³¤Ô¶ï®¿Æ£º2023Äê¶È»·¾³¡¢Éç»á¼°ÖÎÀí(ESG)±¨¸æ(Ó¢ÎÄ°æ)

Introduction to Repo®îThe repo®î is the 2023 Environmental, Social and Governance (ESG) Repo®î released to the public by Hunan Changyuan Lico Co.,Ltd. (hereinafter referred to as "Changyuan Lico", "the Company" or "we"). the repo®î is open to all stakeholders of Changyuan Lico,and truthfully discloses the Company's responsibility pe®íormance practices towards impo®îant stakeholders such as shareholders,clients, pa®îners, and employees in 2023, and its e®ão®îs in the ESG ®êeld based on the principles of objectivity, standardization andtransparency, with the aim of responding to the expectations of stakeholders and better ful®êlling social responsibilities in the future.Repo®îing PeriodFrom Janua®ñ 1, 2023 to December 31, 2023. To enhance the comparability and completeness of the repo®î, some data and contentare appropriately traced back to previous years.Repo®îing scope

Unless otherwise specified, the report covers the ESG situation of Hunan Changyuan Lico Co., Ltd. and its wholly-owned andholding subsidiaries, and the repo®î scope is consistent with the Company's annual repo®î.Description of usage standardThe repo®î is prepared in accordance with the relevant requirements of theSelf-regulato®ñ Guidelines for the Companies ListedNo.1-Standardized Operation of Shanghai Stock Exchange,thePreparation Guidelines for Sustainable Development Repo®î(GRIStandards) of Global Repo®îing Initiative, and theGuidelines on Corporate Social Responsibility Repo®îing for Chinese Enterprises(CASS-ESG5.0) of Chinese Academy of Social Sciences and other repo®îing guidelines or rules.Data source and reliability guaranteeAll information data referenced in the repo®î is based on the in-house documentation, statistical repo®î, ®ênancial repo®î, etc., ofChangyuan Lico. The repo®î is issued after full review by the Board of Changyuan Lico and no presence of inaccurate records,misleading statements or major omissions will be found in the repo®î.

Moneta®ñ unitUnless otherwise speci®êed, the moneta®ñ amounts included in the repo®î are listed in RMB.

Availability of the Repo®î

The repo®î and its English version are available for download at the website of Shanghai Stock Exchange (www.sse.com.cn) and thecompany website.FeedbackPlease feel free to contact us if you have any comments or suggestions regarding the content of the repo®î or the Company'spe®íormance in ESG. Your opinions and suggestions will help us fu®îher improve the repo®î and our ESG pe®íormance.E-mail: [e-mail].: 0731-88998117Address: No. 61 Yan'gao Road, Yuelu District, Changsha City, Hunan Province

About the Repo®î

Improvement of environmental managementReduction of resource consumptionPrevention and control of pollution emissionsClimate risk response

Message from the ChairmanAbout Changyuan LicoESG management

Future prospectsAppendix

Environment

CONTENT

Protect employee happinessStrictly adhere to product qualityDelivering high-quality se®ïicesBuilding a sunshine chainStrengthening innovation driveTake on social responsibility bravely

Putting people®êrst and creating abetter future

Social

12		36

Adhere to the guidance of Pa®îy buildingOptimize governance architectureStrengthen risk managementAdhere to compliance operationConduct internal auditDeepen honesty constructionProtect Shareholders' equity

Governance

Low carbon andenvironmental protection,harmonious coexistence

E®æcient governancewith stable footsteps andforward thinking

AppendixSocialGovernance

0203

Changyuan Lico 2023Environmental, Social and Governance Repo®î

Message from theChairman

AboutChangyuan Lico

ESGmanagement

Environment

Futureprospects

Message from the Chairman

The year of 2023 is the beginning year of fully implementing the spirit of the 20th National Congress ofthe Communist Pa®îy of China. Over the past year, the Company has adhered to the guidance of Xi JinpingThought on Socialism with Chinese Characteristics for a New Era, conscientiously implemented the spirit ofthe Central Economic Working Conference, actively practiced the new development concept of innovation,coordination, green, openness, and sharing, adhered to the overall keynote of seeking progress whilemaintaining stability, honed the original intention of struggle, adhered to the major responsibilities andtasks, focused on value creation, deepened enterprise reform, and worked hand in hand with its pa®înersto promote high-quality development, contributing the "Lico power" to the sustainable development of theindust®ñ and society.In 2023, we ®êrmly followed the road of green development and con®êrmedly promoted the environmentalprotection.

Actively implement the main responsibility of ecological environmental protection, deeplycarry out special inspections for safety and environmental protection and special investigations andrectification for major accident hazards, and continuously fight the battle against pollution preventionand control. Adhere to the concept of green, low-carbon and environmental protection throughout thewhole production and operation management process, complete the carbon footprint certification andfull lifecycle accounting of the featured products, and solidly promote energy conservation, emission

reduction and carbon reduction measures in various links such as raw material selection, technology research anddevelopment, equipment upgrading, product manufacturing, process iteration, project construction, resource recyclingand management optimization. Organize theme activities such as "Fire Propaganda Month", "Energy ConservationPropaganda Week" and "National Low Carbon Day" to gather digital and intelligent empowerment, and promote theconstruction of a beautiful China and the achievement of the "carbon peaking and carbon neutrality" goal.In 2023, we will e®ãectively ful®êll our social responsibilities and demonstrate the mission and responsibility of centralenterprises by taking proactive and practical actions.Always keeping in mind the "greatness of the count®ñ", activelyserving the national new energy vehicle strategy, strengthening key core technology research and development,accelerating the cultivation and development of new quality productivity, promoting high-level technological self-reliance and self-improvement, and ensuring that the company's social and economic benefits grow synchronously,and the development achievements are shared with society. Organize public welfare actions such as love packagedonations, donations for education, school enterprise cooperation, volunta®ñ blood donation, and tree planting, andcontinue to pa®îicipate in the targeted assistance work of Huayuan County, Hunan Province, to help consolidate andexpand the achievements of pove®îy alleviation and e®ãectively connect with rural revitalization. Adhere to the strategy ofstrengthening enterprises with talents, attach impo®îance to the health, safety, and development of employees, advocatethe concept of "e®æcient work, healthy life", warmly build a "home for employees", car®ñ out diverse cultural and spo®îscompetition activities, focus on improving the work environment and quality of life, and continuously enhance the senseof gain, happiness, and security of employees.In 2023, we will benchmark against world-class standards and enhance modern corporate governance capabilities withreform and innovation courage.Seriously implement the principle of "two consistencies" and promote the integrationof Pa®îy leadership into corporate governance from the aspects of institution, system, and organization. In accordancewith the decisions and deployments of the State-owned Assets Supe®ïision and Administration Commission of the StateCouncil and China Minmetals on the deepening and upgrading actions of the new round of state-owned enterprisereform and the value creation actions by benchmarking world-class enterprise, we will coordinate the deepening of thecompany's reform and the construction of world-class enterprises, focus on the goals of "excellent products, outstandingbrands, leading innovation, and modern governance", continuously improve core competitiveness and enhance corefunctions. Strengthening the capacity building of the headqua®îers to "manage all kinds of a®ãairs and grasp the overallsituation", and enhancing the functions of internal control, risk prevention, and compliance promotion are becomingincreasingly prominent. Develop and implement a series of policy measures to "manage the present and benefit thelong term", and steadily improve the efficiency of modern enterprise governance through the two wheel drive of"reform+innovation".Environmental protection, social responsibility, and corporate governance are the necessary paths for sustainabledevelopment of the enterprise. We will always adhere to the guidance of Xi Jinping Thought on Socialism with ChineseCharacteristics for a New Era, deeply implement the spirit of the 20th National Congress of the Communist Pa®îy of China,not disappoint the responsibility of central enterprises, not disappoint the expectations of the times, maintain a spirit offorging ahead and never slacking o®ã, and an attitude of seizing eve®ñ minute and pressing forward with indomitable will,pushing the Company to move forward towards the goal of "being a leader in the global new energy materials indust®ñ",and strive to write a new chapter of high-quality development of Changyuan Lico on the new journey !

Hu Liuquan, the Secreta®ñ of the Pa®îy committee and Chairman

of Hunan Changyuan Lico Co., Ltd.

