Environmental Social

and Governance Report

Gongniu GroupCo., Ltd.

About the Report

Index of Indicators

Feedback

Board StatementAbout Gongniu

ESG Management

Company Pro?le

Development Strategy

Corporate Culture

2022 Timeline

Responsibility Topic:

Technology EmpowersProducts to Lead theIndustry's "Wind Vane"Research and DevelopmentInnovation MechanismScienti?c Research andInnovation Practice

Intellectual PropertyManagement

Building a SolidFoundation forSustainableDevelopmentthrough Governance

Corporate Governance25Integrity Operation30Compliance and RiskControl

Party Building for aStrong Foundation

Strive for excellenceto create a newsituation throughwin-win cooperation

43Bull Business System BBS45Product QualityManagement

48Customer Service

Responsible MarketingSupply ChainManagement

Be People-orientedand Give back tothe Community

Diversi?ed WorkplaceEmployee Rights andBene?tsEmployee Training andDevelopmentSocial Welfare

StrengthenEnvironmental Safetyfor SustainableDevelopmentEnvironmentalManagementEcological EnvironmentProtectionUse of Resources andEmissionsManagement of Safetyin ProductionOccupational Healthand Safety

Environment Society andGovernance Report

About the Report

Based on the principles of objectivity, standardization, transparency, and comprehensiveness, the 2022Environmental, Social and Governance (ESG) Report of Gongniu Group Co., Ltd. discloses in details the Company'spractices and performance in environmental, social, corporate governance and other areas of responsibilities in 2022.

Description

The organization scope of the Report is Gongniu Group Co., Ltd. and its subsidiaries.

Report scope

This Report mainly covers the period from January 1, 2022 to December 31, 2022. To enhance the comparabilityand completeness of the Report, some content is appropriately retroactive to previous years and prospective tosubsequent events related to 2023are added.Time frame

For the convenience of expression and reading, "Gongniu Group Co., Ltd." is also referred to as "Gongniu","Company", "Enterprise" or "Group" in the Report.Descriptions on references

The data sources used in the Report include the original data on the Company's actual operation, annual financialdata, internal statistical reports, administrative documents and reports, etc. The financial data in this Report isdominated in RMB. In case of any inconsistency with the financial report, the financial report shall prevail.Descriptions on data

Sustainable Development Goals (SDGs) Corporate Action Guidelines of the United NationsSustainability Reporting Standards from Global Sustainability Standards Board (GRI Standards)

Guidelines for Compiling Corporate Social Responsibility Reports in Chinafrom Chinese Academy of Social Sciences(CASS-ESG5.0)Guidelines for Compilation of Social Responsibility Reports from China's National Standards (GB/T36001-2015)Shanghai Stock Exchange Self-Regulatory Supervision Guidelines for Listed Companies No. 1 – StandardizedOperations

Compilation basis

The Report is released in electronic form. You can view and download it on the website of Shanghai Stock Exchange(www.sse.com.cn) and the Company's official website (www.gongniu.cn). For further information on the Company'sbusinesses, please refer to the 2022 Gongniu Annual Report.Report acquisition

If you have any questions or suggestions about the Report, please feel free to correct.Address: Building 20, Baoshi Building, No. 487, Tianlin Road, Xuhui District, ShanghaiFeedback and comments on the Report

0102

Environment Society andGovernance Report

Board Statement

In 2022, we surmounted a multitude of adversities,cultivating vitality amid crises and pioneering newpaths in the face of change, ultimately achievinga robust growth in performance. Our traditionalbusiness strengthened its competitive advantages,while our initial ventures into new markets andindustries began to reveal their potential. TheCompany's overall operational quality experienced acomprehensive enhancement. We extend our gratitudeto our shareholders for their unwavering support andcompanionship, as well as to our devoted employeesfor their relentless efforts and persistence.Throughout this year, we have diligently kept up withthe evolving trends in consumer preferences, placingcustomer needs at the forefront of our priorities andactively pursuing product innovation. We introduceda range of state-of-the-art products, such as orbitalsocket, ultra-thin switches with aerospace-level safetyfeatures, eye-friendly desk lamps, intelligent doorlocks with integrated peephole cameras, and fanlights. This has enabled us to offer our customers adiverse selection of top-quality, trendy, and visuallyattractive products.We enthusiastically pursued the advancement ofrenewable energy and intelligent headless lamp. Uponits launch, our charging gun rapidly became the top-selling online product among independent brands.Additionally, our portable outdoor energy storageexperienced swift growth, and our intelligent headlesslamp achieved more than RMB 100 million turnoverduring its inaugural year on the market, demonstratinga highly promising beginning.In our extensive brand upgrade, we achieved remarkableprogress by unveiling Gongniu's fresh logo in 2022and reinforcing our brand's core message: "Gongniuis used by 7 out of 10 Chinese families." Additionally,we launched the novel "Muguang" brand and proudlybecame the first China space affiliate in the civilelectrical industry. Our cutting-edge orbital socket

quickly gained prominence, emerging as the unrivaledleader among individual products, owing to innovativemedia promotion. This success sets a robustfoundation for our brand's continued growth in 2023.We diligently endeavored to strengthen our managementreforms and augment the development of our BullBusiness System (BBS), and comprehensivelyimplanted the improved BBS gene into the wholevalue chain consisting of production, research, sales,and service from point to surface and from inside tooutside, and thus enabled the BBS to be a powerfulengine for our innovation, growth, cost reduction andefficiency improvement. In 2022, we established a top-tier Audit and Risk Committee, focusing on addressingten major risks and effectively enhancing our internalcontrol management. Furthermore, we persistentlyadvocated for organizational innovation and cultivatedour talent pool to ensure our company's ongoing,healthy growth.

We stayed true to our founding mission, proactivelyembraced our social responsibility, and in 2022, weestablished the "Gongniu Charity Trust", the largestannual charity trust in the country. Additionally,we actively contributed to Shanghai's epidemicprevention and control efforts, supported theconstruction of cabin hospitals in Hong Kong, andparticipated in other crucial initiatives. Our effortsmade a positive impact in various fields, includingepidemic prevention and control, culture, education,health, poverty alleviation, disaster relief, andemployee well-being.As we enter a new year, we also embrace new opportunities.China's economic fundamentals are steadily improving,the new energy industry is booming and expanding,and China's supply chain and brand have gainedglobal edge in some emerging sectors, all of which laya solid foundation for our company's growth. In 2023,we will prioritize the following three areas of work:

Firstly, we will diligently work to refine our brand,heightening the professionalism and premium appealof the Gongniu brand to meet the domestic market'sdemand for superior quality consumption. We willfurther raise awareness of our flagship products,including converters, wall switches, and sockets, whileincreasing visibility for our eco-friendly offerings, suchas LED lighting, clothes dryers, and smart door locks.Additionally, we will bolster the promotion of our"Muguang" brand for strategic new ventures, includingheadless lamp solutions, and establish a professionalbrand image.Secondly, we will fortify the core competitive edgeof Gongniu's new energy business by masteringcritical technologies, including power modules, groupcharging, and intelligent control. We will expedite thedevelopment of our marketing network and establisha swift-response service capability to accelerate ourcharging pile business growth and delve into the homeenergy storage market. This will take Gongniu's newenergy business to the next level.Thirdly, we are passionately advancing theinternationalization of the Gongniu brand. We arecapitalizing on the new wave of new energydevelopment in European and American markets byswiftly entering with our core new energy chargingand home energy storage businesses. Simultaneously,we are embracing the new cycle of householdelectrification development in Southeast Asia andother countries by overcoming the developmentbottleneck of Chinese brands in emerging marketswith core products like converters.Though the journey ahead may be lengthy and filledwith challenges, we will reach our destination bypersistently pressing onward. We will maintain ourbusiness philosophy of "taking the long way withprofessionalism and devotion" as we forge ahead.Our commitment lies in generating high-quality andsustainable value returns for our shareholders and

striving relentlessly to achieve our vision of "becominga leader in the international civil electrical industry".

Board of Directors of Gongniu Group Co., Ltd.

April 27, 2023

0304

About Gongniu

Company Profile

Corporate CultureDevelopment Strategy

ESG Management2022 Timeline

0506

Environment Society andGovernance Report

Founded in 1995, Gongniu concentrates on the research, development, manufacturing, and marketing of civilelectrical products. Over the past two decades, with adherence to the corporate vision of "becoming a leader in theinternational civil electrical industry", the Company shoulders the corporate mission of "providing customers witha safe and comfortable power use experience", and practices the development philosophy of "taking the long waywith professionalism and devotion". The Company has always been driven by consumer needs with focuses onproduct quality. Starting from the subdivision of "sockets", it has continuously promoted functional, technological,and design innovation and developed a large number of new products which are popular among consumers. With aninnovative spirit, the Company has utilized its comprehensive leading advantages in product R&D, marketing, supplychain, and branding to form three major business sectors consisting of electricconnection, smart electrical lighting,new energy through years of development, thereby forming a long-term sustainable industrial layout in the field ofcivil electrical and lighting.

Aiming to "become a leader in the international civil electrical industry", the Company will leverage the opportunitiespresented by consumer upgrades, new energy, and internationalization. Concentrating on the three primary areas ofelectricconnection, smart electrical lighting, new energy, the Company will vigorously advance the enhancement ofthe Gongniu brand and the establishment of the new brand "Muguang". The Company will expedite the developmentof core competencies in its new energy business while proactively expanding into international markets to deliversuperior and more diverse electrical products and services to customers worldwide.

Gongniu is committed to becoming a leader in the international civil electrical industry. With both intensive domesticefforts and global operations, the Company focuses on the civil electrical engineering with household scenariosas the core; shouldering the corporate mission of "providing customers with a safe and comfortable power useexperience", the Company uses intelligent technology to create a safe power use environment and a comfortablepower use experience for customers. The Company adheres to the core values of "loyalty, integrity, professionalism,and dedication". With honesty and trustworthiness, it aims for achieving harmonious and win-win results and deeplycultivating its businesses with a revolutionary and innovative spirit.

Company ProfileDevelopment Strategy

Corporate Culture

Electric Connection

Corporate Culture System of Gongniu

Provide customers with asafe and comfortable poweruse experience

Corporate missionLoyalty, integrity,professionalism anddevotion

Core values

Corporate vision

Become a leader inthe international civilelectrical industry

Smart Electrical LightingNew Energy

0708

Environment Society and

Governance Report

On January 15, the 8th Positive Energy SpringFestival Gala with the theme of "Crossing the Peakto Build Dreams in the Blue Sea" and the 2022Summary Commendation Conference were heldonline for the first time. As a traditional item of theCompany's culture activities, this Gala innovativelyintegrated new product releases and other aspectsand promoted team integration in a better way.

January

On February 11, relying on excellent productdesigns, Gongniu won three German DesignAwards, including the Gold Award (Orbital Socket),the Winner Award (Shadowless Table Lamp), andthe Special Mention Award (General Scenario-control Switch, etc.).

February

On August 3, the 27th Guangzhou InternationalLighting Exhibition (GILE) grandly opened.Gongniu stood out from numerous cases andbecame the winner of the 10th Aladdin MagicLamp Awards- Comprehensive Influence BrandAward (Industrial Lighting) in 2022. The AladdinMagic Lamp Award is regarded as the "OscarAward" in the lighting industry.On September 6, Gongniu fully cooperated with State Grid Smart Internet of Vehicles toaccelerate the promotion and application of orderly charging of electric vehicles, in orderto achieve faster access to large-scale community charging resources.

August

September

On October 27, Gongniu was rated as a nationalintellectual property demonstration enterpriseby China National Intellectual PropertyAdministration.October

In December, Gongniu was awarded the 2021Golden Bull Award for Most Valuable Investmentby China Securities Journal.On December 12, Gongniu became the firstChina space affiliate! On the day of the release,heavyweights gathered to explore the new era ofsafe electricity use, and the ?rst digital collection(Aerospace Technology Switch Digital Collection:

Master Ultra-thin PROO) in the industry waslaunched simultaneously released.

December

On November 12, relying on innovative designs of multiple products, Gongniu stood outfrom numerous design categories, and won several international awards after layers ofscreening, including two Good Design Awards (G-Mark) and ?ve IF Design Awards.November

On March 1, Gongniu was awarded the title of "2021Leader of Per-Mu Benefit in Zhejiang Province".On March 10, Gongniu was awarded the Certificateof "Red Dot Winner 2022 - General Scenario ControlSwitch".In April, Gongniu was elected as a council unit inthe third session of China Association for PublicCompanies.

March

April

On July 6, the groundbreaking ceremony of NingboGongniu Binhai Community Project was successfullyheld. The implementation of this project, to someextent, intensified housing support to employeesand provided multiple channels to meet thehousing needs of talents, which were of milestonesignificance for deepening the talent strategic layoutof the Company's living and housing project.

On May 12, Ningbo Gongniu Home Appliances Co.,Ltd. was successfully shortlisted in the NationalSmall and Medium Sized Science and TechnologyEnterprises.

May

July

0910

Environment Society andGovernance Report

ESG Management

Focusing on issues relative to environmental, social, and corporate governance, Gongniu has established operationalmanagement mechanisms covering all departments of the Company, and regularly discloses information andimproves and implements various ESG management regulations and systems.Based on the Sustainable Development Goals (SDGs) of the United Nations and China's14th Five-Year Plan and 2035Vision Outline, the Company has developed a set of substantive issue identification processes by combining thecharacteristics of the industry and operations of the Company and benchmarking the experience and practices ofdomestic and foreign industries.

With reference to the Global Reporting Initiative'sSustainability Reporting Standards(GRI Standards), the Companyfurther screens ESG-related issues based on focuses of stakeholders. According to the above-mentioned issueidentification procedures, the Company and professional personnel jointly determine ESG issues with substantivemateriality as the key content of company management and this report.

The Company identifies shareholders, customers, employees, government and regulatory agencies, partners,communities, and the public as its main stakeholders, and responds and maintains communication throughchannels and methods such as websites, conferences, reports, events, and media.

Gongniu's Main Stakeholders and Communication Methods

Substantive Issue Identi?cation ProcessPeer benchmarkingfor policies

Industry expertconsulting

Issuesummarizationand generalizationInterview withinternal and externalstakeholders

Main stakeholdersIssues concerned

Communication and

responseShareholders and seniormanagement

Economic performance, corporategovernance, compliance and riskcontrol, and business ethics

General Meeting of Shareholders,Board of Directors, financial report,business report, roadshow andcommunication with the Company,

etc.Customer

Product quality, customer service,and responsible marketing

On-site communication, marketresearch, customer satisfaction

surveys, etc.Employee

Employee rights, interests andbenefits, employee development andtraining, and occupational health and

safety

Employee activities, employeetraining, corporate intranet, employee

handbook, etc.Government and regulatory

agencies

Corporate governance, businessethics, environmental management,and waste residue discharge

Regular communication andreporting, institutional research,policy implementation, information

disclosure, etc.

Gongniu's Substantial Issue Matrix in 2022

Materiality to the Company

Materiality to stakeholders

L

H

H

Responding to climate changeAnti-corruption and business ethics

Community welfare

Corporate governanceProduct quality and safetyEnergy and water managementRights and interests of shareholders and investors

Information security and privacy protection

Occupational health and safety

Customer service levels

Compliance audit and risk management

Technological r&d innovationEnvironmental managementSupply chain management

Investor relationsEmployee development and training

Responsible marketingHazardous emissions and waste residue

Employee rights, interests and benefits

Partner

Supply chain management,technological R&D innovation, and

product quality

Industry conferences, strategiccooperation, exchange visits, etc.Community, the public and media,

etc.

Ecological environment protection,

and community welfare

Community volunteer activities,social welfare projects, and social

support projects

1112

Responsibility Topic:

Promoting Research andDevelopment to DriveInnovation and Foster NewGrowth Momentum

Research and Development Innovation MechanismScienti?c Research and Innovation PracticeIntellectual Property Management

1314

Responsibility Topic:

Promoting Research and Development to DriveInnovation and Foster New Growth Momentum

Research and Development InnovationMechanism

The Company deems technological R&D innovation as its core competitiveness and key success factor. Based onthree R&D strategies of "Leading in technology", "Leading in process", and "Leading in tool", the Company hasformulated and improved relevant systems such as theR&D System Construction and Management System,R&DProject Incentive System, R&D Tool Introduction and Application Management System, and Management System forScientific and Technological Intelligence and Knowledge Management System, to jointly build a technological R&Dinnovation system, stimulate and motivate employees to carry out various R&D innovation projects, improve theCompany's competitiveness, and promote industry development.

To encourage R&D innovation, the Company has formulated a series of incentive systems to link employee innovationachievements with performance rewards, so as to enhance the enthusiasm and creativity of the R&D team, promotethe improvement of innovation capabilities and technological level, and enhance the Company's competitiveness inthe market to consolidate its core position.

Gongniu's R&D Innovation System

In 2022, aftercomprehensively sortingout key technologiesof each product lineand evaluating theirtechnical level in theindustry, the Companyformulated a technologydevelopment roadmapfor key technologiesthat have not reached aleading position.

R&D team building

The Company constantly expands its R&D team with concentration on cultivating a high-quality and high-level R&D team capable of independent thinking ability and expertized in both marketing and R&D. By theend of 2022, the Company had1,400 R&D employees in total, accounting for 11.34% of the total number ofemployees. Relying on national postdoctoral workstation platform, the Company has introduced high-levelR&D talents and there was a total of 4 postdoctoral fellows in the station during the reporting period.

R&D team building

The Company values investment in R&D technology, enhancement of innovation capabilities to improve theCompany's core competitiveness and promote the Company's development. By the end of 2022, the Company'sR&D expenses totaled RMB58,829.61 million, a year-on-year increase of 24.90% and accounting for 4.18 %of sales revenue, which provided a strong support for product strategy and R&D plans.

Continuous R&D investment

Attaching great importance to industry-university-research cooperation, the Company actively establishescooperative relationships in various forms with Harbin Institute of Technology, Central South University,Xi'an University of Posts and Telecommunications, Shaanxi University of Science and Technology, ChongqingUniversity of Posts and Telecommunications, Wuhan University and other universities, and strengthensexchanges and cooperation with domestic and foreign peer enterprises, so as to promote the development andinnovation of industrial technology.

Industry-university-research cooperation

Industry-university-research cooperationContinuous R&Dinvestment

Innovationmechanism building

By organically integratingthe integrated productdevelopment (IPD) withthe lean merchandiseplanning, the Companyhas established acomplete R&D processwith Gongniu'scharacteristics,including front-end leanmerchandise planningand project initiation,back-end productdevelopment, andtechnical pre-researchprocesses.

