the Company has established an emergency response
Personal Information Protection Management System and the management team formulated the Information System Emergency Plan and defined emergency contacts
Physical and Environmental Safety Management Procedures emergency response processes and measures. During the reporting period the Company organized and
we continuously improve the information security management carried out two information security emergency drills: handling of power outages and core network failures
system to provide employees with a safe service environment. in the data center. For power outages in the data center a simulated power outage was conducted in the IT
Corporate
Governance room of Pingshan Plant and simulated operations were performed for both normal and abnormal startup of the
emergency circuit to ensure normal operation of the system. For core network failures the Company built a test
Sound Corporate During the reporting period platform to simulate core network equipment failures used replacement equipment imported configuration files
Governance replaced the current core equipment and quickly restored normal network operation.Strengthen Integrity System availability:
Building In addition the Company also conducted a number of information security training sessions for all employees. 99.9% The training content included awareness campaigns on information security and company-specific information Information Security security protocols. aiming to enhance employees' awareness of information security.and Privacy Protection
Important data backup completion rate:
100% Information security certification
Innovation and Operation
Information security training completion rate:
100% As of the end of the reporting period Kaizhong Precision had
Envirnoment
passed the ISO 27001 infor-
Number of information leaks: mation security management
0 system certification and TISAX Society trusted information security as-
sessment certification and the
Appendix Number of major information security incidents: certification covered the Compa-
0 ny's entire business scope. ISO 27001 Certificate TISAX Certificate
23Privacy protection
About this Report Attaching great importance to the protection of partners' privacy data Kaizhong Precision has ensured that all business activities are carried out under the premise of legality and
compliance. The Company strives to create a trustworthy business landscape. The Company has ensured that company information and partner privacy are strictly protected by
Message from the strengthening information access rights and file outbound control improving information encryption methods and carrying out privacy protection training.Chairman
Asset management Access rights management
About Kaizhong
Precision
Asset classification: We have formulated the Information Classification and
Control Management Procedure to identify the Company's main information assets Permission control: We have formulated strict permission control measures
Sustainability Governance and supporting assets and define the classification of information assets. for information systems and internal shared files stipulating that only specific
Protection of confidential assets: Through an effective data backup mechanism authorized personnel can have access to specific information.major information assets are effectively protected and strict requirements are Authority review: We regularly review the allocation and recovery of authority to
imposed on confidential information obtained in the course of work. Personnel ensure that authority allocation is reasonable and controllable.involved should keep it properly individuals are not allowed to bring it home or to
Corporate any public place and confidential information must not be disclosed.Governance Display of sensitive information: We have developed detailed desensitization
Sound Corporate standards based on different businesses and departments and used masks to
Governance provide security protection for sensitive information in the information system. Personnel management
Strengthen Integrity
Building
Identification of sensitive positions: We identify information security sensitive
Information Security File outbound management positions conduct effective background checks on personnel in sensitive positions
and Privacy Protection
and require all employees to sign information security confidentiality agreements.Software development: Enterprise WeChat company mailbox Internet behavior Privacy protection training: We provide employees with privacy protection-related
control system desktop control system and document encryption system are training and assessments.combined to strictly control the outbound sending of files. Management of outsiders: Outsiders entering the factory must strictly register
Innovation and Operation Channel restrictions: Only two channels corporate WeChat and email are available necessary identity information and purpose of visit. All collected information must
for sending files and all other channels are closed. be clearly informed of its purpose and storage period and their consent must be
obtained. When outsiders enter sensitive areas they should be accompanied by
Audit for outbound sending: We regularly organize audits of corporate WeChat and designated personnel and restricted from using equipment with functions such as
Envirnoment email to prevent illegal leakage of internal information. recording video recording photography and information storage.Society
During the reporting period
Appendix
The Company did not have any incidents of infringement of customer privacy or leakage of customer privacy data.
24About this Report
Message from the
Chairman
About Kaizho0ng Precision 3
Sustainability Governance
Innovation and
Corporate GoveOrnanceperation
In response to the country's "14th Five-Year Plan" and
Innovation and its "Made in China 2025" strategic guidelines Kaizhong
Operation Precision has seized the development opportunities of the
R&D Innovation transformation of the precision components industry towards
Intelligent Manufhacigtuhrin-gend intelligent and green development. Adhering to
the philosophy of innovation-driven development we are
Quality Managemceonmt mitted to becoming a global leading integrated solution
Supply Chain provider for precision components by continuously promoting
Management technological upgrades and deepening industry collaboration.While strictly implementing quality management to ensure
excellent product quality the Company has built an operation
local network to quickly respond to customer needs and
Envirnomecntreated a sustainable supply chain system to achieve synergy
across the entire industry chain. Our aim is to create value
with customers for win-win results.Society
* R&D Innovation
Appendix* Intelligent Manufacturing
* Quality Management
* Supply Chain Management
25R&D Innovation Structure of the Institute of Engineering Technology
About this Report
Connector Engineering
Regarding science and technology as the core driving Commutator Engineering Technology Center New Materials Engineering Message from the
Chairman force for development Kaizhong Precision is committed to
Technology Center Technology Center
creating a dynamic R&D environment and establishing a
fair incentive mechanism so that every employee can give
About Kaizhong full play to their innovative talents. Guided by customer
Precision needs and future market trends the Company strengthens
collaborative R&D between industry academia and Institute of Engineering
research promotes the introduction and cooperation of German R&D Center
scientific research talents constantly pursues technological
Sustainability Governance progress continues high-intensity R&D investment develops
new quality productive forces and transforms it into market
results continuously creating value for customers. The
Company has built an independent intellectual property
system to ensure that its technological advantages are Engineering Technology Computer Aided
Corporate Governance consolidated. Laboratory Materials Technology Laboratory
Engineering Laboratory
Standard Research
Laboratory Room
Innovation system
Innovation and
Operation Kaizhong Precision attaches importance to and strengthens
R&D Innovation the construction of the scientific and technological innova-
tion system. In order to coordinate the Company's technical
Intelligent Manufacturing
resources and enhance its technological competitiveness
Quality Management we have established the Engineering Technology Research
Supply Chain Institute and the German R&D Center to efficiently coordi-
Management nate R&D resources and information and realize the sharing
of technical capabilities and platforms covering product
development new material preparation intelligent manu-
facturing processes and equipment pilot and experimental
verification and other innovative capabilities.Envirnoment As of the end of the reporting period
Meanwhile in order to continuously strengthen R&D mo-
mentum and fully mobilize the enthusiasm of R&D per-
sonnel the Company uses innovative incentive systems The Company has a total of 363 researchers and developers accounting for Society 9.86% of all such as the R&D Project Management Measures the R&D
Incentive Management Measures and the Intellectual Prop- employees. Meanwhile the Company made long-term continuous and high-intensity R&D investment in the
erty Incentive Management Measures as a guarantee to
reward individuals and teams who have made outstanding fields of R&D and innovation. This year's R&D investment was RMB 76.0642 million accounting Appendix
contributions to technological innovation. These efforts have
promoted the Company's continuous breakthroughs in core for 2.49% of the audited total operating income for the year.technology fields.
26About this Report Intellectual property rights
Message from the Kaizhong Precision adheres to the intellectual property management policy of "intellectual property promotes innovation
Chairman The Intellectual Property Training Plan is formulated and enhances global competitiveness" and strictly abides by the Intellectual Property Law of the People's Republic of every year and intellectual property training conducted
China the Patent Law of the People's Republic of China and other national laws and regulations. The Company has at different levels for the Company's management
continuously established and improved the intellectual property management system formulated and implemented intellectual property specialists scientific researchers
About Kaizhong
Precision the Intellectual Property Management System Manual and other systems to control intellectual property maintenance purchasing personnel and sales personnel so that
implementation licensing and transfer. While attaching importance to the protection of its own intellectual property all employees have a deep understanding of the
rights the Company also respects the intellectual property rights and trade secrets of others. intellectual property management work guidelines
goals respective responsibilities as well as the basic
Sustainability Governance knowledge of intellectual property laws regulations
systems and standards. These efforts have continuously
As of the end of the reporting period enhanced the scientific and technological innovation
capabilities of our scientific researchers and the
management level of intellectual property management
Corporate Governance personnel.The Company had authorized The Company had passed the intellectual property
240 valid patents management system certification. The certification certificate is in its validity period.
Innovation and
Operation
During the reporting period
R&D Innovation
Intelligent Manufacturing
Including invention patents 证书号第
Quality Management 68 6716951号发
发 明 The Company had conducted a total of 明名
称：专发用
Supply Chain 明 于电 利机人 定专 ： 子 证陈 的雷 金利 ;胡 属 书炼 焊号 接
专：式连
利 ZL申2接
01器请8及
日1生：001产方
Management 专 2利 0 51 4 法8 9年 8权 .0 7人 1月地 ： 0深 8日圳市凯址中
授：精权51密公81技
2
告5术
广 股日 东 份有 5 internal intellectual property-： 省 限国 20 深并 家 24年 圳 公在 知 0 市 司专 识 2 宝算 利 产 月 安。 登 权 1 区记 局 3簿 依 日 沙上 照 井予 中 镇专 以 华 新人 利 登 人民 桥的 证 记。 共 授 芙姓 书 蓉名 记 专 和 权利 国 公 工或 载名 专 权 专利 自 利 告 业区称、 权 授 法 号国 登 权 进 ：籍 记 公 行、 时 告 审 C之 查 N 1*地的址法日，决082变律起0更状生定
06
1等况效授
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0记利利
利
0载权权
权期，局1在的专转限颁54利移为发
长登、二发9记质十明8簿押年专申7上、，利。无自证书*效申
168
长、请雨终日
止 起 、 related training sessions covering 恢 复 和 专 利权
utility model patents
第 basic knowledge of intellectual 1 页 ( 共 2 页 2) 024年02月13日
Envirnoment property intellectual property mining
and standards for writing briefing
documents.Society 4 international patents The Company's Intellectual Property Management System Certification
Certificate and Patent Certificate
Appendix
27About this Report Open collaboration
Message from the Kaizhong Precision has consistently attached great importance to industry exchanges and cooperation actively joined
Chairman industry associations and participated in industry forums and summits. It is the initiator of the National Innovation Institute
of Digital Design and Manufacturing and a director unit of the Industry Alliance. The Company actively participates in
the revision of industry standards. During the reporting period we participated in the research of 5 national standards
About Kaizhong industry standards and group standards promoting knowledge sharing and business cooperation. Meanwhile we
Precision
organized more than 500 external technical exchanges academic seminars and exhibitions to promote the circulation of
knowledge and jointly carried out more than 100 technical research projects with mainstream automobile companies to
accelerate industrial upgrading.Sustainability Governance
In addition the Company also took the initiative to carry out in-depth cooperation with experts from well-known scientific
research institutes to form internal and external synergy. Based on customers' demand for higher performance of multi-
layer insulated wires in terms of environmental protection and high frequency and high voltage the Company cooperated
deeply with the Shenzhen Institute for Advanced Polymer Materials of the Chinese University of Hong Kong to develop
Corporate Governance two high-performance insulation materials and complete the construction of material preparation capabilities.Participation in the annual meeting of the Micromotor Industry Association
Innovation and
Operation
R&D Innovation
Intelligent Manufacturing In October 2024 Kaizhong Precision as a
Quality Management member representative of the Micro-Special
Motor and Components Branch of the China
Supply Chain
Management Electronic Components Association was
invited to attend the annual meeting held
by the Micro Motor Industry Association.Focusing on the cutting-edge technologies
key technologies and core technologies of
Envirnoment micro-special motors and bringing together
representatives of outstanding companies in
the industry to carry out in-depth discussions
on how to effectively promote the sustainable
Society development of the micro-special motor
industry the event aimed at promoting the
transformation upgrading and sustainable
Appendix prosperity of the industry through in-depth
exchanges and cooperation.
28Intelligent Manufacturing
About this Report
Message from the
Chairman As an advanced enterprise in the field of intelligent manufacturing of precision components Kaizhong Precision aims to build an "industry lighthouse factory" promoting digital
transformation in an all-round way and building an intelligent manufacturing system covering the entire value chain including production quality control warehousing and logistics.About Kaizhong
Precision
Intelligent operation
Sustainability Governance In the field of intelligent manufacturing Kaizhong Precision has formulated an implementation plan for the MOM system and has further expanded the depth and breadth of automation
and informatization in key areas such as planning and scheduling process management equipment management quality management inventory management data integration
and analysis. We strive to gradually achieve the transformation goal of intelligent manufacturing in all aspects of operations while providing solid technical support and management
guarantees for the Company's sustainable development and value creation.Corporate Governance
Phase 1 Phase 2 Phase 3
Innovation and
Operation (2025) (2026) (2027)
R&D Innovation
Intelligent Manufacturing
Quality Management
Supply Chain Transparency in production Management informationization Intelligent manufacturing
Management
Data collection in production process Program management Interconnection
Envirnoment Rapid response in production process Warehouse management Intelligent decision-making
Visualization Quality management Intelligent production scheduling
Equipment management AI quality analysis
Society Technology management
Appendix
29Intelligent manufacturing achievements Intelligent manufacturing applications
About this Report
Relying on multiple information platforms and with the support of cutting-
edge technologies such as artificial intelligence the Internet of Things (1) Automatic visual inspection system
Message from the and 5G Kaizhong Precision has built an intelligent manufacturing system The Company has actively introduced automatic visual inspection equipment with deep learning
Chairman and an intelligent operation system. Through full-range collaboration capabilities in multiple domestic production bases to replace traditional manual inspection methods
in human resources management financial management safety and achieved accurate and rapid product inspection and real-time monitoring of product quality
management product R&D production and manufacturing and supply
About Kaizhong status and production progress significantly improving inspection efficiency and accuracy product
Precision chain management the Company has achieved lean management of the quality and production efficiency and optimizing production management processes.entire value chain improved production efficiency and product quality
and provided more flexible and efficient solutions for production. (2) Flexible full-process automatic production line
The company's Huizhou factory has invested in multiple automated production lines realizing the
Sustainability Governance
Established platforms automation of the entire process from stamping injection molding assembly to inspection. These
production lines not only have fast switching functions and can flexibly respond to the production
needs of different products but are also equipped with advanced real-time monitoring systems that
ERP system PLM system CRM system Model manager can grasp the production status in real time and ensure the stability and continuity of production.Corporate Governance Besides with powerful data analysis capabilities these production lines can also optimize
SPC system PM System OA system Cost control production processes improve production efficiency and reduce production costs through in-depth
system mining and analysis of production data.