AppendixSocialGovernanceChangyuan Lico 2023Environmental, Social and Governance Repo®î

Message from theChairman

AboutChangyuan Lico

ESGmanagement

Environment

Futureprospects

About Changyuan Lico

Company pro®êle

Corporate culture

Organizational structure

The Company has always adhered to the corporatephilosophy of "world-class mission and responsibility,leading role of independent innovation, problem-oriented work thinking, quality of excellence, and thestriving spirit of daring to win". Taking the road ofindependent innovation, we are committed to buildinga characteristic corporate culture, standardizingorganizational governance, earnestly fulfilling socialresponsibilities, promoting a continuous and sounddevelopment of the Company, creating a businessenvironment that pursues client satisfaction andefficient operation, and playing a decisive role inthe continuous pursuit of excellent performancemanagement for the enterprise.

Procurement centerSales centerR&D centerProduction centerQuality assurance depa®îmentLogistics depa®îmentInformation technology centerProject headqua®îers

Enterprise

mission

Becoming the leader in the global newenergy material indust®ñ

Faithful, win-win,e®æcient and innovative

Hunan Changyuan Lico Co., Ltd. (hereinafter referred to as Changyuan Lico, stock code: 688779) was founded in 2002. It is a directlymanaged enterprise of China Minmetals Corporation, a Fo®îune Global 500 company. It is a member enterprise of State-owned EnterpriseElectric Vehicle Indust®ñ Alliance, the president unit of the Batte®ñ Association of Hunan, and the leader unit of Advanced Energy StorageMaterials Indust®ñ Alliance in Changsha-Zhuzhou-Xiangtan. It was listed on the science and technology innovation board of ShanghaiStock Exchange in August 2021.As the core support for China Minmetals to implement the innovation-driven development strategy and build a "new power for thefuture", Changyuan Lico adheres to the action guide, value orientation and enterprise spirit of "world-class mission and responsibility,leading role of independent innovation, problem-oriented work thinking, quality of excellence, and the striving spirit of daring to win".With the strategic positioning of "domestic ®êrst-class and internationally renowned new energy material supplier", it focuses on majorresponsibilities and tasks, adhering to righteousness and innovation, being brave in unde®îaking and daring to take actions and creatingworld-class, and is committed to making the enterprise stronger, better and bigger, sharing development achievements with a widerrange of stakeholders.In the future, the Company will actively practice the new development concept of innovation, coordination, green, openness andsharing, hone its original intention, strengthen its advantages, and work hand in hand with its pa®îners to become "a leader in the globalnew energy material indust®ñ". We will continue to contribute to meeting the growing needs of the people for a better life, se®ïing theimplementation of the national new energy vehicle strategy and taking on the responsibility of promoting high-quality economic andsocial development. We will also make new and greater contributions to achieving the goal of the second centu®ñ!

Corevalues

(Party committee publicity department,Party-masses work department and partycommittee o®æce)General management depa®îment

Shareholders' meeting

Board of Supe®ïisorsStrategy CommitteeNomination Committee

ManagementBoard of DirectorsRemunerationand Appraisal Committee

(Human resource depa®îment)Pa®îy committee organization depa®îmentStrategic planning depa®îmentFinancial depa®îment(Inspection office of the party committee,audit depa®îment and legal depa®îment)Discipline inspection depa®îmentSafety & environment protectiondepa®îment

0607

AppendixSocialGovernance

Changyuan Lico 2023Environmental, Social and Governance Repo®î

Message from theChairman

AboutChangyuan Lico

ESGmanagement

Environment

Futureprospects

Business ove®ïiewSocial recognitionThe Company is mainly engaged in the R&D, production and sales of cathode materials of high-e®æciency batte®ñ. The Company's mainproducts include multi-material precursors, multi-component cathode materials, lithium iron phosphate, lithium cobalt oxide and otherLi-ion cathode materials, as well as Ni-MH batte®ñ cathode materials. It has a complete product system of lithium multi-componentmaterial precursors, lithium multi-component cathode materials and lithium iron phosphate cathode materials, and has alwaysmaintained an industry-leading market share in the power ternary materials. The Company is headquartered in Changsha, HunanProvince, with three production bases: High-tech, Lugu and Tongguan.

Changyuan Lico takes "adhering to strengthen the main business of Li-ion batte®ñ cathode material indust®ñ,adhering to diversi®êed industrial allocation policy and adhering to global development direction" as the basicprinciple, and takes "becoming domestic ®êrst-class and internationally renowned new energy material supplier"as the strategic positioning. The Company is market-oriented, based on the precise analysis of the market,to reasonably allocate corporate resources, clarify future development paths, and formulate the Company'sdevelopment strategy in combination with internal and external environment and its own advantages.

Corporate strategy

"Increasing Varieties, Improving Quality andCreating Brands" Benchmarking Enterpriseof Raw Material Indust®ñ in Hunan

ESG Pioneer Practitioner

2023 "Green Pa®îner"

University-enterprise CooperationInnovation and Entrepreneurship

Education Base in Hunan

Quality Excellence Award for CATL

Supplier in Q1 of 2023

Golden Bull Science and Technology

Innovation Board Top 50

China's Top 50 MostPromising Enterprises

Best Strategic Pa®îner

Science and Technology Award in China's

Nonferrous Metals Indust®ñ

Indust®ñ and Information TechnologyDepa®îment of Hunan Province

Securities Daily

EVE

Education Depa®îment of

Hunan Province

CATL

China Reform Holdings Corporation Ltd.

China Securities Journal

China Automotive Batte®ñ

Innovation Alliance

Sunwoda

China Nonferrous Metals Indust®ñ

Association and the Nonferrous

Metals Society of China

Constructing and improving business po®îfolioAiming at the diversified development of the cathode material industry, based on the existing ternary cathodematerial, lithium iron phosphate cathode material, lithium cobalt oxide cathode material and ball nickel business, wewill strengthen the layout of cutting-edge products, construct an indust®ñ chain for raw material guarantee, materialproduction and recycling, improve the industrial layout, and enhance the Company's comprehensive competitivenessand discourse power in the indust®ñ.Stabilizing the domestic market and entering the international marketThe Company adheres to the world-class mission and responsibility, and continues to expand its cooperativerelationship with top domestic power batte®ñ manufacturers on the basis of stable cooperation with existing clients.At the same time, it strengthens the expansion of the international market and actively competes and exchanges withinternational counterpa®îs. Based on the cooperation of production and sale, cooperation of technical R&D, it exploresdiversi®êed forms to bind strategic pa®îners.Continuously promoting the integration of indust®ñ and ®ênanceThe Company has the ability to use multiple equity and debt ®ênancing tools, with strong ®ênancing capacity, it cane®ãectively suppo®î the Company's technical progress, capacity expansion and rapid growth in business scale.Implementing the strategy of cost leadership and technology leadership

Technological innovation is also the fundamental guarantee of the Company's competitiveness. The Company continuesto invest funds in technical R&D, continuously optimizes core products, actively researches and develops cutting-edgeproducts, and actively explores future technical directions.Cost is the core capability of the Company's competitiveness. The Company continues to promote full cost control,with careful calculation and strict budgeting, allowing eve®ñ penny to be spent e®ãectively and play a greater role, andeliminating cost waste.

090809

AppendixSocialGovernanceChangyuan Lico 2023Environmental, Social and Governance Repo®î

Message from the

Chairman

AboutChangyuan Lico

ESGmanagement

Environment

Futureprospects

ESG management

ESG governance architecture

Changyuan Lico establishes an ESG management system with structural integrity, clear hierarchy, clear rights and responsibilities,and e®æcient operation. It clari®êes the job responsibilities of personnel in each position and provides organizational guarantee for theCompany's ESG work.

Identify and evaluate ESG risks inthe Company, formulate ESG relatedpolicies, systems and objectives,review and make decisions on ESGrelated matters in the Company,and supervise and evaluate thepractice of ESG related matters in theCompany.

Implement various resolutions andpolicies of the Board of Directorson ESG work, examine the ESGrisks in the Company, execute andpromote specific ESG matters, andregularly communicate and reportthe progress on ESG related mattersto the Board of Directors.

Regularly collect, report and reviewESG information to improve statisticalcontrol efficiency of ESG relatedinformation and ESG work e®æciency,and ensure the e®æcient developmentand implementation of ESG work.