With focuses onbuilding a digital R&Dsystem, the Companylaunches a smart R&Dproject concentratedon achieving processgoals, solving processpain points, managingresources throughout theentire process, buildingfunctional talent teams,and implementingspecial performancemanagement, so as tostimulate the vitality ofthe R&D organization.Company's Three Major R&D Strategies

Gongniu's R&D Innovation System

Main Content of the R&D Innovation System of Gongniu

Innovation mechanism building

The Company has formulated the Science and Technology Achievement Evaluation and Reward System toencourage excellent projects in product innovation, technological innovation, manufacturing technology andindustrial design. During the reporting period, the Company issued a total of RMB 1.04 million of incentivesthrough this system.The Company has formulated the Patent Management Institution to provide incentives for patent application,authorization and industrialization, and stimulate employees' enthusiasm in researching and applying forpatents. During the reporting period, the Company issued a total of RMB 1.7408 million of incentives throughthis system.The Company has formulated the R&D Project Incentive System to provide incentives for product researchand technology research projects. During the reporting period, the Company issued a total of RMB 6.7134million of incentives through this system.

Leading intechnology

Leading inprocess

Leading intool

1516

Responsibility Topic:

Promoting Research and Development to DriveInnovation and Foster New Growth Momentum

Scientific Research and Innovation Practice

With supports from the technological R&D innovation system and innovation platform, Gongniu cultivates newindustries by constantly deepening the study and analysis of market demand and pain points. In 2022, theCompany's new energy products such as charging guns and charging piles achieved rapid growth in sales andreceived favorable comments from the market. Considering customer needs and service and adhering to safetyphilosophy, the Company's product design strictly implemented multiple protections to provide safe and efficientpower supports for green travel due to true realization of "protecting automobiles and persons".

The Company continued to make great efforts to strategic directions including new product R&D, product featureimprovement, and product differentiation, and has designed and successfully registered multiple works.

Registration of Gongniu's Works in 2022Works nameRegistration number

Date ofcompletion

First publication

dateDesign for the series works

of Gongniu intelligentcurtain category names

Guo Zuo Deng Zi-2022-F-10105601

March 25, 2022May 25, 2022Design for the series works

of Gongniu intelligentclothes dryer category

names

Guo Zuo Deng Zi -2022-F-

10105602

March 26, 2022May 25, 2022

In response to the needs of ToB market customers

New Industry Market Demand Strategy

Upgrade to version 2.0 on bothportable chargers and home ACcharging piles;Launch a variety of new productssuch as high-power charging guns(movable charging piles), and A00-level vehicle-specific MINI AC piles,according to characteristics ofsegmented customers and usagescenarios;Fully integrate new bluetoothproducts into the "Gongniu SmartHome" App to improve users'experience from both software andhardware aspects

Support flexibly customized DCcharging piles available for the fullpower range of 20kW to 240kW;Meet the battery charging of DC150V-1000V in terms of the output voltagebandwidth

CaseJ051 hidden clothes dryerAs conventional clothes dryer products in the industry have encountering serioushomogenization, fierce price competition and continuous profit decline, theCompany's project team intends to create the first hidden clothes dryer aftercombining market analysis and user needs analysis. With innovative features suchas ultra-thin body, overall shrinkage pole, large lamp board lighting, metal ringbuckle for hanging rod holes, and intelligent control, this hidden clothes dryerbecomes a popular product in the industry. J051 Hidden Clothes Dryer

Case7kW/11kW Fashion Smart Interconnection Charging PileWith the continuous growth in new energy vehicle sales, the demand forcharging piles, the supporting equipment, is rapidly increasing. To achievethe interconnection of automobiles and charging piles, solve the problem ofsingle interaction of charging piles, and improve the user experience in mobilesmart interconnection, Gongniu released the smart electric vehicle chargingpile together with operation platform system and independently developedIoT core technology by taking smart charging solutions and services as entrypoints. Through a dual-mode networking method including 4G and Bluetooth,Gongniu charging pile has realized close-range self-checking, so as to guaranteeusers easily connect to the Gongniu Smart Home APP. With the support of 4Gthat breaks the limitations of time and space, users are able to remotely view thecharging status in real-time and manage the charging pile reservations.By the end of the reporting period, "Fashion Smart Interconnection ChargingPile" obtained 2 invention patents, 5 utility model patents, 3 design patents, and 2software copyrights.

Fengshang SmartInterconnection Charging Pile

In response to the needs of ToC market users

The Company has been committed to building an innovative platform for many years. After establishing theTechnology Innovation Platform in the Wall Switch Division, the Home Appliance Division also established theTechnology Innovation Platform during the reporting period, aiming to activate the innovation vitality of the businessdivisions and shape an environment of "daring to think, to break through, and to create". At the same time, theHome Appliance Division has integrated technical resources from various departments of the business divisions andemployed outstanding technical experts from the entire Group to guide the application of innovative technologies,so as to continuously improve its core competitiveness for future development.

1718

Responsibility Topic:

Promoting Research and Development to DriveInnovation and Foster New Growth Momentum

German Industrial Design Award by the GermanDesign Council, mainly involving eye-protecting tablelamp, power purification socket, orbital socket, fashioncharging gun, and general scenario control switch.

2022 Red Dot Award, involving general scenariocontrol switch for products

IF Industrial Design Award by IF Industrie Forum Design,involving flexible power system, Gongniu infrared voicesocket, fan light, and Gongniu new energy electricconnection system.

Patent Gold Award and Design Patent Gold Awardof 2022 Ningbo Patent Innovation Competitionissued by the Ningbo Administration for MarketRegulation, involving products such as adapter,orbital socket, power rails, and table lamp.In terms of promoting industry development, Gongniu, as a leader in the domestic civil electrical industry, is alwayscommitted to promoting the common development of the entire industry. Therefore, the Company actively participatesin various industry associations to initiatively discuss and study industry development and technological innovationwith peer enterprises. Through coordinated coexistence and mutual benefit approach, Gongniu and peer enterprisesjointly promote technological innovation and shared development in the electrical industry to improve the industry'scompetitiveness and level, thereby achieving a virtuous cycle and sustainable development of the industry.In addition, in order to thoroughly implement the national standardization development plan, the Company activelyorganizes and participates in the formulation and revision of various national, industry, and association standards at alllevels. During the reporting period, the Company engaged in 22 standards related to the industry in total, including 14association standards, 1 industry standard, and 7 national standards.

List of Partial Industrial Associations Participated by Gongniu

Name of associationPosition heldParticipating legal personNational Technical Committee on ElectricalAccessories of the Standardization Administration

of China (SAC/TC67)

Vice ChairmanGongniu Group Co., Ltd.National Technical Committee on Lighting of theStandardization Administration of China (SAC/

TC224)

Committee memberGongniu Group Co., Ltd.Subcommittee on Lamps and Related Auxiliaries ofNational Technical Committee on Lighting of theStandardization Administration of China

(SAC/TC224/SC1)

Committee memberGongniu Group Co., Ltd.Subcommittee on Luminaire of National TechnicalCommittee on Lighting of the StandardizationAdministration of China (SAC/TC224/SC2)

Committee member

Ningbo Gongniu OptoelectronicTechnology Co., Ltd.Sub-technical Committee on Household CircuitBreaker and Similar Appliances of NationalTechnical Committee on Low-voltage ElectricalApparatus of the Standardization Administration of

China (SAC/TC189/SCI)

Communication

committee member

Ningbo Gongniu Low Voltage Electric

Co., Ltd.National Electronic Equipment SafetyStandardization Committee (SAC/TC588)

Committee member

Ningbo Gongniu Digital Technology

Co., Ltd.Lithium-ion Battery Safety Standardization Special

Working Group

Member

Ningbo Gongniu Digital Technology

Co., Ltd.National Technical Committee on GreenManufacturing Technology of the Standardization

Administration of China

Committee memberGongniu Group Co., Ltd.National Technical Committee on Electrician Alloyof the Standardization Administration of China

(SAC/TC228)

Committee memberGongniu Group Co., Ltd.China Association of Automobile Manufacturers MemberGongniu Group Co., Ltd.China Association for Standardization (Electrical

Appliances and Electronics Branch)

Senior memberGongniu Group Co., Ltd.Standardization Committee of China Electrical

Equipment Industry Association

CouncilGongniu Group Co., Ltd.

During the reporting period, certain products of the Company and itssubsidiaries and branches won multiple innovation and design awards athome and abroad, including:

Key results

1920

Responsibility Topic:

Promoting Research and Development to DriveInnovation and Foster New Growth Momentum

Intellectual Property Management

Attaching great importance to the protection of intellectual property rights, the Company strives to prevent its ownintellectual property rights from infringement by others on the basis of preventing infringement of other's intellectualproperty rights. The Company has formulated documents such as theTrademark Management System, CopyrightManagement System, Patent Management Institution and Trade Secret Management System, and establishedan application process for protecting trademarks and copyrights to conduct risk assessments and registrations fortrademark and copyright applications according to business needs. Meanwhile, the Company continues to combatthird-party intellectual property infringement through administrative complaints, civil litigation, and other legal means.

Case

Case

Carrying out intellectual property protection training activities

Carrying out intellectual property protection training activities

In April 2022, in order to strengthen the management of intellectualproperty protection and enhance the awareness of intellectual propertyprotection among company employees, the Company launched apromotional activity with the theme of "strengthening trademarkawareness and enhancing brand influence", and held training relative tobasic knowledge of trademarks covering 200 trainees. At the same time, indaily management, the Company organizes trade secret training for eachconfidentiality commissioner in order to actively prevent its own intellectualproperty from infringement by others.

Photo of the Company'sTrade Secret Training

Promotional Image for the Company's Intellectual Property Training Activities

During the reporting period, the Company received multiple honors and awards related to intellectualproperty protection.With respect to the overall intellectual property protection, Gongniu was rated as a national intellectual

property demonstration enterprise by China National Intellectual Property Administration.The Company's charging dock product was awarded the Excellent Design Patent Award of the 23rd

China Patent Award by the China Patent Award Reviewing CommitteeThe Company's products such as adapter and orbital socket, and power rail were awarded by Ningbo

Administration for Market Regulation the Gold Award of 2022 Ningbo Patent Innovation Competition

and the Design Patent Gold Award of 2022 Ningbo Patent Innovation Competition, respectively.The Company was rated as a "Demonstration Enterprise for Trade Secret Protection" by Zhejiang

Provincial Administration for Market Regulation.

Key results

Key performance

During the reporting period, the Company had a total of 565 new authorizedpatents, including 59 inventions,346 utility models, and 160 designs; and a totalof630 new patent applications, including 143 inventions, 314 utility models,and173 designs.By the end of the reporting period, the Company held a total of2,379 validauthorized patents, including230 inventions, 1,322 utility models, and designs.

List of Partial Standards of which Gongniu Participated in the DevelopmentStandard codeStandard name

Standard

levelGB/T 17465.6-2022

Appliance Couplers for Household and Similar General Purposes -

Part 3: Standard Sheets and Gauges

NationalGB/T 17465.1-2022

Appliance Couplers for Household and Similar General Purposes -

Part 1: General Requirements

National

GB/T 17466.21-2022

Boxes and Enclosures for Electrical Accessories for Householdand Similar Fixed Electrical Installations - Part 21: ParticularRequirements for Boxes and Enclosures with Provision for

Suspension Mean

National

GB/T 17466.22-2022

Boxes and Enclosures for Electrical Accessories for Householdand Similar Fixed Electrical Installations - Part 22: Particular

Requirements for Connecting Boxes and Enclosures

National

2122

Building a SolidFoundation forSustainable Developmentthrough Governance

Corporate GovernanceIntegrity Operation

The sound governance system and good governance capacity are the foundationfor the steady development of a company. By continuously improving corporategovernance structure, managing investor relations well and firmly establishing theconcept of compliance management, Gongniu continues to enhance risk preventionand control capabilities with adherence to high standards of business ethics, andestablishes a solid foundation for the sustainable development of the Company witha gradually complete modern enterprise system.

Party Building for a Strong FoundationCompliance and Risk Control

2324

Building a Solid Foundation for Sustainable

Development through Governance

Corporate Governance

In strict accordance with requirements of laws and regulations such as theCompany Law of the People's Republicof China, Securities Law the People's Republic of China, Governance Guidelines for Listed CompaniesandRulesGoverning the Listing of Stocks on Shanghai Stock Exchange, the Company has revised its corporate governancesystems such as theArticles of Association of Gongniu, and Procedure Rules for the General Meeting of Shareholders,and continuously updates and improves these systems in combination with actual operations to safeguard thestandardized operation of the Company's "three boards and one level". The governance structure composed of theGeneral Meeting of Shareholders, Board of Directors, Board of Supervisors, and the senior management has formeda mechanism of mutual coordination and balances among the power organization, decision-making organization,supervisory agency, and management with clear duties, close cooperation, and efficient operation. During thereporting period, the Company and its directors, supervisors, and senior management personnel encountered nosecurities regulatory penalties.

Improvement of the Governance System

The Company's General Meeting of Shareholders has clear duties and clarified procedure rulesthat are implemented effectively. The convocation, holding, and proposal procedures of theCompany's General Meeting of Shareholders are subject to relevant laws and regulations andinternal regulations of the Company.GeneralMeeting ofShareholders

The Company's Board of Directors has clear duties, and all directors are able to diligentlyand responsibly fulfill their duties. The convocation and convening procedures of the Boardof Directors are subject to relevant laws, regulations, and institutional provisions. Exceptfor the Strategy Committee, the chairmen of other specialized committees are all served byindependent directors. Independent directors have played important roles in the Board ofDirectors in making major decisions and monitoring functions, contributing the Company'sdecisions to be more efficient, standardized, and scientific.During the reporting period, the Company's Board of Directors consistently adhered to highlycompliant corporate governance and internal control, responding to the State Council's callofOpinions on Further Improving the Quality of Listed Companieswith practical actions. TheCompany has continuously strengthened its system construction and internal control processoptimization in areas such as the operation of the three boards, information disclosure, internalreporting of significant information, investor relations, and changes in the equity holdings ofdirectors, supervisors and senior management.Meanwhile, the Company's Board of Directors actively promotes innovative changes in theCompany's governance structure. In the first half of this year, the Board of Directors upgradedthe Audit Committee to the Audit and Risk Committee that was authorized to guide, supervise,and evaluate the Company's risk management, through which the Company explored practicalcases relative to the participation in company risk management by specialized committeesof the Board of Directors, in order to further adapt to the Company's rapid development andstrengthen the Company's risk prevention and control capabilities.

Directorsand Board of

Directors

The Company's Board of Supervisors has clear duties, and all supervisors are able toconscientiously and responsibly fulfill their duties. The convocation and convening proceduresof the Board of Supervisors are subject to relevant laws, regulations, and institutionalprovisions.During their tenure as supervisors, all supervisors fulfill their duties diligently and responsibly,able to actively participate in the Company's conferences of Board of Supervisors with theirduties fulfilled conscientiously. With a sense of responsibility to the shareholders, they havesupervised the legality and compliance of the Company's finance personnel, Board of Directors,and senior management, in order to safeguard the legitimate rights and interests of theCompany and all shareholders.

Supervisorand Board ofSupervisors

By the end of the reporting period, the Company owned a total of 9 directors, including 2 female directors and

independent directors.By the end of the reporting period, the Company owned a total of 3 supervisors, including 1 employeesupervisor.

During the reporting period, the Company held 2 General Meetings of Shareholders, 7 conferences of theBoard of Directors,7 conferences of the Board of Supervisors, 5 conferences of Audit and Risk Committeeand 2 conferences of Remuneration and Appraisal Committee.

During the reporting period, the Company revised and completed4 governance systems, namely theInformation Disclosure Affairs Management System, Internal Reporting System for Material Information,

Investor Relations Management System, Management System for Shareholding Changes of

Directors, andSupervisors and Senior Management, and submitted

the draft of the Fundraising Management Measures,Articles of Association and Procedure

Rules for the General Meeting of Shareholdersto the General Meetingof Shareholders for deliberation.

Key performance

To promote and improve the governance structure and enhance investor relations management, the Companyhas formulated theInvestor Relations Management System of Gongniuand established an investor relationsmanagement organization responsible for the Company's investor relations affairs. The Company alsocommunicated with investors through multiple channels, platforms, and methods to introduce and reflect the actualsituation of the Company objectively, truthfully, accurately and completely, in order to enhance investors' knowledgeand recognition of the Company, improve the Company's governance level, and protect investors' legitimate rightsand interests in maximum.

Maintenance of Investor Relations

2526

Building a Solid Foundation for Sustainable

Development through Governance

By continuously innovating communication methods, such as approaches including official website, ShanghaiStock Exchange website, Shanghai Stock Exchange E-Interactive Platform, new media platform, telephone, fax andemail, and forms such as General Meeting of Shareholders, investor briefings, roadshows, analyst conferences, andreception visits, the Company has established and improved the communication mechanism with investors on majorevents, thereby forming positive interaction and communication with the capital market, and delivering companyvalues in a fair, open, and objective manner. In 2022, the Company held three performance briefings for all investorsthrough the Shanghai Stock Exchange Roadshow Center, which provided accurate and detailed information in theform of videos and networks, so that investors can be aware of the Company's production and operation status in athree-dimensional, comprehensive, and timely manner.

Investor communication channels

Strengthen thepositive interaction andcommunication betweenthe Company andinvestors, and enhanceinvestors' understandingand familiarity with theCompany;

Establish a stable high-quality investor foundationto obtain long-termsupport from the capitalmarket;

Form a corporate culturethat serves and respectsinvestors;

Maximize the overallinterests of the Companyand increase shareholders'wealth;

Increase thetransparency of disclosedcorporate informationand improve corporategovernance.

The board secretaryserves as the personin charge of investorrelations management,responsible for theoverall management ofthe Company's investorrelations;

The SecuritiesDepartment is a dedicateddepartment responsiblefor investor relations,assisting the boardsecretary in handlingthe Company's investorrelations affairs.

Investors；

institutions andindividuals engaged insecurities investment;

institutions andindividuals engagedin securities analysis,consulting, and othersecurities services;

media such as financialmedia and industry media;

regulatory authoritiesand relevant governmentagencies;

other institutions orindividuals recognized byShanghai Stock Exchange.