(3) Fully automatic extrusion production platform
Innovation and Platforms under construction
Operation The Company has independently developed an extrusion automation platform. With its advanced
R&D Innovation technical architecture and deep learning algorithms the platform has successfully realized MES platform Digital financial Contract HCM platform unmanned operation of the extrusion process significantly improving production efficiency and
Intelligent Manufacturing platform management enhancing the stability and consistency of product quality. By integrating an efficient automatic
Quality Management platform monitoring system the platform can collect production data in real time and conduct in-depth
Supply Chain analysis thereby optimizing the production process and achieving precise quality control. In
Management Planning and construction platform addition with its quick switching function the platform can flexibly adapt to the production needs of
different products further enhancing production flexibility and market response speed.MOM Intelligent
platform park (4) Intelligent Manufacturing of the Processing Center of Pingshan
Envirnoment Production Base Shenzhen
Based on the intelligent manufacturing system the Company actively Thanks to the application of advanced production management systems such as MES
applies artificial intelligence automation and information technology to (Manufacturing Execution System) and Mold Manager the Company has achieved real-time
continuously improve the intelligence level and operational efficiency monitoring of production equipment and production progress. Through these systems we can Society
of each production base and to adapt to the rapidly changing market efficiently carry out order management process management spare parts inventory management
demand. The Company has successfully built multiple information and document management achieving full-scenario coverage and significantly improving
and technology platforms achieving full-scenario coverage from order production efficiency and product quality while providing strong support for the Company's Appendix
management process management spare parts inventory management intelligent production and lean management.to document management while ensuring efficient coordination of
process control and decision-making.
30Quality Management
About this Report
Message from the Kaizhong Precision attaches great importance to product quality management and strictly implements the quality policy of "participation by all prevention first continuous improvement
Chairman
and long-term and stable satisfaction of customers' demand". By building a systematic quality management system and obtaining external certification we have formulated a sound
internal management system to continuously improve the quality management level of all links in the product life cycle and create safe and quality products for customers.About Kaizhong
Precision High-quality products and services are the guarantee for the Company to gain a good reputation. With its outstanding pursuit of quality and innovative spirit perfect quality management
system full industrial chain layout and high-quality customer service the Company has earned high recognition and deep trust from many world-class customers enjoyed a good
reputation among world-class customers and won many honorary awards from customers further consolidating its competitiveness in the field of global precision components.Sustainability Governance
Global Excellent Supplier (4 consecutive times) Excellent
Excellent Supplier Excellent Supplier in China Best
Corporate Governance Supplier in China Innovation Award for China
Quality Award for Plants in Jiangsu
Innovation and Excellent Supplier in China Global Excellent Supplier
Operation Innovation Award for Asia Pacific
R&D Innovation Excellent Supplier
Intelligent Manufacturing
Quality Management
Supply Chain
Management Global VIP Supplier VWS Excellent Supplier in China
Global Excellent Supplier VWS Best Quality Award for
China
Excellent Quality Award
Envirnoment
Society
Excellent Quality Award Excellent Competitiveness Award
Best Cooperation Award for Plants in Hangzhou Excellent
Appendix Supplier Award for Plants in West Asia Global Contribution Excellent Quality Award
Award
31Quality management system
About this Report
Kaizhong Precision has built a systematic product Certification of Major Management Systems
quality management system based on ISO 9001 quality
Message from the
Chairman management system requirements IATF16949 quality
management system for automotive production parts
and related service parts organizations ISO 14001
About Kaizhong environmental management system specifications and
user guidelines and IS0 45001 occupational health Shenzhen Kaizhong Precision IATF 16949 ISO 14001 ISO 45001 ISO 9001 ISO 50001 ISO Precision
and safety management system specifications. In strict Technology Co. Ltd. 17025 ISO 27001 TISAX
accordance with relevant national laws regulations and
relevant professional standards we have formulated the
Sustainability Governance System Management Manual laying a solid foundation
for the operation of the product management system
to achieve standardized and efficient operations. In
addition we have formulated the Internal Audit Plan for Huizhou Kaizhong Precision IATF 16949 ISO 14001 ISO 45001 ISO 9001
Quality Management System and conducted internal Technology Co. Ltd.Corporate Governance inspections on the implementation of the Company's
quality management system every year to evaluate
the conformity suitability and effectiveness of the
management system.Heyuan Kaizhong
Innovation and Precision Manufacturing IATF 16949 IATF90001 ISO 14001 ISO 45001
Operation Technology Co. Ltd.R&D Innovation During the reporting period
Intelligent Manufacturing
Quality Management
Supply Chain The Company planned and carried out Heyuan Keshun Insulation IATF 16949 ISO 9001
Management
16 Materials Co. Ltd. internal audits
Envirnoment Changsha Kaizhong Electrical IATF 16949
Technology Co. Ltd.Society 16
external supervisory audits
Appendix SMK Systems Metal Composite IATF16949 ISO 50001 ISO 14001
Materials Co. Ltd.
32Laboratory certification Hazardous substance
About this Report management
The Company strictly follows the requirements of ISO17025 system to ensure that product testing and measurement meet
quality requirements. Product testing items cover appearance performance environmental reliability corrosiveness etc. The Company is committed to promoting the
Message from the
and calibration items include temperature pressure electromagnetic and other contents. Equipped with advanced testing protection of the earth's environment and pollution Chairman
equipment such as precision measurement reliability testing mechanical properties testing electrical properties testing prevention activities. In strict accordance with the
polymer material analysis metal material testing and environmental testing the Laboratory has the ability to internally calibrate EU Directive on the Restriction of the Use of Certain
About Kaizhong length electrical and mechanical measuring equipment. As of the end of the reporting period the Laboratory had obtained Hazardous Substances in Electrical and Electronic
Precision CNAS certification and passed a number of regular reviews such as measurement audits and proficiency verification. Equipment (RoHS Directive) the Regulation on
the Registration Evaluation Authorization and
Restriction of Chemicals (REACH Regulation) the
Persistent Organic Pollutants Regulation (POPs
Sustainability Governance Regulations) the Battery Directive the U.S.Toxic Substances Control Act (TSCA) China's
Management Measures for the Restriction of the Use
of Hazardous Substances in Electrical and Electronic
Corporate Governance Products and other domestic and foreign hazardous
substance standards and regulations the Company
has formulated the Control Standards for Prohibited
Substances to effectively control raw materials
processes shipments and other links to ensure
Innovation and
Operation that the products provided do not contain prohibited
CNAS-certified laboratory's test results are substances. These efforts have continuously
R&D Innovation internationally recognized improved product quality.Intelligent Manufacturing
Quality Management In addition when cooperating with suppliers the
Supply Chain Company requires that the products (including raw
Management materials parts semi-assemblies and/or finished
products) supplied by suppliers must comply with
the restrictions of the REACH regulations the EU
Persistent Organic Pollutants (POPs) Regulation the
Envirnoment EU ELV Directive and the RoHS Directive and must
not contain environmentally prohibited chemicals
specified in the relevant regulations. Meanwhile raw
material suppliers are required to provide effective
Society environmental-related substance testing reports from
third-party laboratories that comply with regulatory
standards such as RoHS and REACH to ensure
Appendix Participation in measurement audit and proficiency that the raw materials and components in the supply
verification and the certificates obtained chain meet the requirements on the restriction of
hazardous substances.
33Process quality control Building of quality culture
About this Report
Kaizhong Precision adopts process quality control measures such as automated production Attaching importance to customer demands Kaizhong Precision continuously
Message from the automatic detection and process error-proofing design and combines intelligent technical improves product quality and conveys quality management concepts to every
Chairman
means such as machine vision to reduce the product abnormality rate and impact during employee by organizing quality culture construction activities every year. During the
the production process. In the actual operation of quality control by using QRQC 8D and reporting period we organized a total of 80 quality and safety-related internal and
About Kaizhong other quality tools to analyze the root causes of abnormalities we have achieved continuous external training sessions covering all employees of the Company. The total training
Precision optimization and improvement in building the core competitiveness of the "zero defect" time was approximately 300 hours and the training topics covered management
production system. system quality management tools quality audit capability etc. The training
popularized quality management knowledge among all employees instilled product
quality management awareness in the hearts of employees and thereby improved the
Sustainability Governance After-sales service Company's product quality management level.In order to respond to customer needs quickly and promptly and ensure that customer
demands are resolved efficiently the Company has formulated and implemented a series of Employees participated in "Zero-Defect" quality activities
Corporate Governance internal systems including the Customer Complaint and Return Resolution Protocol and the
On-Site After-Sales Service Management System which clearly define the responsibilities
and work processes of the after-sales technical team and ensure that the Company's
domestic and international teams can respond to customer demands within 24 hours and From October to December 2024
solve quality problems on customer sites efficiently and with high quality. the Company organized the "zero
Innovation and
Operation defect" quality culture knowledge
Being well aware that after-sales service is an important guarantee for customer satisfaction competition for all employees of
R&D Innovation the Company continues to strengthen the quality of after-sales service and improve the each product line with the theme of
Intelligent Manufacturing professional skills and service level of the after-sales team through regular training. By "Pursue zero defects create unlimited
Quality Management establishing a customer feedback mechanism we can collect customer opinions in a timely possibilities". Through the form of
Supply Chain manner to further optimize the service process. In addition the company also pays attention a quality knowledge competit ion
Management to communication and collaboration with customers. Through regular return visits and with prizes the Company promoted
customer satisfaction surveys it deeply understands customer needs and further improves the "zero defect" quality culture
service quality. popularized quality management-
related knowledge and enhanced
Envirnoment the quality management awareness
of all employees. With a participation
During the reporting period rate of employees from business lines
reaching over 80% this quality activity
Society
The Company did not see any product recall incidents caused due to effectively stimulated employees'
quality reasons enthusiasm for learning and promoted
the construction of the Company's
Appendix quality culture.
34Customer service Customer relation management
About this Report
Consistently regarding "continuously creating value for customers" as its mission and upholding the core value of The Company has formulated the procedure document
"customer first" Kaizhong Precision is committed to providing customers with valuable services based on customer for the Customer Satisfaction Evaluation continuously
Message from the needs and to designing personalized services and professional countermeasures for them. improved the customer satisfaction evaluation system
Chairman defined the responsibilities and authorities of each
The Company sets annual sales targets every year based on its product development plan. By timely collecting department in maintaining customer satisfaction and
information such as industry trends customer needs and competitor dynamics we have been developing new regularly conducted internal satisfaction evaluations
About Kaizhong customers in new market areas strengthening relationships with old customers and increasing the market share of customer scorecard reviews and customer satisfaction
Precision existing products. Meanwhile we continue to innovate and improve product and service quality timely adjust and surveys every year through internal quarterly satisfaction
evaluations and annual evaluations by external
optimize marketing strategies continuously improve customer satisfaction and product market competitiveness. customers. Regular inspections are conducted on
In addition we have established long-term and stable cooperative relationships with customers creating value for the quality of products and services provided by the
Sustainability Governance customers and contributing to the sustainable development of the Company. In the past three years the number of Company. The inspection dimensions include product
customer complaints has not exceeded the target value of customer complaints set for the year. quality service quality timeliness of delivery and
environment. Improvement plans are formulated for
projects that do not meet the requirements to find
directions for improvement and continuously improve
Corporate Governance
During the reporting period customer satisfaction.Customer complaint handling rate: The annual average number of PPM
(product defects per million) was During the reporting period
Innovation and
Operation 100% 0.08
R&D Innovation The customer satisfaction survey rate was
Intelligent Manufacturing
Quality Management 98.5%
Supply Chain
Management
The Company collects customer comments on its
Envirnoment products and services through a variety of channels
and methods. These channels include customer
communication activities customer online portals market
share analysis dealer reports customer testimonials
Society and claims guarantees. Attaching great importance to
customer feedback the Company promptly transmits the
customer demand information obtained to the relevant
Appendix departments respond quickly and make continuous
optimization and improvement to ensure that products
and services always meet customer expectations.
35"Kaizhong Tech Day" activities Responsible marketing
About this Report
During the market promotion and marketing process the
On September 20 2024 the Company organized a large-scale "Kaizhong Tech Day" event at the request of its Company is committed to following the highest standards Message from the
Chairman customers. The event deepened customers' understanding of Kaizhong Precision through PPT video explanations of business conduct strictly abiding by various national
and other forms. During the event on-site and online audiences had in-depth discussions and exchanges laws and regulations such as the Advertising Law of
on technical details such as the Company's busbar cost-reduction design plan soft connection technology the People's Republic of China and the Anti-Unfair
About Kaizhong electroplating process welding process fisheye needle application and Kaizhong's mold making and copper Competition Law of the People's Republic of China.Precision material making techniques. Through this event we fully displayed our technical process to customers which played We regularly conduct the training courses of the Code
a positive role in promoting the Company's technological advantages process level and product quality and laid the of Business Conduct and strictly prohibit exaggerated
foundation for future technical communication and development of new business. publicity false publicity and other behaviors enhancing
sales personnel's compliance awareness while resolutely
Sustainability Governance maintaining a transparent environment for sales
promotion. In addition we strictly review the release
and management of external promotional materials and
expand the Company's influence and brand effect on the
basis of ensuring that external promotional information
Corporate Governance and product information are authentic and reliable.Innovation and During the reporting period
Operation
R&D Innovation
Intelligent Manufacturing The Company's responsible marketing
Quality Management training averaged
Supply Chain
Management 22.5 hours per person
Envirnoment
covering all marketing employees
100%
Society In addition when conducting business cooperation with each customer the Company attaches great importance to
customer information security and protection of their rights and interests requiring all employees who have access
to confidential information to sign a confidentiality agreement or clearly including confidentiality clauses in relevant
Appendix contracts. We have strictly defined the scope and authority of use of confidential information ensuring customer
information security and fully safeguarding the legitimate rights and interests of customers.