Analysis of material issues

In order to better respond to the expectations and demands of stakeholders, Changyuan Lico regularly conducts the analysis of ESGmaterial issues. Through various ways, identify, evaluate, sort and confirm ESG issues, accurately understand the concern extent ofstakeholders on related issues, and their expectations for the ESG management of Changyuan Lico. In 2023, the process of material issuesof the Company is as follows:

We will strengthen the disclosure of importance issues in the report according to the evaluation results on importance. In the dailybusiness activities, we also take the evaluation results of ESG issues as a guide for future work, constantly improve it to respond to theexpectations of stakeholders, enhance trust and cooperation, and jointly promote the sustainable development of the Company and thesociety.

Issueidenti®êcation

Identify major trends related tothe Company through indust®ñresearch, combined withnational policies, key pointsof capital market, industrydevelopment, etc., to identifyimpo®îant issues.

Issueevaluation

Through inte®ïiews, meetings,communications, regular visitsand other forms, understandthe importance evaluationcomments of internal andexternal stakeholders on theCompany's ESG issues.

Impo®îanceso®îingCarry out overall analysis ofthe research results, combinedwith national policies, keypoints of capital market, etc.,to determine the internal andexternal sorting of materialissues, and ultimately generatean importance matrix ofstakeholders.

Management con®êrmation

and audit

Submit the so®îing and matrixof material issues generatedto the ESG management ofthe Company for review andcon®êrmation.

Boardof Directors

Strategy Committee ofthe Board of Directors

ESG working

group

Decision-making levelManagementExecution body

In 2023, the judgment matrix of material issues of Changyuan Lico is as follows:

Impo®îance on Changyuan LicoEnvironmentEnvironmentalmanagement policyPollutant emissionsWaste treatmentResource usageand recove®ñEcological environmentalprotectionResponse toclimate changeGreen productsClean technology

Protection of employees'rights and interestsOccupational health and safetyEmployee trainingProduct liabilityChemical substancemanagementClient rights and interestsScienti®êc andtechnological innovationIntellectual prope®îy protectionSupply chain managementSocial public welfare

1.2.3.4.5.6.7.8.

9.10.11.12.13.14.15.16.17.18.

Society

Signi®êcance to stakeholders

LowHigh

High

Corporate governanceProtection of shareholders'rights and interestsProtection of investors¡¯ rightsand interestsRisk managementCompliance managementLeadership of pa®îy buildingAnti-corruption and cleangovernmentEconomic pe®íormanceESG information disclosure

19.20.21.22.23.24.25.26.27.

Governance

10111011

AppendixSocialGovernance

Changyuan Lico 2023Environmental, Social and Governance Repo®î

Message from theChairman

AboutChangyuan Lico

ESGmanagement

Environment

Futureprospects

Stakeholder communicationESG honorsChangyuan Lico actively fulfills its social responsibility, attaches great importance to the expectations and demands of stakeholders,carries out in-depth exchanges with the help of di®ãerent channels, fully understands the opinions and suggestions of stakeholders suchas government and regulato®ñ agencies, shareholders and investors, clients, suppliers and pa®îners, employees, environment, communityand the public, and improves the ESG performance of Changyuan Lico in a targeted manner, to continuously adjust the sustainabledevelopment strategies and actions of the enterprise.

StakeholdersExpectations of stakeholdersCommunication and responseGovernmentand supe®ïiso®ñbody

Compliance operationIntegrity constructionIntellectual prope®îy protection

Improvement of compliance system constructionStrengthening education and training on combat

corruption and uphold integrityIntellectual prope®îy protection system

Shareholdersand investors

Improvement of corporate governanceProtection of shareholders' rights and

interestsInvestor relations management

Information disclosure

Risk management

Improve the level of operation and management

Investor research and communicationIssuing regular repo®îs, tempora®ñ announcements

and pe®íormance brie®êngsComprehensive risk control

Customer

Scienti®êc and technological innovation

Customer's rights and interests

Product quality and safety

R&D management systemClient satisfaction su®ïey and complaint channel

Strict governance and management

Maintaining information security

Suppliers andpa®îners

Supply chain management

Fair competitionIntegrity and reciprocity

Improvement of purchasing system

Faithful pe®íormance of contractsSign the cooperation agreement.

Employees

Basic protection of rights and interests

Personal development

Employee welfare

Employee caring

Establishment of fair promotion channelProfessional training and career development

Employee satisfaction su®ïey

Guarantee work safetyDaily communication

Environment

Green and low-carbon developmentProtect the ecological environment

Green transformation developmentGreen technological innovation

Community andthe public

Pa®îicipation in rural revitalizationSuppo®îing educational business

Pairing co-buildingPove®îy alleviation in consumption

Donation for education

"ESG Pioneer Practitioner" Awards issued

by Securities Daily

Granted the "ESG Golden Bull Top 100"of the First CRHC Cup hosted by ChinaReform Holdings Corporation Ltd. andChina Securities Journal

Granted the "ESG Golden Bull Top 50 Central

Enterprises" of the First CRHC Cup hostedby China Reform Holdings Corporation Ltd. and

China Securities Journal

1213

AppendixSocialGovernanceChangyuan Lico 2023Environmental, Social and Governance Repo®î

Message from the

Chairman

AboutChangyuan Lico

ESGmanagement

Environment

Futureprospects

Low carbon andenvironmental protection,harmonious coexistence

Environment

SDGs

Changyuan Lico deeply implements Xi Jinping's Thought on ecologicalcivilization, fully implements the major decisions and arrangements of thePa®îy Central Committee and the State Council on the ecological civilizationconstruction, adheres to the main responsibility of the enterprise,establishes and improves the responsibility system for energy conse®ïationand ecological environmental protection, adheres to green and high-qualitydevelopment, actively practices the concept of green and low-carboncircular development, continuously enhances its strength in the e®æcient useof energy and resources as well as its strength in low-carbon development,and solidly carries out energy conservation and emission reduction tocontribute to responding global climate challenge and realizing the "carbonpeaking and carbon neutrality" goals.

1415

AppendixSocialGovernance

Changyuan Lico 2023Environmental, Social and Governance Repo®î

Message from the

Chairman

AboutChangyuan Lico

ESGmanagement

Environment

Futureprospects

Improvement ofenvironmental managementThe Company adheres to the concept of lucid waters and lush mountains are invaluable assets, and ®êrmly follow the road of green andlow-carbon sustainable development. The Company continuously improves its environmental management system, strengthens energyconse®ïation and environmental protection, and strives to build the Company into a model enterprise for e®æcient utilization of resourceand harmonious coexistence of environment.To ensure the comprehensive promotion of energy conservation and environmental protection, the Company continuously improvesthe responsibility system for energy conse®ïation and environmental protection, follows the principle of "uni®êed leadership, hierarchicalmanagement and clear responsibilities", and ensures that the main responsibility for energy conse®ïation and environmental protection ofthe Company is fully implemented. To this end, the Company establishes a work safety, energy conse®ïation and environmental protectioncommittee as the leading core of environmental management, and the safety and environmental protection depa®îment takes on the dailymanagement. By formulating a detailed responsibility list, we have ensured collaboration, coordination and joint management with varioussubordinate units in energy conse®ïation and environmental protection, forming a comprehensive and e®æcient energy conse®ïation andenvironmental protection management system.Relevant systems of environmental protection of Changyuan Lico?Management Measures for Responsibility System for Energy Conse®ïation and Ecological Environmental Protection?Measures for the Management of Comprehensive Emergency Plan for Sudden Environmental Incidents?Management Measures for Energy?Management Practices of Energy Conse®ïation?Management Measures of Solid Waste

Emergency plan for sudden environmental incidents

Environmental objectives and implementation in 2023

In order to further strengthen the ecologicalenvironmental protection of the Company, enhance itscoping capacity to sudden environmental incidents,and enhance its strength to prevent and handleenvironmental pollution incidents, the Companyformulates the Emergency Plan for EnvironmentalEmergencies and completes the ®êling in the competentdepartment of ecological environment. This planaims to minimize environmental pollution, ensure theenvironmental safety of the Company and the lifeand health of employees and surrounding residents,and provide the Company with a comprehensiveand efficient environmental risk management andemergency response mechanism.The Company organized 9 emergency exercises forwaste water leakage, solution leakage and hazardouswaste leakage throughout the year. In November, itcollaborated with the Ecological Environment Bureau ofHunan Xiangjiang New Area to organize an "emergencyexercise for electrical short circuit induced hazardouswaste fire - fire waste water leakage emergencyenvironmental incident". Through the exercise, theemergency response ability of employees was improved.