Official website

Shanghai Stock Exchangewebsite

Shanghai Stock ExchangeE-Interactive Platform

New media platform

Email

Investor briefing

Roadshow

Analyst conferences, etc

Purpose

Organization

Management object

Communicationmethod

Investor RelationsManagement System

Main Content of Investor Relations Management System

Investor relations construction is an important aspect of corporate governance transparency. Since listing, theCompany has continuously improved investors' understanding and recognition of the Company through stableoperating performance and shareholder returns, diversified investor communication mechanisms, and two-wayinteractive investor relations construction, and further safeguards the interests of investors from perspectives ofshareholder returns, emphasis on small-and medium-sized investors, attention to overseas investors, and investorinformation feedback.

Optimization of investor relations management

Shareholder returnsOverseas investorsDespite facing with challenges from complexexternal environment and many unfavorablefactors, the Company, as concentrating on theimprovement of products and services, has achievedsteady growth in business performance, whichdemonstrates its strong resilience. In terms ofshareholder returns, the Company has maintaineda consistently high dividend payout ratio sincelisting, and actively returned to investors by sharingits operation results and development dividends.The Company's profit distribution plan is strictlyimplemented in accordance with the provisions ofthe Articles of Association and resolutions of theGeneral Meetings of Shareholders, thus ensuringthe transparency and operability of cash dividends.Therefore, the rights and interests of small-and-medium-sized shareholders and investors areeffectively safeguarded.

With reference to the Company's investorstructure, the Company released the Englishversion of 2021 Annual Report and 2021Environmental, Social and GovernanceReport for the first time in April 2022. Whenreceiving researches from institutionalinvestors, the Company also tries toestablish closer connections with overseasinvestment institutions and continuouslyenhance the Company's capital image in theinternational market by conveying its valuesto more overseas investors, so as to promotethe Company's investor structure to bediversified.

Feedback on investors' informationIn order to listen to investors' suggestions in a better way, the Securities Department of the Companycollects, records, and organizes main issues concerned by investors and effective information on theCompany's management and governance suggestions in daily communication and liaison activities,and then organizes relevant departments of the Company to timely and accurately respond to investors'questions and consultations as well as handle complaints and suggestions properly. Meanwhile, theCompany organizes special meetings to regularly provide the feedback on relevant information to theCompany's management, and to provide suggestions for business development.

2728

Building a Solid Foundation for Sustainable

Development through Governance

Awards related to investor relationsThe 13th Award for Best Investor Relations for ListedCompanies in China bySecurities TimesThe 24th Golden Bull Award for Most Valuable Investmentfor Listed Companies in China byChina Securities JournalThe 24th Golden Bull Award for Board Secretary for ListedCompanies byChina Securities Journal

During the reporting period, the Company conducted more than 170 investor communication activities toconnect with2,500 investors and communicated with 1,000 investors through investor hotline and email.

During the reporting period, the Company won multiple awards related to investorrelations, demonstrating

industry recognition of its management on investor relations.

Key performance

With adherence to highly compliant information disclosure and in strict compliance with requirements such as theCompany Law of the People's Republic of China, Securities Law the People's Republic of China and Rules Governingthe Listing of Stocks on Shanghai Stock Exchange, the Company has formulated systems such as the InformationDisclosure Affairs Management System and the Internal Reporting System for Material Information. Complyingwith various information disclosure principles, such as truthfulness, accuracy, completeness, timeliness, fairness,simplicity, clarity, and accessibility can help investors have a more comprehensive and multi-level understanding ofthe Company's operating conditions and future development direction. The Company is committed to continuouslyimproving the quality of information disclosure to ensure that all investors can fairly have access to companyinformation, thereby effectively protecting investors' right to know.

Strengthening Information Disclosure

During the reporting period, the Company issued a total of 196 announcements and online documents,including134 interim announcements.During the reporting period, the Company was ranked as A-level (Excellent) for information disclosure by ShanghaiStock Exchange.

Key performance

Rating for Information Disclosure by Shanghai Stock Exchange

Integrity Operation

The Company has formulated theRegulations on Integrity Management of Gongniu and Regulations on Acceptanceand Processing of Complaints for Violation of Professional Ethics from Reporting Channelsto enforce disciplinestrictly and regulate employee practices. The Company executes the Commitment of Post Integrity with itsemployees to procure all employees to serve the Company with integrity. Meanwhile, departments such as theSupervision Department, Human Resources Department, and Legal Department have assisted in integrity building,such as planning and support. The Company also executes theAgreement on Joint Efforts for IntegrityBuilding withthird parties, and formulates theAccountability Systemto hold accountable to those who violate company systemsor regulations, industry norms, professional requirements, etc. and cause adverse consequences. We will promotethe Company's integrity building and eliminate commercial corruption together to create a fair, transparent, andhonest working and business environment.2930

Building a Solid Foundation for Sustainable

Development through GovernanceMain Departments and Their Duties under the

Regulations on Integrity Management of Gongniu

DepartmentDuty

Supervision Department

Formulation of relevant standards;Planning and guidance for integrity building, acceptance and investigation ofviolations of the code of conduct for integrity, and organization and promotion ofintegrity education and publicity.

Human Resources

Department

Responsible for requiring employees to execute theCommitment of Post Integritywhen they join in the Company;Responsible for collecting reported information on conflicts of interest for newemployees;Responsible for organizing new employees' integrity training and examination;Responsible for organizing annual integrity training and exams for employees.Legal Department

Responsible for providing legal support for investigations conducted by theSupervision Department;Responsible for following up on cases transferred by the Supervision Departmentfor judicial prosecution.Finance Department

Responsible for estimating economic losses and tracking and confirmingcompensation amounts;Responsible for deducting default damages and compensation fees from externalorganizations that violate the code of conduct for integrity.Internal ControlDepartment

Responsible for promoting the rectification and closed-loop of problems found inthe cases of the Supervision Department.Marketing and procurement

system

Responsible for introducing new dealers and suppliers, and conducting auditsunder the integrity system;Responsible for establishing a classification anddisposal mechanism for dealers and suppliers who violate the code of conduct forintegrity or cause losses to the Company.Labor Union

Responsible for handling appeals from personnel who violate the code ofconduct for integrity, and supervising the fair and impartial handling of employeedisciplinary incidents.Each business division/

functional center

Responsible for the integrity building of this department, setting up full-timeor part-time anti-corruption commissioners to be responsible for the integritymanagement;Responsible for training and promoting the department's integrity system, andidentifying and preventing integrity risks, etc.

The Company has established standards and procedures for handling reports and complaints related to integrity. TheAudit and Supervision Center and relevant functional departments cooperate with each other to review, investigate,follow up, respond to, and manage the received complaints.

Procedures for Regulations on Acceptance and Processing of Complaints for Violation of

Professional Ethics from Reporting Channels

ReceivingcomplaintsSupervisionDepartment

ReviewingcomplaintsSupervisionDepartment

Accept

Not accept

InvestigationSupervisionDepartment

HR, EHS and otherbusiness departments

Respondinginvestigationresults to theSupervisionDepartment

SupervisionDepartment

Sending thefeedback tothe real-timecomplainant

FilingSupervisionDepartment

In addition, the Company actively carries out integrity training activities, requiring personnel from various functionalcenters and business departments to promote and learn about integrity related systems, continuously advocate thespirit of integrity, and implement integrity education, so that the culture of integrity can be deeply rooted in people'sminds.

3132

Building a Solid Foundation for Sustainable

Development through Governance

CaseTo build a culture of honesty and integrity and promote the construction of an integrity businessenvironment, the Company has launched an integrity campaign in which internal employees and externalunits jointly participate with focuses on joint rectification, case warnings, clean government surveys, andself-inspection of work style.In December 2022, different sectors of the Quality Department organized training activities on cleangovernance and integrity separately to educate and warn employees of high-risk behaviors and punishmentmeasures for dereliction of duty by introducing material theft cases in Mold Making Division and Wall SwitchDivision through videos, which laid a foundation for establishing the integrity culture.

The Wall Switch Division Carries out Integrity Education Activities

Compliance and Risk Control

To strengthen and standardize internal control, the Company has formulated systems and regulations such as theInternal Control Management Systemand theRules for Internal Control Management Assessmentto clarify theinternal control management system and organizational structure. Under the direction of establishing internalcontrol management responsibilities, standardizing work processes, and reducing the negative impact of inadequateinternal control management, the Company gradually improves its internal control manual and system andenhances its operational management level and risk prevention capabilities through internal control evaluations,internal control defect ratification and internal control performance assessment, thereby promoting the Company'sstandardized and sustainable development.

Implementation and Consolidation of the Internal ControlSystem

XYZ Sales Channel

The Group's Internal Control Structure

Sales Channel

Sales Channel 1Sales Channel 2

Business Division

Business Division 1Business Division 2

XYZ Business Division

Functional Center

Functional Center 1Functional Center 2

XYZ Functional Center

The Company's Internal Control FrameworkDuring the reporting period, the Company broadened its internal control system's scope and successfullyimplemented internal control systems across six business units. The Company aimed to establish at least twointernal control systems per year, with a target of achieving full coverage by 2025. Simultaneously, regarding internalcontrol performance evaluations, the Company intended to incorporate business units that established internalcontrol systems in 2021 into the scope of the 2022 performance assessments, and continue this process until fullcoverage is attained.

During the reporting period, more than 300 training sessions were conducted for new employees, wheremore than9,000 employees were trained, and more than 470 employees were trained for promotion. The

Company published a total of25 integrity propaganda articles, which were viewed by 42,000 readers.The Company filed a total of41 cases through supervision, and violators were held accountable according tocompany regulations. Meanwhile, the Company terminated the cooperation with2 suppliers due to corruptionissues.

Key performance

3334

Building a Solid Foundation for Sustainable

Development through Governance

ComprehensivenessImportanceBalancesStandardizationCollaborative andconsistent

The foundation of internal control: The internal environment is thefoundation for the Company to implement internal control.Three links of internal control: Risk assessment, control activities, andinformation communication are three links of the core of internal controlsystem.Guarantee for internal control: Internal supervision is an importantcomponent of the internal control system and is the guarantee forcontinuous optimization and improvement of the internal controlsystem.Principles and Elements of the Company's Internal Control

Principles

Basic elements

Monthly self-evaluationQuarterly inspectionAnnual evaluation

Internal control evaluation method

Internal Control Evaluation Method

In 2022, the Company's Supervision Department carried out thorough investigations into pertinent violations andproactively addressed potential risks, saving RMB

6.562 million in the process.

Key performance

Work?ow Diagram of Internal Control Evaluation

Start

Understandthroughinterviews

Ifcontrolchanges

Understand specificcontrol measures afterthe change throughfurther interviews

Walk-throughtestingUpdateRCM

Design defects/implementationdefects

Implementationdefects

Controltesting

Identifyabnormalities

Identifyabnormalities

Abnormalitydeterminationand fill inabnormalitiesdescriptionRisk levelassessmentRiskassessment

score

Deducted

scores

Actualscores

Percentagescore

Accountabilityand processoptimization

by Internal

ControlDepartment

End

YesNo

Very high Large defects in design effectiveness with poor implementation;

High Partial deficiencies in design effectiveness with poor implementation;

Medium Actual operation has a fixed process and the actual process design is not defective except absence of standard documents;

Low The design is effective, but the implementation is materially defective;

Very low The design is effective, but the implementation is partially defective.

Yes

No

Yes

No

Comprehensiveness

ImportanceBalancesStandardizationCollaborative and

consistent

The foundation of internal control: The internal environment is thefoundation for the Company to implement internal control.Three links of internal control: Risk assessment, control activities, andinformation communication are three links of the core of internal controlsystem.Guarantee for internal control: Internal supervision is an importantcomponent of the internal control system and is the guarantee forcontinuous optimization and improvement of the internal controlsystem.Principles and Elements of the Company's Internal Control

Basic elements

Monthly self-evaluationQuarterly inspectionAnnual evaluation

Internal control evaluation method

Internal Control Evaluation Method

In 2022, the Company's Supervision Department carried out thorough investigations into pertinent violations andproactively addressed potential risks, saving RMB

6.562 million in the process.

Key performance

Work?ow Diagram of Internal Control Evaluation

Start

UnderstandthroughinterviewsIfcontrolchangesUnderstand specificcontrol measures afterthe change throughfurther interviews

Walk-throughtestingUpdateRCM

Design defects/implementationdefects

Implementationdefects

Controltesting

Identifyabnormalities

Identifyabnormalities

Abnormalitydeterminationand fill inabnormalitiesdescriptionRisk levelassessmentRiskassessment

score

Deducted

scores

Actualscores

Percentage

score

Accountabilityand processoptimizationby Internal

ControlDepartment

End

YesNo

Very high Large defects in design effectiveness with poor implementation;

High Partial deficiencies in design effectiveness with poor implementation;

Medium Actual operation has a fixed process and the actual process design is not defective except absence of standard documents;

Low The design is effective, but the implementation is materially defective;

Very low The design is effective, but the implementation is partially defective.

Yes

No

Yes

No

Principles

3536

Building a Solid Foundation for Sustainable

Development through Governance

Gongniu continuously strengthens enterprise risk management and control. The Company has formulated systemssuch as theRisk Management System, and establishes the Audit and Risk Management Joint Office responsible forcoordinating the Company's risk management work, implementing the control objectives of "enhancing internalcontrol, promoting compliance, and preventing risks". With adherence to the principles of risk management,the Company clarifies standards and guides relevant risk monitoring work through management processes andtools such as risk identification, risk assessment and analysis, and risk disposal. Meanwhile, the Audit and RiskManagement Joint Office regularly coordinates different departments (units) for rolling identification of major riskissues, formulates risk control measures, identifies the list of major risks of the Group for special follow-up, andstrengthens internal control and risk prevention, so as to promote the healthy and sustainable development of theCompany and provide guarantee for achieving the Company's strategic objectives.

Strengthening Risk Management and Control

Risk Classi?cation

Under the leadership of the RiskJoint Office based on the riskidentification of each department,the Company organizes the relatedpersonnel to identify, assess,dispose of and supervise theGroup's major risks and determinesthe list of top ten risk of the Group.The identification is made on arolling basis every six months. Formajor special risks, the Companyorganizes special risk assessmentmeetings to determine risk controlmeasures.

Coordinated by the centralizedbusiness department, the Companyconducts centralized managementon risks reported by variousdepartments with review opinionsresponded, and carries out specialcommunication meetings basedon identified risks to supervise therisk responsibility department indetermining risk control measures.

The Company requires eachbusiness unit to formulate controlmeasures for all risks except for thetop ten risks of the Group and thecentralized business risks underthe leadership of its own internalcontrol team, and takes routinecheck for the implementation andeffectiveness of control measuresthrough internal control work.

Group-level riskCentralized riskOther risks

Risk classification

In strict accordance with laws and regulations such as the Anti-Monopoly Law of the People's Republic of China, Anti-Unfair Competition Law of the People's Republic of China, Interim Provisions on Prohibition of Commercial Bribery,the Company has formulated the Anti-Monopoly Compliance Management System to actively create a harmoniousand orderly operating environment. Meanwhile, the Company executes the Dealer Compliance Commitment with itsdealers.

Anti-Monopoly

Principles for Risk Management

Unified leadershipHierarchical management

Risk management process and

requirements

Principle of balancing riskmanagement and benefitsRisk management throughoutthe entire processEnhancing risk managementBuilding internal control

foundation

Party Building for a Strong FoundationWith thorough exercise of the requirement of self-governance in every aspect, Gongniu fully plays the leading roleof party building. The Company has improved and revised the Quantitative Examination and Evaluation Standardsof Party Branches, and carried out a series of training activities from the foundation of party building, effectivelypromoting the development of the Company. Meanwhile, the Company attaches great importance to the CPC historyeducation to improve the cultural and ideological level of the party members.

Case

Holding a theme report meeting on studying "the spirit of the 20thNational Congress of the Communist Party of China"

In November 2022, in order to thoroughly study and implement the spirit of the 20th National Congressof the Communist Party of China, further strengthen the construction of the party member team, andcontinuously enhance the cohesion, service and combat effectiveness of the party organization, the Partycommittee held a report theme meeting on the implementation and study of "the spirit of the 20th NationalCongress of the Communist Party of China", which laid a solid foundation for actively playing the exemplaryrole of party members by studying "Hold High the Great Banner of Socialism with Chinese Characteristicsand Strive in Unity to Build a Modern Socialist Country in All Respects - Study the Spirit of the 20th NationalCongress of the Communist Party of China".

The Company Holding a Theme Report Meeting on "the Spirit of the 20th

National Congress of the Communist Party of China"

3738

Building a Solid Foundation for Sustainable

Development through GovernanceDuring the reporting period, to strengthen the construction of labor union organizations and leverage the power ofthe labor union branches, the Company formulated and launched the Employee Representative Proposal System onthe basis of extensively soliciting the opinions of employees, which would contribute to effectiveness of employeerepresentatives' roles and promotion of democratic management of the Company.

During the reporting period, during the preparation of employee representative conference, the Company receiveda total of116 proposals,including15 selected proposals

and101 general proposals,

all of which were dealt with and responded effectively.

Key performance

Case

Gathering together to study for encouraging growth, and exchangingideas for pooling strength

In September 2022, in order to effectively promote the party building business capabilities of each branch,the Company's Party committee organized committee members of Party branches to carry out thesecond empowerment training in 2022. Through training, exchange and explanation of the QuantitativeExamination and Evaluation Standards of Party Branches, introduction for Party branches' separation ofduties, development of party members, specific requirements for system construction, publicity, studyand promotion, pioneer models, integrity, assessment and incentives, etc., it is convenient for each Partybranch to have a more intuitive understanding of the latest policy requirements and work norms, andclosely integrate party building with business growth to serve the masses, so as to continuously enhance thecohesion and combat effectiveness of the party organization for a better development of the Company.

The Company Conducting Empowerment Training for Branch Committee Members

CaseHolding the launching ceremony for the "Party Member Pioneer Post" pilot

During the reporting period, in order to strengthen the construction of the party member team and playthe exemplary role of party members in social activities such as production, work and study, the third PartyBranch of the Group organized the launching ceremony for the "Party Member Pioneer Post" pilot in homeappliances division.The Company's Party committee guided each Party branch to practice the "Five Pioneers", namely pioneerof integrity, business, love, culture and democracy by exploring the innovative work of party building aroundbusiness, which included tracking and guiding the party building work every month, taking routine checkevery quarter, setting up physical propaganda columns, etc.At the business division level, the Company emphasized that party members should play the exemplary rolein business, overcome difficulties and strive for excellence, assisting in building a clean, united, harmonious,enterprising, and daring work atmosphere, in order to enhance organizational combat effectiveness andpromote rapid business development.