36Supply Chain Supplier access
About this Report
Management The Company develops new suppliers based on the five principles of "quality system requirements automotive
Message from the industry priority supply chain security classified development and market competitiveness." In terms of quality
Chairman A stable and sustainable supply chain is one of the system we give priority to suppliers that have passed IATF16949 ISO 9001 and ISO 14001 management system
key factors for the enterprise to maintain long-term certification. Suppliers engaged in special work and service processes are required to have corresponding professional
competitiveness. Upholding the concept of sustainable qualifications to ensure compliance and safety of their work.About Kaizhong development Kaizhong Precision is committed to creating
Precision
a green and responsible supply chain. We actively work
Management system certification requirements for suppliers
with supply chain partners to jointly assume our social
responsibilities. While establishing and improving its ISO9001 IATF16949 ISO14001 and customer-specific requirements
Sustainability Governance
supplier management mechanisms the Company regularly
conducts supplier knowledge and lean management
training so as to promote the sustainable development of
the supply chain and help the enterprise and its partners to
Corporate Governance
achieve green development.Electroplating suppliers:
Supplier management system Electroplating suppliers Manufacturers: are required to pass Auto parts suppliers:
Innovation and Suppliers with ISO14001 environmental Auto parts suppliers Committed to building a stable and responsible supply
Operation IATF16949 management system must pass IATF16949
chain Kaizhong Precision has formulated the Supplier and ISO14001 certification and the R&D Innovation certification. Suppliers
Management Manual to manage suppliers from the certification are minimum requirement is to that have not yet been
Intelligent Manufacturing aspects of supplier development review performance preferred. pass ISO9001 certification approved should
Quality Management rating annual review improvement etc. to establish high except for traders. have plans to obtain
Supply Chain standards for supplier behavior norms in terms of labor certification.Management rights and environmental responsibilities and to promote
the process-based standardized and efficient supplier
management.Envirnoment
Society
Appendix
37Supplier management
About this Report
The Company conducts daily performance appraisals on suppliers and monthly QCDS appraisals on suppliers mainly In addition in order to strengthen the quality assessment
in four aspects: Q (quality) C (cost) D (delivery) and S (service). The appraisal indicators involved include batch of suppliers the Company arranges regular on-site audits Message from the
Chairman defective rate average purchase price on-time delivery rate on-time response rate timely response rate etc. Supplier of suppliers every year. For suppliers whose on-site
performance results grades and management measures are as follows: audit results are unqualified the Company will require
them to submit a corrective and preventive measures
About Kaizhong plan to the Supplier Management Department within 7
Precision working days and the Company's supplier management
personnel will provide guidance to the supplier. Suppliers
should complete improvements within 3 months. After the
Sustainability Governance Deepen cooperation and increase purchasing volume. improvements are completed the Supplier Management
Department will arrange a re-inspection. Suppliers that
Level-A supplier
fail the re-inspection will be eliminated.In early January of each year the Supplier Management
Corporate Governance Department will summarize and analyze the supplier
assessment results of the previous year and on this
basis define the quality improvement goals and supplier
Maintain cooperation ask suppliers to provide improvement reports tutoring plan for the year fill in the supplier performance
based on the problem and track the improvement results. in the Supplier QCDS Performance Report and send it
Innovation and
Operation Level-B supplier back to the supplier and ask them to confirm and sign.R&D Innovation The improvement goals will be delivered to suppliers in
the form of a letter of contact. Suppliers need to sign the
Intelligent Manufacturing letter of contact to confirm the improvement goals for the
Quality Management year and take corresponding measures to achieve the
Supply Chain improvement goals.Management
Suppliers are required to provide improvement reports and their
improvement effects are tracked. If they are rated Level C for three
Level-C suppliers consecutive months the supplier replacement procedure will be initiated.Envirnoment
Society
We do not renew the contract or add new contracts and will suspend
cooperation until they have passed rectification acceptance. Otherwise
Appendix
Level-D supplier the supplier replacement procedure will be initiated.
38Sustainable construction
About this Report of supply chain Suppliers are strictly prohibited from imposing restrictions on employees of the Company excessive Labor
recruitment fees confiscation of ID cards and/or passports withholding of wages abusive working employment
Message from the Kaizhong Precision is committed to working
conditions debt bondage violence or any other type of exploitation or abuse.Chairman together with its business partners for com-
mon development optimizing management
policies and strategies strengthening sup- Suppliers are required not to bribe company employees by giving gifts or red envelopes.About Kaizhong plier sustainable development management Business Suppliers are required to maintain permanent confidentiality responsibilities and obligations for
Precision and actively carrying out supplier capacity ethics the relevant information provided by the Company and the confidentiality obligations shall not be
building activities to help suppliers grow. In
addition we explicitly prohibit "conflict min- exempted regardless of whether or not the final cooperation is reached.erals" from entering the Company's supply
Sustainability Governance chain ecosystem and actively promote the
traceability of conflict minerals and due dili-
gence of supplier conflict minerals. Suppliers are required to monitor track and record their consumption of natural resources such as
Resource
efficiency
water raw materials and energy; and energy
Suppliers are encouraged to adopt green raw materials. consumptionCorporate Governance Supply chain SER audit
The Company conducts social and environ- Emissions Suppliers are required to monitor track and record their facilities’ emissions to air water and soil as
mental responsibility (SER) risk assessment and waste well as wastewater and solid waste generated in their processes.Innovation and on its suppliers. When developing new management
Operation suppliers the Company takes social and Suppliers are required to monitor track and record the composition of packaging materials.R&D Innovation environmental responsibility factors into
Intelligent Manufacturing consideration in the selection process and
distributes and collects the Supplier Envi-
Quality Management ronmental Controlled Substance Self-Ap-
plication Form and the Supplier Environ- Suppliers are required to identify potentially hazardous substances in chemical products and articles Supply Chain
Management mental Safety Survey Form. Meanwhile in used in production.response to green environmental protection Suppliers are required to supply products (including raw materials parts semi-assemblies and/
and human-oriented management the or finished products) that comply with the restrictions of the REACH Regulation the EU Persistent
Company has actively introduced ISO14001
and ISO45001 environmental management Organic Pollutants (POPs) Regulation the EU ELV Directive and the RoHS Directive and must not Envirnoment Hazardous
system/occupational health and safety man- contain any environmentally prohibited chemical substances specified in the relevant regulations. Substance
agement system calling on all suppliers to Suppliers are required to fill in the Supplier Environmental Governance Substance Self-Declaration Management
jointly build a sustainable supply chain in
terms of human rights and labor business Form issued by the Company and provide RoHS reports and REACH reports for their products.Society
ethics health and safety environment and Suppliers are required to provide safety information to educate train and protect employees from
hazardous substances energy conservation hazardous materials and to provide employees with adequate personal protective equipment.and consumption reduction. In addition we
Appendix conduct social environmental responsibility
impact assessments on all qualified suppli-
ers every year.
39Supplier training
About this Report During the reporting period
To help suppliers grow the Company actively carries out supplier capacity building activities and regularly conducts supplier
quality training. Through systematic training technical support and guidance the Company is committed to helping suppliers to
Message from the As of the end of 2024 deeply understand the quality management system and master advanced quality control methods and to enhancing suppliers'
Chairman the Company had developed a total of quality awareness and supply quality. Meanwhile paying attention to the improvement of the ESG capabilities of suppliers
every year we publicize the Company's supply chain ESG management requirements among suppliers and share with
163 major suppliers suppliers experiences in fulfilling social responsibilities through online and offline training field visits and supplier conferences.
About Kaizhong These efforts have promoted the continuous stable and healthy development of suppliers.Precision
Supplier ESG training
Sustainability Governance 100% of new suppliers were
During the reporting period the Company organized two supplier ESG training sessions covering all suppliers. It mainly
screened using social and environmental provided guidance and specifications to suppliers based on three ESG standard documents: the ESG Management System
responsibility criteria Requirements and Usage Guidelines for China's Automotive Industry the ESG Information Disclosure Guidelines for
Corporate Governance China's Automotive Industry and the ESG Evaluation Guidelines for China's Automotive Industry to help the enterprise to
form a closed-loop ESG management improvement path of "management - evaluation - information disclosure - feedback -
management improvement" and to further improve the sustainable development level and management capabilities.Innovation and
Operation 100% of suppliers had been
R&D Innovation subject to social and environmental During the reporting period
Intelligent Manufacturing responsibility impact assessments
Quality Management The Company conducted supply chain ESG training 100%
Supply Chain
Management 2 of the Company's suppliers participated in ESG training
No major environmental or social risks
were found among suppliers
Envirnoment
Conflict minerals management
Society 100% of suppliers had In response to the zero-tolerance policy the Company has made the commitment of not purchasing minerals (gold tantalum
tungsten cobalt tin and other metal minerals) from "conflict areas" in the Democratic Republic of the Congo or its adjacent
signed the Integrity Cooperation countries. Meanwhile the Company actively carried out conflict mineral traceability and supplier conflict mineral due diligence
Commitment of Suppliers and the and sends Conflict-Free Metals investigation letters to suppliers every year requires suppliers to conduct "conflict-free
Appendix Confidentiality Agreement investigations" on their own to identify all smelters that supply tin tantalum tungsten cobalt and gold to it and its suppliers and
urges suppliers not to provide support for armed conflicts or human rights violations in conflict areas or high-risk areas. As of
the end of the reporting period the Company had never been involved in the use of minerals from conflict areas.
40About this Report
Message from the
Chairman
About Kaizhong
Precision04
Sustainability Governance
Envirnoment
Corporate Governance
Faced with increasingly severe global environmental
Innovation and Ocpehratliloennges Kaizhong Precision has actively responded to
the country's "3060" dual-carbon strategic goals. Under the
vision of "building a green global supply chain providing
green products and services and building a better homeland
together" the Company has deeply integrated the concept
Envirnoment of sustainable development into the core of its corporate
Practice Green asntdra Ltoewg-y. The Company is fully committed to promoting energy
carbon Conceptsconservation emission reduction and green transformation
and contributing to the efficient use of resources and the
Water Resource
Management i
ndustry's green development and biodiversity protection
with a view to achieving carbon peak by 2025 and carbon
Pollutant Managnemeuentrtality by 2050. The Company has demonstrated its sense
Environmental Poroft ercetisonp onsibility and commitment with practical actions by
Capacity Buildinegarnestly fulfilling its corporate environmental responsibilities
and working with all parties to build a green homeland and
protect our planet.Society
* Practice Green and Low-carbon Concepts
Appendix* Water Resource Management
* Pollutant Management
* Environmental Protection Capacity Building
41Practice Green
About this Report and Low-carbon Environmental management system
Message from the
Chairman Concepts
In strict accordance with the Environmental Impact Assessment Law of the People's Republic of China the
Clean Production Promotion Law of the People's Republic of China and other national laws and regulations
About Kaizhong and environmental management system standards the Company has actively promoted the construction of the
Precision Kaizhong Precision actively practices the internal environmental management system. In order to monitor environmental factors we have formulated a
green and low-carbon concept and adheres to series of environmental management-related policies and systems such as the Environmental Area Management
the environmental and safety policy of "green Implementation Measures the Energy Conservation and Emission Reduction Management Regulations etc. and
manufacturing reducing consumption preventing environmental management procedure documents such as the Safety Health and Environmental Management the Sustainability Governance
pollution participation by all early prevention Identification and Evaluation of Environmental Factors etc. In addition the Company actively promotes and carries
and ensuring safety". While actively participating out external third-party system certification and review work strictly follows the audit regulations and accepts external
in environmental protection initiatives we are third-party supervision and audit once a year to ensure the continued effective operation of the management system.committed to achieving environmental protection Renewal audits are conducted every three years to meet the latest requirements of the certification standards.Corporate Governance and sustainable development by improving the Besides the Company conducts an internal system audit and a comprehensive self-inspection of the management
environmental management system promoting system every year. We have formulated and implemented effective corrective measures for any non-conformities
the construction of green factories actively found ensuring that all problems are thoroughly resolved and further improving the scientificity and standardization
responding to climate change optimizing energy of the Company's management system.Innovation and Operation use and implementing energy-saving and
emission reduction projects.As of the end of the reporting period
Envirnoment
Practice Green and Low-
carbon Concepts Kaizhong Precision Heyuan
Water Resource Kaizhong Huizhou Kaizhong and
Management Dongguan Ruixi had all passed
Pollutant Management ISO 14001:2015 environmental
management system certification.Environmental Protection
Capacity Building
Kaizhong Precision had passed ISO
Society 50001:2018 energy management
system certification.Appendix Certificate of Environmental Certificate of Energy
Management System Management System
Certification Certification
42Environmental honors and titles Environmental protection
About this Report investment
In response to the country's "dual carbon" strategic goals the Company is committed to promoting ESG concepts and The Company has consistently regarded environmental
Message from the to achieving green transformation through systematic environmental protection measures. The Company will continue protection as the top priority of corporate development.Chairman to increase its investment in environmental protection drive green development through technological innovation and With a strong sense of responsibility and mission it
provide replicable green solutions for industry transformation and upgrading. continues to invest environmental protection funds for environmental monitoring environmental remediation
About Kaizhong introduction of advanced environmental protection
Precision
Core practices equipment upgrading of production processes R&D of
environmental protection technologies and implemen-
tation of energy-saving and emission reduction projects
Optimization of resource recycling system
Sustainability Governance with a view to ensuring the efficient advancement of
Continuous improvement of production technology environmental protection work in all aspects. Through
Thorough implementation of the clean production model its unremitting efforts the Company has achieved green
and sustainable development and contributed to the de-
Upgrade of environmental protection technology and velopment of ecological civilization in the whole society.Corporate Governance equipment
Innovation and Operation Honors and achievements
During the reporting periodNational "Green Factory” Award
National-level "Green Factory" (Ministry of Industry and The Company invested
Information Technology's 2023 Green Manufacturing List)
Envirnoment Provincial-level "Environmental Protection Integrity
RMB 9.9911 million
Enterprise" in environmental protection
Practice Green and Low-
carbon Concepts Municipal-level "Clean Production Demonstration
Enterprise"
Water Resource
Management
Pollutant Management
Environmental Protection Future development focus
Capacity Building
Strengthen the benchmarking and demonstration effect
of "green factories"
Society Improve the low-carbon circular manufacturing system
Deepen the integration of smart manufacturing and
green production
Appendix Continuously improve energy efficiency per unit of
output value
Intelligent “Green Factory”
43Environmental risk management
About this Report
The Company has formulated internal procedural documents such as the Environmental Operation Control and the Identification and Evaluation of Environmental Factors. Through
Message from the a systematic process the Company conducts comprehensive and in-depth identification and scientific evaluation of EHS risks and environmental factors in various departments and
Chairman
throughout the entire production service process to ensure that risks are controllable and environmentally friendly.About Kaizhong
Precision
Dehumidification
review of Initial review Major Update Determine of external Identification Establishment of Identification environmental management
the scope internal environmental and evaluation identification and and evaluation factors and of identification
Sustainability Governance environmental factors of opportunities evaluation teamfactors controls and evaluation
Identification and Evaluation Process of Environmental Factors
Corporate Governance
Carbon target
Kaizhong Precision keeps pace with the national dual-carbon strategy and promotes the national 3060 strategy. Based on its own business development it has formulated the dual-
Innovation and Operation
carbon goals of "achieving carbon peak by 2025 and carbon neutrality by 2050". While fulfilling its commitment to environmental responsibility with resource investment and practical
actions the Company is embracing a carbon-neutral future.Envirnoment Carbon Neutrality Roadmap
Practice Green and Low-
carbon Concepts
Short-term goals by 2025 The Science Based Targets 2030 Long-term carbon goal 2050
Water Resource
Management Phased Were to reduce carbon intensity by 50% Achieving 100% carbon neutrality
goal
Pollutant Management Save 5 million kWh of energy Clean energy usage ratio: 50% Reduce absolute carbon emissions by 50% for Scope 1 and 2
Environmental Protection Help suppliers to save 3 million kWh of energy Achieve carbon neutrality by 2050
Capacity Building
Improve energy efficiency Optimize energy structure Help suppliers reduce Promote low-carbon design Implement green operations
emissions
Society Critical Equipment heat recovery and reuse Purchase green electricity Implement supplier Product packaging design and Advocate green travel
strategy Replacement of high energy Raise the access standards of energy-saving projects utilization Implement clean production
consumption equipment and equipment energy efficiency Reduce energy Solid waste classification and Plan the construction of a
energy-saving transformation Develop green energy such as consumption in supply recycling green factory
Appendix Construction of digital energy photovoltaic/wind power chain transportation Low energy consumption
consumption management platform Product carbon footprint process design
44Combat climate change
About this Report
Climate change is one of the most pressing challenges facing the world today. Kaizhong Precision is clearly aware of the far-reaching impact of the risks and opportunities brought about
by climate change on its own business and industrial chain. By systematically analyzing the risks and opportunities brought about by climate change the Company has formulated
Message from the
Chairman scientific and effective response measures to actively respond to climate change and contribute to promoting global sustainable development.About Kaizhong Climate Change Risk Management
Precision
The Company conducts in-depth analysis of the impact of climate risks and opportunities on its value chain implements targeted measures to reduce adverse impacts and seizes
opportunities to promote corporate transformation upgrading and sustainable development.Sustainability Governance
Risk type Risk description Countermeasures
Formulate emergency response mechanisms for natural disasters and emergency plans for extreme weather
Corporate Governance events reserve emergency supplies and strengthen safety inspections and conduct corresponding extreme
Acute risks Extreme weather such as typhoons heavy rains and weather drills regularly.floods may affect production
Rationally adopt commercial insurance and other measures to reduce the losses that may be caused by
extreme weather.Innovation and Operation Physical risks Scientifically arrange production plans carefully deploy production organizations and improve operational
Chronic Chronic risks such as continued high temperatures and efficiency.risks prolonged droughts affect production and operation efficiency Make plans for high temperature and other weather conditions arrange production reasonably and equip with
heat and sun protection equipment and supplies.Governments of countries and regions around the world
Envirnoment Continue to pay attention to carbon emission policies and regulations at home and abroad and respond
Policy and have introduced stricter carbon emission management appropriately to policy and legal updates.Practice Green and Low- legal risks policies and regulations to mitigate climate change
carbon Concepts and companies are facing stricter supervision and Actively carry out energy conservation and emission reduction work and increase the proportion of clean
management and compliance risks energy.Water Resource
Management Enhance the Company's R&D capabilities through talent development and retention measures.Pollutant Management Technical Transition to low-carbon emission technologies is facing Continue to study and apply low-carbon technologies increase investment in low-carbon technology R&D and actively carry out industry cooperation.Environmental Protection risks further R&D and investment in low-carbon technologies
Capacity Building Select low-energy production equipment optimize production process flow explore and carry out energy-saving
and emission reduction projects and reduce energy consumption.Transformation Strengthen procurement management implement price forecasting energy consumption monitoring and
risks The scarcity of non-renewable resources and energy analysis and improve energy management and control capabilities.Market risks and consumer demand for green and low-carbon
products will affect product costs and prices. Actively develop green and low-carbon products to meet consumer demand and continuously promote resource Society conservation.Actively disclose climate-related risks and opportunities and their responses.Reputational Investors and stakeholders are paying more attention Appendix Establish energy conservation and emission reduction management targets and regularly monitor the
risks to climate change action achievement of targets.Improve the transparency of relevant management and proactively respond to inquiries from stakeholders.