As of the end of the repo®îing period, the Company and its subsidiaries have not experienced any general and above environmentalpollution incidents, have not been punished by the competent depa®îments of ecological environment, have not engaged in anymajor environmental violations, and have 100% implemented the annual environmental protection objectives.

The Company organized

emergency exercises for waste waterleakage, solution leakage and hazardouswaste leakage throughout the year.

Ce®îi®êcation of environmental management systemChangyuan Lico is committed to continuously optimizing its environmentalmanagement system and achieving sustainable development goals of environmentallyfriendly, low-carbon and efficient. Based on the ISO14001:2015 environmentalmanagement system and related standards, the Company comprehensively identi®êesinternal environmental factors and formulates targeted environmental protectioncontrol measures and management systems. As of the end of 2023, the Company and2 subsidiaries have all passed ISO14001:2015 environmental management systemce®îi®êcation.

As of the end of 2023,the Company and 2 subsidiarieshave all passed ISO14001:

2015 environmental managementsystem ce®îi®êcation.

Violation of laws and regulations on environmental protection : 0

Up-to-standard waste water emission 100%Administrative penalty of environmental protection related: 0

Up-to-standard noise emission 100%Up-to-standard waste gas emission 100%

Safe disposal of hazardous waste 100%

100%completed

Environmental objectives and implementation in 2023

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AppendixSocialGovernanceChangyuan Lico 2023Environmental, Social and Governance Repo®î

Message from the

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ESGmanagement

Environment

Futureprospects

Reduction of resource consumption

In terms of water resource management, Changyuan Lico actively adopts water-saving measures to reduce water resource consumptionfrom the source, encourages all employees to pa®îicipate in water resource management, enhances their awareness of water resourceprotection, and jointly promotes the continuous improvement of water resource management, striving to build a water resource-savingenterprise. Its subsidia®ñ, Jinchi Energy is awarded a water-saving benchmark enterprise by the Indust®ñ and Information TechnologyDepa®îment of Hunan Province.

Changyuan Lico mainly uses electric energy, natural gas and steam as the energy supply during the production. In order to activelyrespond to the global call for energy conse®ïation and emission reduction and promote the sustainable development of the Company,the Company attaches great impo®îance to energy management. Ensure the compliance and e®æciency in energy usage by formulatingthe Energy Management Measures and Management Practices of Energy Conse®ïation. Changyuan Lico will continue to be committedto optimizing energy structure, improving energy utilization e®æciency, and making unremitting e®ão®îs to achieve green and low-carbonproduction operation.

the recoveredcondensate water was

51.34

by 10,000 tons

the water resourcerecycling rate was

26.63

%

Usage management of water resource

Energy usage management

2021

2021

2022

2022

2023

2023

Total water consumption

Total circulating water

10,000 t

10,000 t

128.78

47.22

150.87

48.88

121.69

34.29

2021

2021

2022

2022

2023

2023

Fresh water consumption

Propo®îion of total circulating water

10,000 t

%

74.47

26.63

101.99

32.39

94.49

38.80

With environmental issues becoming more and more obvious, people's demand for clean energy is increasing eve®ñ day. As anew energy transaction mode, green electricity transaction has gradually attracted people's attention due to its environmentallyfriendly and renewable characteristics. The Company actively promotes the clean and low-carbon transformation of itsenergy structure, actively pa®îicipates in green electricity transaction, and its subsidia®ñ, Jinchi Energy signs contracts with theelectricity power company, which stipulates that the propo®îion of green electricity for the whole year shall not be less than80%. By purchasing green electricity, we ensure the green and environmental protection of electricity used from the source,while promoting the development and utilization of new energy and reducing reliance on traditional energy.

Pa®îicipation in green electricity transaction

Jinchi Energy Materials Co., Ltd.Water Saving Enterprise of

Hunan Province

In 2023

the circulating waterconsumption was

34.29

by 10,000 tons

the new waterconsumption was

94.49

by 10,000 tons

Remarks£º

1. The energy consumption in 2021 includes Lugu Base and Tongguan Base, with an addition of High-tech Base sta®îing from 2022;

2. Standard coe®æcient: Electricity - 1.229 tons of standard coal/10,000 kWh; the enthalpy value corresponding to steam temperature

and pressure is 2,768 kJ/kg, heat - 0.0341 tons of standard coal/GJ, namely, steam - 0.0944 tons of standard coal/tons of steam;natural gas - 13.3 tons of standard coal/10,000 m?, gasoline - 1.4714 tons of standard coal/tons.

2021

2021

2022

2022

2023

2023

Total energy consumption

Natural gas conve®îed standard coal quantity

10,000 tonsof standard coal

10,000 tonsof standard coal

7.91

0.02

8.32

0.10

5.59

0.39

2021

2021

2022

2022

2023

2023

Outsourced steam conve®îed standard coal quantity

Electricity conve®îed standard coal quantity

1.03

6.74

1.09

7.16

0.78

4.54

10,000 tonsof standard coal

10,000 tonsof standard coal

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AppendixSocialGovernance

Changyuan Lico 2023Environmental, Social and Governance Repo®î

Message from the

Chairman

AboutChangyuan Lico

ESGmanagement

Environment

Futureprospects

Prevention andcontrol of pollution emissions

Changyuan Lico strictly abides by the national and local laws and regulations on the prevention and control of waste gas pollution,implements the main responsibility of ecological environmental protection, continuously optimizes production processes, reduces waste gasoutput, and ensures that waste gas emissions meet standards by introducing advanced waste gas treatment technology and equipment. TheCompany establishes a strict monitoring mechanism for waste gas emissions, regularly monitors and evaluates the waste gas emissions toensure the accuracy and reliability of waste gas emission data. Changyuan Lico will continue to strengthen waste gas emission management,continuously improve the level of waste gas control, to achieve the goals of green, low-carbon and circular development. In addition, in 2023,the subsidia®ñ, Jinchi Energy implemented ammonia absorption tower water scrubbing to acid pickling, and Changyuan Lico New Energyupgraded and renovated dust control facilities to fu®îher reduce the impact on the atmospheric environment.During the repo®îing period, all types of waste gas treatment facilities were operating well, with complete operating records and up-to-standard waste gas emission.

Waste gas emission management

The Company actively promotes the cleaner production and promotes thedevelopment of recycling economy. According to theManagement Measures forEnergy Conservation and Ecological Environmental Protectionof the Company,priority is given to the use of clean energy, and processes and equipment with highresource utilization and low pollutant emissions are adopted. Comprehensive wasteutilization technology and harmless pollutant treatment technology are promotedto reduce the generation of pollutants and e®ãectively strengthen the managementof the Company's cleaner production.

Cleaner production

202120222023

Total exhaust pollutant emissions

Ton

2.292.742.42

202120222023

Pa®îiculates

Ton

1.301.421.54

During the repo®îing period,2 subsidiariesof Changyuan Lico havepassed the ce®îi®êcation

audit of cleanerproduction

The Company continues to promote green manufacturing and circular development. In the ®êeld of waste batte®ñ recycling, theCompany continuously promotes technological innovation and completes the production application of priority lithium extractionand extraction lithium new technology demonstration production lines. Increase the lithium recove®ñ rate by more than 10%, toachieve higher lithium recove®ñ rate and lower carbon emission.The subsidiary, Jinchi Energy upgrades the waste water MVR mother liquor evaporation system and conducts grading andseparating treatment of puri®êed water and concentrated water. The condensate water is treated by reverse osmosis and then madeinto puri®êed water for reuse in production. Pa®î of the puri®êed water and concentrated water is used for leaching replenishment inthe waste batte®ñ recove®ñ workshop, while the other pa®î is used for water replenishment in the circulating water cooling tower ofthe oxygen production station and cathode workshop. By implementing advanced treatment and comprehensive utilization of wastewater, we can achieve emission reduction at the source of waste water while reducing water resource consumption.

Case of clean technology

Changyuan Lico actively promotes advanced waste water treatment, strictly abides by theLaw of the People's Republic of China onthe Prevention and Control of Water Pollution, and formulates theWaste Water ManagementMeasures based on the actual situationof the Company to ensure that all waste water is e®ãectively treated. In addition, the Company establishes an improved waste watermanagement ledger to monitor the operation of waste water facilities in real time. The Company's production waste water is treatedand reused without discharge.