Holding the Launching Ceremony for the "Party Member Pioneer Post" Pilot

3940

Bull Business System BBS

Customer ServiceResponsible MarketingSupply Chain Management

With adherence to the quality concept of "winning by quality" and the quality vision of"creating world-class Gongniu quality", Gongniu is always in pursuit of improvementand refinement for product quality. Focusing on the goal of building a specializedand distinctive enterprise, the Company actively organizes and improves its qualitymanagement system and technology management system to continuously andseriously promote various scientific and technological projects, and collaborates withupstream and downstream partners to constantly improve the quality of the industrialchain and promotes the progress and development of the industry.

Product Quality Management

Strive for excellence tocreate a new situationthrough win-wincooperation

4142

Strive for excellence to create a new situation

through win-win cooperation

Bull Business System BBSWith the continuous improvement of the Bull Business System (BBS), Gongniu deepens organizational reformand implements business innovation and related strategic goals, continuously supporting to build a world-classoperation system with core innovative technology and talents, so as to provide a guarantee for delivering world-classQDCI (quality, delivery, cost, and innovation) operational performance.

The Bull Business System Office (BBSO) is responsible for building the Group's BBS target system, rule system, andmethodology case system. By establishing rules with internal driving force, BBSO promotes full application of BBS toolsthroughout the whole value chain to contribute to business development and talent cultivation.With the goal of empowering business to achieve continuous success, Gongniu BBS constantly summarizes and iteratesits own methodology system by learning, using, and creating tools to lay a solid foundation for the quick realizationof the Group's strategic goals. Meanwhile, with routine management as the carrier, Gongniu BBS implements leantransformation through tool empowerment and talent cultivation to achieve strategic goals, and eventually achievesthe Company's objective of building a comprehensive system by means of measurement and evaluation.

In 2022, with deeper management reforms, the Company continuously intensified the BBS system building andcompleted BBS target system and rule system guided by policy deployment (PD). By integrating BBS toolkits intothe business end and applying BBS toolkits in the business end, the Company has comprehensively implanted theimproved BBS gene into the whole value chain consisting of production, research, sales, and service from point tosurface and from inside to outside, and thus enabled the BBS to be a powerful engine for the Company's innovation,growth, cost reduction and efficiency improvement.

Improvement of BBS System

With focuses on market sales, Gongniu BBS system promotes the channel end to achieve a continuous growth bymeans of developing dealers' market planning ability, outlet's customer acquisition ability, daily managementability, and regional decoration enterprises' rapid development ability. Gongniu BBS system contributes to anincrease of 51% for the pilot sales in decoration channel with the introduction of lean retail tools, and an increaseof 16% for the pilot sales in the hardware channel pilot with the introduction of lean operation tools.

By continuously iterating the BBS methodology and cultivating various BBS talents in different levels suitable forthe development of Gongniu business, Gongniu BBS system has provided a solid guarantee for the Company'ssustained and rapid development. Internally, Gongniu BBS system has summarized and released 40 BBSmethodology, cultivating 19 black belt talents, 25 blue belt talents, and 729 green belt talents, and successfullyincreased the BBS maturity level from 2.6 points to 3.8 points, thereby reaching an industry-leading level.

Gongniu BBS system has achieved an internal cost reduction of over RMB 200 million by means of development,iteration and deep empowerment of the systematic cost improvement methodology in various businesses, while anexternal cost reduction of nearly RMB 20 million by introducing BBS tools in the process for empowering key suppliers.

Dimension of innovation and growth

Dimension of talent cultivation and method precipitation

Dimension of cost reduction and efficiency improvement

Gongniu BBS System's Performance in 2022

In the future, under the guiding principle of "accompanying business to deliver results", Gongniu BBS will build a wholevalue chain empowerment system based on PD main line, which can empower quick practice of PD priority items bybroadening thinking, simplifying implementation, and building a smooth business flow to form a closed loop, therebysupporting the achievement of various business goals.In the future, with "going a long way to be the top one" as the core value and the BBS mission as the cornerstone,Gongniu BBS will request high goals from top to bottom to establish rules with internal driving force, and promotefull application of BBS tools throughout the whole value chain from bottom to top, in order to promote businessdevelopment and talent cultivation.Concentrated on precise growth, optimal cost and leading talent, the Company continuously practices, summarizes,and iterates the BBS system, and thus gradually moves towards an excellent level of creating values continuously andefficiently to contribute to businesses' success and creation of a world-class business system.

BBS Development Direction

Gongniu BBS System

AutomationInformatization

Strategicdeployment

Valuestream

Brand-level talentcultivationGrowthmodel

ProcessoptimizationLeanimprovement

Core supplierempowerment

Key measuresTarget systemRule SystemMonitoring/evaluationCorrection/empowermentDailymanagement

Vision: Create world-class BBSContinuous business success

Precision growth, Cost optimization, Talent leading

Bottom-up support

Top-down drive

BBS

Lean management Processed management

Researchproductionservice

sales

BBS culture (guideline of high goals) Full participation 5S visualization

DM (Daily management) CI (Continuous improvement)Mission: Empowering every employee and business of Gongniu to pursue

faster, higher and further development

4344

Strive for excellence to create a new situation

through win-win cooperation

Inspection control

Transformation

Quality prevention

Identification of key quality characteristics

Increase quality control points

Reduce potential

product risks

Automated detection equipment

CCD vision inspection equipmentStrengthen theability to detectproduct defects

Supplier management system

Comprehensive and precise performance control process

Improve supplierquality capabilities

R&Dquality

Y≈f(x)

Rapid response tocustomer complaintswith closed-loopprocedures, and warning

of outflow of qualityevents

Leading in China

First curve ofbusiness

Leading all over the worldEleventh→ Nth curve of businessSecond → tenth curve of

businessDesign CTQ,productevaluationandreliability

Internalquality

Finishedproducts CTQ

Supplied

goodsquality

Parts andcomponentsCTQ

Output

Focus on inspectionand interception ofunqualified products withproblem solution as asupplement!Prevent problems throughexcellent technicalprecipitation!

Focus on solving problemswith quality inspection as asupplement!Progressively improve qualityprevention capabilities toreduce problems!

Do things right at once with high productconsistency and optimal quality cost!Solve problems to fill the shortcomings, andconduct quality inspection to plug the leaks!

An outstanding brand inChina with less after-salesand good quality

An internally renowned brand withless after-sales and good service and

quality

Output

Output

Output

Input

Input

Input

Input

Past

Current-transformation

period

Future

Y≈f(x)Y≈f(x)

inspection

inspection

inspection

control

control

control

Prevention

Prevention

Prevention

质量成本线-新观念

6Sigma分析

质量水平

故障成本（损失）预防和鉴定成本质量总成本质量成本

Quality Management System Upgrade and Transformation

Product Quality ManagementAdhering to the concept of "going the long way with professionalism and devotion to be the top one" and aimingto reach a world-class quality management level in quality management, Gongniu has practiced multi-trackmanagement for the pain points of various business segments to make breakthrough improvements, in order to takecontinuous innovation of quality management and provide users with high reliable products in first-class quality.The Company has revised systems such as theNew Product Defect Management Specification, InspectionManagement Regulations, and Partsand Components Evaluation Management Regulationsin accordance withrelevant quality management system standards, and strengthened quality management from multiple aspectsincluding R&D quality management, supplier quality management, internal manufacturing quality management,and after-sales customer quality management, to ensure the effective operation of the quality managementsystem. Meanwhile, the Company has established and improved the quality management organizational structureand clarified the duties and work procedures of various management positions, to promote the institutionalizedconstruction of quality management work.The Company actively promotes the transformation of quality management from inspection control to qualityprevention by grasping the key points of transformation such as product risk, supplier quality capability, andproduct defect detection, in order to realize the goal of controlling external risks through intensified internal controlmeasures, thereby improving the efficiency of quality management and building a quality management system.

In terms of quality inspection, relying on strong quality inspection experimental resources and capabilities, theCompany has always been committed to researching product reliability over the years. Through accelerated lifetest (ALT) model, the Company has improved product reliability and obtained significant achievements in multiplebusiness fields. Reliability models have been applied to new product development and the entire product lifecycle,resulting in continuous improvement in product quality. In 2022, the LED Division and the Wall Switch Division wereshortlisted in the List for Excellent Case of Manufacturing Reliability Improvement by the Ministry of Industry andInformation Technology of the People's Republic of China.In terms of digital construction, the Company has introduced QMS quality information management system andMES system quality inspection module to realize comprehensive digitization of incoming inspection and processinspection, and real-time monitoring of product and production process stability. The Company actively promotesthe informatization of core quality management processes and analyzes and manages process through BI big data toimprove operational efficiency.

High customersatisfaction

High customersatisfactionCustomer

quality

Customer

VOC

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Strive for excellence to create a new situation

through win-win cooperation

Gongniu has established a quality management system in strictcompliance with the relevant requirements of GB/T19001-2016/ISO9001:2015 and continuously learns and explores advanced qualitymanagement experience inside and outside the industry, so as tocontinuously improve the quality management level and ensureoutstanding product quality by strictly following standards in everystage of raw materials, production, inspection, sales, and after-sales.During the reporting period, all of the following companies obtainedGB/T19001-2016/ISO9001:2015 Certification for Quality ManagementSystem: Gongniu Group Co., Ltd., Cixi Gongniu Electric Co., Ltd.,Gongniu Group Co., Ltd. Guyao Branch, Ningbo Banmen Electric Co.,Ltd., Ningbo Gongniu Low Voltage Electric Co., Ltd., Ningbo GongniuElectric Appliance Co., Ltd., Ningbo Gongniu Optoelectronic TechnologyCo., Ltd., Ningbo Gongniu Home Appliances Co., Ltd., and NingboGongniu Digital Technology Co., Ltd.

The Strategic Business New Energy Electric Connection Division was builtunder the automotive grade quality management system at the beginningof its founding, and successfully passed the IATF16949 certification forquality management system in 2022.

GB/T19001-2016/ISO9001:2015

Certi?cation for Quality

Management System

IATF16949 Certi?cation for QualityManagement System

System certi?cation

Two projects from Gongniu's subsidiarieswere chosen for the Ministry of Industryand Information Technology's 2022List forExcellent Case of Manufacturing ReliabilityImprovement, including Ningbo Gongniu's"Fundamental Solution" for quality assuranceand dependability, as well as GongniuOptoelectronic's contribution of the "Study onLED Light System Life Prediction Techniqueunder High Acceleration Testing" project.

In order to effectively achieve the quality management objective of reducing the defective rate of product quality yearby year, the Company is committed to strengthening the competence in solving negative quality problems mainlyby means of establishing a management list of negative quality problems and building a closed-loop managementprocess for solving negative quality problems from problem detection to complete solution; moreover, the Companycontinuously monitors quality data through monitoring and measurement, including incoming inspection, process

Customer ServiceUpholding the customer service vision of "building a professional service system for undertaking Gongniu's 100billion businesses to be the top one service brand in intelligent electric field", the Company, with focuses onundertaking the Group's 100 billion development strategy, adheres to high target requirements and establishes ruleswith internal driving force to promote the construction of a service system centered on dealers and distributors, so asto create the customer service concept of being a new model for high-quality industry service by providing Gongniuconsumers with timely, professional, and warm services.

With adherence to the customer service vision, the Company has established and improved the customer servicemanagement system by formulating the Closed-loopQuality Management System for External Customer Complaints,Corrective and Preventive Measures Control ProceduresandQuality Improvement Management Regulations forProducts Returned by Customers in the Market, and implementing multiple specific measures to improve customersatisfaction, so as to comprehensively control the quality of customer service and enhance customer satisfaction.

Customer Service Management

inspection, test, supervision and random inspection, and monitoring of external defective data, and continuouslyoptimizes product quality with the support of the E-NCMR (internal negative problem handling process), E-CAPA(external negative problem handling process), D-CAPA (new product negative problem handling process), E-SCAR(supplier negative problem handling process), NCMR, and CAPA procedures.

Giving play to the advantage of sales channel, the Company quicklyestablishes an after-sales service network system nationwide. Inorder to improve service quality and user experience, the CustomerService Department has established a service certification systemcomposed of different levels, through which all service personnelfrom dealers are required to be authenticated by real name andcertified through training and assessment when providing services.As of December 2022, the Company certified 425 star-rated serviceoutlets and 3,106 full-time service engineers. Meanwhile, theCompany also released on-site service standards for dealers to unifyservice outfit and operational requirements with a coverage rate of

92.21%. Therefore, the professional service image of Gongniu shapes

preliminarily.

Build a leading on-site service network in the industry thatcan achieve 100% services coverage nationwide

Customer Service

Measures andPerformance

On-site Service Picture of Gongniu

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After-sales Service

The Company's Smart CustomerService System

In order for rapid response to the service needs of dealers, theCompany adjusts the core value and organizational functions of theCustomer Service Department. The service region team establishedby the Company for pre-process of market problems has empoweredand assisted in solving 242 after-sales cases on-site throughout theyear, and quickly responded to and solved 7,437 received problems.The backend service support team established for collaborationand interaction has supported dealers to efficiently deliver the "lastmile of service" in high quality for Gongniu products with serviceattributes through on-site empowerment, after-sales parts operationimprovement and return and exchange process optimization.

In 2022, the feedback handling closed-loop rate for dealer marketproblems reached 100%, and the 24-hour delivery rate for after-salesservice parts reached 95.3%.

The Company has built a unified Gongniu after-sales service system platform, where it is available for theinterconnection and sharing of data among dealers, enterprises and users, automatic dispatch throughservice request system, synchronized push of service engineer's service information, quick application of after-sales parts, real-time service progress tracking, self-evaluation by users after completion of services, and fullytransparent display and settlement of service fees. By means of comprehensive business informatization andtransparent management of all process nodes, a customer-centric service system has been built under controlquickly, timely and visibly to improve overall service capabilities and customer experience.

Customer Service

Measures andPerformance

Customer ServiceMeasures and

Performance

Establish a fast service response support center for e?cientcollaboration for the "last mile of service"

Upgrade the digital intelligent service system platform toenhance users' one-stop service experience

In the handling of customer complaints, the Company has formulated standardized closed-loop management requirementsfor the processing of external negative quality problems, including processes, rules, and operational management.

Customer Complaint Resolution Rate of Gongniu2020

87.00%

Customer complaint resolution rate

87.50%

88.00%

88.17%

89.00%

89.24%

89.52%

90.00%

88.50%

89.50%

20212022

In principle, externalnegative qualityproblems should beprimarily resolvedwithin 7 working daysby completing faultanalysis, risk analysis,event handling,containment andtemporary measures,and basically solvedwithin 30 workingdays by completingroot cause analysis,corrective measures,and effectivenessverification.

External negativequality problemsshould be handledunder different levels,which means differentlevels of managersprocess these problemsthrough variousprocedures withdifferent requirements.

All external negativequality problemsrelated to E-CAPAinput should be closed100% under closed-loop management,and the Group'sCustomer QualityDepartment shouldfocus on followingup E-CAPA problemsthat have not beenclosed or postponedto be closed toensure closed-loopmanagement.

All external negative

quality problems

should be handled in

the E-CAPA process

in OA to achieve

information flow and

preservation.

General Rules for External Customer Complaint Quality Closed-loop Management (E-CAPA)

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At "China Customer Service Festival (6th Session) in 2022", Gongniu became the only electrical industryenterprise shortlisted in the "2022 China Service Brand Top 100".

Key results: Forming industry benchmark image throughauthoritative institution assessment

The Award Issued by China Customer Service Festival (6th Session) in 2022

Upholding customer service vision and development strategy, with serving customers as the ultimate goal, theCompany understands customer needs and expectations and collects customer feedback and suggestions by meansof customer satisfaction survey management, so as to detect problems in a timely manner for improvement, enhancecustomer satisfaction and increase customer loyalty, thereby promoting the Company's business development.During the reporting period, with focuses on customer satisfaction to solidify the service foundation, the Companyattaches importance to strengthen the capacity of dealer service support to enhance its core competitivenessin service through deeper service process reform and service standardization and professionalism, achieving aproportion of 96.53% for user satisfaction evaluation relative to on-site services by dealers.

Customer Satisfaction Management

Case

Case

2022 third-party commissioned satisfaction survey

2022 third-party commissioned satisfaction survey

The Company commissioned Zhejiang Provincial Quality Association to conduct user satisfaction surveyson sockets, wall switches, digital accessories, and LED products with relevant information summarizedas reports. By comparing and analyzing qualitative and quantitative data such as brand image, qualityexpectations, and quality perception under different population segments, these reports providedconstructive recommendations to improve service quality and information support to improve brand quality.

Structural Variables Analysis of User Satisfaction Evaluation Report for "Bull" Brand Socket

Quality Perception

83.59

Quality Expectations

82.60

Value Perception

82.11

CustomerSatisfaction

86.61

-0.08

0.37

0.26

0.32

0.34

0.43

-0.16

0.18

0.18

0.18

0.71

0.36

0.48

0.25

CustomerComplaints

80.85

CustomerLoyalty

78.51

Brand Image

87.78

Responsible Marketing

Guided by the core values of "loyalty, integrity, professionalism, and devotion" and the vision of "become a leaderin the international civil electrical industry", the Company has formulated a number of responsible marketingmanagement measures to enhance its social responsibility in the marketing process, protect customer rights andinterests, and improve customer satisfaction.To ensure ethical procurement and marketing, the Company has implemented multiple control measures, includingproviding training to dealers and signing relevant integrity agreements to enhance their awareness of integrityoperations; providing new product knowledge training to marketing personnel to avoid misleading consumersduring the promotion process; conducting detailed analysis on after-sales services and collaborating with marketingpersonnel to respond to customer needs; and strictly controlling product packaging to prevent exaggeration ofproduct quality or concealment of risks.

Responsible Marketing Management

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Before the introduction of new products and the iteration of new products to replace old products, theCompany provides product knowledge training to marketing personnel to ensure that they are familiar withproduct performance and promo

Marketing personnel management

In 2022, the Company optimized and executed contracts and policy agreements with dealers such as the

Order Task and Discount Policy Agreement, Offline Channel Promotion Material Deployment Policy andManagement Regulations, and Agreement on Joint Efforts for Integrity Building, thereby achieving win-wincooperation with dealers in a compliant manner and expanding and maintaining the market's upward trendof development.The Company and its dealers have conducted integrity training and executed theOverseas DistributionCooperation Agreement of Goingniuand Agreement on Joint Efforts for Integrity Building, so as to jointlyform integrity awareness.