45Climate risk management measures
About this Report
We have established a systematic climate risk identification and assessment mechanism to regularly analyze the
potential impact of climate change on the Company's business. By cooperating with professional organizations the
Message from theChairman Company has regularly conducted carbon inventories and has set a reduction target of “reducing carbon intensity by 3%per year”. We also conduct regular risk assessment to ensure that the Company’s actions in addressing climate change
have a clear direction and can be measured when progress is made.About Kaizhong
Precision
Kaizhong Precision's greenhouse gas emissions in 2024
Sustainability Governance Year Total carbon volume for Total carbon volume for Total carbon volume Carbon intensity (tCO2e/
Scope 1 (tCO2e) Scope 2 (tCO2e) (tCO2e) RMB mn)
2024190.48107005.45107195.930.0091
Corporate Governance
[Note] Scope 1: The Company's direct carbon emissions mainly came from emissions generated by fixed emission
sources (such as natural gas coal etc.) mobile emission sources (such as self-owned vehicles etc.) and other
Innovation and Operation production auxiliary facilities. Scope 2: The Company’s indirect carbon emissions mainly came from purchased electricity.Optimize energy use
Envirnoment
Upholding the concept of green development Kaizhong
Practice Green and Low- Precision has formulated the Energy Conservation and
carbon Concepts Emission Reduction Management Regulations to clearly
Water Resource define energy-saving targets scope of application and Energy saving goal
Management responsibilities at all levels. Focusing on key equipment
Pollutant Management such as air conditioners production equipment power
distribution facilities and air compressors the Company
Environmental Protection
Capacity Building has optimized energy use from all aspects of technology
and management and formulated detailed energy- Energy consumption decreases by
saving management rules. Meanwhile the Company per year
actively encourages employees to propose energy-saving 3%
technical solutions and rational suggestions and ensures
Society the effective implementation of management regulations
through a reward and punishment mechanism. In addition
the Company has established a sound supervision and
Appendix inspection mechanism to regularly evaluate energy usage
and has set scientific and reasonable energy-saving targets
to ensure efficient and economical energy use.
46Air Compressor Waste Heat
Green operation Recovery Project
About this Report
The Company actively responds to the call of the national "double reduction" policy and comprehensively implements The air compressor needs to dissipate heat when it is
the green operation strategy launching energy-saving and emission reduction initiatives to all employees from the running. Under traditional methods the heat emitted by
Message from the
Chairman three major aspects of low-carbon office low-carbon life and low-carbon manufacturing. Through energy-saving
the air compressor is dissipated into the nature through
electricity paperless office green travel resource management optimization and production efficiency improvement the cooling tower which fails to effectively utilize energy
the Company actively responds to the national call for energy conservation and emission reduction and is committed and leads to energy waste. Therefore the Company
to achieving sustainable development goals. invested in the construction of an air compressor About Kaizhong waste heat recovery project. The project uses the air
Precision compressor waste heat system for heating transferring
the waste heat to the circulating water through a plate
heat exchanger. The recovered heat is sent to the
Sustainability Governance Energy-saving electricity: Use energy-saving lamps and advocate the use of strong cleaning line while improving the heat dissipation
natural light for lighting. It is strictly required that electrical appliances be turned off when efficiency of the cooling tower. In addition the waste
leaving the office and that computer screen saver time be set appropriately; regulate the heat can also be transported to the heating tank of
use of air conditioners and stop using them on specific days. the finishing line to meet its heating needs thereby
replacing the electric heating method of the original
Corporate Governance Low carbon
office Paperless office: Promote paperless communication and document processing (using heating tank realizing the effective recovery and
OA electronic office platform video conferencing) save printing paper and encourage utilization of energy and reducing energy consumption.double-sided printing. In 2024 the Company saved 313500 kWh of electricity
and reduced carbon emissions by 297.6 tCO2e through
Innovation and Operation this project.Green travel: Implement the "3-5-10 travel plan" (3 kilometers of walking 5 kilometers
of cycling 10 kilometers of public transportation and more than 10 kilometers of driving) Waste Gas Tower Energy-saving
Envirnoment encourage walking cycling and public transportation and drive one day less per week. Technical Transformation Project
Practice Green and Low- Low-carbon
carbon Concepts Energy-saving and emission-reduction behaviors: advocate taking stairs garbage Life sorting and recycling saving resources (water paper electricity) and cultivating Before the energy-saving technical transformation
Water Resource
Management environmentally friendly habits.of the waste gas tower a manual on/off mode was
used which resulted in employees often forgetting to
Pollutant Management turn off the equipment when dining or changing shifts
causing waste of electricity and manpower. To solve this
Environmental Protection
Capacity Building problem the Company made technical improvements
Resource management: timely discover and deal with "leakage" phenomena to reduce to synchronize the operation of the waste gas tower
energy waste. with the working hours of the production workshop and
modified the PLC program to add a timed power on
Production efficiency: Ensure that the machine stops when people leave turn off and off function. This project not only improves energy
Society Low-carbon
Manufacturing unnecessary power improve production quality and efficiency to save energy.utilization efficiency but also optimizes the production
process and achieves the goal of energy conservation
Energy saving and improvement: Encourage the proposal of energy-saving equipment and emission reduction. In 2024 the Company saved
Appendix and improvement suggestions to improve the Company's operating efficiency. 39125 kWh of electricity and reduced carbon emissions
by 37.13 tCO2e through this project.
47Water Resource Utilization of water resource
About this Report Management Kaizhong Precision actively formulates and implements a series of scientific and reasonable water-saving measures
to carry out delicacy management of water use in various aspects such as production and life. For example in the
Message from the production workshop by optimizing the production process and adopting advanced water-saving equipment and
Chairman Kaizhong Precision regards water conservation technology the water consumption can be accurately controlled to reduce the consumption of water resources in the
and reuse as an important part of sustainable production process. In office areas we promote the use of water-saving appliances continuously carry out water-saving
development strictly abides by the Water Law publicity and education for employees and help them develop water-saving awareness.About Kaizhong
Precision of the People's Republic of China the Water
Pollution Prevention and Control Law of the
People's Republic of China and other laws and Pingshan Plant Zero emissions saving 15000 tons of water annually
regulations and systematically plans the use
Sustainability Governance of water resources in production and operation. Heyuan Plant Metering supplying water on demand saving 15000 tons of water annually
The Company continuously carries out zero-
discharge sewage treatment station projects and Huizhou Plant Zero emissions 100% reuse of industrial water saving 21000 tons of water annually
through internal control third-party monitoring
and reclaimed water reuse measures ensures
Corporate Governance that wastewater is treated in compliance with In terms of water resource reuse the Company has invested in the construction of an advanced water treatment and
standards and is recycled thereby minimizing the reuse system. After professional collection deep treatment and strict purification of production wastewater water
impact on the surrounding water environment. resources that meet the reuse standards are reused in production processes and equipment cooling forming a closed-
loop water resource management system.Innovation and Operation
Main water conservation management measures
Envirnoment Conduct water balance tests: Accurately control water consumption through real-time monitoring and
Practice Green and Low- analysis of test data.carbon Concepts Grinding machine wastewater recycling: In order to solve the problem that the two grinding machines waste
Water Resource about 10 cubic meters of water every day the wastewater is recycled after sedimentation to reduce the use
Management of fresh water.Pollutant Management Optimization of the recycled water system: In the pipeline well by connecting the ends of the cleaning
Environmental Protection machine and grinder to the recycled water pipe about 3 cubic meters of water can be recycled every day.Capacity Building Foot valve update: Replace the foot valves in the bathroom that are often damaged and do not rebound in
time to reduce water waste caused by equipment failure.Intelligent urinals: Change the urinals in men's washrooms from mechanical to intelligent flushing types to
improve flushing efficiency and reduce water waste.Society Faucet maintenance: Check the sink faucets and replace any that are leaking or not tightly closed to avoid
unnecessary water loss.Cooling tower water circulation: Add recycled water to the process cooling tower and replace the float valve
Appendix to achieve water recycling and reduce the addition of new water.
48With the Zero-discharge sewage treatment station project treated water
that meets the standards can be reused in production Wastewater management
About this Report
To address the environmental pressures faced by the Company and the need for efficient water resource utilization Kaizhong Precision strictly abides by the Water Pollution
Message from the a zero-discharge wastewater treatment station was established at the Pingshan Plant. The station processes
Chairman Prevention and Control Law of the People's Republic of emulsion cutting fluid high-concentration wastewater and composite wastewater from the plant. High-concentration China and other national and local wastewater pollution
wastewater undergoes specific treatment procedures before being mixed with composite wastewater followed by prevention and control policies and regulations and
multiple treatment stages including sedimentation filtration biological treatment and membrane treatment. During
About Kaizhong strictly implements the Water Pollutant Emission Limits
Precision the process concentrated water sludge and other byproducts are properly managed—some are recirculated - Guangdong Provincial Local Standards and the Odor
for further treatment while others are handled by certified third-party units. After the implementation of the zero- Pollutant Emission Standards and other standards.discharge wastewater station the Company achieved complete wastewater elimination with the first-stage and During the production and operation process the
second-stage reverse osmosis (RO) treated water being reused. The reclaimed water meets the standards outlined Company strictly controls various pollutants ensuring
Sustainability Governance in the Water Quality Standards for Urban Wastewater Reuse in Industrial Water fulfilling production water demands zero wastewater discharge through professional
while significantly enhancing the Company's environmental benefits. In 2024 the wastewater treatment capacity treatment processes and effectively fulf i l l ing its
reached 70 tons per day. responsibility of protecting water resources.Meanwhile in order to support the production of the electroplating workshop and the efficient use of water resources
Corporate Governance in the park the Company has begun to build an industrial wastewater zero-discharge sewage treatment station in The Company has established a complete wastewater
Huiyang Plant. After the completion of the sewage treatment station 99% of the industrial wastewater discharged management system formulated normative documents
from the workshop will be reused in cleaning electroplating grinding and other processes after meeting the such as the Wastewater Treatment Management
standards through deep treatment. The remaining 1% of concentrated waste liquid will be outsourced to a unit with Operation Manual and implemented a daily water
hazardous waste treatment qualifications for disposal. The reuse of reclaimed water complies with the requirements volume monitoring and data verification mechanism to Innovation and Operation
of the Water Quality for Industrial Water Recycling in Urban Wastewater. It is expected that the treatment capacity ensure that the monitoring data is accurate and reliable.will achieve the design target of 600 tons per day after the completion of the project. When abnormal water volume occurs the early warning
mechanism will be immediately activated and adjustment
measures will be taken to ensure the stable operation of
the sewage treatment system. Meanwhile the Company
Envirnoment regularly entrusts qualified third-party testing agencies
Practice Green and Low- to conduct quarterly monitoring and comprehensive
carbon Concepts inspections on emissions of pollutants such as waste gas
Water Resource and wastewater. All previous test reports have shown
Management that the Company's pollutant emission indicators are in
Pollutant Management full compliance with national and local standards fully
demonstrating the Company's standardized management
Environmental Protection and outstanding results in environmental protection.Capacity Building
Society
Appendix
Zero-Discharge Sewage Treatment Station
49Pollutant Waste gas management
About this Report
Management
Kaizhong Precision has formulated a series of internal management systems including the Waste Gas Treatment Facility
Message from the
Chairman Management Operation Manual incorporating waste gas management into the core process of daily operations while
implementing full-process control through "three-fixed" management (fixed time fixed location and fixed personnel).Kaizhong Precision continues to optimize the
About Kaizhong pollutant emission management system focusing
Precision on strengthening waste gas treatment and waste Control at the source Optimize the waste gas collection system to ensure that all waste gas is collected
management significantly improving VOCs
emission reduction results and resource recycling Process Implement standardized operations on key equipment such as spray towers and UV
Sustainability Governance rates and ensuring environmentally friendly and management activated carbon purifiers
compliant operations. Meanwhile the Company
actively practices the concept of circular economy End monitoring Conduct online monitoring of emission data to ensure stable compliance with standards
and effectively reduces environmental burden
Corporate Governance
through waste resource utilization achieving
coordinated development of economic and The Company has established a closed-loop mechanism of "monitoring - early warning -disposal" to ensure the efficient
ecological benefits. operation of treatment facilities and continuously reduce the concentration of atmospheric pollutant emissions through
real-time data monitoring and preventive maintenance.Innovation and Operation
The Waste Gas Treatment Upgrade Project achieved efficient emission reduction
and promotes green development
Envirnoment
Practice Green and Low- The Company has upgraded the extrusion and cleaning
carbon Concepts processes changing the collection method of the extrusion
Water Resource process from a gas collection hood to an enclosed overall
Management exhaust and the cleaning process from unorganized
Pollutant Management emissions to an enclosed gas collection. In addition the
end-of-pipe treatment facilities for organic waste gas
Environmental Protection have been upgraded to water spray + two-stage activated
Capacity Building carbon adsorption. After the transformation was completed
in 2024 the results were significant. The VOCs grade was
rated A the collection efficiency increased from 30% to
50% the treatment efficiency jumped from 31% to 80%
Society and the VOCs emission reduction reached 0.583 tons.The transformation not only optimized our production
environment but also set an environmental protection Waste Gas Treatment Upgrade Project
Appendix benchmark for the industry and demonstrated our sense of
responsibility in addressing climate change.