Wastewater discharge management

202120222023

Ammonia nitrogen

Equivalent value/total emission ofpollutant (ton)

0.180.070

Industrial waste water emission

202120222023

02.535.21

10,000 t

Equivalent value/total emission ofpollutant (ton)

202120222023

COD

4.791.610

In 2023

the industrial waste watertreatment capacity was

53.95

by 10,000 tons

the puri®êed waterand concentrated waterfor cascade utilization was

19.66

tons

the recoveredcondensate water was

34.29

by 10,000 tons

the waste wateremission was

202120222023

Ammonia

Ton

0.720.730.69

202120222023

Sulfuric acid mist

%

0.060.590.40

2021

AppendixSocialGovernanceChangyuan Lico 2023Environmental, Social and Governance Repo®î

Message from the

Chairman

AboutChangyuan Lico

ESGmanagement

Environment

Futureprospects

Climate risk responseBased on Xi Jinping's Thought on Ecological Civilization, Changyuan Lico adheres to the green development direction and strives tobecome a "resource-saving and environmental-friendly" enterprise. The Company continues to pay attention to global climate change andactively evaluates the risks and oppo®îunities brought by climate change, as well as its impact on enterprises.Changyuan Lico aims to achieve the reduction, resource and harmless for solid waste by taking relevant measures to reduce the outputof solid waste, promote the comprehensive utilization of solid waste, and reduce the hazard of solid waste. The Company follows therelevant provisions of theLaw of the People's Republic of China on the Prevention and Control of Environmental Pollution by Solid Waste

and formulates theManagement Measuresof Solid Waste. Through technological upgrading and process optimization, the output of solidwaste is signi®êcantly reduced. Meanwhile, the Company establishes an improved solid waste classi®êcation, storage and transpo®îationsystem to ensure that waste is treated in a standardized manner.All subsidiaries establish tempora®ñ storage warehouses for household waste, general industrial solid waste and hazardous waste. Thetempora®ñ storage warehouses for general industrial solid waste and hazardous waste shall be standardized constructed in accordancewith the requirements of theStandard for Pollution on the Storage and Disposal Site for General Industrial Solid Wastes(GB18599-2001)and theStandard for Pollution Control on Hazardous Waste Storage(GB18597-2001), respectively. For household waste, it is collected atdesignated locations and entrusted to environmental sanitation for timely removal; for general industrial solid waste, it is classi®êed andcollected, tempora®ñ stored appropriately, and handed over to professional processing units for recove®ñ processing; for hazardous waste,it is classi®êed and collected, stored in di®ãerent zones, with hazardous waste signages posted. A registration ledger for ent®ñ and exit isestablished. Units with corresponding hazardous waste disposal quali®êcations are entrusted for harmless disposal, and transfer forms arehandled. In 2023, 383 tons of hazardous waste and 336 tons of general solid waste were safely disposed.

The Company strictly abides by theLaw of the People's Republic ofChina on Prevention and Control of Pollution from EnvironmentalNoise, and strictly controls the generation and transmission ofnoise by adopting various noise reduction measures. Meanwhile,the Company regularly carries out noise monitoring to understandthe current noise status and actively carries out noise reductionand improvement to continuously improve the control e®æciency ofnoise. In 2023, the subsidia®ñ, Changyuan Lico New Energy High-tech Base fu®îher reduced the noise at bounda®ñ by adding noisereduction compartments to the noise generating equipment ofthe oxygen production station and adding acoustic panels to theair compressor room to separate the noise.

Solid waste management

Noise prevention and control

Risk

Oppo®îunity

Extreme weather

Growth in demand for

clean energy

Technologicalinnovation drive

Brand image promotion

Development of electric

transpo®îation

Policies and law risksRaw material supplyEnergy consumption

Potential impacts on supplychains and productionfacilities, causing asset loss,and even causing potentialemployee safety incidents;

With the increasing demandfor clean energy, themarkets for lithium batte®ñenterprises in ®êelds such as

batteries may expand.

The adjustment of climate

policies may a®ãect theproduction and operation of

enterprises.

Climate relatedtechnological innovation

may bring newdevelopment oppo®îunities

for enterprises.

The key raw materials forlithium batteries may bea®ãected by the resource

sho®îages or price®ìuctuations caused by

climate change.

Actively responding to climate

change can enhance thesocial image of enterprises.

The energy demandsduring processing andproduction may increasewith the climate change,

leading to rising costs.

The popularization of

electric vehicles willpromote the demand forhigh-pe®íormance lithium

batte®ñ.

Promote sustainable

development

Take energy conse®ïation andemission reduction measures,

improve resource utilizatione®æciency, reduce carbon emission,

and continuously improveemergency response mechanismfor natural disasters.

Technological research

investment

Strengthen the R&D of

high-pe®íormance and

low-cost lithium batte®ñtechnology to meet market

demands.

Strengthen climate risk

assessment

Pay close attention to the changesin regulations and policies relatedto carbon peaking and carbonneutrality, understand its ownvulnerability to climate change,and formulate corresponding risk

management strategies.

R&D innovation

Invest in R&D strength

to develop moreenvironmentally friendly

and e®æcient products

and technologies.

Diversenessin supply chain

Ensure the stability ofraw material supply and

search for substitute

materials or pa®îners.

Active disclosure

Regularly release ESG repo®îsof the Company, disclose thecompletion of the Company's

energy conse®ïation andemission reduction goals, andenhance the green image of

the Company.

Energy e®æciencyimprovementOptimize productionprocess, reduce energyconsumption and improve

energy e®æciency.

Expansion ofproduction scale

Improve productione®æciency and ensuresynchronous supply oflithium batte®ñ with the

growth of the electric

vehicle market.

The Company optimizes the cleaning equipment of wastesaggar and adopts automatic sandblasting machines topromote the resource utilization of waste saggar.

Resource utilizationof waste saggar is

5,138

tons

throughout the year

General industrial solid

waste management

Waste typeTypes of wastesAnnual disposal capacity (ton)Disposal method

Hazardous wastes

Waste residue containing nickel29.52Outsourced disposalDamaged waste packaging bag and

undamaged inner bag

347.53Outsourced disposal

Waste mineral oil3.0Outsourced disposal

Laborato®ñ hazardous waste2.95Outsourced disposalGeneral solid waste

Packaging materials for raw and auxilia®ñ

materials

Selling out forcomprehensive use

Waste classi®êcation and treatment measures

2223

AppendixSocialGovernance

Changyuan Lico 2023Environmental, Social and Governance Repo®î

Message from theChairman

AboutChangyuan Lico

ESGmanagement

Environment

Futureprospects

Emission reduction measures and actions for greenhouse gasCaseIn 2023, the subsidia®ñ, Changyuan Lico New Energy promoted technical improvement projects such as kiln single-layer to double-layer and sealing renovation, increasing bowl loading capacity, dilute alkali to concentrated alkali of precursor for Jinchi Energyand MVR condensate water to puri®êed water and concentrated water reuse; through special research on refrigeration and energyconsumption in High-tech Base of Changyuan Lico New Energy, organized relevant units to analyze and guided them to establishmacro thinking. While focusing on production energy consumption and reducing non-production energy consumption, take theonline energy monitoring as an oppo®îunity to analyze the energy consumption of major energy consuming equipment such as kilns,air compressors, oxygen production, refrigeration and dehumidi®êcation, as well as the energy consumption ratio during "peak valley"period, optimize energy management measures and reduce low e®æcient energy consumption.Changyuan Lico New Energy transforms some cathode material sintering kilns from single-layer structure to double-layer structure,reducing energy consumption of unit product and increasing energy utilization rate by about 30%, achieving energy conse®ïation andbene®êt creation.

In order to fu®îher optimize and improve the energy conse®ïation and emission reduction statistical system of the Company, improvethe control level of energy conse®ïation and emission reduction, in accordance with relevant laws and regulations such as theLawof the People's Republic of China on Energy Conse®ïation, theSupe®ïision and Management Measures for Energy Conse®ïationand Ecological Environment Protection of Central Enterprises, as well as the relevant work management requirements of thegroup company, the Company formulates theManagement Measures for Statistical Repo®î of Energy Conse®ïation and EcologicalEnvironmental Protection, which clari®êes the responsibilities and work requirements for energy conse®ïation and carbon reductionmonitoring, measurement, statistics and repo®îing of each unit, and establishes a monthly repo®î system for production energyconsumption and carbon emission.