Dealer management

The Company studies and analyzes the pros and cons of products to confirm the measures to deal withpotential drawbacks in prior. Therefore, in the event of product abnormal feedbacks and customercomplaints, marketing personnel can collaborate with product planning personnel to make quick responsesand make improvements without affecting customer needs.In 2022, the Company took routine checks on dealers' procurement, sales and inventory data monthly tooptimize and improve order accuracy and reduce inventory risks.

Sales management

It indicates precautions in product packaging, including instructions for use and warning signs for usagescenarios, to ensure that customers use products in a safe and comfortable manner.The products are certified with certification and guaranteed to be of genuine quality.The products, with long shelf life and after-sales service warranties, can ensure that consumers feel at easewhen purchasing and using.

Product packaging management

In responsible marketing management in e-commerce channels, the Company has improved and perfected themarketing process according to management systems such as theOnline Dealer Business Policy, Online PromotionSupport Policy, and Online Market Management Specifications, in order to clarify duties of each department toeffectively improve promotional benefits and reduce related risks.

Special rectification for self-wiring socket bugsell in violation of rules and regulations inPinduoduo platform Study and practice of pre-violation prevention measures for authorized stores

Improvement Methods for Responsible Marketing by

Online Channel Supervision Department

Improvement

Specific measuresResponsibility

Combat illegal activities systematically through multiple measures such as wireless socketencryption, supply chain management, and front-end store litigation

Conduct rule training, issue inspection reminders, and verify quotation calculations

Fully assist dealers in avoiding risks relative to market order and implementing theguiding principles of protecting the interests of dealers and distributors

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through win-win cooperation

During the reporting period, the Company executed strategic agreements or strategic supply agreements with manyimportant customers.Gongniu and State Grid Smart Internet of Vehicles concluded a strategic cooperation agreement for promotion ofcommunity orderly chargingGongniu concluded a strategic cooperation framework agreement with Zhejiang Geely New Energy CommercialVehicle Group Co., Ltd.Gongniu concluded a strategic cooperation agreement with Evergrande Real Estate and Weixing Real Estate inChongqingIn terms of contract execution for real estate developers' joint procurement, Gongniu concluded strategicprocurement agreements with Bluetown Group and Newhope Real Estate, and supply cooperation agreementswith Seres New Energy Electric Vehicle Sales Co., Ltd.

Key results

Execution Ceremony between Gongniu andState Grid

Execution Ceremony between Gongniu andGeely

In October 2022, Gongniu became a Chinaspace affiliate.

Gongniu orbital socket wonthe award of "2022 KitchenPopular Product".In November 2022, Gongniuwon the honor of "NO.1Wall Switch and Socket ofChinese Brand of the Year2022".

Key awards

The First Product Testing for Household Plug and Socket and Those with Similar Uses that

Conform to the New National StandardsNingbo Gongniu Electric Appliance Co., Ltd. passed the national standard conformance testing in "the first producttesting for household plug and socket and those with similar uses that conform to the new national standards".

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In terms of marketing strategy, the Company has formulated corresponding marketing management methods foreach marketing channel, and targeted to improve the marketing management efficiency on the basis of responsiblemarketing.In terms of overseas marketing channels, according to the internationalization strategy and the vision of becominga leader in the international civil electrical industry, the Company combines promotion with sales to set goals basedon researched data of overseas markets and products and actual scenarios, in order to achieve high-quality andefficient output goals in the current year.

Marketing Strategy

In the overall marketing chain, the Company's overseas marketing channel has formulated multiple marketing andpromotion strategies to ensure effective implementation of marketing activities through various agreements, trainingactivities and product requirement management, so as to enhance customer purchase intention, increase customerloyalty and achieve sustainable consumption on the basis of maintaining customer-related rights and interests.

To ensure the common development of dealers and the Company, the Company has carried out multiple dealerassistance and management projects to promote the Company's marketing strategy and strengthen communicationwith dealers while guiding compliance with contracts and rules, thereby empowering dealers in various ways.Due to complexity of Gongniu's business categories and channel types, the Company's channel dealers should bemanaged under higher requirements. Accordingly, the Company, attaching great importance to the task of leanimprovement at the marketing end, builds a capability tunnel from factory to dealers and distributors by exploringmultiple cooperation opportunities, cultivating the capability of the marketing team, and empowering the growthof dealers, etc., so as to summarize and advocate the two major methodologies of lean market planning and leanretailing, thereby opening up the capability tunnel from factory to dealers and distributors.

Dealer Management and Empowerment

MarketresearchUser survey

Promotion

activitieslaunchingProductpromotionAchievementof sales goalsProductpositioninganalysis

Company Marketing Chain

Promotion Strategies for Overseas Channel Marketing

According to the survey results of the consumption level of the Southeast Asian market, the Companystrengthens product promotion by means of promotion/gifts/discounts/exhibition participation inshowrooms and other activities, and establishes the brand through advertising materials such as posters/door signs, thereby enhancing customer purchase intention, increasing customer loyalty and achievingsustainable consumption.The Company incentivizes dealers to achieve their sales targets through sales policies in accordance withtheOrder Task and Discount Policy Agreement/Offline Channel Promotion Material Deployment Policy andManagement Regulations, so as to continuously promote the healthy development of the market.

Promotion Strategies for Overseas Channel Marketing

Capacity Building Map for Decoration Channel Dealers

Dealer

Dealer's market planning

Dealer's daily management

Lean retail

Business personnelPDCVD

Control and encourage

DistributorCustomer

DecompositionDecomposition

DM

supportsupport

Gongniu

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Strive for excellence to create a new situation

through win-win cooperation

By reviewing the historicdata of dealers' operation,customer product data, andmajor marketing activities,the Company analyzesopportunities in products,channels, and promotions tohelp dealers to expand theirbusiness and scale;

By analyzing the dealers' HRefficiency output, operationmode, market basic data, theCompany benchmarks excellentmarket methodologies toimprove the HR efficiency; Meanwhile, through pre-

control over dealer operationrisk, the Company plans inadvance to avoid risks, therebyguaranteeing dealer team'sbenign operation."

Lean marketing for

dealers

With the development ofmultiple product categoriesin the Company, in order toensure that frontline dealerbusiness personnel can learnabout the Company's productknowledge, marketing policies,and development skills in atimely manner, we have builtthe Lightning Bull LearningPlatform, which uses WeChatpublic account as the carrierto deliver relevant trainingmaterials from headquartersdirectly to dealer businesspersonnel. Therefore, dealerbusiness personnel can learnat any time as the learningmaterials are permanentlysaved and available forreview and re-learning in theplatform."

Lightning Bull Learning

Platform

To ensure that the new dealers

can quickly operate in themarket, the Company hasestablished a dealer supportprocess. During the first threemonths of dealer operation,the Company providesspecial assistance includingdeveloping a new marketoperation assistance plan andtaking one-on-one guidancefor the period from dealeraccount opening to three-month evaluation. In the sixthmonth when the dealer hasbeen formerly recognized,the Company providescomprehensive assistanceto ensure that new dealersoperate quickly and healthily."

New market assistance

Figure Caption: Empowerment Measures for Hardware Channel Dealers

Case

Expanding new products to win the future - Benteng Action, movingforward together

By means of organizing the development of Benteng Expansion Action nationwide, the Company cooperatedwith dealer teams in a pairing form to assist weak markets and promote the development of new products.Meanwhile, the Company also empowered marketing personnel and dealer business personnel to enhanceteam confidence.

Case

Building a service system relative to core outlets with distinctivecommercial photosThe Company has established a service system relative to core outlets with distinctive Gongniu commercialphotos by precisely exploring outlets capable of displaying commercial photos and providing high-qualitypolicies and services. This system consists of exclusive display areas with commercial photos and acts as the"commercial photo sales verifier, product display center and brand promotion center". Through rapid layoutof professional markets and urban/county/township street shops from zero to one, Gongniu brand hasquickly rooted in the commercial photo field.

Construction of ExclusiveSales Area with Commercial

Photos

Benteng Action

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Case"Two-way E?ort" between Gongniu and China Space

As the first space cooperative enterprise for civil electrician aerospace, Gongniu drives high-quality industrydevelopment through technological innovation with 2,379 patents. With more than 100,000 offline aerospacecooperation banners put up across the country, and more than 30,000 times forwarding of online videosand tweets in WeChat moments and Douyin App, Gongniu has enhanced its brand reputation on the basis ofbrand awareness.

Space Cooperation Promotion

CaseInitiating "Yuanhang Plan" - Lean Market PlanningIn order to improve the localized and differentiated market operation ability of dealers, and enhance themarket supervision and management ability of overseas personnel, Gongniu decoration channel conductedan early layout by launching the "0-1 pilot" and summarizing a set of marketing planning methodology –"Lean Market Planning" in 2021, and initiated "Yuanhang Plan" in 2022. Yuanhang Plan focuses on dealers,assisting dealers in understanding the market, identifying opportunities and developing effective localizedmarketing strategies through annual market review and opportunity analysis, so as to guarantee theachievement of goals and vision.During the reporting period, the Company's "Yuanhang Plan" achieved phased results through promotion asplanned:

Comprehensive promotion: Rapid iteration of methodology resulted in 98% methodology coverage rate,with nearly 1,400 qualified market plans published.

Excellent experience cases mushrooming: During the implementation process, excellent experience caseswith regional differences and innovation mushroomed in various local markets, of which more than 30cases have been included in the excellent case library and promoted through video dissemination with atotal of 14,256 views.

Setting up benchmarks: Yuanhang Plan has successfully built 56 comprehensive benchmark regions andselected 18 Yuanhang benchmark markets, so as to encourage to learn from benchmarks and make animpact that matters.

Cultivating talents: Yuanhang Plan has produced 65 marketing personnel qualified for Yuanhang GreenBelt, and 18 dealers qualified as Yuanhang expert by training and cultivating the marketing personnel teamand the dealer team in project practice.

Photos of the Company's "Yuanhang Plan"

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Case Focusing on "Lean Retail" to create new retail methodologyIn 2022, in order to explore the growth points for future performance of the decoration channel, theCompany laid out the 0-1 pilot and summarized the methodology of "Lean Retail 1.0", namely, the methodof "paying great attention to stores to improve people, goods, and scene by assisting store owners in drivingout-of-store traffic and concluding in-store transaction and other aspects, so as to increase store sales".By implementing our projects in a hands-on manner, we have successfully boosted sales across all categoriesin our pilot stores. After analyzing these successful cases, we developed lean retail strategies, including theFive Sources System for external store operations and the Five Senses System for in-store experiences. Toreplicate our achievements, we have integrated these strategies into our standards and produced videosfor swift dissemination across our nationwide market. Moreover, we have helped train and output manyoutstanding retail coaches for dealer teams in the pilot regions.

Photos of the Company's "Lean Retail"

Supply Chain Management

The Company attaches great importance to supply chain management, regarding it as one of the key factorsin achieving sustainable development goals. In order to continuously establish and improve the supply chainmanagement system, the Company has formulated multiple management procedures such as theManagementProcedure for Suppliers of Production Materials, and theRegulations on the Admission of Non-production Suppliers,so as to reduce negative environmental and social impacts while improving efficiency and competitiveness througheffective supply chain management.

While managing suppliers, the Company also identifies multiple important risks in the procurement business,implementing targeted control measures and reporting them to the special review and approval meeting.

Supplier Management

Supplier Management Process SystemNew suppliers' product prices, performance, and service should be better than those ofold suppliers in principleAgents and traders are required to have a registered capital of more than RMB 1 millionper year and a registration time of more than 2 years without any credit issues;If the new suppliers' supplied materials are required to have 3C, HSF or AEO certifications,the new suppliers should provide relevant certificatesThe new suppliers should have certain performance and well-known cooperativecustomersThe new suppliers should be industry leading companies, global leading companies, etc.Suppliers are required to take integrity exams before factory audits;After introduction, suppliers should execute the Agreement on Joint Efforts forIntegrity Building

In 2022, the concept of internal control management was introduced intoprocurement and a procurement internal control management organization andrelated assessment methods were established.Five procurement cycles were set up, involving 65 secondary processes and 232tertiary processes.

The review and annual review of new suppliers should be conducted from threeaspects of procurement, technology and quality, and only new suppliers withcomprehensive scores equal to or more than 60 can be shortlisted.

Criteria forsupplierselection

Code of conduct

for suppliers

Internal controlmanagement

concept forprocurement

Supplier

evaluation

and review

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Strive for excellence to create a new situation

through win-win cooperationImportant Risks and Response Measures in Procurement BusinessRiskControl measuresSuppliers' authenticity

Separate the functions of sourcing and development; establish a dedicatedsourcing department; build a supplier database and selection criteria; andarrange the Development Department to select suppliers from the supplier list

under management supervisionPrice management risk

Establish a price management mechanism with Procurement OperationDepartment responsible for price increase approval and price reductionsupervision; reduce procurement cost under the guideline of high goals; setindicators for Group procurement and business division procurementProportion management risk

Clarify the assessment rules with enhanced implementation; arrange theGroup's Procurement Operation Department to be responsible for supplierperformance feedback, proportion formulation, and inspection execution

under financial supervisionSupplier brand or specification

designation

Establish a supplier database to clarify supplier, variety, price and othercontents; formulate emergency procurement rules; require departmentswith demands to provide parameters; and arrange the Group's procurer to be

responsible for the businessBidding and tendering risk

Manage and control bidding and tendering risk through supply pool and

process managementExcess order management

Avoid excess order by means of contract; clearly stipulate that the system orderis the standard, and ordering through verbal, WeChat, and other means is not

recognized; and do supplier advocacy work well

The Company has executed the Code of Conduct with 100% suppliers.

Key performance

On the basis of a comprehensive and improved supplier management system, the Company vigorously develops a digitalprocurement management system and adopts the "1 + 2 procurement management platforms" solution, which includes 1digital procurement management cockpit and 2 procurement management systems (the SRM production material systemand the MRO non-production material system). The digital procurement management cockpit, as the core of the plan,obtains basic data by docking with SRM and MRO systems, and automatically generates trend analysis on quality, cost,delivery time, market conditions, etc. according to preset models, so as to realize the end-to-end connectivity throughoutthe procurement business process and the visual management from the procurement business end to the supply chainend. This digital procurement management model effectively improves the efficiency and accuracy of procurementbusiness, providing reliable information support for the Company's management decisions. The connection of digitalprocurement management cockpit with SRM and MRO systems has achieved end-to-end connectivity of internal andexternal procurement business, enabling the Company's procurement management to be more efficient and convenient.At the same time, the trend analysis generated from the digital procurement management platform can help theCompany grasp the market situation and supply chain situation in a better way, so as to improve the Company's decision-making ability and flexibility in the procurement process.

In terms of managing production material suppliers, Gongniu has established a joint audit mechanism involvingprocurement, quality, research and development, audit, and legal affairs which covers review contents of SupplierCapabilityEvaluation Form-Quality, Supplier Capability Evaluation Form-Procurement, Supplier CapabilityEvaluation Form-Technology, etc., to comprehensively control the quality safety of raw materials providedby suppliers. When new products of business divisions or customers' custom products are subject to controlrequirements of related hazardous substances, the supplier HSF (hazardous substance free) management measuresare triggered. Accordingly, it is required to calculate the comprehensive supplier HSF risk score by reviewing supplersites and conduct risk control pursuant to detailed management plan.

Procurement management cockpit

Production material SRMNon-production material MRO

The Company's "1+2 Procurement Management Platform"

During the reporting period, Gongniu's "Lean and Efficient Supply Chain System Management" project waschosen to be part of the Ministry of Industry and Information Technology's 2022 Pilot Demonstration Program forIntegrating New Generation Information Technology with the Manufacturing Sector.

Key results

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Gongniu not only values the development of its own circular economy and environmental protection business, butalso emphasizes clean production and energy conservation and emission reduction throughout the whole value chain.Accordingly, the Company cooperates with suppliers to take a series of measures, such as purchasing greener and moreenvironmentally friendly plastic raw materials, helping suppliers improve their processes, and sharing new emissionreduction technologies, to actively assist suppliers in achieving energy conservation and emission reduction, therebyfurther promoting the green and clean development of the whole value chain and laying a practical foundation for theCompany's greenhouse gas emission reduction throughout the whole value chain.Gongniu practices green and environmental protection concepts from "raw materials" to "source suppliers", andcollaborates with source enterprises to integrate circular economy, green low-carbon and responsibility care into productsand production processes. The Company continuously raises higher requirements for the environmental performance ofsuppliers. For example, the Company has set up relevant certification standards for plastic raw material suppliers, suchas requiring that all plastic materials have RoHS and REACH testing certification. Meanwhile, the Company graduallyincentivizes plastic suppliers to hold the GRS (Global Recycling Standards) certification to increase the recycling rate ofplastic raw materials and reduce the production of new plastic raw materials and plastic waste. For example, Kingfa, animportant plastic supplier of the Company, has obtained the GRS certification.

Green development of value chain

Measures for Green Supply Chain Management

If the supplier does not have any environmental assessment certificate and firefighting certificate, the Company will terminate the factory audit directly;If the supplier violates the integrity agreement, the Company will terminate thefactory audit directly.Admission process

of new suppliers

Selection criteria

for raw materialsuppliers

Gongniu has formulated (Q_GN G051011-2019 hazardous substancemanagement standard and requires that suppliers should execute theEnvironmental Compliance Statement and all plastic raw material TDS reportsshould involve environmental RoHS and REACH compliance testing.

To achieve the green and sustainable development of the supply chain, the Company has implemented multiplemanagement measures to control the level of suppliers from the source, in order to ensure the green safety of thesupply chain to reduce the negative impact on the environment and society, thereby improving corporate efficiencyand competitiveness.In the green procurement section, Gongniu requires all cooperative suppliers to pass relevant environmentalassessment and fire inspection upon admission of new suppliers, and executes the Safety and EnvironmentalManagement Agreement with cooperative suppliers. This Agreement specifically stipulates the content ofoccupational health and environmental protection and advocates safety and environmental protection to jointlycreate a socialist harmonious society. Before formal cooperation, the Company will include basic rights and interestsof supplier workers, supplier compliance requirements for environmental protection, prohibition of employing childlabor and other social responsibility clauses in the annual framework contract.

Green Supply Chain Management

During the reporting period, the Company actively carried out the integrity building for employees in theGongniu Procurement System, and held1 large-scale event with more than 115 employees participating,covering over75% of the procurement staff.

In terms of supplier management, the Company carried out more than 100 supplier integrity oath activities,where more than440 suppliers participating.