50Waste management
About this Report
Kaizhong Precision strictly abides by the Law of the
Message from the Hazardous waste management measures
Chairman People's Republic of China on the Prevention and
Control of Environmental Pollution by Solid Wastes and
other laws and regulations while building a full life cycle
About Kaizhong
Precision management system for hazardous wastes. The person in charge of the hazardous waste warehouse must keep records
of the management ledger in accordance with regulations. The Environmental
Protection Group of the Equipment and Power Department shall regularly inspect
Institutional guarantee Standardized the generation collection storage transfer operation of pollution prevention and
Sustainability Governance records and control facilities pollution damage execution of rectification within a time limit and
Establish regulatory documents such as the inspections
Waste Management Regulations and the implementation of management systems.Hazardous Waste Management System
Corporate Governance
Process control Ensure that the collection storage and transfer of hazardous wastes comply with
national laws and regulations and company regulations. It is strictly prohibited to
Innovation and Operation Implement the standardized process of "classified dump them into the environment or mix them with non-hazardous wastes. Use
collection - standardized storage - legal disposal" Full process
control standard containers and packaging and set identification signs.Emergency management
Envirnoment
Practice Green and Low-
carbon Concepts Regularly conduct emergency drills for hazardous Develop and regularly practice preventive measures and emergency plans for
Water Resource waste leaks Prevention and hazardous waste pollution accidents.Management emergency
preparedness
Pollutant Management
Ledger management
Environmental Protection
Capacity Building
Realize the traceability of the entire process
of hazardous waste generation transfer and Once a pollution accident or emergency occurs the emergency plan will be
disposal immediately activated the affected units and individuals will be notified in a timely
Society Accident manner and the environmental protection department will be reported for investigation
response and handling.Classify and manage general industrial solid waste (waste
Appendix metal waste paper etc.) and hazardous waste (oily rags
waste engine oil waste light bulbs etc.) to ensure a
100% compliance disposal rate.
51Circular economy
About this Report
Under the guidance of the circular economy concept the Company actively practices Environmental Protection
Message from the the model of efficient resource utilization and sustainable development. The Company
Chairman requires comprehensive treatment of recyclable general waste to transform it into useful
materials and achieve recycling. In this way the Company can not only effectively Capacity Building
reduce the pollution of waste to the environment but also save a lot of energy and
About Kaizhong realize the recycling of resources. For example waste paper and waste metal that have
Precision been professionally processed can be reused as raw materials or packaging materials Kaizhong Precision has built a comprehensive environmental protection system.thereby extending the life of resources reducing the exploitation of natural resources Through annual emergency drills it has enhanced the emergency response
and promoting harmonious coexistence between the enterprise and environment. capabilities of employees and the coordination capabilities of departments
Sustainability Governance ensuring a rapid and orderly response to sudden environmental incidents.Meanwhile the Company pays attention to environmental protection training and
publicity and strives to enhance employees' environmental awareness and skills;
The Company continues to strengthen the management of packaging materials strictly comply with ecological and environmental management requirements and
actively promotes green and environmentally friendly packaging materials and focus on biodiversity protection throughout the project life cycle; enhance the
Corporate Governance takes the following measures: level of environmental management and lay a solid foundation for sustainable
development through continuous improvement.Use recycled input materials to ensure sustainable packaging materials.Innovation and Operation Reuse plastic cartons provided by suppliers to reduce the consumption of Emergency drills
packaging materials and the waste of raw materials.Kaizhong Precision formulates an annual environmental emergency drill plan
at the beginning of each year and organizes and implements drill activities
strictly in accordance with the plan. The drill content covers multiple scenarios
Envirnoment During the reporting period the packaging materials used by the Company (such as including common environmental risk events such as sudden wastewater leakage
Practice Green and Low- cartons PE tapes packing tapes etc.) all complied with RoHS and other environmentally excessive waste gas emissions and accidental leakage of hazardous chemicals.carbon Concepts hazardous substance standards to ensure their environmental friendliness. By simulating real scenarios the Company has not only effectively improved
the emergency response capabilities of its employees but also enhanced the
Water Resource
Management collaborative capabilities among departments ensuring that it can respond quickly
Pollutant Management Processing Copper Cleaning and Recycling Project
and in an orderly manner when sudden environmental incidents occur. In addition
the Company pays attention to the post-drill summary and feedback. After each
Environmental Protection drill a review meeting is organized for department heads and participating
Capacity Building employees to analyze the strengths and weaknesses of the drill in detail propose
In 2024 the Company cleaned the copper scraps produced in the workshop targeted improvement measures and incorporate them into the optimization plan
removed the oil and dirt and reused them as raw materials thus achieving for the next drill. Through continuous improvement the Company continues to
efficient recycling of resources. The project adopted environmentally friendly improve its emergency response plan to ensure its scientificity and effectiveness
cleaning technology strictly controlled wastewater discharge and ensured the
Society in practical applications.quality of recycled copper materials through drying sorting and other steps. After
the implementation of the project not only the costs of raw material procurement
and waste disposal have been reduced but also environmental pollution has been
Appendix significantly mitigated and production efficiency has been improved bringing both
economic and environmental benefits to the enterprise.
52Environmental protection training and publicity
On-site disposal drill for hazardous
About this Report waste pollution incidents
Kaizhong Precision attaches great importance to the cultivation of environmental awareness and continues to
Message from the To standardize environmental management strengthen environmental protection training and publicity activities. By carrying out systematic environmental
Chairman
and strengthen environmental emergency education and training the Company imparts to employees the knowledge of environmental laws and regulations
response capabilities the Company organized energy conservation and emission reduction and green production concepts helping them establish correct
About Kaizhong an environmental emergency drill on December
environmental values. Meanwhile the Company uses various channels to carry out environmental protection
Precision 14 2024. The dri l l simulated the scenario publicity activities such as posting environmental protection posters and organizing environmental protection
of "emergency response to leakage during theme activities to create a strong environmental protection atmosphere and further enhance employees' attention
hazardous waste sludge transfer". Sewage and sense of responsibility for environmental issues. Through these initiatives we have not only enhanced
treatment technician A transferred sludge and it employees' awareness of environmental and social responsibility but also stimulated their enthusiasm to actively
Sustainability Governance leaked. After notifying the person in charge the participate in environmental protection actions laying a solid foundation for promoting the sustainable development
person in charge arranged for alert and organized of the Company.emergency response. After clean-up hazardous
waste management training was conducted
Corporate Governance transfer was resumed and the drill was reviewed. Industrial solid waste standardized management training in Pingshan District
This environmental emergency drill achieved
the expected results and fulfilled the expected
objectives effectively enhancing the Company's
emergency response capabilities for sudden In 2024 in order to improve the standardized management level of hazardous waste in enterprises in
Innovation and Operation environmental incidents and the environmental Pingshan District and ensure that corporate operations complied with environmental protection laws and
awareness and skills of its employees. regulations the Pingshan District Government held standardized management training on industrial solid
waste and interpreted the Technical Specifications for the Setting of Hazardous Waste Identification Marks
(HJ1276 - 2022) and the Pollution Control Standards for Storage of Hazardous Waste (GB18597 - 2023).The training system explained the basic concepts and standards of hazardous waste and used practical
Envirnoment cases such as companies being punished for setting up incorrect signs enabling trainees to gain an intuitive
understanding of the consequences of irregular management. In addition the training also included an
Practice Green and Low-
carbon Concepts interactive Q&A session to deal with the problems that trainees may encounter in their actual work and
materials were distributed to assist them in learning. The Company organized 10 employees to participate in
Water Resource this training which further improved its standardized level of hazardous waste management and effectively
Management
reduced the risk of environmental pollution.Pollutant Management
Environmental Protection
Capacity Building
Biodiversity protection
Society Emergency response drill for Biodiversity is related to human survival and sustainable social development and is a valuable resource with
hazardous waste sludge leakage strategic significance. Kaizhong Precision strictly follows the national "three lines and one list" ecological
during transportation environment zoning control requirements prioritizes biodiversity protection throughout the project feasibility assessment construction and operation process strictly controls the damage caused by production and operation
Appendix and strives to achieve a virtuous interaction between economic development and ecological protection. During the
reporting period the Company's production operations products and services did not have a significant impact on
biodiversity.
53About this Report
Message from the
Chairman
About Kaizhong
Precision05
Sustainability Governance
Society
Corporate Governance
As the international community pays increasing attention
Innovation and Otpoe ralatiobnor rights protecting employee rights has become an
important issue in global sustainable development. Adhering
to the "people-oriented" concept Kaizhong Precision is
committed to building a fair respectful and inclusive working
Envirnomeentnvironment. The Company attaches great importance to
the construction and development of the talent team. By
continuously introducing outstanding talents and improving
the training system it has created a high-quality efficient and
professional talent team to provide strong talent guarantee
Society for the Company's sustainable development. Meanwhile the
Protection of EmCploymeepsa' ny strictly protects the legitimate rights and interests
Rights and Intereosft semployees. By improving the employee care system and
Employee Recruditmeemnto cratic management mechanism the Company has
and Talent Deveelofpfmeecnttively guaranteed the occupational health and safety
Employee Welfaoref employees and continuously improved their sense of
Occupational Hebaelthlo anndg ing and satisfaction.Safety
Engage in Social Welfare
* Protection of Employees' Rights and Interests
* Employee Recruitment and Talent Development
* Employee Welfare
Appendix
* Occupational Health and Safety
* Engage in Social Welfare
54Protection of Employees' Measures to protect workers' rights and interests
About this Report Rights and Interests
Message from the We do not interfere with employees’ freedom of belief.Chairman
Kaizhong Precision respects and protects the legitimate rights and We do not discriminate against employees in hiring compensation training
interests of employees strictly abides by relevant regulations such
About Kaizhong as the Labor Law of the People's Republic of China the Law of the
opportunities promotion dismissal or retirement based on ethnicity race
Anti-
Precision People's Republic of China on the Protection of Women's Rights and nationality religious beliefs gender etc.discrimination
Interests and the Special Provisions on Labor Protection for Female
Employees as well as applicable laws and regulations of overseas After a discrimination incident occurs or a related complaint is received
an investigation will be conducted in a timely manner and reasonable
Sustainability Governance operations and implements international labor conventions and
initiatives with high standards including the Universal Declaration assistance will be provided to those affected such as legal aid financial
of Human Rights the Core Conventions of the International compensation psychological counseling etc.Labor Organization and the United Nations Guiding Principles on
Business and Human Rights. In order to build a complete labor rights
Corporate Governance management mechanism the Company has formulated labor rights
protection systems such as the Employee Handbook the Labor
Protection Regulations for Underage Workers and Female Employees
and the Employee Complaint Management Procedure. Eliminate all types of harassment such as psychological harassment
Innovation and Operation sexual harassment verbal harassment etc.Encourage employees to report any possible or existing harassment or
Anti- abuse to their company’s human resources administrator or department
Envirnoment As of the end of the reporting period harassment head.When harassment or abuse occurs or a related complaint is received
the Company had not found any incidents involving violations timely investigation shall be conducted into the incident and reasonable
of freedom of association and collective bargaining rights assistance shall be provided to those affected such as legal aid financial
Society forced labor illegal slavery child labor or any type of compensation psychological counseling etc.discrimination.Protection of Employees'
Rights and Interests
Employee Recruitment
and Talent Development
Employee Welfare Strictly confirm the age of applicants by checking their ID cards and
Occupational Health and resorting to other means to ensure that no child laborers or underage
Safety workers enter the company to work.Engage in Social Welfare Prohibition
of child Once child labor is discovered their work will be stopped immediately in
labor accordance with the provisions of the Labor Law they will be sent to a
specialized institution for a health check returned to their guardians in a
Appendix timely manner and assisted in continuing their compulsory education.
55Sign labor contracts with employees in accordance with the law and clearly define employment conditions.