Energy conse®ïation and carbon reduction monitoring, statistical repo®îing and evaluation system

In order to implement the strategic deployment of carbon peaking and carbon neutrality, the Company continuously improves its basiccapacity construction of energy measurement. In 2023, the construction of online monitoring system of energy consumption wascompleted and accepted by government regulato®ñ depa®îments, to achieve the Company's level I and level II energy consumption dataautomatically uploaded to the provincial development and reform commission platform, the MES energy management constructionwas simultaneously promoted, the information input of energy measuring instruments was completed, as well as the level I, level IIand level III electricity and gas data was automaticallycollected, water electricity and gas data was dynamicallydisplayed, and energy consumption and peak valleydata statistics were conducted to provide effectivesupport for the rational use of energy by variousdepa®îments of the Company. Develop the whole plantboard, early warning and alarm functions, and improvethe automatic collection Function of energy data toachieve the track management of energy system, andenhance the Company's informatization and re®ênementlevel of energy management.

Jinchi Energy adjusts the precursor production line synthesis process from dilute alkalito concentrated alkali, reducing the dilute alkali preparation process and waste wateroutput, so as to reduce energy consumption and cost of waste water treatment.The Company actively responds to the national call and closely focuses on the themeof "green, low-carbon, energy conservation first" during the energy conservationpropaganda week. Based on the actual situation of the Company, various publicityand education activities are carried out, such as posting theme posters, playingpromotional videos with electronic displays and cafeteria televisions, to promote theconcept of energy conse®ïation, low-carbon and related knowledge, advocate green,low-carbon production and lifestyle, enhance the low-carbon and environmentalprotection awareness of all employees, and create a proactive and total involvedatmosphere for energy conse®ïation and carbon reduction.

Responding to the "carbon peaking and carbon neutrality" strategyChangyuan Lico actively responds to the national carbon peaking and carbon neutrality strategy,striving to reduce its own carbon emissions and promote green and sustainable development.The Company strives to reduce carbon emissions during the production by optimizing energystructure, improving energy utilization e®æciency and developing green manufacturing technologies.At the same time, in order to fu®îher optimize and improve the energy conse®ïation and emissionreduction statistical system of the Company, and improve the control level of energy conse®ïationand emission reduction, the Company establishes a monthly repo®î system for production energyconsumption and carbon emission. Changyuan Lico continues to increase green investment andefforts, contributing its own efforts to achieve carbon peaking and carbon neutrality goals, andpromoting the development of global green, low-carbon and recycling economy.

1. Natural gas is mainly used in the stationa®ñ combustion devices such as boilers, canteen gas stoves, and workshop d®ñing equipment;

2. Gasoline is mainly used for o®æcial business vehicles of the Company and picking up clients;

3. Electricity and heat are outsourced, of which the heat is steam;

4. Carbonate greenhouse gas is the carbon dioxide generated by the carbonate reaction in the production process.

Remarks:

The total greenhouse gasemission of the Companyin 2023 was

33.08

by 10,000 tons

202120212022202220232023

Total greenhousegas emission(catego®ñ I + catego®ñ II)

Greenhouse gasemissions (catego®ñ I)10,000 t CO

e10,000 t CO

e

33.081.7135.461.2822.980.20

202120212022202220232023

CarbonateGreenhouse gas

emissions (catego®ñ II)

10,000 t10,000 t

10,000 t CO

e

31.3634.1922.771.821.920.291.071.130.17

202120212022202220232023

Natural gasGasoline

10,000 m

Ton10,000 t CO

et CO

e

295.790.7166.750.8613.881.380.642.160.142.620.034.2

202120212022202220232023

Outsourcedelectricity

Outsourced

heat (steam)

100 million degrees10,000 GJ10,000 t CO

e10,000 t CO

e

3.7022.925.8332.255.4930.2619.452.5230.653.5528.843.33

2425

AppendixSocialGovernanceChangyuan Lico 2023Environmental, Social and Governance Repo®î

Message from theChairman

AboutChangyuan Lico

ESGmanagement

Environment

Futureprospects»·¾³Æª³¤Ô¶ï®¿Æ 2023 Äê»·¾³¡¢Éç»á¼°ÖÎÀí±¨¸æ¶­Ê³¤Ö´ǹØÓÚ³¤Ô¶ï®¿ÆESG¹ÜÀí

E®æcient governancewith stable footstepsand forward thinking

Governance

Changyuan Lico strives to establish a sound management system,optimize governance structure and business strategies, adhere tobusiness ethics, improve internal control and risk management,enhance compliance capabilities and anti-corruption education,safeguard the rights and interests of shareholders and investors,ensure the Company's long-term and stable development, andregard this as an important starting point for actively assumingenvironmental and social responsibility.

SDGs

2627

AppendixSocialGovernanceChangyuan Lico 2023Environmental, Social and Governance Repo®î

Message from the

Chairman

AboutChangyuan Lico

ESGmanagement

Environment

Futureprospects

Adhere to the guidanceof Pa®îy building

Optimize governance architecture

Under the correct leadership of the China Minmetals Pa®îy Group, the Changyuan Lico Pa®îy committee has always adhered to the guidanceof Xi Jinping's Thought on Socialism with Chinese Characteristics for a New Era, continuously strengthened pa®îy building and ideologicaland political work, and promoted the deep integration of pa®îy building and enterprise development. By organizing diverse pa®îy buildingactivities, we aim to improve the political quality and ideological consciousness of pa®îy members, and stimulate their exempla®ñ role aspioneers. The Company continuously strengthens grassroots guidance, strictly and practically regulates the construction of the "three basics",implements the responsibility of grassroots pa®îy building work, revises and builds six new pa®îy building work systems, fu®îher improvesand pe®íects the pa®îy building work system, and regularly supe®ïises the implementation of the "three meetings and one lesson" and themepa®îy days of the pa®îy branch; inviting teachers from the Provincial Pa®îy School to provide special guidance, organizing members of thePa®îy committee team to go deep into grassroots Pa®îy organizations and contact points to promote the spirit of the 20th National Congressof the Communist Pa®îy of China; organize a training demonstration class for the improvement of the quality of the Company's pa®îy branchsecretaries and grassroots pa®îy a®ãairs personnel in 2023, using platforms such as "three meetings and one lesson", special lectures, andsma®î pa®îy building APP learning to ensure that the education hours for pa®îy members meet the standards.

In strict accordance with the requirements of theCompany Law, Securities Law, Code of Corporate Governance for Listed Companies,Rules Governing the Listing of Stocks on the STAR Market of the Shanghai Stock Exchangeand other laws and regulations, ChangyuanLico has established a regulatory system based on theArticles of Association of Hunan Changyuan Lico Co., Ltd.with theRules ofProcedure for Shareholders' Meeting of Hunan Changyuan Lico Co., Ltd., Rules of Procedure for Meeting of the Board of Directors ofHunan Changyuan Lico Co., Ltd., Rules of Procedure for Meeting of the Board of Supe®ïisors of Hunan Changyuan Lico Co., Ltd., andMeasures for Management of Independent Directors of Hunan Changyuan Lico Co., Ltd.as the main structure; and the Company hasformed the Shareholders' Meeting, the Board of Directors, and the Board of Supe®ïisors as the institutions for power, decision-making andsupe®ïision. The Company pays attention to the clear division of responsibilities of the organizational structure, mutual cooperation ande®ãective operation of the check and balance mechanism.The Company fully considers the gender, professional experience, background and other factors of the members of the Board of Directorsto ensure that the Board of Directors is fair and diversi®êed, and the decision-making is scienti®êc and comprehensive, so as to respondto challenges more e®æciently and promote the sustainable development of the Company. Presently, the Company's Board of Directorsconsists of 9 members, including 3 independent directors. The Board of Supervisors consists of 5 members, including 2 employeerepresentative supe®ïisors, and the propo®îion of female in the Board of Supe®ïisors is 40%.Besides, the Company highly emphasizes the strategic leading role of the Board of Directors. The Board of Directors of the Company hasset up four special committees, namely the Audit Committee, the Nomination Committee, the Strategy Committee and the Remunerationand Assessment Committee, and has formulated the terms of reference and implementation rules of each committee in detail, whichgives full play to its professional advantages and e®ãectively ensures the legitimacy, scienti®êcity and correctness of the collective decision-making of the Board of directors, thus signi®êcantly reducing the operational risks of the Company. These special committees not onlyenhance the transparency and e®æciency of corporate governance, but also provide a solid guarantee for the Company's long-term sounddevelopment.Political construction is the soul and foundation of a company, and the fundamental guarantee for promoting itshealthy, stable, and sustainable development. Therefore, the Company's pa®îy committee continuously strengthenspolitical theo®ñ learning, improves political sensitivity and political execution ability, and ensures that the Companyalways moves forward in the correct political direction. In order to fu®îher strengthen pa®îy building, improve theideological consciousness and political quality of pa®îy members, the Company actively carries out various pa®îybuilding activities. In 2023, the Company held 24 pa®îy committees, and the pa®îy committee's theoretical learningcenter group conducted 10 activities including concentrated discussions, expe®î guidance, and reading classes.