Key performance

In terms of transparent procurement, the Company has formed a set of transparent procurement managementmechanisms to ensure a fair, just and efficient procurement decision-making process. In details, the procurementcommittees decision-making bodies at two levels (Group-level and supply-chain-level) jointly review the procurementdemands from the Company's key procurement projects or procurement projects with an amount equal to or morethan RMB 500,000 and rationality of supplier selection, and realize the procurement requirements, supplier quotationsand pricing by means of systems to reduce human intervention and improve procurement efficiency. For major biddingprocurement projects, the Company has developed a mature bidding operation mode and formulated theNon-Production Material Bidding Management System, Production Material Bidding Management System, and EngineeringConstruction Project Bidding Management Measures.The bidding amount threshold has been decreased to RMB 100,000from the original RMB 1 million, so as to establish a fast bidding mode.

Transparent Procurement

HSF Comprehensive Risk Level and Management Plan

Comprehensivesupplier HSF risk score

Comprehensive supplier

HSF risk level

Risk management plan

0None HSF control is not required

2-8Low

? It is required to test hazardous

substance at least once per quarter? It is required to conduct HSF on-site

audits once every two years? It is required to provide at least one

third-party testing report per year

9-17Medium

? It is required to test hazardous

substance at least once per month? It is required to conduct HSF on-site

audits once per year? It is required to provide at least one

third-party testing report per year

≥18High

? Each batch of incoming materials is

required to undergo one hazardous

substance test? It is required to conduct HSF on-site

audits at least once per year? It is required to provide at least one

third-party testing report per year

6768

StrengthenEnvironmental Safety forSustainable Development

To achieve the carbon peak and carbon neutrality goal, Gongniu, under theguidance of Xi Jinping Thought on Socialism with Chinese Characteristics for aNew Era, continues to implement the concept of "lucid waters and lush mountainsare invaluable assets" and take the mission of achieving operational excellenceand setting industry benchmarks. Meanwhile, we strengthen work safety andoccupational health management and strive to resolve safety risks and ensure worksafety and employees' health in all aspects such as formulation of

Environmental ManagementEcological Environment ProtectionUse of Resources and EmissionsManagement of Safety in ProductionOccupational Health and Safety

6970

Strengthen Environmental Safety for

Sustainable Development

Environmental Management

In active response to the green development strategy and to carry out the green, low-carbon and ecologicaldevelopment concept, Gongniu has formulated documents such asRegulations on the Management ofEnvironmental Protection Equipment, theEnergy Management System of GongniuandRegulations on theManagement of Hazardous Waste and General Industrial Solid Wastein conjunction with national laws, regulationsand relevant requirements on ecological environment protection, so as to strengthen its comprehensiveenvironmental management capability. During the reporting period, neither Gongniu nor any of its branches(subsidiaries) were subject to administrative penalties for environmental protection.Besides, Gongniu promotes its ISO14001 environmental management system certification by conductingcomprehensive checks and diagnoses of the operation effectiveness and compliance of its environmentalmanagement system, completion of its environmental indicators, important environmental risk control and otherenvironmental operations through regular internal audits, management reviews and third-party audits and followingup on the improvement of environmental performance.

Environmental Management System

In 2022, Gongniu carried out its ISO 14001:2015 environmental management system certification. During the reporting period,its subsidiaries (branches) passed the environmental management system certification, including Gongniu Group Co., Ltd.,Ningbo Banmen Electric Co., Ltd., Ningbo Gongniu Low Voltage Electric Co., Ltd., Ningbo Gongniu Electric Appliance Co., Ltd.,Ningbo Gongniu Optoelectronic Technology Co., Ltd. and Ningbo Gongniu Digital Technology Co., Ltd.The certification covers the design and manufacturing of plug, socket-outlet (including converters, extension sockets, mobilesockets, open sockets and hidden sockets), busways (busbars), portable cable reel, portable single-phase transformer,

ISO14001:2015 Environmental Management System Certification of the Company in 2022

handlamp, USB-cable, power adapter, vehicle power adapter, powerbank, earphone, lithium ion cells and batteries used in portable electronicequipment, residual current circuit breakers, miniature circuit breakers,hidden switch, open switch, doorbell, enclosure of electrical accessories,footlight, LED lights, portable outdoor power bank, power distributionunits for communication equipment and home terminal informationboxes, and the production of PVC cable and primary batteries.

The Company continues to improve its comprehensive environmental management mechanism. We have formulatedthe Response Plan of the Second Base in Longshan of Gongniu Group Co., Ltd. for Environment Emergenciesaccording to national laws and regulations such as the Environmental Protection Law of the People's Republic ofChina, the Measures for Emergency Management of Environmental Emergencies and the Method for Grading the Riskof Environmental Emergencies in Enterprise, aiming to improve our environmental risk emergency managementsystem in adherence to the principle of "prevention-oriented to minimize harm; unified leadership with hierarchicalresponsibilities; enterprise self-rescue and local management; resource integration and joint disposal".To strengthen our emergency response capability, the Company has established an emergency rescue organizationfor sudden environmental pollution accidents based on the actual needs of emergency response. The organizationconsists of an emergency command department, an emergency rescue professional disposal group and anemergency expert group, and the specific responsibilities of the emergency command department, the coordinationgroup and other departments have been clearly stipulated.

Environmental Risk Emergency Management

The Emergency Rescue Organization for Sudden Environmental Pollution Accidents

Emergency Command Department

Information Release Group

Communicationand Liaison Team

Security Team

Material SupplyTeamEmergency RepairTeam

Medical RescueTeam

Emergency FireBrigade

On-site Rescue GroupEnvironmental Protection GroupMaterial Dispatch Group

Coordination Group

The Company analyses the production process and environmental profile to identify the types and levels ofenvironmental risks, including major hazards and pollutants such as "three wastes", etc.Each department of the Company carries out hazard identification, risk evaluation and risk control; classifiesrisk levels according to the likelihood of accidents, the frequency of exposure to hazardous environmentsand the possible consequences of accidents, and takes corresponding preventive measures according to thedifferent levels

Environmental risk identification and emergency response capacity assessment

Key performance

7172

Strengthen Environmental Safety for

Sustainable Development

Main Contents of the Environmental Risk Emergency Response Plan of the Company

The Company establishes an emergency rescue organization to explain and regulate emergency preventionand warning mechanisms, emergency response and emergency disposal, post-disposal, emergency securityand supervision and management, etc., and makes every effort to reduce the negative impact of suddenenvironmental risk events.

Environmental risk emergency response management

Emergency Response Drills for Environmental Emergencies of the Company in 2022

In addition, to ensure a rapid, orderly and effective emergency response capability, the plan stipulates that theCompany shall strengthen emergency training and drill activities by taking various forms of training such as regularlyemploying experts in environmental protection, safety and fire fighting to hold training courses and accident lectures,and broadcasting. Emergency drills are classified into self-exercises and joint drills. During the reporting period, theCompany organised relevant personnel to prepare an emergency response plan for environmental emergencies and,accordingly, regularly conducted emergency response drills for different types of environmental emergencies such aschemical spills and hazardous waste spills every year.

In terms of environmental assessment of planning and construction projects, Gongniu strictly implements theenvironmental impact assessment system for construction projects in accordance with the requirements of theLaw of the People's Republic of China on Environmental Protection, theLaw of the People's Republic of Chinaon Environmental Impact Assessmentand other relevant laws and regulations. We promote the environmentalmanagement of construction projects in an orderly manner, strengthen the pre-, mid- and post-constructionsupervision and guidance, and take corresponding measures to prevent or reduce negative environmental impacts,so as to ensure the compliance of project construction with laws and regulations. During the reporting period, theCompany prepared theEnvironmental Impact Report on the Construction Project of Switch and Socket ProductionBase with an Annual Output of 410Million and obtained the relevant environmental impact assessment approval

Project Environmental Assessment

During the reporting period, the Company was successfully selected in the list of first batch of enterpriseswith positive environmental enforcement in Ningbo in 2022.

The Company was Awarded the "Positive Enterprise" by Ningbo Municipal Bureau of

Ecology and Environment

Ecological Environment Protection

To implement the concept of "lucid waters and lush mountains are invaluable assets" and achieve ecologicalenvironment protection and green development, the Company carried out publicity, training and volunteer activitieson ecological environment protection through various forms and channels to raise the awareness of the generalpublic and workers on ecological environment protection.

Environmental Protection Promotion and Training

Measures Taken by the Company to Protect Ecological Environment in 2022The Company took out environmental pollution liability insurance to prevent environmental risks;In April, the Company invited experts from the Chinese Research Academy of Environmental Sciences toprovide special training for the EHS team and equipment management managers, managers from keysupervisors and others.

The Company Invited Environmental Experts to Provide Assistance and Training

Key performance

7374

Strengthen Environmental Safety for

Sustainable Development

The Company conducts regular internal training on environmental protection every year in terms ofcompliance control, site management, operation and maintenance management of environmentalprotection equipment and hazardous waste management, to ensure its compliance and law-abiding inenvironmental protection.

The Company Conducted Internal Training on Environmental Protection

Use of Resources and Emissions

Use of Energy Resources

During the reporting period, the Company invested a total of RMB9.605 million in ecological environmentprotection, which was mainly used for its investment in environmental protection equipment, operation and

maintenance of environmental protection equipment and environmental protection improvement projects.

Key performance

The types of resources used by Gongniu are electricity, water resources, natural gas and diesel fuel. With respect toresource management, the Company has formulated theEnergy Management System of Gongniuin accordance withrelevant laws and regulations such as theLaw of the People's Republic of China on Energy Conservationand theRegulations of Zhejiang Province on Energy Conservation, establishing a comprehensive energy management systemin terms of the organisational structure of energy management, management requirements for electricity, water andoil consumption, energy metering and assessment management and other aspects.

The energy consumption management system of the Company has specified the responsibilities of theindustrialisation department of business divisions, the regional management officer, the finance department ofbusiness divisions and other departments, and provided for the implementation and audit of energy consumptionmanagement.

Energy Resource Conservation Management and Measures:

Optimizing energy structure:We vigorously increased the proportion of clean energy use such asphotovoltaic. During the reporting period, our use of photovoltaic power generation totaled 5.94 millionkilowatt hours.

The Photovoltaic System Located on the Rooftop of the Second Floor in the Longshan Base

Center of the CompanyStrengthening the management of equipment energy consumption:For major energy consumingequipment, each factory shall establish daily maintenance requirements and regular overhauls to enablenormal and efficient operation of the equipment; in case of intermittent shutdown of some equipment,they shall maximise the rational use of energy consumption and avoid idling of equipment; after equipmentshutdown, the total power supply and supporting water valves, gas valves, fans and other facilities need tobe turned offStrengthening the management of the "running, overflowing, dripping and leaking" of water resources.Promoting the use of recycled water, such as the recycling of air-conditioning condensate.

7576

Strengthen Environmental Safety for

Sustainable Development

Specific Energy Management Requirements of the Company

The industrialisation departmentof each business division drawsup an energy managementmap, controls the energy of theterritory according to the energymanagement area, and theperson in charge of the area isresponsible for internal energywaste. The person in charge ofthe facility specifically managesthe use of water, electricity andgas energy in each equipment/facility and performs daily energyconsumption monitoring andimprovement.

Encourage the implementationof energy saving andconsumption reduction inall functions, implement fullparticipation and make energyconsumption a routine task ona long-term basis to eliminatewasteful energy consumption.

Each business division setsup an energy consumptionaudit team to strengthenthe management of dailyenergy consumption, andfrom time to time audits theenergy consumption of water,electricity and gas withinthe factory, and the financedepartment informs theregional officier of any energywastage on a monthly basis.

Use of computers:

Management of lighting use:

The computer host and display lights must be switched off when you are off duty.The screen must be locked when people leave their seats and the computer display needs to be turned offwhen they leave for a long time.

For places with skylights such as fire escapes and warehouses, lights need to be switched off if the weather isfine and natural light meets the light conditionsLighting for workshop production shall be controlled in sections. For sections without production, thelighting shall be turned off; for test workstations, the workstation lights must be turned off when peopleleave. For all areas using electricity, water, electricity and gas equipment (except for special equipment) shallbe turned off during meal, mid-break and off hours.All lights and air conditioning must be switched off at the end of the meeting.

Green Office Rules:

Use of air conditioners:

When the temperature (based on thermometer temperature) is between 5°C and 30°C, any non-productionair conditioning is strictly prohibited.The standard on the use of air conditioning: In summer, when the indoor temperature is above 30°C, thecooling temperature shall be set no lower than 25°C; in winter, when the indoor temperature is below 5°C,the heating temperature shall be set no higher than 20°C.If the space is large and the temperature of local area is more than 30°C, the temperature can be lowered byfans, household chillers, ice and other ways. For the electronic workshop that has specific requirements forthe indoor temperature due to the special materials, the indoor temperature shall be kept constant and nolower than 25°C.Doors and windows need to be closed when the air conditioner is on to prevent hot and cold air fromescaping and causing energy wastage.

Waste Reduction Measures for 2022

Gongniu classifies and manages all emissions from its production and operations, including air pollutants, wastewater, general waste and hazardous waste. The Company strictly follows the relevant national laws and regulationsand has formulated the Regulations on the Management of Hazardous Waste and General Industrial Solid Wastetotake measures to promote compliance and meet the emission standards.Gongniu identifies the types of pollutants produced by the Company and its subsidiaries in production andoperations, and monitors and manages them against the corresponding emission standards. The Company mainlyemits nitrogen oxides (NOx), sulphur oxides (Sox), volatile organic compounds (VOCs) and particulate matter;and wastewater mainly emits COD, ammonia nitrogen and total nitrogen. During the reporting period, all majorpollutants such as exhaust gas and wastewater from the licensed emission units of the Company achieved organisedand compliant emissions.

Waste Management

Exhaust emission reduction measures:

The Company has introduced an internationally advanced VOC treatment system - zeolite runner + RTO,which is far more effective in treating exhaust gases than national standards.We replaced the UV paint with PU paint.

7778

Strengthen Environmental Safety for

Sustainable Development

To prevent environmental and regenerative pollution, Gongniu classifies hazardous waste and general industrial wastein accordance with theNational List of Hazardous Waste, and provides for the control and disposal of hazardous wastegenerated during production, living and construction, and general industrial solid waste generated during production.During the reporting period, the Company achieved a 100% disposal rate of general industrial waste and hazardous waste.

Measures for reducing solid waste discharge:

New sludge drying equipment was installed to reduce sludgegeneration by 200t/year, saving RMB550,000 in annualhazardous waste disposal costs

Sketch of Sludge Drying Equipment

Main Contents of the Hazardous Waste Management of the Company

Wastewater/Exhaust Emissions KPIs of the Company from 2022Wastewater/ExhaustUnit2022Total exhaust generation m

106,950Total wastewater dischargem

165,600

Hazardous waste disposal units are required to provide a business licence,hazardous waste operation permit within the validity period;The EHS of the business division will inform each department that generateswaste of the requirements for waste disposal in OA form in a timely manner, andeach department will pack the waste in accordance with the packaging methodspecified in the service agreement and store it in the hazardous waste bin, etc.

Hazardous waste storage facilities are subject to EIA approval and "threesimultaneous" acceptance;Storage sites are "dispersion-proof, loss-proof and leak-proof"Containers for hazardous waste must be in good condition

Prepare hazardous waste warning signs and labels in accordance with theHazardousWaste Management Noticeboard;Sharps waste is identified by a special sharps box, and when sharps are biologicallycontaminated, they are identified as non-tissue medical waste

Implement a registration mechanism for the entry of hazardous waste intothe warehouse, and all solid and liquid hazardous waste transported into thewarehouse by each department should be written with the type, quantity andnature of hazardous wasteThe entry and exit of hazardous waste in the temporary storage area and thehazardous waste warehouse must be registered in theHazardous Waste EntryLedger and the Hazardous Waste Exit Ledger

Generalrequirements

Storage

Label

Ledger

7980

Strengthen Environmental Safety for

Sustainable Development

Management of Safety in Production

Gongniu insists on the red line of safety in production in implementing the national safety policy of "putting safety first,maintaining safety mainly by prevention efforts, and comprehensive safety administration". To ensure the safety ofproduction activities, the Company has developed and improved theEquipment Safety Management Regulations, SafetyManagement Regulations for Special Equipment, Fire Safety Management Regulations, Safety Management Regulationsfor Hazardous Operation, Management Regulations on Lifting Ropes and Tools, Electricity Safety Management Regulationsand Management Regulations on Hazardous Chemicalsbased on the EHS system and BSS system, and standardizedmanagement of production norms according to different safety risks to effectively reduce production safety risks.Based on theAccountability Regulations for Safetyin Production, the Company stipulates the duties and responsibilitiesto be performed by each functional department of Gongniu and its staff and production personnel of each post for thesafety in production, and implements China's policies and regulations on the safety in production, so as to enhance theawareness of personnel for the safety in production.

System for Safety in Production

Responsible for organising the establishment and improvement of the Accountability Regulations for Safety inProduction and implementing assessment, rewards and penalties.Responsible for organising the development of production safety regulations and operating procedures.Responsible for the organisation and implementation of the Company's safety education and training programmes.Ensuring the effective implementation of its investment in safety.Ensuring that the Company has the production safety conditions stipulated by laws, administrative regulations andnational or industry standards.Responsible for organising, supervising and inspecting its production safety management and eliminating potentialproduction safety accidents in a timely manner.Responsible for organising the development and implementation of its emergency rescue plan for production safetyaccidents.Responsible for timely and truthful reporting of production safety accidents and organising accident investigations.Responsible for establishing staff safety education and training mechanisms and organising their implementation.Organising the formulation of annual safety and occupational health objectives, targets, management programmesand safe work planning, and inspect and supervise their implementation.Responsible for organising the implementation of safety management measures for major hazards, establishingemergency response organisations and guiding the implementation of plans.according to the safety management situation, responsible for organizing relevant departments to formulate safetyinspection plans or programs.Responsible for organizing and arranging regular safety meetings and special meetings on emergency response,formulating improvement measures and checking and supervising their implementation.

Group EHS Committee

Responsible for taking over the safety responsibilities of the Group EHS Committee and organising the work as requiredby the Group EHS Committee.Responsible for organising the establishment and improvement of the Accountability Regulations for Safety inProduction and implementing assessment, rewards and penalties.Responsible for organising the development of production safety regulations and operating procedures of theCompany.Responsible for the organisation and implementation of the Company's safety education and training programmes.Responsible for overseeing the effective implementation of the Company's investment in safety.Responsible for organising, supervising and inspecting its production safety management and eliminating potentialproduction safety accidents in a timely manner.Responsible for organising the development and implementation of its emergency rescue plan for production safetyaccidents.Responsible for timely and truthful reporting of production safety accidents and organising accident investigations.Responsible for defining the responsible personnel and scope of responsibility for each functional department at thegroup level.Responsible for organizing and implementing other tasks as requested by the Group EHS Committee.