About this Report
Fight
against It is strictly prohibited to collect deposits from employees in any form and it is not allowed to hold or destroy hide or confiscate documents except under
Message from the forced the circumstances prescribed by law.Chairman labor
Once forced labor is discovered an investigation will be conducted promptly. While those responsible are held accountable reasonable assistance will
be provided to those affected including legal aid financial compensation psychological counseling etc.About Kaizhong
Precision
The Company supports the establishment of trade unions and ensures that employees exercise their right to organize in an environment free of violence
Sustainability Governance
Freedom of pressure fear intimidation and threats.association
and collective For matters involving the vital interests of employees such as wages welfare labor safety and health and social insurance we will listen to employees'
bargaining opinions through democratic forms such as the Staff and Workers' Congress and trade union meetings and care about and pay attention to employees'
Corporate Governance reasonable demands.Innovation and Operation Position arrangement and transfer of female employees: It is prohibited to arbitrarily arrange female employees to inappropriate positions. If a position is
not suitable due to production changes the position should be transferred in time. Female employees can apply for a job transfer due to health reasons
with a hospital certificate.Envirnoment Protect female Labor protection during pregnancy: It is prohibited to arrange overtime work for pregnant employees. Women who are pregnant for more than seven
employees months will not be assigned night shifts and will be given time for rest. We regularly monitor the working hours and tasks of pregnant employees.Breastfeeding protection: Female employees who are breastfeeding their babies will not be arranged to work overtime or night shifts.Society Maternity leave and breastfeeding leave: Maternity leave breastfeeding leave and childcare leave for female employees are protected in accordance
Protection of Employees' with the law.Rights and Interests
Employee Recruitment
and Talent Development
Employee Welfare
Occupational Health and
Safety Conduct testing of occupational disease hazards in the workplace every year.Engage in Social Welfare Protect Conduct regular occupational health examinations every year.occupational
health and
safety Adopt hierarchical control and provide personal protective equipment for risky positions.Appendix If any incident endangering occupational health and safety occurs we provide medical assistance to employees in a timely manner.
56Employee satisfaction
About this Report Kaizhong Precision always regards employees as the core force of corporate development and attaches great importance to employees' demands and experiences. Therefore the
Company has established a normalized and systematic employee communication mechanism through which an employee satisfaction questionnaire is organized every quarter. By
Message from the widely collecting employees' opinions and suggestions we can gain a deeper understanding of their ideas and expectations on work environment career development teamwork and
Chairman
welfare benefits to ensure that every employee's voice is heard and valued.About Kaizhong Satisfaction survey
Precision
Sustainability Governance Front-desk express delivery Water electricity and other Greening maintenance Dining environment in Timeliness of logistics
supporting facilities in canteens maintenance
Inbound call management dormitories Timely cleaning of office
areas Hygiene of canteen food Maintenance quality of
Corporate Governance Meeting room arrangement Dormitory Management logistics maintenance
and pre-meeting preparation System Cleanliness of office areas Variety of canteen food
Cleanliness of the logistics
Dispatching of official Hygiene in public areas of Cleaning staff's service Freshness of canteen food maintenance site
vehicles
Innovation and Operation dormitories
attitude
Portion of canteen meals Work attitude of logistics
Dormitory administrators' work maintenance personnel
attitude Service attitude of canteen
staff
Envirnoment
Society
Protection of Employees' Employee satisfaction
Rights and Interests
100%
Employee Recruitment 91.78% We are clearly aware that organizational atmosphere is an important link for mutual
and Talent Development shaping and common growth between the Company and its employees. A positive
Employee Welfare 90% 85.45% 85.25% organizational atmosphere will have a positive impact on employees' motivation
Occupational Health and
Safety performance potential and cultural integration. Therefore the Company used the 80% Gallup Q12 assessment tool to distribute questionnaires to formal employees at the
Engage in Social Welfare
headquarters and factories to conduct surveys on organizational climate. In 2024
70% the Company's overall organizational climate score was 3.95 (out of 5).
Appendix 60%
202220232024
57Employee complaints
About this Report
Kaizhong Precision has formulated the Employee Complaint Management Procedure The Company clearly stipulates that all complaints must strictly follow established methods
Message from the which is applicable to the submission and handling of complaints by all employees and formal channels. The Human Resources Department is committed to improving and
Chairman ensuring that the Company's employee complaint channels are unobstructed protecting these legitimate methods and normal channels and fully safeguarding the rights
guiding internal employees to use internal complaint tools reasonably and effectively of employees to express their demands and make appeals reasonably and legitimately.About Kaizhong standardizing internal employee complaints and handling procedures and ensuring
Precision
that complaints are accepted in a fair just and open manner thereby improving
employee satisfaction and enhancing employees' sense of identity and belonging.Sustainability Governance Employee complaints management
Department officers Employee complaint channels
Corporate Governance
Department heads should first accept employee complaints and try their best
Before an employee files a formal complaint they should report to his or her
to resolve their demands. When the employee relations team conducts a fact- department and seek a solution.finding investigation they should fully cooperate and provide information and
Innovation and Operation
support during the investigation. They should also make an oral or written complaint to the Employee Relations
Handling Group.Channels are: call the Employee Relations Specialist e-mail suggestion box
Envirnoment
Employee Relations Handling Group of the Human Resources Department and the general manager’s mailbox
If an employee is still dissatisfied with the outcome after going through
the appeal channel they may submit a written complaint to the Employee
Responsible for collecting complaint information within the Company and for
Society Complaint Committee.handling feedback and supervision of complaints from company employees
Protection of Employees'
Rights and Interests or departments.Employee Recruitment
and Talent Development
Employee Welfare
Occupational Health and Employee Appeal Committee
Safety
Engage in Social Welfare Responsible for handling employees’ further appeals when they are
dissatisfied with the handling results of the appeal by the Human Resources
Department in order to safeguard the legal and legitimate rights and interests
of employees and avoid infringement of their legal and legitimate rights and
Appendix
interests.
58Employee Recruitment
About this Report
and Talent Development Diversity and equality
Message from the
Chairman
Kaizhong Precision always adheres to the "people-oriented" The Company is committed to creating an inclusive and equal working environment and to eliminating
About Kaizhong concept and is committed to building a fair transparent and discrimination while paying attention to vulnerable groups. In order to safeguard the legal rights and interests
Precision efficient talent development system. The Company focuses of underage workers and female employees and ensure their health in production and labor in the enterprise
on the introduction and training of potential and professional the Company has specially formulated the Labor Protection Regulations for Underage Workers and Female
talents. By improving training resources and promotion Employees strictly prohibiting child laborers and underage workers from entering the company to work. Meanwhile
channels it promotes employee capacity improvement and the Company evaluates and classifies all positions identifies positions that are not suitable for female employees.Sustainability Governance career development and realizes the organic unity of personal For positions suitable for female employees the Human Resources Department shall not refuse to recruit female
value and corporate strategy. The growth of every employee employees during recruitment activities. In 2024 the Company did not recruit or use child labor. The proportion of
is the driving force for the Company's development. We will newly recruited female employees reached 33.18%.continue to optimize the talent training mechanism build
Corporate Governance a high-quality and highly cohesive professional team and The Company actively assumes the role of a corporate citizen and ensures employment for key and special
provide strong talent guarantee for the Company's sustainable groups. We have employed 9 people with disabilities who are provided with equal benefits and promotion
development. opportunities.Innovation and Operation Employee recruitment
During the reporting period
In strict accordance with the Labor Law of the People's
Envirnoment Republic of China the Regulations for the Implementation of
the Labor Contract Law of the People's Republic of China and
other laws and regulations Kaizhong Precision has formulated Labor contract
the Recruitment Management Regulations adhering to the disabled ethnic signing rate:
principle of equal employment and opposing any form of forced 9 462
Society labor. We are committed to building a diverse workforce and employees minority employees
Protection of Employees' providing fair employment opportunities for job seekers from 100%
Rights and Interests different backgrounds.Employee Recruitment
and Talent Development
Employee Welfare Recruitment
Occupational Health and
Safety Social insurance Proportion of newly Employee In 2024 upholding the recruitment principles of "openness
Engage in Social Welfare transparency competition and selection and staffing control" coverage rate: recruited female employees: turnover rate:
the Company attracted talents through campus recruitment
and social recruitment. Campus recruitment injected new 100% 33.18% 6.28%
forces of innovation and vitality into the Company while social
Appendix recruitment brought in experienced professionals. This dual-
track parallel model successfully created a diversified talent
pool.
59Staff training Professional skills training on the Operation Manual for
Material Supply Management Process
About this Report
Kaizhong Precision attaches great importance to talent cultivation. Every year we carry On August 28 2024 the Company organized professional skills training on the
Message from the out a variety of internal and external training sessions for all employees covering new
Operation Manual for Material Supply Management Process and invited planners site
supervisors material control specialists and cost accounting personnel to participate
Chairman employees business implementation management professional track professional in the training. The purpose was to strengthen the understanding and cognition of
quality legality and compliance to help employees improve their capabilities in an all- the supply chain planning system among business department personnel through
About Kaizhong round way and achieve sound career development. In 2024 the Company held a total the promotion of relevant planning system knowledge thereby further promoting
Precision of 1411 online and offline open learning projects with a total of 26312 participants a the collaborative cooperation of various
total training time of 304711 hours an average training time of 82.76 hours per person business links. There were 45 participants
in this training. The training content
and an average satisfaction rate of 90.02%. involved a review of the S4 system design
Sustainability Governance the three lines of defense in the supply
Training for new employees chain the importance of the supply chain
and specific implementation methods. The
trainees' satisfaction rate for this session
Corporate Governance reached 90 points. In terms of improving
The Company provides comprehensive induction training for new employees in- knowledge and skills the trainees had
cluding the Training on the Corporate Culture and Human Resources Administration a deeper and more comprehensive
System the Training on Factory-level Safety Education the Training on Anti-fraud understanding of the relevant professional
Innovation and Operation Knowledge etc. Every quarter we also regularly conduct the Training on Perfor- content which could help improve their
mance Management the Training on Personal Income Tax Settlement the Training efficiency at work. Professional skills training
on Intellectual Property and the Training on Corporate Culture. The online learning
platform provides rich resources to help new employees gain a deeper understanding
Envirnoment of the Company.Leadership training
In department-level train-
ing after new employees
Society return to the department On April 16 2024 the Company organized a training on the Role Positioning and
Protection of Employees' the mentor will provide Cognition of Managers. 36 managers at the middle level and above participated in the
Rights and Interests professional skills training training. The training content covered aspects such as manager role transformation
Employee Recruitment according to the job train- positioning misunderstandings positioning analysis and cognition. By combining theory
and Talent Development ing plan. Through the du- with cases it helped the trainees to deeply understand the roles and responsibilities
Employee Welfare al-channel training model of managers. After the training trainees said that they had understood their role
new employees can fully positioning and improved their decision-making capabilities and management Occupational Health and
Safety understand the company efficiency.Engage in Social Welfare and positions improve
their comprehensive abil- From September 23 to 24 2024 the Company conducted the training titled Advancing
ities enhance corporate to True Executives. 22 managers at the middle level and above participated in the
cohesion and competitive- training. The training content revolved around the definition responsibilities roles
ness and help achieve and capabilities of true executives. Through the training the trainees gained an in-Appendix
the Company's strategic depth understanding of the multi-dimensional requirements of true executives
goals. New employee training site improved their management capabilities and laid a solid foundation for the Company's
competitiveness.
60About this Report
Message from the
Chairman
About Kaizhong
Precision
Sustainability Governance Employee promotion
Kaizhong Precision has established a 7-level 23-grade job grade system set up three major tracks: management specialty and operation and formulated the Job Grade Management
Corporate Governance System to provide employees with clear career development channels and cross-track development opportunities.Innovation and Operation
Management channel Professional track Operation track
Envirnoment M17 Management Expert P16 Expert 014 Senior technician
M16 Senior Executives P15 Senior 013 Technician
Society
Protection of Employees' M15 Senior Manager P14 Advanced 012 Senior technical worker
Rights and Interests
Employee Recruitment
and Talent Development M14 Mid-level Manager P13 Intermediate 012 Intermediate technical worker
Employee Welfare
Occupational Health and P12 Junior employee-level 011 Junior technician/operator
Safety
Engage in Social Welfare
Encourage academic advancement
Appendix
We have established academic allowances to encourage employees to continue their studies improve their professional qualities and grow with the Company.
61Employee Welfare Selection of Monthly Awards winners
About this Report
On April 17 and 18 2024 Pingshan Plant and Huiyang Plant where the Company's connector product
Kaizhong Precision has built a market-competitive salary and benefits system lines are located held commendation meetings for outstanding employees for February and March Message from the
Chairman to meet employee demands through diversified measures and to continuously 2024 respectively. The meetings summarized the work achievements from February to March and
enhance employees' sense of belonging and cohesion. The Company regularly commended outstanding line leaders and employees aiming to motivate employees to keep up the
evaluates salary levels and formulates scientific salary strategies based good work and serve as role models.About Kaizhong on market dynamics to ensure that we can maintain our advantages in the
Precision 13 employees from Pingshan Plant competition for talent and provide talent guarantee for sustainable development. and 16 employees f rom Huiyang
Plant won awards. Representatives of
outstanding employees shared their
Sustainability Governance Employee compensation and incentives work insights and some employees also put forward self-improvement plans
and improvement suggestions. The
Kaizhong Precision has formulated and improved a series of compensation and Human Resources and Administration
Corporate Governance incentive systems such as the Salary Management System the Performance Department collected and followed up
Management System the Production Incentive Award Management Measures on the employees' suggestions. It is expected that the workshop will further
and the Sales Commission Award Management Measures aiming to provide Group photo of Monthly Awards winnersimprove in production and management.employees with incentive and competitive compensation levels that fit their job
Innovation and Operation
responsibilities and to pay performance bonuses on time every year based on
the Company's existing policies operating conditions and personal performance Selection of Annual Awards winners
appraisals.Envirnoment
Compensation policy and performance On February 7 2024 the Company carried
out the 2023 annual evaluation work. After
comprehensive selection and recommendation
Society When hiring new employees the Company determines individual salaries based by various departments review by the Human
Protection of Employees' on their education work experience and professional capabilities (including Resources Management Department and
Rights and Interests years of professional work experience and level of professional knowledge) to selection by the Evaluation Group outstanding
Employee Recruitment ensure pay equity without discrepancies based on gender age nationality race i n d i v i d u a l s a n d t e a m s i n 2 0 2 3 w e r e
and Talent Development ethnicity gender identity religion marital status or physical and mental disability. commended and bonuses and related benefits
Employee Welfare were issued to outstanding employees.In order to maintain salary competitiveness the Company coordinates the
Occupational Health and Among them the Company awarded the annual salary policy plans and adjustments of each park based on changes
Safety Production Model Award Technology Pioneer
in the external economic environment. In addition to following the local
Engage in Social Welfare Award Outstanding Talent Award Elite government's minimum wage standards we also assess local market salary Backbone Award Professional Elite Award
levels through external salary surveys and formulate salary adjustment plans and Outstanding Rising Star Award to 95
when appropriate. Meanwhile the Company conducts regular monthly and employees in total. Outstanding teams were
annual performance appraisals based on individual employee performance awarded the Technological Innovation Award
Appendix and issues performance bonuses to fully stimulate employee enthusiasm and Group photo of Annual Awards winnersand the Management Innovation Award. A total
creativity while promoting the continuous progress and development of its of 4 teams won the awards.business.