In 2023, the Company organized 12 meetings of the Pa®îy building work leadership group,and standardized the development of 11 new Pa®îy members; normalized the implementationof the reminder mechanism for the adjustment of party organization changes, guided 2directly affiliated party branches to complete the election of changes, established 1 newpa®îy general branch, and established 2 pa®îy branches under it; promptly supe®ïised thetransfer of relationships and Pa®îy statistical work, established a Pa®îy expense managementledger, and strictly regulated the use and management of Pa®îy organization work funds.

Political construction

Organization construction

Changyuan Lico conducts special study and guidance on the spirit of the 20th National Congress ofthe Communist Pa®îy of ChinaCaseIn order to deepen the study, publicity, and implementation of the spirit ofthe 20th National Congress of the Communist Party of China, and furtherstrengthen the ideological foundation for holding democratic life meetings forparty members and leading cadres and Party (general) branch organizationallife meetings, in February 2023, the Changyuan Lico Party committee invitedProfessor Yang Zhenwen from the Hunan Provincial Party School to providespecial study and guidance on the spirit of the 20th National Congress of theCommunist Pa®îy of China. Hu Liuquan, Secreta®ñ of the Pa®îy committee andChairman, attended the meeting and delivered a speech. Zhang Zhen, generalmanager and deputy secreta®ñ of the Pa®îy committee, as well as members ofthe leadership team at home, attended the meeting.

It is the highest authoritythat decides on theCompany's business policy

and investment plan.Supe®ïise the business ofthe Company, and raiseproposal or inqui®ñ.

It implements theresolutions of theShareholders' Meetingin accordance with theA®îicles of AssociationandRules of Procedurefor Meeting of the Boardof Directors.

It supe®ïises theCompany's ®ênancesand the compliance of

directors and seniorexecutives in pe®íormingtheir duties.

It implements theresolutions of theBoard of Directors andorganizes the Company'sbusiness activities such

as production and

operation.

Regulato®ñ system of governance of Changyuan Lico

Shareholders' meetingBoard of DirectorsBoard of Supe®ïisorsManagement

In 2023,the Company held

pa®îy committees

In 2023,the Company organized

meetings of the Pa®îybuilding work leadership group,and standardized the developmentof

new Pa®îy members

A®îicles of Association of Hunan Changyuan Lico Co., Ltd.Rules of Procedure for Shareholders' Meeting of Hunan Changyuan Lico Co., Ltd.Rules of Procedure for Meeting of the Board of Directors of Hunan Changyuan Lico Co., Ltd.Rules of Procedure for Meeting of the Board of Supe®ïisors of Hunan Changyuan Lico Co., Ltd.Measures for Management of Independent Directors of Hunan Changyuan Lico Co., Ltd.

2829

AppendixSocialGovernanceChangyuan Lico 2023Environmental, Social and Governance Repo®î

Message from theChairman

AboutChangyuan Lico

ESGmanagement

Environment

Futureprospects

In 2023, the Company held 1 meeting of the Strategy Committee of the Board of Directors and 5 meetings of the Audit Committee ofthe Board of Directors. The Special Committees of the Board of Directors performed their duties conscientiously in accordance withthe relevant provisions of theCode of Corporate Governance for Listed Companies,theA®îicles of Associationand theMeasures forthe Managementof the Special Committees, fu®îher standardized the governance structure of the Company, actively researched anddiscussed professional items, and put forward relevant opinions and recommendations for the Board of Directors' decision-makingreference and assisted the Board of Directors in its work.

Based on the system ofMeasures for Management of the Audit Committee of the Board of Directors ofHunan Changyuan Lico Co., Ltd.,it is responsible for the communication, supe®ïision and veri®êcation ofthe Company's internal and external audits. In 2023, the Audit Committee was held 5 times.Based on the system ofWork Rules of the Nomination Committee of the Board of Directors of HunanChangyuan Lico Co., Ltd.,it is responsible for selecting and researching, reviewing and makingrecommendations on the candidates, selection criteria and procedures of the Company's directors andmanagers.Based on the system of theWork Rules for the Strategy Committee of the Board of Directors of HunanChangyuan Lico Co., Ltd.,it conducts research and makes recommendations on the Company's long-term development strategies and major investment decisions, and promotes the construction of the ruleof law. In 2023, the Company held 1 meeting of the Strategy Committee.Based on the system ofWork Rules for the Remuneration and Assessment Committee of the Board ofDirectors of Hunan Changyuan Lico Co., Ltd.,it studies the evaluation standards, remuneration policiesand programs for directors and senior executives, and evaluates and makes recommendations to thedirectors and executives.

AuditCommittee

NominationCommittee

StrategyCommittee

Remunerationand Assessment

Committee

Remuneration and training

The Company has established a Remuneration and Assessment Committee (including the Chairman and two non-executive directors),whose main responsibilities include recommending the remuneration policy and its formulation process to the Board of Directors . TheCommittee also considers and decides on the sala®ñ and incentive programs for senior executives, taking into account a variety of factorsrelated to remuneration, such as indust®ñ sala®ñ levels, position responsibilities, length of tenure, company pe®íormance and potentialrisks. Besides, the Board of Directors of the Company attaches impo®îance to improving the professional competence of the directors,supervisors and senior management by arranging them to participate in professional training on a regular basis, including specifictraining provided by the SSE as well as diversi®êed training programs provided by other relevant organizations, so as to enhance theirunderstanding and execution of corporate governance and ESG management through various training methods. In 2023, the trainingcoverage rate of se®ïing directors, supe®ïisors and senior management personnel had reached 100%.

Strengthen risk managementChangyuan Lico constantly improves its risk management system; continuously improves the organizational structure of risk management;implements the closed-loop management mechanism of comprehensive assessment and timely warning beforehand, dynamic monitoringand key monitoring during the process, and timely repo®îing and hierarchical response after the process; makes e®ão®îs to promote theconstruction of information systems such as Treasury, BI, MES, WMS, etc.; and continuously promotes the internal control system togradually change from "human control" to "technological control", so as to enhance the platform's ability of preventing risks.In 2023, the Company continued to operate the five-in-one supervision system. The risk control, audit, and discipline inspectiondepa®îments collaborated to car®ñ out whole-process risk identi®êcation and assessment, internal control self-evaluation and job integrityrisk identi®êcation from the internal control standards, covering 23 functional boards, 31 business processes and 786 control nodes, andrevealing the key risks and weaknesses of the Company through a "comprehensive physical examination and scoring" to provide guidanceon the rational inclination of management resources.The Company has always adhered to the risk strategy of advance steadily, adhering to the safety bottom line of the new developmentpattern, focusing on the management of major decisions, major risks, major events and the internal control of impo®îant processes, andimplementing so®î, layer and centralized management of risks. Focusing on 10 major risks, the Company has established a responsibilityledger on major risk prevention and control, clari®êed the responsible units, prevention and control objectives and responses, implementedthe risk management responsibilities of all employees, and supe®ïised the implementation of monthly investigation, qua®îerly tracking, andannual review, so as to realize strict defense of key risks.During the repo®îing period, the Company does not incur any major losses, no general or above safety accidents, no external litigations orpenalties from regulato®ñ authority and risk control was e®ãective.