EHS Management Department

Responsible for organizing or participating in the formulation of the business division's production safety rules andregulations, operating procedures and emergency plans for production safety accidents.Responsible for organizing or participating in production safety education and training in this business division, andkeeping truthful records of production safety education and training.Responsible for supervising the implementation of safety management measures for the major hazards of the businessdivision.Responsible for organizing or participating in its emergency rescue drills.Responsible for inspecting the safety production status of the business division, promptly investigating productionsafety accident hazards and making suggestions for improving production safety management.Responsible for stopping and correcting violations of rules and regulations, forced risky operations, and violations ofoperating procedures.Responsible for supervising the implementation of corrective measures for production safety in each business division.Responsible for establishing and improving the Accountability Regulations for Safety in Production of each businessdivision and implementing assessment, rewards and punishments.Responsible for the effective implementation of the investment of each business division in production safety.Responsible for timely and truthful reporting of production safety accidents in each business division and organizingaccident investigation.Responsible for defining the responsibility of each functional department and all types of personnel in each position atthe business division level for safety in production.

EHS Management Organization of Each Business Division

Responsibilities of Each Department of the Company under theAccountability Regulations for Safety in Production8182

Strengthen Environmental Safety for

Sustainable DevelopmentOver the years, the Company has insisted on conducting EHS production safety trainings to enhance the safety awarenessin production among staff in various departments, with a coverage ratio of 99.69% during the reporting period.

Summary of Production Safety Training Performance

Key performanceUnit202020212022

Production safety training hourshour13,19315,52619,517

Number of training sessions on safety in

production

session 2,2272,8663,033Attendance of training sessions on safety in

production

person141,994177,655187,294

Based on the principle of "unified planning, hierarchical management and division of responsibility" and "safety must beensured in production and business management, one who is in charge assumes responsibility", the Company formulatedtheRegulations on Safety Inspection (Threat Detection) and Governancein accordance with theLaw of the People's Republicof China on Work Safety, Law of the People's Republic of China on Fire Fighting and Law of the People's Republic of China onSafety of Special Equipment, which stipulates the items, contents, time, methods, rectification of hidden hazards, division ofresponsibilities and requirements for safety hazard inspection, and effectively controls all regional risks involved in productionsafety, environmental protection, occupational health and fire safety. Through the process of safety inspection, safetyrectification, information feedback tracking and verification as well as registration and management of regular reporting, theCompany conducts detailed inventory of risks and hazards to ensure the safe conduct of production activities.According to the rectification requirements or suggestions made by the safety inspectors, the person in charge of the inspecteddepartment shall thoroughly analyse the reasons for the hidden dangers and draw up, from a management perspective,effective measures to rectify or correct the hidden dangers based on the reasons and the suggestions for rectification. It shalladhere to the principles of "Five Determines" and "Three No-shifting-responsibilities" and formulate corresponding emergencyplans or temporary safety measures for the hidden dangers that cannot be rectified in the short term to avoid the emergence ofunexpected risks.

Safety Risk Control

Determine theperson in charge

of rectification

Determinecorrectivemeasures orprograms

Determine thetime and periodfor rectification

Determinesource of funding

Determine the contingencyplan for projects that cannot berectified in the short term

Five Determines

Shifts do not shift responsibilities

to the workshop

The competent department does

not shift responsibilities to the

CompanyThe workshop does not shiftresponsibilities to the competent

department

Three No-shifting-responsibilities

"Five Determines" and "Three No-shifting-responsibilities" Principle of the Company

To enhance its emergency response capability, the Company has set up an ERT emergency response team andformulated theERT Organizational Management Provisionsin accordance with the requirements of theLaw of thePeople's Republic of China on Fire Fightingand the relevant contents of theGuidelines for Enterprises to DevelopEmergency Response Plans for Work Place Accidents(GB/T 29639-2013) to respond to sudden safety accidents,control and dispose of accidents quickly and effectively, minimize casualties and damage to its property, protect theenvironment, implement rescue in a timely and effective manner, promote its overall sustainable development andstrengthen its ERT organizational management.The Company has clarified the principle of emergency rescue for accidents, which is to adhere to being people-oriented and take protecting the lives of employees and its property safety, and minimizing casualties as the primarytask in conducting emergency rescue. With unified command, hierarchical responsibilities, departmental self-rescueand company rescue, we constantly improve and strengthen the means of rescue and organize emergency rescue ina scientific and rapid manner, so as to minimize casualties and injuries.The Company has clearly stipulated the standard response procedures. The departmental head shall quicklyorganize the personnel on duty to set up the departmental ERT level 1 response organization in accordance withthe requirements, and study and judge the situation on site. If the ERT level 1 organization can effectively conductemergency rescue disposal of the accident and quickly carry out emergency rescue, all personnel shall be dividedinto a rescue group, a support group, an evacuation group and an aid group according to the division of labor.If the ERT level 1 organization cannot effectively conduct emergency rescue disposal of the accident, it needs tobe reported to the base head and the base's EHS, and the base head will give the order to set up the ERT level 2response organization with the base head or his designated person being the ERT commander on site. The deputy ofthe ERT commander will quickly call the members of the ERT level 2 response organization to assemble and rush tothe scene for emergency rescue, and all personnel shall be divided into a guidance group, a rescue group, a supportgroup, an evacuation group and an aid group.

Safety Emergency Drills

8384

Strengthen Environmental Safety for

Sustainable Development

The Company's ERT level 1 response organization consists of at least 12 persons, including 6 persons on each of theday and night shifts. After the response organization has been established, according to the division of labor, therescue group shall include at least 2 persons, the support group shall include at least 1 person, the evacuation groupshall include at least 1 person and the aid group shall include at least 2 persons. Emergency rescue shall be carriedout according to the division of duties.

Support Group

Support Group

Aid Group

Aid Group

Evacuation Group

Evacuation Group

Vigilance Group

Vigilance Group

Rescue Group

Rescue Group

Guidance Group

Immediate Command

ERT General Commander

ERT Commander

ERT Level 1 Response Organization

ERT Level 2 Response OrganizationThe ERT level 2 response organization consists of at least 20 persons, including 10 persons on each of the day andnight shifts. After the response organization has been established, according to the division of labor, the rescue groupshall include at least 3 persons, the support group shall include at least 2 persons, the evacuation group shall includeat least 2 persons and the aid group shall include at least 3 persons. Emergency rescue shall be carried out accordingto the division of duties.

Case

Emergency drill on the disposal plan for fire accidents in a wallswitch factoryIn June 2022, theCompany carried outan emergency drill onthe disposal plan forfire accidents in a wallswitch factory in orderto implement the basicwork policy of prevention-oriented and preventionand elimination-combined, test thefunctioning of the entiresafety organization andcommand system, test theability of the emergency

Fire Drill Scene

In November 2022, Ningbo Gongniu Electric Appliance Co., Ltd. wasawarded as an advanced collective for its outstanding performancein fire fighting publicity in Cixi City.

"Advanced Collective" for Fire Fighting Publicity in Cixi City

response team and departmental management to deal with sudden fire accidents, and enable all employees tounderstand the basic general knowledge of fire fighting and master the relevant capabilities. The drill simulatedas far as possible the occurrence of real events to improve the emergency rescue and disposal capability forsudden fire accidents and minimize the environmental pollution disaster caused by fire.

Occupational Health and SafetyGongniu strictly abides by theWork Safety Law of the People's Republic of China, theLaw of the People's Republicof China on Prevention and Control of Occupational Diseasesand theRegulations of the People's Republic of Chinaon Work-related Injury Insurance, and has established a comprehensive occupational health protection and safetymanagement system to provide employees with a healthy and safe workplace, take various measures to preventpotential safety hazards and protect the health and safety of employees in all aspects.

Key performance

8586

Strengthen Environmental Safety for

Sustainable Development

During the reporting period, the Company and itssubsidiaries actively carried out the certification ofoccupational health and safety management system andhave obtained ISO 45001:2018 occupational health andsafety management system certification. The entitiesinclude Gongniu Group Co., Ltd., Ningbo Banmen ElectricCo., Ltd., Ningbo Gongniu Low Voltage Electric Co., Ltd.,Ningbo Gongniu Electric Appliance Co., Ltd., NingboGongniu Optoelectronic Technology Co., Ltd. and NingboGongniu Digital Technology Co., Ltd.The certification covers the design and manufacturingof plug, socket-outlet (including converters, extensionsockets, mobile sockets, open sockets and hiddensockets), busways (busbars), portable cable reel, portablesingle-phase transformer, handlamp, USB-cable, poweradapter, vehicle power adapter, power bank, earphone,lithium ion cells and batteries used in portable electronicequipment, residual current circuit breakers, miniaturecircuit breakers, hidden switch, open switch, doorbell,enclosure of electrical accessories, footlight, LED lights,

The Company and itsSubsidiaries Received ISO45001:2018 OccupationalHealth Management System

Certification in 2022

The Company constantly expands its occupational health and safety management system to ensure that allaspects of employee health and safety management are covered, including prevention and control of occupationaldiseases, occupational health protection facilities, protection for female and underage workers, and labor protectionequipment, which have been strictly regulated by relevant documents.

Regulations on Prevention and Control of Occupational Diseases2022Management Regulations on Occupational Health Protection Facilities2019Management Measures on Protection for Female and Underage Workers2019Management Regulations on Labor Protection Articles2020

portable outdoor power bank,power distribution units forcommunication equipment andhome terminal information boxes,and the production of PVC cableand primary batteries.

In order to further prevent occupational disease hazards and strengthen the health and safety protection of employees,the Company started with the risk identification of occupational diseases and safety hazards, and took various measuresto reduce the frequency and hazards of occupational diseases as much as possible by adopting EHS incentives andestablishing special rectification projects for highly dangerous and highly risky serious occupational diseases.During the reporting period, to identify occupational disease risks more scientifically, the Company adopted the "riskmatrix method" to assess the risk level of possible hazard events. This method is a qualitative risk assessment method thatmainly assesses the level of risks based on the "likelihood" and "severity" of the occurrence of a hazard event, classifiesthe assessed risks and takes corresponding risk control measures according to the different levels of risk.

In December 2022, the Cixi Public Health Working Committee issued aNotice on the Publication of the Listof Occupational Health Achievers for 2022and our six colleagues were selected.The Health Commission of Ningbo issued aNotice on Excellent Organizational Units and Excellent Casesfor the 2022 Occupational Health Achievers Selection Campaignand our two colleagues were selected asexcellent cases.

Our Employees Received the Cixi Occupational Health Achiever Award in 2022

Risk Matrix (R=L*S)

Severity (S)Likelihood (L)

CatastrophicSevereModerateMinorSlight

107531Frequent1010070503010Likely7704935217Possible5503525155Unlikely330211593Rare1107531Note: Severity (S) is the value taken under the existing prevention and control measures.

Occupational Disease Risk Identification Matrix

Key performance

8788

Strengthen Environmental Safety for

Sustainable Development

Risk Control Measures

Risk LevelScoreControl MeasuresMethod Applied (Recommended)

MonitoringLevelHigh Risk70-100

Unacceptable risk, needimmediate recti?cation

Elimination, replacement,engineering control measures

CompanyMedium Risk30-50

Acceptable risk, butrequires management orcontrol measures

Elimination, replacement, engineeringcontrol measures, management measures

(warnings, training, operating standards,

inspections, etc.), personal protection

BusinessDivisionLow Risk7-25

Acceptable risk, monitoredand operated in existing

manner

Management measures (warnings,training, operating standards,

inspections, etc.), personal protection

WorkshopMinor Risk1-5Negligible risk

Management measures (warnings,

training, operating standards,inspections, etc.), personal protection

Team

After identifying serious occupational disease factors with high risks and hazards, Gongniu has taken variousmeasures to rectify and deal with them.

Matrix of Occupational Disease Risk Control Measures

In addition, the Company attaches importance to strengthening the occupational health and safety training ofemployees. From 25 April to 1 May 2022, which is the 20th publicity week of theOccupational Disease Preventionand Control Law of Gongniu, the Company launched the publicity week of theOccupational Disease Prevention andControl Lawwith the theme of "All for the Health of Workers". In order to enhance the capabilities of occupationalhealth managers and further popularize the knowledge of occupational disease prevention and control, each unit ofGongniu launched a series of occupational health publicity activities one after another.

MeasuresContentsEstablishedrelevantresearchprojects

The Company identified highly risky occupational diseases and established special research projects to sortout project background, designation of relevant programmes and implementation plans, in a bid to reducethe risk and hazards of occupational diseases. Take the noise reduction project at Guyao as an example,during the reporting period, the Company analysed the range of jobs and the number of people involvedin this occupational disease hazard and clarified the percentage of people exposed to noise; analysed thegeneration, sources and decibels of the noise area and established a special noise reduction project teamto clarify the objectives and action plans, and finally explained the health and safety and economic effectsbrought about by the implementation of the project to increase its feasibility.EHS rewardreportingmechanism

The Company has set up an EHS reward reporting mechanism. The declaration form should state thesafety hazards before and after improvement and their solutions, and sort out their safety benefits, soas to stimulate employees' awareness of safety hazard protection.

Issued time-limitedrectificationnoticesfor safetyhazards

The Company vigorously carried out safety hazard inspections. In the course of safety inspections, theCompany analysed and rectified the safety problems found in a timely manner, and issued time-limitedrectification notices for serious problems.During the reporting period, the Company issued time-limited rectification notices for the three remainingsafety hazards, and each relevant unit took corrective and preventive measures based on the details of thehazards and all completed the rectification within the prescribed period.

Main Contents of the OHS EHS Reward Declaration of the CompanyBefore improvementSafety benefitsAfter improvementSolutions

Case

Join Hands Together for Occupational Health - Occupational Healthand Safety WeekFrom 25 April to 1 May 2022, the Company launched an occupational health and safety week. Its mainactivities include basic occupational health training, advanced occupational health training and the businessdivision's occupational health promotion activities.EHS Management Department conducted several occupational health training sessions extensively from25 April to 28 April 2022 at Longshan Base, Shiqiao Base and Xiqu Base, mainly for occupational healthmanagers in production workshops, empowering them from aspects including occupational diseasehazards, labor protective equipment and occupational health records and effectively enhancing theirknowledge and skills.

8990

Strengthen Environmental Safety for

Sustainable Development

Basic Training on Occupational Health

Invited Professional Institutes for Training

EHS Management Department invited a teacher from a testing institute to give a lecture onOccupationalDisease Prevention and Control Law on 27 April 2022 at our Longshan Base.

Occupational Health Promotion Activities Carried Out by Business Divisions

Occupational Health Knowledge Competition Quiz

To deeply promote theOccupational Disease Prevention and Control Lawand further popularize theknowledge of labor protection, the three branches of the Company joined hands with the EHS engineersfrom the electrical appliance division, the wall switch division and the moulding company and widelymobilized Party volunteers to carry out precise propaganda to the employees of the Company exposed tohazards, on 28 April 2022.

To strengthen the widespreadunderstanding of occupational healthknowledge, the Shiqiao Base hasdrawn occupational health posters andorganized an online occupational healthknowledge quiz from 25 April to 28 April2022. A total of 408 people participated inthe event and the Company awarded giftsto the top 150 outstanding participants inthe occupational health knowledge quiz.

During the reporting period, the number of working days lost due to work-related injuries was 256; the numberof people injured at work was31, a significant decrease compared to 84 in 2020; the number of employees

participating in medical examinations for occupational diseases was6,359; and the funds invested for safety

in production and occupational health of employees amounted to RMB7,623,300.

Key performance

9192

Be People-orientedand Give back to theCommunityAs the valuable resources and assets of the Company, employees serve as theguarantee of talents for us to implement our development strategy and create aworld-class specialized and sophisticated enterprise that produces new and uniqueproducts. Gongniu adheres to and practices the concept of "people-oriented",respects and safeguards the rights and interests of employees, stimulates the vitalityof employees, and strives to achieve the common enhancement of employees'personal value and corporate value and build a harmonious and happy enterprise.Diversi?ed WorkplaceEmployee Rights and Bene?tsEmployee Training and DevelopmentSocial Welfare

9394

Be People-oriented andGive back to the Community

Diversified Workplace

Gongniu has always been people-oriented. We attach importance to the training and development of talents, uphold theprinciple of fair and just recruitment to protect the basic rights and interests of every employee, establish a sound trainingand development system to improve the work quality and skills of employees, and pay attention to the occupationalhealth and safety of employees. We are committed to providing equal and diversified development space for employeesand promoting the common growth of the enterprise and employees.Meanwhile, Gongniu strictly abides by theLabor Law of the People's Republic of China, theLabor Contract Law of thePeople's Republic of Chinaand other relevant national laws and regulations, respects and protects human rights, regulatesemployment procedures and effectively safeguards the legitimate rights and interests of employees. The Company entersinto labor contracts with its employees in accordance with the law, firmly prohibits the employment and use of child labor,resists all forms of forced labor, provides equal employment opportunities to all candidates and employees, and does notdiscriminate against candidates or employees on the basis of gender, age, race, color, religion, nationality, disability, etc.During the reporting period, female employees accounted for 37.53% at the Company.Gender Composition of Employees (Unit: persons)Age Composition of Employees (Unit: persons)

20202020

80006000400020001000

600040002000

Male31 to 4051 and aboveFemale

4,6194,669

4,6357,6267,7147,716

5,986

5,485

5,044

5,048

5,259

1,841

1,678

4,561

1,551

30 and below41 to 50

2021202120222022

During the reporting period, the Company had 12,351 employees, with the rate of 100% for signinglabor contracts and100% social insurance coverage.

During the reporting period, the Company took in a total of7,998 employees, including 73 freshgraduates.

Employee Rights and Benefits

Employee Rights and Interests

Gongniu insists on people-oriented values, attaches importance to the protection of employees' rights and interests,creates a working atmosphere and conditions for employees to exercise their talents, and encourages them to workhand in hand with the Company to strive for a happy life, create value together and share the good.