62Employee stock ownership plan
About this Report
In order to improve the interest sharing mechanism between workers and owners and achieve consistency in the interests of the Company shareholders and employees the Company
Message from the has launched an employee stock ownership plan. In 2024 a total of 110 outstanding employees participated in the stock ownership plan. Through the employee stock ownership plan
Chairman the Company further improves its governance structure and long-term and effective incentive and constraint mechanism ensuring its long-term stable and healthy development.Meanwhile we have deepened the incentive system for the management of the headquarters of the Company and its subsidiaries fully mobilized the enthusiasm and creativity of
About Kaizhong employees attracted and retained outstanding management talents and business backbones and enhanced the cohesion of our employees and the Company's competitiveness.Precision
Sustainability Governance Employee benefits
Paying close attention to employee welfare Kaizhong Precision has established and improved the Welfare Management System and implemented a layered and multi-category welfare
Corporate Governance
system for all employees including statutory welfare fixed welfare special welfare and flexible welfare programs. These benefits have effectively met the multi-level demands of
employees stimulated employees' work enthusiasm and improved employee stability.Innovation and Operation
Statutory benefits Care for pregnant employees
covering pension insurance medical insurance work-related injury insurance
Envirnoment
unemployment insurance maternity medical care and housing provident fund. The Company attaches great importance to the rights and interests of female
employees. During the reporting period we provided extra meals for pregnant
employees several times. In addition the Administrative Department planned and
Society Fixed benefits
arranged extra meals every Wednesday providing them with free nutritious soup or
fruit.Protection of Employees'
Rights and Interests covering living allowance regular physical examination care for employees during
important holidays and other benefits.Employee Recruitment
and Talent Development
Helping employees in need
Employee Welfare
Occupational Health and Special benefits
Safety
Engage in Social Welfare comprehensive welfare support covering family transportation communication etc. The Company has established an employee mutual aid fund which is mainly used
to subsidize members and their families who have difficulties in seeking medical
treatment or attending school as well as members who have suffered major
losses or difficulties in life due to natural disasters emergencies etc. During the
Appendix Flexible benefits reporting period with the mutual aid fund we completed 12 rescue operations and distributed RMB50400 in relief funds.covering commercial insurance training and education support etc.
63Staff activities
About this Report
Kaizhong Precision integrates employee care into its corporate culture. By carrying out diversified activities we have enriched employees' spare time increased communication
Message from the
Chairman opportunities between the Company and its employees enhanced cohesion among employees and created a harmonious working atmosphere.About Kaizhong
Precision Pingshan Base saw female employees celebrating Women's Day A fun sports meeting
Sustainability Governance On March 8 2024 the Company gathered all female employees at the Kaizhong During the reporting period the Company in conjunction with its plants organized
Pingshan Base to celebrate Women's Day. We organized games to create a happy a fun sports meeting. We set up extremely challenging and interesting game
atmosphere and distributed holiday gifts. The event site was decorated with a levels to test the team members' teamwork ability. The combination of traditional
festive atmosphere filled with joy and vitality. This activity mainly created a joyful sports competitions and fun games fully mobilized the enthusiasm of employees
Corporate Governance atmosphere for all female employees in the form of games and the Company also demonstrated the vigorous positive and youthful spirit of our employees created a
prepared nice holiday gifts for them. When the female employees received the gifts lively cultural atmosphere and enhanced communication exchanges and cooperation
their faces beamed with happy smiles. It was not only a gift but also the Company's among colleagues.recognition of their hard work and good wishes for the festival. The whole event
Innovation and Operation
ended successfully in a harmonious and joyful atmosphere. It was an unforgettable
holiday.Envirnoment
Society
Protection of Employees'
Rights and Interests
Employee Recruitment
and Talent Development
Employee Welfare
Occupational Health and
Safety
Engage in Social Welfare
The activity site at Pingshan Base on Women's Day Fun sports site
Appendix
64Exciting basketball games Welcoming the Spring Festival warmly Teachers' Day activities
About this Report
In 2024 the Company held the 16th "Kaizhong In order to promote traditional culture and enrich September 10 2024 was the 40th Teachers' Day of
Message from the
Chairman Cup" employee basketball game. After a month the cultural life of employees before the Spring our country. The Pingshan headquarters of Kaizhong
of fierce competition 7 representative teams from Festival in 2024 various parks of Kaizhong Precision Training Center and Heyuan Plant jointly launched
various plants and departments took the game as an organized festival activities enabling employees
About Kaizhong opportunity to exchange skills made friends through to feel the unique charm of traditional festivals in a activities to celebrate the Teachers' Day. Kaizhong
Precision basketball fought with all their might and presented happy and peaceful atmosphere. During the event Training Center reviewed the training achievements
9 fun and exciting games. On August 3 the much- each park carefully decorated the venue with a festive in the past year: 104 training solutions more than
anticipated final came to a successful conclusion atmosphere hung red lanterns and couplets creating 5000 participants 289.9 training hours and 95.7
Sustainability Governance in Heyuan Plant. After the competition an award a strong festive atmosphere. The interactive games points for the average trainer satisfaction score.ceremony was held on site. Manager Zhou Jianfeng were even more lively including traditional games
of Heyuan Commutator Manufacturing Department such as guessing riddles pitching pots and hooping These impressive training data were inseparable
II and Manager Su Hanmei of Human Resources allowing employees to feel the charm of traditional from the hard work of the trainers. Group leaders
Management Department presented trophies medals culture in laughter. The games also enhanced issued appointment letters and certificates of honor to
Corporate Governance and prizes to the winning teams. communication and cooperation between employees new and outstanding lecturers. In the end Kaizhong
and strengthened team cohesion and their sense of Training Center presented holiday gifts to all lecturers
belonging.to thank them for their hard work generous sharing
Innovation and Operation and patient guidance which helped all employees to
continue to grow and surpass themselves.Envirnoment
Society
Champion team of "Kaizhong Cup"
Protection of Employees'
Rights and Interests
Employee Recruitment
and Talent Development
Employee Welfare
Occupational Health and
Safety
Engage in Social Welfare
Appendix Group photo of the “Kaizhong Cup” Spring Festival activities New lecturers and outstanding lecturers
Basketball Games
65Occupational Health and Safety
About this Report
Kaizhong Precision always puts the health and safety of its employees first actively creates a healthy hygienic and safe working environment and continuously strengthens the
Message from the
Chairman prevention and management of occupational health and safety risks to safeguard the physical and mental health of its employees.About Kaizhong OHS Management System
Precision
In strict accordance with the Occupational Disease Prevention and Control Law of the People's Republic of China the
Production Safety Law of the People's Republic of China and other laws and regulations as well as the occupational
Sustainability Governance health and safety standards and regulations of overseas operation locations and referring to the requirements of
industry associations such as the International Labor Organization we have formulated a series of production safety
rules and regulations including the Safety Management Regulations the Production Safety Target Management System
the Production Safety Target Assessment and Evaluation System the Production Safety Responsibility System the
Corporate Governance Production Safety Responsibility Assessment System the Safety Education and Training Management System the
Production Safety Risk Management System the Occupational Health (Hygiene) Management System the Occupational
Hazard Notification System and the Emergency Management System so as to strengthen the Company's production
safety and occupational health management and ensure the Company's production safety environmental safety and
Innovation and Operation occupational health safety. In addition we have also established a production safety committee to further strengthen the
Company's production safety management effectively implemented the main responsibility for production safety and
ensured that safety measures are effectively implemented thereby effectively preventing and reducing the occurrence of
production safety accidents. As of the end of the reporting period Kaizhong Precision and its branches and subsidiaries Certificate of Occupational Health and
Envirnoment had passed the ISO 45001:2018 occupational health and safety management system certification.Safety Management System Certification
Safety goals for production safety
Society
Protection of Employees'
Rights and Interests The employee production safety 0 deaths and serious injuries (including traffic-
education and training rate: 100% related accidents)
Employee Recruitment
and Talent Development 0 major fire (explosion) accidents
Employee Welfare
The rate of special operation
Occupational Health and
Safety personnel holding certificates: 100% 0 major equipment accidents
Engage in Social Welfare
The rectification rate of accident Four goals 0 major accidents
hazards: 100% achieved Six zeros
Appendix 0 major environmental pollution accidents
The compliance rate of workplace hazard factors:
100% The incidence rate of occupational
diseases among employees: 0 66About this Report
Message from the
Chairman
About Kaizhong
Precision
Production safety risks and control
Sustainability Governance
The Company always adheres to the production safety policy of "safety first prevention Noise reduction measures in Heyuan Plant aimed to protect
Corporate Governance first and comprehensive management" strictly follows the three-level production employee health
safety standardization enterprise standards standardizes the safety standardization
management measures of each park and completes the reporting and publicity work in
accordance with government requirements. For new modified and expanded projects In September 2024 the Safety Department of Heyuan Kaizhong implemented noise
the Company strictly implements the "three simultaneous" system conducts preliminary reduction measures to address the problem of air discharge noise from pneumatic
Innovation and Operation evaluations to assess safety and occupational health risks and implements control equipment in the commutator production workshop. After purchasing and testing
effectiveness evaluations to ensure that on-site safety and occupational health hazards various types of silencers the cavity filter silencer solution was finally selected.are effectively managed and controlled. The Company purchased and installed 1000 silencers for this purpose. After the
transformation the noise in the workshop was significantly reduced to 84.9 decibels
Envirnoment The Company has established a complete production safety inspection mechanism: which is acceptable to human ears. The exhaust noise of the cold press was also
reduced from 98.6 decibels to 83.5 decibels effectively protecting the working
environment and physical health of employees.Society Comprehensively check the fire hazards of electrical facilities and
Protection of Employees' issue professional inspection reports.Rights and Interests Annual
inspection Systematically detect the operating status of fire protection facilities
Employee Recruitment and complete the statutory annual inspection.and Talent Development
Employee Welfare
Occupational Health and
Safety Carry out regular safety inspections to eliminate potential safety
hazards in a timely manner.Engage in Social Welfare
Hold regular safety meetings to promote safety experience exchanges
between management and employees.Monthly
manage- Through the above systematic management and control measures
Appendix ment the Company continues to improve its production safety level effectively protects the health of employees and ensures production Fixed chamber filtering and silencing solution
safety.