The Company strictly complies with national laws and regulations, and has formulated internal policies, such as theEmployee Compensation Management Regulations, to ensure legal compliance in recruitment and employment,regulate the recruitment workflow and requirements, provide fair and reasonable employment opportunities foremployees, adhere to democratic management and create a fair, just, sound and comfortable working environment.The Company continues to work hard on income distribution and compensation incentive by leveraging themotivational role of compensation incentive and improving relevant compensation systems to adjust thecompensation structure of employees according to job grades.In terms of employee performance appraisal, the Company improved and revised theEmployee PerformanceManagement Regulations, and carried out the promotion of the performance management system and processand daily performance appraisal through cooperation among the Group Performance Management Committee, theHuman Resources Center and the Human Resources Department of the Business Division.

Compensation Determination PrinciplePerformance Management Process

ResourcepriorityprincipleComprehensivecompensation

principleLegalcomplianceprinciple

Marketcompetitivenessprinciple

Performance-orientedprinciple

Performanceresults feedbackand application

Performanceappraisaland review

and plandevelopment

Performanceimplementationand coaching

To further establish and improve the long-term incentive mechanism, attract and retain outstanding talents, fully mobilizethe enthusiasm of the core team of the Company (including branches and subsidiaries) and effectively integrate theinterests of shareholders and the Company with the personal interests of the core team so that all parties will jointly focuson our long-term development, the Company formulated Gongniu 2022 Restricted Share Incentive Plan (Draft), throughwhich the Company granted 1,501,800 restricted shares to 670 persons, including its directors, senior management, core

Key performance

9596

Be People-oriented andGive back to the Communitymanagement and core backbone, at a grant price of RMB63.06 per share. The underlying shares were derived from theCompany's A ordinary shares repurchased from the secondary market, and the lock-up periods granted to the incentivetargets under the incentive plan were 12 months, 24 months and 36 months respectively from the completion of theregistration date of the restricted share grant. In July 2022, the Company published the Announcement on the Release ofRestricted Shares from the First Lock-up Period under the 2021 Restricted Share Incentive Plan and the Listing of the Sameand the Announcement on the Release of Restricted Shares from the Second Lock-up Period under the 2020 RestrictedShare Incentive Plan and the Listing of the Same respectively.As confirmed and considered and approved by the Board

of Directors of the Company, the conditions for the release of the corresponding batch of shares from the lock-up period have been fulfilled and the Company has handled the release of shares from the lock-up period for theeligible incentive recipients.

In order to standardize democratic management and supervisionmechanisms and encourage employees to contribute to thedevelopment of the Company, the Company carried out surveyssuch as the Integrity Satisfaction Survey through the EmployeeVoice Platform, to effectively safeguard employees' rights toknow, participate, express and supervise.

Employee Voice Platform

Form of Integrity Satisfaction Survey

Employee Benefits

Gongniu highly values humanistic care for its employees and strives to enhance their sense of happiness andbelonging at work. To continuously improve and elevate employees' benefits, the Company revised and perfectedtheEmployee Benefits Management Regulations, pursuant to which we implemented benefits into protectionand care initiatives under the principles of standardization, motivation and rationalization. At the same time, theCompany is always concerned about the health of its employees. We carried out a series of activities to enhancecommunication, truly integrating employee care into our corporate culture.

Medical Examination for Female Employees Drowning Prevention Class for Employees' Children

Life benefitsRest and holiday

Learning and

growth

Culturaldevelopment

Education andtraining

Paid annual leaveSick leave,bereavementleave, marriageleave, maternityleave, paternityleave, etc.

Cultural

activitiesTeam-building

activities

Housing allowanceMigratory Bird HouseLoans for house

purchase

Gifts such as birthday andmatrimonial careStart-of-year allowanceLong-service memorial awardRed cross (charity) reliefRetirement care

Main Contents of Bene?ts

Basic security

Social insurance and housing provident fundMedical coverage

Commercial insuranceHealth certificate medical examinationHigh-end medical insuranceStatutory holidaysHigh temperature allowanceLunch allowanceNight shift allowanceHoliday careBenefits

Onboarding medical examinationOccupational health screening

9798

Be People-oriented andGive back to the Community

"Work Together for Happiness" Lecture Medical Fraud Prevention Lecture

Employee Training and Development

Employee Training

As talents are the key driving force for a company's continuous innovation, the Company formulated theInternalLecturer Management Regulationsto comprehensively improve the overall quality of the workforce, stimulate thevitality of employees and meet the needs of its high-quality development. The Regulations creatively proposedthe "牛" project training system, which develops different learning and promotion paths for fresh graduates andoutstanding/high-potential managers, striving to cultivate multi-level, high-quality and creative talents.

Training programmeContent

NewcomersNewcomers integration and regulations training

ManagersLaunched the "Human Resource Management for Non-HR Managers" course

Internal lecturersConducted TTT training and Teachers' Day activitiesCapability enhancement for all

employees

Relying on the online learning platform, we enriched learning resourcesthrough external purchase and knowledge extraction to create a knowledgebase and enhance the capabilities of all employees

Training Programme and Content of the Company

牛 Plan Training CampTraining on "Human Resource Management for Non-HR

Managers"

"Gongniu" TrainingSystem

Onboarding training forfresh graduates and GongniuAcademy's graduates

Capability enhancementtraining for outstanding/high-potential N-3 managers

Capability enhancementtraining for outstanding/high-potential N-2 managers

Capability enhancementtraining for N-1 managers

Directed by Gongniu

University

Gongniu University isresponsible for genericcompetency training;Each department andbusiness division isresponsible for practiceand professional skillstraining.

Gongniu University isresponsible for genericcompetency training;Each department andbusiness division isresponsible for practiceand professional skillstraining.

Gongniu Universityis responsible forleadership training;Each department andbusiness division isresponsible for practiceand professional skillstraining.牛 Plan Project

牪 Plan Project

犇Plan Project

Plan Project

College StudentProject

N-3 DevelopmentProject

N-2 DevelopmentProject

N-1 Project

"牛" Project Training System

TTT Training Teachers' Day Activities

99100

Be People-oriented andGive back to the Community

Employee Development

The Company's development process goes hand in hand with the growth of its employees. Gongniu focuses on talentretention and attraction, continuously promotes the construction of a talent team, and builds fair and transparentcareer promotion channels and a complete vocational training system. Each year, the Company identifies successorsfor key positions through a talent inventory tool and carries out targeted training plans to provide employees witha broad space for personal growth. The Company has also formulated regulations and specifications such as theRegulations on Promotion Management of Administrative and Marketing Employeesand theRegulations on On-the-job Training and Learning Management of Middle and Senior Managers.

The Company further improves its internal rotation mechanism to provide more opportunities andpossibilities for employee development, so as to cultivate more comprehensive talents.

According to the requirements of the Group's strategic business development, the Human Resources Center willformulate the overall management and professional talent structure each year and stipulate the promotion ratiofor the year. The promotion step by step includes veto conditions, necessary conditions, sufficient conditions andreference conditions. Employees who meet the necessary conditions are considered to be qualified for promotion,while they can only be promoted after meeting the sufficient conditions and passing the assessment.

Internal ?ll rate20222021Growth rate

All employees41.4%34.8%19.0%

During the reporting period, the Company invested a total of RMB7.06 million in training.During the reporting period,16,001 employees received training sessions.During the reporting period, our employees received a total of37,650 hours of training, with the averagelength of training reaching

2.4 hours.

Type of conditionsAssessment factors

VetoValues, disciplinary behavior, work experience requirementsNecessaryYears of service in previous ranks, performance resultsSufficientJob competence requirements, job experienceReference

Management: Gongniu leadershipProfessional: Industry technical certifications, awards, national associate senior titlesBBS capabilitiesWillingness to rotate

Type of conditionsAssessment factors

ExceptionYears of service in previous ranks, performance results, outstanding contributionsSkipping grades

Performance results, qualified for basic conditions and exception conditions,potential, BBS capabilities, project managerPromotion Conditions and Assessment FactorsAccording to the demand of the Company for human resources in its strategic development and the needs of employees'career development, the Human Resources Center has established a ranking system with 19 levels in management andprofessional sequences. The two vertical and horizontal promotion channels provide reliable talents for the Company toachieve its strategic goal of RMB100 billion in ten years, guarantee the building of its organizational capacity and promotethe mutual development of the enterprise and its employees. In addition to its internal career development channels,Gongniu has extended its employee development channels to its dealers and suppliers.

Internal Employee Promotion Procedures

External employee promotion pathIn addition to the internal career development channel, Gongniu also provides a unique value chain (suppliers,dealers, etc.) development channel, through which internal outstanding talents can develop into excellent dealerbosses or dealers' professional managers, and excellent talents in supplier management, factory representatives andworkshop management can develop into the core management team of suppliers.By the end of the reporting period, over 275 employees developed into dealers and dealers' professional managers.

Recommendations

for promotion

Promotion

review360 assessment

Result approvaland disclosure

Evaluation duringthe study period

Unique Employee Development Path

ProfessionalManagementDealersSupplier executivesDealers' professional managers

ExternalInternal

Key performance

Internal employee promotion path

101102

Be People-oriented andGive back to the Community

Charity Activities of Gongniu in 2022

Employee Education Enhancement

During the reporting period, the Company updated theLearning and Growth System for Middle and Senior Managersto encourage and support core employees to attend MBA and EMBA studies. The Company provides a certainamount of tuition support to the participants in accordance with the system, and the participants can also applyfor tuition loans from the Company. Since the establishment of the system, the Company has supported about 10senior executives to attend MBA and EMBA studies. In addition to the tuition support, the Company has also granteda certain amount of paid study leave every month, making efforts to give adequate support to employees who arewilling to improve themselves.In the latest version of theLearning and Growth System for Middle and Senior Managers, the Company has paid moreattention to the quality of education for senior managers and has also increased the amount of reimbursement to amaximum of 80% of the out-of-pocket expenses.

Social WelfareGongniu proactively undertakes its social responsibility by integrating social responsibility management into its dailyoperations while safeguarding its own business development, and actively participating in community development.We have set up the Gongniu Charity Trust to carry out activities such as relief for the poor and needy, donations toschools and medical care for the elderly, with a view to develop together with the local communities and achievemutual benefits and win-win situation.

CategoryDetalisAmount

Relief for thepoor andelderly

Donation for the construction of the Huimin Building in Weixi VillageDonation to Cixi Ageing Development Foundation (2nd round and 1styear),etc.Taiyuan Village, Guandao Town, Tongcheng County, Hubei Province -Poverty-stricken Village Support,etc.

RMB1 millionRMB500,000RMB30,000Education Set up the Gongniu Charity Trust,etc. RMB50 millionHealthcare

Elken Fund (2nd round and 4th year) Healthcare system protection for villagers in Guyaopu Village, Zhangqi Town,etc.

RMB5 million RMB1 million

Gongniu set up a charity trust

In December 2022, the "CITIC Trust·Gongniu Charity Trust" initiated by Gongniu was successfully filed, becomingthe largest charity trust filed nationwide in 2022. This trust aims to "promote the development of education, science,culture, healthcare and sports, help the poor and needy, promote rural revitalization and common prosperity, as wellas other public welfare activities in line with theCharity Law of the People's Republic of China", reflecting Gongniu'sphilosophy and values of undertaking social responsibility and giving back to the society.In the future, Gongniu will continue to increase its investment in public charity while maintaining the sustainable andstable development of its own business, and innovate a long-term mechanism for public charity, so as to contributemore to the harmonious development and common prosperity of Chinese society.

CaseFacilitating the Development of Education with the Charity TrustaIn March 2023, the ceremony of the Gongniu Charity Trust for funding Wuhan University was held atWuhan University. Through this funding, Gongniu will support Wuhan University to introduce high-level talents from home and abroad to enhance its teaching and research capabilities, and co-establishthe "Gongniu New Energy Industry Research Institute of Wuhan University" to focus on the frontiertechnology of new energy and carry out innovative research project, so as to promote the industry-academy-research institute integration and the transformation of results and advance the jointdevelopment of the university and the enterprise. Ruan Liping, Chairman and President of Gongniu,attended the ceremony and expressed his hope that they can give full play to their respective advantages,strengthen scientific research cooperation, deepen university-enterprise cooperation and promote theircommon development.

Gongniu Charity Trust's Wuhan University Project was implemented Gongniu conducted warm-hearted education activities

Gongniu took efforts to facilitate the development of education and provided security for the development ofthe next generation. During the reporting period, the Company carried out "warm-hearted education" activitiesin campuses. We provided students with electricity safety education and repair and inspection of aged electricalappliances to ensure electricity safety, helped campuses to build "bright classrooms" and donated winter clothing.103104

Environment Society andGovernance Report

Electricity Safety Promotion ActivitiesThe Company carried out promotional activities in nearly1,000 colleges and universities across the country to explainelectricity safety knowledge, so that university students whohave just entered the society can enhance their awarenessof electricity safety, understand the national standardrequirements of sockets and how to choose the right sockets,so as to protect the electricity safety for students. Promotional Activities in Campuses

Donating School UniformsIn December, the Company launched the "Winter Clothing Campaign" to donate winter school uniforms.

Donating School Uniforms in the "Winter Clothing Campaign"

Replacing Campus Circuit Breakers to Ensure Electricity SafetyThe Company enhanced campus electricity safety awareness by promoting the concept of safe electricity use,and carried out electricity safety hazard inspection and overhaul and replaced aged circuit breakers, striving toguard campus electricity safety with Gongniu safety circuit breakers.

Campus Electricity Safety Inspection Activities

Lighting the Future of ChildrenWith professional design and installation techniques,Gongniu is committed to creating energy efficient, safe,effective classrooms with lights precisely controlled, so asto help schools improve the learning environment, createcomfortable light vision and promote learning efficiency.

Bright Classroom Campaign

Case

Gongniu conducted the "Party Members' Day of Dedication" Activity

In September 2022, to celebrate the 73rd anniversary of the founding of New China, and the successfulconvening of the 20th CPC National Congress, enhance the cohesion and combat power of the Partyorganization, further play a pioneering and demonstration role, consolidate its business, serve the masses, andcreate a safe and stable social and political environment and a strong atmosphere of serving the people, theParty Committee of the Group intended to establish the first Saturday of September every year as the "PartyMembers' Day of Dedication" and organize corresponding activities. The activity received rapid response andpositive action from all Party branches, Party members and activists, with a total of 10 Party branches, 130 Partymembers and activists participating in the activity and a total of 356.7 hours of voluntary services.

The "Party Members' Day of Dedication" Activity

106105

Environment Society andGovernance Report

Index of Indicators

GRIStandards

DisclosuresSection IndexGRI 1: Foundation 2021GRI 2: General Disclosures 2021

2-1Organizational detailsAbout the Report2-2Entities included in the organization's sustainability reportingAbout the Report2-3Reporting period, frequency and contact pointAbout the Report2-6Activities, value chain and other business relationshipsCompany Profile2-7EmployeesDiversified Workplace2-9Governance structure and compositionCorporate Governance

2-10Nomination and selection of the highest governance bodyCorporate Governance

2-12

Role of the highest governance body in overseeing the management

of impacts

Corporate Governance

2-13Delegation of responsibility for managing impactsESG Management

2-16Communication of critical concernsESG Management

2-27Compliance with laws and regulations

Compliance and Risk

Control

2-29Approach to stakeholder engagementESG Management

GRI 201: Economic Performance 2016

201-3Defined benefit plan obligations and other retirement plans

Employee Rights and

BenefitsGRI 203: Indirect Economic Impacts 2016

203-1Infrastructure investments and services supportedCommunity Benefit203-2Significant indirect economic impactsResponsibility Topic

GRIStandards

DisclosuresSection IndexGRI 205: Anti-corruption 2016

205-2

Communication and training about anti-corruption policies and

procedures

Integrity OperationGRI 206: Anti-competitive Behavior

206-1

Legal actions for anti-competitive behavior, anti-trust, and

monopoly practices

Compliance and Risk

ControlGRI 302: Energy 2016302-3Energy intensity

Use of Resources andEmissions302-4Reduction of energy consumption

Use of Resources andEmissions302-5Reductions in energy requirements of products and services

Ecological EnvironmentProtectionGRI 303: Water and Effluents 2018303-2Management of water discharge-related impacts

Use of Resources andEmissions303-3Water withdrawal

Use of Resources andEmissions303-4Water discharge

Use of Resources andEmissions305-7

Nitrogen oxides (NOx), sulfur oxides (SOx), and other significant air

emissions

Use of Resources andEmissionsGRI 306: Waste 2020306-2Management of significant waste-related impacts

Use of Resources andEmissions

GRI 308: Supplier Environmental Assessment 2016308-1New suppliers that were screened using environmental criteriaSupply Chain Management

107108

Environment Society and

Governance Report

GRIStandards

DisclosuresSection Index

GRI 401: Employment 2016

401-1New employee hires and employee turnoverDiversified Workplace

401-2Benefits provided to full-time employees

Employee Rights andBenefits

401-3Parental leave

Employee Rights and

BenefitsGRI 403: Occupational Health and Safety 2018

403-1Occupational health and safety management system

Occupational Health and

Safety403-2Hazard identification, risk assessment, and incident investigation

Management of Safety in

Production403-3Occupational health services

Occupational Health and

Safety403-4

Worker participation, consultation, and communication on

occupational health and safety

Occupational Health and

Safety403-5Worker training on occupational health and safety

Occupational Health and

Safety403-6Promotion of worker health

Occupational Health and

Safety403-7

Prevention and mitigation of occupational health and safety impacts

directly linked by business relationships

Occupational Health and

Safety403-9Work-related injuries

Occupational Health and

SafetyGRI 404: Training and Education 2016404-1Average hours of training per year per employee

Employee Training andDevelopment404-2

Programs for upgrading employee skills and transition assistance

programs

Employee Training and

Development

GRIStandards

DisclosuresSection IndexGRI 405: Diversity and Equal Opportunity 2016

405-1Diversity of governance bodies and employeesDiversified Workplace

GRI 413: Local Communities 2016413-1

Operations with local community engagement, impact assessments,

and development programs

Community BenefitGRI 414: Supplier Social Assessment 2016414-1New suppliers that were screened using social criteriaSupply Chain Management

GRI 416: Customer Health and Safety 2016

416-1

Assessment of the health and safety impacts of product and service

categories

Customer ServicesGRI 417: Marketing and Labeling 2016417-1Requirements for product and service information and labelingResponsible Marketing

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Environment Society andGovernance Report

FeedbackDear readers:

Thank you for reading the 2022 Environmental, Social and Governance (ESG) Report of Gongniu Group Co., Ltd.In order to provide you and other stakeholders with more professional and more valuable information about theenterprise social responsibility, we request your help to answer relevant questions in the feedback form, so that wemay further improve our management over social responsibility and sustainable development in the future.Please rate the following questions from 1 to 5 (where 1 is the lowest score and 5 is the highest score)

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