67Safety culture construction
About this Report
Kaizhong Precision strengthens the construction of safety
culture and improves employees' safety awareness and
Message from the
Chairman emergency response capabilities by regularly carrying
out activities such as Safety Month and Fire Protection
Month.About Kaizhong
Precision The Safety Month event aims to
popularize safety knowledge in the
workplace and enhance employees'
safety awareness.Sustainability Governance
The Fire Protection Month activities Attending the launch ceremony of Inviting Pingshan Fuyou Health Center's emergency medical
aim to enhance employees’ self- Pingshan District Fire Safety Month team to provide on-site training on first aid knowledge
Corporate Governance rescue and mutual rescue capabilities
in fire situations through fire preven-
tion and emergency response training. Pingshan District Emergency Management Bureau organized
safety training for enterprises
Innovation and Operation
In addition the Company strictly abides by laws and
regulations such as the Design Hygiene Standards for On May 21 2024 Kaizhong Precision actively
Industrial Enterprises and the Management Regulations responded to the call of national production safety
Envirnoment for Workplace Occupational Health and regularly regulations. In order to further strengthen production
provides relevant knowledge and skills training to first aid safety work the Company invited safety emergency
personnel safety management personnel etc. experts appointed by the Pingshan District Emergency
Management Bureau to organize a training on
production safety. The Company attached great
Society As of the end of the reporting period importance to this training and carefully arranged
Protection of Employees' a total of 41 department heads supervisors part-
Rights and Interests time safety officers and employee representatives
The Company had owned a total of
Employee Recruitment to participate in the training. The training instructors
and Talent Development 40 gave in-depth explanations on key topics such Red Cross first aid workersEmployee Welfare as production safety management knowledge
prevention of work-related accidents and fire safety.Occupational Health and
Safety Through vivid case analysis and practical skills
teaching they effectively helped various departments
Engage in Social Welfare of the Company improve their safety management
108 employees holding safety level. This training provided the Company with strong knowledge and skills support in effectively preventing
management personnel certificates safety accidents and creating a safe and stable Pingshan District Emergency Management
Appendix production environment during production operations. Bureau's training on production safety
68Safety emergency plan
About this Report Occupational health examination
In order to ensure the timely control and effective response to production safety accidents the Company has formulated
Message from the the Emergency Plan for Production Safety Accidents in accordance with relevant laws and regulations and the Guidelines
Chairman for the Preparation of Emergency Plans for Production Safety Accidents for Production and Operation Units (GB/T29639- Attaching great importance to occupational health
2020). By standardizing and guiding emergency rescue actions it requires all departments to train employees to prevent management the Company carries out the Detection
accidents effectively control the situation and ensure a rapid response after an accident occurs with a view to protecting of Hazardous Factors of Occupational Diseases in the
About Kaizhong employee safety and the Company’s property. Workplace every year conducts the Evaluation of the Status
Precision of Hazardous Factors of Occupational Diseases every three
years and identifies positions with hazardous factors of
occupational diseases based on the report. The Company
has signed an occupational health examination agreement
Sustainability Governance
with Pingshan People's Hospital on arranging physical
examinations for employees at different stages. Before taking
up the post a physical examination will be scheduled within
one month of the employee's exposure to hazardous factors.Corporate Governance During the work period employees who have worked for one
year or more will be scheduled for physical examinations
after we analyze the hazardous factors they are exposed
to. When leaving the job employees who are exposed to
Innovation and Operation hazardous factors apply for resignation. The department
will hand over the Resignation Form to a specialist and
then schedule for a physical examination. In addition new
employees in noise-related positions are required to conduct
Envirnoment Fire drill Emergency drill on electrical shock their own noise testing before joining the Company. During
the reporting period the employee physical examination
coverage rate was 100%.Society
Protection of Employees'
Rights and Interests
Employee Recruitment
and Talent Development
Employee Welfare
Occupational Health and
Safety
Engage in Social Welfare
Appendix Publicity on occupational diseases
Emergency drill on food poisoning Emergency drill on confined space
69About this Report Engage in Social Welfare
Message from the
Chairman Contributing to rural Ecological protection
In order to contribute to building a harmonious society employment
About Kaizhong
Precision Kaizhong Precision actively fulfills its corporate social In response to the employment difficulties in Heyuan On March 12 2024 Arbor Day five representatives
responsibility continuously carries out public welfare and City (a relatively underdeveloped area in Guangdong of Kaizhong Precision Party members actively
charity activities repays the society by promoting rural Province) Kaizhong Precision built a new energy vehicle participated in the tree planting activity under the
Sustainability Governance employment helping disadvantaged groups and practicing parts intelligent manufacturing industrial base in the local arrangement of Zhukeng Community and donated
environmental protection and low-carbon actions. area in 2017 to: RMB10000 in cash for purchase of saplings.After the activity the Company received a letter of
Corporate Governance Firefighting charity donation thanks from the Party Building Office of Longtian
Neighborhood Pingshan District Shenzhen
promote the transformation and upgrading of
During the reporting period Kaizhong Precision donated local industries expressing sincere gratitude for the Company's
to the Heyuan Red Cross Firefighting Rescue Foundation good deeds.Innovation and Operation aiming to provide regular assistance to officers and soldiers create a large number of jobs (as of the end of
in difficult circumstances and those with disabilities as well the reporting period: 988 employees in total
as the families of martyrs and officers and soldiers who died including 460 local employees)
Envirnoment in the line of duty and to provide timely assistance to people give priority to hiring local people with difficulty
who have difficulties in life due to fire disasters. Heyuan Plant finding a job
was awarded the "2024 Advanced Collectives for Engagement
in Firefighting Public Welfare" by the Heyuan Red Cross promote high-quality development of regional
Society Society. economy
Protection of Employees'
Rights and Interests
Employee Recruitment
and Talent Development
Employee Welfare
As of the end of the reporting period
Occupational Health and
Safety
Engage in Social Welfare The Company had provided
460 jobs in Heyuan City
The Heyuan Red Cross Society awarding the "2024 Advanced
Appendix Collectives for Engagement in Firefighting Public Welfare"
Company employees planting trees
70Appendix
About this Report
Key Performance Data Sheet
Message from the
Chairman
Indicator name Unit 2024 Indicator name Unit 2024
Revenue RMB mn 3049.6076 Diesel L 47606.29
About Kaizhong
Precision Net profit attributable to shareholders RMB mn 170.1108 Energy Gasoline L 14692.37
Total amount of tax paid RMB mn 83.9 consumption Purchased electricity KWh 112968623.90
Total cash dividends RMB mn 108.30 Total energy consumption Tons of standard coal 13958.52
Sustainability Governance Proportion of female directors % 44.44% Greenhouse gas emissions
for Scope 1 Tons of CO2 equivalent 190.48
Proportion of independent directors % 33.33%
Greenhouse gas emissions
Proportion of independent directors on the Greenhouse Tons of CO2 equivalent 107005.45
Audit Committee % 66.67%
for Scope 2
gas
emissions Total greenhouse gas
Corporate Governance Is the convener of the Audit Committee an emissions Tons of CO2 equivalent 107195.93
accounting professional / Yes
Carbon intensity Tons of carbon dioxide Proportion of independent directors on the equivalent/RMB mn 0.0091
Compensation Committee % 66.67%
Total water consumption Cubic meters 175836
Proportion of independent directors on the % 66.67%
Innovation and Operation Nomination Committee Use of water Water resource recycling % 24%
Proportion of independent directors on the resource rate
Strategy and Compensation Committee % 66.67% Circulating water Tons 41659
Coverage rate of employees receiving anti- consumption
corruption training % 100%
Envirnoment Water
Coverage rate of directors receiving anti- % 100% pollutant Total wastewater discharge Tons 100819corruption training discharge
Rate of employees signing anti-bribery
commitment % 100% Gas
Society pollutant Total waste gas emissions 10000 cubic meters 255053.06
Environmental protection investment RMB mn 9.9911 emissions
1 The greenhouse gas emissions for Scope 1 mainly come from direct greenhouse gas emissions generated by the consumption of fossil fuels in the Company's operation/production process (such as gasoline
liquefied petroleum gas etc.). The emission factors and calculation methods refer to the Guidelines for the Accounting and Reporting of Greenhouse Gas Emissions from Other Industrial Industries (for Trial
Appendix Implementation). The calculation formula used is: Carbon dioxide emissions from fossil fuels = fuel consumption * low calorific value * carbon content per unit calorific value * fuel carbon oxidation rate * 44/12.
2 T he greenhouse gas emissions for Scope 2 mainly come from indirect greenhouse gas emissions generated by purchased electricity consumed in the company's operations/production processes. The
calculation method refers to the HKEX (Hong Kong Exchanges and Clearing Limited) document Appendix 2: Guidelines for Reporting of Key Environmental Performance Indicators. The electricity emission
factor adopts the Emission Factor of China Regional Grid Baseline which is 0.9489 tCO2/MWh for the Southern Regional Grid.
71Indicator name Unit 2024 Indicator name Unit 2024
About this Report
Total amount of non- Tons 2390 Number of employees Person 3682hazardous waste
Total amount of non- Male Person 2365
Message from the hazardous waste Tons 900 By gender
Chairman incineration Female Person 1317
Total amount of non-
Waste hazardous waste recycled Tons 1490 Chinese mainland Person 3272
discharge
Total amount of hazardous By region
About Kaizhong
Precision waste
Tons 357 Other countries and regions Person 410
Total hazardous waste Tons 357 Number of employees of ethnic minorities landfill employed Person 462
Percentage of waste
recycled % 54.24% Number of local employees Person 612Sustainability Governance
Customer satisfaction % 98.50% Number of employees with disabilities Person 9
Customer complaint handling rate % 100% Number of veterans recruited Person 2
Corporate Governance Number of quality and safety trainings / 80 Total employee turnover rate % 6.28%
Total quality and safety training time Hours 300 Labor contract signing rate % 100%
Percentage of suppliers who have signed the Social insurance coverage rate % 100%
Code of Conduct for Suppliers % 76%
Innovation and Operation
Percentage of suppliers that have signed Total number of training courses conducted / 1411
clauses that include environmental and labor % 100%
requirements Total hours of training received by employees Hours 304711
Percentage of new suppliers screened using
environmental criteria % 100%Envirnoment Health Total safety training time Hours 24196
and safety
Percentage of suppliers screened using % 100% investmentsocial criteria Production safety investment RMB mn 1.0845
Percentage of suppliers that have conducted
environmental impact assessments % 100%
Employee satisfaction % 91.78%
Society
Percentage of suppliers that have conducted Number of the Staff and Workers' Congress / 4
social impact assessments % 100% held
Percentage of suppliers that implement the
Company's supplier access system % 100% Staff seminar / 6
Percentage of suppliers identified as having
Appendix actual and potential significant negative % 0%
environmental impacts
72GRI Index Table
About this Report
Kaizhong Precision reported the information cited in the GRI Content Index in accordance with GRI standards from January 1 to December 31 2024.Message from the GRI Disclosures Section GRI Standards Disclosures Section
Chairman Standards
2-25 Processes to remediate negative Stakeholder
2-1 Organization details Kaizhong Precision impacts Communication
2-26 Mechanisms for seeking advice and Stakeholder
2-2 Entities included in the organization’s
About Kaizhong raising concerns Communication
Precision sustainability report
About this Report GRI 2: General
Disclosures 2-27 Comply with laws and regulations Compliance Management
2-3 Reporting period reporting frequency About this Report 2021and contact person 2-28 Membership of the Association Open Collaboration
2-6 Activities value chain and other Kaizhong Precision and Its
business relationships Supply Chain Management 2-29 Methods of stakeholder engagement Stakeholder
Sustainability Governance CommunicationProtection of Employees'
Rights and Interests Employee 3-1 Process for determining substantive Analysis of Substantive 2-7 Employees Employment and Talent issues Issues GRI 3:
Development Employee Welfare Substantive 3-2 List of substantive issues Analysis of Substantive
2-9 Governance structure and Issues Sound Corporate Governance Issues 2021
Corporate Governance GRI 2: composition 3-3 Management of substantive issues
Analysis of Substantive
General 2-10 Nomination and selection of the
Issues
highest governance body Sound Corporate GovernanceDisclosures 201-1 Economic value directly generated
and distributed Key Performance Table2021 2-11 Chair of the highest governance GRI 201:
body Sound Corporate Governance Economic 201-2 Financial impacts and other risks and
Performance opportunities arising from climate change Combat Climate Change
Innovation and Operation 2-12 The oversight role of the highest
governance body in managing impacts Sound Corporate Governance 2016 201-3 Defined benefit plan obligations and
2-13 Delegating responsibility for other retirement plans
Employee Welfare
managing impacts Sound Corporate Governance 205-1 Operation points that have undergone Business Ethics
2-14 The role of the highest governance Sustainable Development corruption risk assessments
Envirnoment body in sustainability reporting Management System GRI 205: Anti- 205-2 Communication and training on anti-
corruption 2016 corruption policies and procedures Business Ethics
2-15 Conflicts of interest Business Ethics 205-3 Confirmed incidents of corruption and Business Ethics
2-16 Communication on important issues actions taken
of concern Stakeholder Communication GRI 206: Anti- 206-1 Legal actions against anticompetitive
Society 2-17 Shared knowledge of the highest competitive behavior antitrust and antimonopoly Antitrust and Fair
governance body Responding to SDGs Practices 2016 Practices Competition
2-19 Remuneration policy Employee Compensation and
GRI 2: Incentives
302-1 Energy consumption within the
organization Optimize Energy Use
General 2-20 Procedure for determining salary Employee Compensation and GRI 302: Disclosures Incentives Energy 2016 302-4 Reduce energy consumption Optimize Energy UseAppendix 2021 2-22 Statement on sustainable Sustainable Development 302-5 Reduce the energy requirements of
development strategy Management Policy products and services Optimize Energy Use
73GRI
Standards Disclosures Section
GRI Standards Disclosures Section
About this Report 403-5 Occupational health and safety training for Occupational Health
302-4 Reduce energy consumption Optimize Energy Use workers and Safety
GRI 302:
Energy 2016 302-5 Reduce the energy requirements
of products and services Optimize Energy Use
Occupational Health
GRI 403: 403-6 Promotion of workers' health
Message from the and Safety
Chairman 303-1 Interactions between organizations Occupational
and water as a shared resource Water Resource Management Health and
403-7 Prevention and mitigation of occupational
Safety 2018 health and safety impacts directly related to
Occupational Health
business relationships and SafetyGRI 303: 303-2 Management of drainage-related
Water and impacts Water Resource Management 403-8 Workers covered by the occupational Occupational Health
About Kaizhong Wastewater
Precision 2018 303-3 Water withdrawal Water Resource Management
health and safety management system and Safety
303-4 Drainage Water Resource Management 404-1 Average hours of training per employee
GRI 404: Staff Training
303-5 Water consumption Water Resource Management per yearTraining and
305-1 Direct (Scope 1) greenhouse gas Education 2016 404-2 Employee skills development programs Combat Climate Change
Sustainability Governance GRI 305: emissions and transition assistance programs
Staff Training
Emissions
2016 305-2 Energy indirect (Scope 2) GRI 405:
greenhouse gas emissions Combat Climate Change Diversity and 405-1 Diversity of governance bodies and Employee
Equal employees Recruitment306-1 Waste generation and significant
waste-related impacts Pollutant Management
Corporate Governance GRI 306:
GRI 406: Anti- Protection of
Waste 2020 306-2 Management of significant waste- discrimination
406-1 Incidents of discrimination and corrective Employees' Rights
related impacts Pollutant Management 2016 actions taken and Interests
306-3 Waste generated Pollutant Management
GRI 409:
GRI 308: 308-1 New suppliers screened using Forced or 409-1 Operations and suppliers with significant Protection of
Supplier environmental assessment dimensions
Supply Chain Management
Compulsory risk of incidents of forced or compulsory labor Employees' Rights
Innovation and Operation Environmental Labor 2016 and Interests
Assessment 308-2 Negative environmental impacts in
2016 the supply chain and actions taken
Supply Chain Management
GRI 413: Local 413-1 Operations with local community
Community engagement impact assessments and Engage in Social
401-1 New employee hires and employee Employee Recruitment 2016 development plans
Welfare
Envirnoment GRI 401: turnover
Employment 401-2 Benefits provided to full-time GRI 414: 414-1 New suppliers screened using social Supply Chain
2016 employees (excluding temporary or part- Employee Benefits Supplier Social assessment dimensions Management
time employees) Assessment 414-2 Negative social impacts in the supply Supply Chain
403-1 Occupational Health and Safety Occupational Health and 2016 chain and actions taken Management
Society Management System Safety
GRI 416: 416-1 Assessment of health and safety impacts
403-2 Hazard identification risk Occupational Health and Customer of product and service categories
Quality Management
GRI 403: assessment and incident investigation Safety
Occupational Health and 416-2 Non-compliance incidents involving health
Health and Quality Management403-3 Occupational health services Occupational Health and Safety 2016 and safety impacts of products and services
Safety 2018 Safety
Appendix 403-4 Occupational health and safety GRI 418: Information Security
matters: worker participation consultation Occupational Health and Customer
418-1 Substantiated complaints involving breach
Safety Privacy 2016 of customer privacy and loss of customer data
and Privacy
and communication Protection
74Reader Feedback Form
About this Report
Dear Readers 6. Are you satisfied with the overall design of this Report
Message from the
Chairman Thank you for taking time off to read this Report. In order to provide you and other Yes □ Average □ No □
stakeholders with more complete professional and valuable ESG information and
improve the quality of the Company's ESG reports the Company sincerely invites you 6. We are open to your advice and suggestions on the "2024 ESG Report of Kaizhong
About Kaizhong to assist in completing the relevant questions in the Feedback Information Form. Please Precision".Precision feel free to offer your advice.Please let us know your valuable opinions via:
Tel: 0755-86264859
Sustainability Governance
1. Are you satisfied with this Report overall
Fax: 0755-85242355
Yes □ Average □ No □
Address: No. 1 Guihua 4th Road Longtian Neighborhood Pingshan District Shenzhen
Corporate Governance 2. Do you think this Report reflects Kaizhong Precision’s significant impact on ESG
Email: ESG@kaizhong.com
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Innovation and Operation 3. Do you think the analysis of the stakeholders identified in this Report and their
relationship with Kaizhong Precision is accurate and complete
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Envirnoment
4. Do you think the information provided in this Report is complete
Society Yes □ Average □ No □
5. Do you think the information provided in this Report is readable
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Appendix
75
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