The Company further optimizes the working mechanism of risk management reporting, highlights the requirements of closed-loopmanagement, improves the emergency repo®îing of major risk items, and ensures that the all-employee, whole-process, and all-systemrisk prevention and control system functions e®ãectively.

Number of meetings ofBoard of Supe®ïisors held

Number of meetings of theBoard of Directors held

Number of shareholders'meetings held

Risk trendNumber of risksRisk descriptionUpward trend1Credit risk, raw material and product price riskRemaining stable andat the same level as theprevious period

Health, safety and environmental protection risk, project investment risk,intellectual prope®îy risk, capital risk, compliance operation risk, public opinionrisk, etc.Downward trend1Risk of insu®æcient supply of human resources

3031

AppendixSocialGovernanceEnvironment

Futureprospects

Adhere tocompliance operation

Changyuan Lico has formulated theCompliance Management Measures and issued the Guidelines for IntellectualPrope®îy Compliance, Guidelines for Personal Information Protection Compliance, Guidelines for Economic Sanctionsand Export Controls Compliance, Guidelines for Anti-Commercial Bribery Compliance, Guidelines for BusinessPa®îners Compliance, Guidelines for Anti-Monopoly Compliance, Guidelines for Corporate Governance Compliance,Guidelines for Guarantee and Surety Practice Compliance, Guidelines for Contract Compliance Review Key,Guidelines for Overdue Accounts Receivable Management, and Guidelines for Selection of International ArbitrationInstitution and other specialized compliance guidelines.In 2023, the Company fu®îher improved the compliance programmatic systemCompliance Management Measures,added (revised) 42 systems, and improved the organizational structure, operation mechanism and others. TheCompany has so®îed out rules and regulations internally, closely followed the legislative developments externally,internalized laws and regulations or regulato®ñ requirements in a timely manner, and added (revised) 146 systemsthroughout the year. The Company is committed to making the system penetrate the hierarchy and embedding itinto the business processes of the front-line production and operation units, so as to realize the deep integration ofcompliance and business from the system level.

The Company takes the compliance review as the important carrier for compliance management, and strengthens the control forceof compliance review comprehensively. The Company keeps the 100% legal review rate on rules and regulations, economic contract,authorization and entrustment, and impo®îant decision in the year. The compliance review is carried out on 1,172 contracts, 125 letters ofauthorization, 146 systems and 186 impo®îant decisions. More than 3,000 legal compliance opinions are put forward, with the adoptionrate up to 98%. The Company is committed to building a complete chain of compliance risk prevention mechanism, it embedded thecompliance review nodes in the o®æcial document system and decision-making process, and runs through the legal compliance review intothe impo®îance decisions. The compliance personnel deeply pa®îicipate large investment projects, to review the prelimina®ñ consultation,arrangement and interim document, and to routinely attend the business negotiation, project meeting, technical meeting, etc. Underthe background of strengthening supervision and focusing on compliance, the Company resolutely implements the decision-makingmechanism of "supe®ïise the legal compliance before decision-making, and do not make decisions in case of violation of the law".The Company's compliance management is based on the concept of "respecting laws, abiding by rules and creatingvalue". By linking top-down, connecting left-right, establishing and improving compliance organization, formulatingand perfecting compliance system, preventing and controlling compliance risks, cultivating and strengtheningcompliance culture, the Company has built an e®ãective compliance management system covering all aspects, levelsand ®êelds of the Company, and gradually integrated compliance development into the Company's strategy, compliancerequirements into the business process, and compliance culture into the corporate values; the Company has keptthe bottom line of no major compliance risks, shaped compliance soft power and compliance competitiveness, andesco®îed and created value for the construction of a global leader in the new energy materials indust®ñ.The Party Committee of the Company has played a leading role in controlling the direction, managing the overallsituation and guaranteeing implementation, strengthened the top-level design, fully implemented the work programfor the in-depth implementation of compliance management, promoted the strict implementation of compliancerequirements, and continuously improved the level of operation and management in accordance with the law andcompliance; the Board of Directors has played the roles of determining strategies, making decisions and preventingrisks, and ful®êlled its duties of considering and approving the basic system of compliance management, complianceprograms and other documents, studying and deciding on major events of compliance management, and listeningto repo®îs on compliance management on a regular basis; the Board of Managers has played the roles of planningoperation, grasping implementation and strengthening management, and has been responsible for formulating thecompliance management system construction plan, the basic system of compliance management and approving theannual plan, etc., formulating the speci®êc system of compliance management, responding to major compliance riskevents, and guiding and supe®ïising the compliance management work of various depa®îments and subordinate units.

Relying on training and publicity, strengthened protection has enhanced the soft power of compliancemanagement. The Company studied Xi Jinping Thought on the Rule of Law 14 times throughoutthe year, and has mastered the thought; it has achieved the Pa®îy's leadership throughout the wholeprocess of law construction and operation and management. The Company organizes 12 compliancetraining sessions on national security and confidentiality, labor relations, tendering and bidding law,data protection, ®ênancial management, contract management, intellectual prope®îy, work safety, andsupply chain for workshop managers, business personnel, and project personnel, covering a totalof 488 people/times. The Company integrates compliance requirements into business and projects,and penetrates into front-line production and operation units. Meanwhile, the content related tocompliance training is embedded in the existing training scheme of the Company. All units carryout 45 internal compliance training activities in the year, 855 person-times involved, based on theconcept "standardization and full coverage". The Company carries out compliance publicity actively.The staff is trained with compliance culture by the mode of display board, LED screen, "Lico IdealSchool", knowledge competition, singing of letter of commitment, etc., to strengthen the integrity andcompliance awareness of the staff, establish the value of compliance and integrity, and secure theideological basis of compliant operations.

Institutional construction ofcompliant operation

Compliance review

Construction ofcompliance management system

Compliance culture construction

2021

2021

2022

2022

2023

2023

Times of law-abiding and compliance training

Number of person-times receiving training on law-abiding and compliance-

Person

202120222023

Hours of law-abiding and compliance Training

Hour

81020

Changyuan Lico 2023Environmental, Social and Governance Repo®î

Message from theChairman

AboutChangyuan Lico

ESGmanagement

All units car®ñ out

internal compliancetraining activities in the year,

person-timesinvolved

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AppendixSocialGovernanceChangyuan Lico 2023Environmental, Social and Governance Repo®î

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Chairman

AboutChangyuan Lico

ESGmanagement

Environment

Futureprospects

Conduct internal audit

Deepen honesty construction

In 2023, the Company had comprehensively implemented all works deployed by the group company, continuously deepened the internalaudit works, actively performed the supervisory duty on internal audit, carried out positioning based on economic supervision first,focused on major responsibilities and tasks, played the unique role of audit in promoting the self-revolution of the Communist Pa®îy ofChina, ®êrmly followed and practiced "integrity, responsibility, sharing and coordination", fully promoted the establishment of "The culturaltourism indust®ñ has developed by raising standards and improving e®æciency; agriculture and animal husband®ñ has developed in anincremental and qualitative manner; emerging industries have developed intensively; ecological industries have developed along with thetrend; traditional industries have developed to strive for innovation and excellence" and "innovative, e®æcient, digital, safe and brandedMinmetals", and contributed the internal audit power to establish the Company to the leader in the global new energy material indust®ñby closely focusing on the overall development plan of the Company.

Changyuan Lico strictly adheres to the Pa®îy constitution, disciplines and rules, and national laws and regulations; establishes a seriesof rules and regulations, including Measures for Management of Handing Complaints and Reporting, Measures for Supervision andInspection of "Impo®îant Matters, Appointment and Dismissal of Cadres in Impo®îant Positions, Arrangement of Impo®îant Projects, Useof Large Amount of Money" Decision-making System, Work Rules for Supervision and Inspection of the Implementation for Spirit ofEight-point Decision of the CPC Central Committee, Measures for Handling Hand-in and Registration of Gifts, Cash Gifts and Souvenirs;standardizes the honest practices of all cadres and employees of the Company; carries out production and operation activities in theopen and transparent modes. We take a clear-cut stand against corruption, against "micro-corruption" around all production, operation

The Company has established a comprehensive supervision system based on discipline inspection and inspection to ensure thee®ãective implementation of the anti-corruption system. According to practical guidelines, such asWorking Rules for Handling Repo®îsand Accusations by Discipline Inspection and Supervision Organissued by China Minmetals, the Company has formulatedMeasuresfor Management of Handing Complaints and Reporting, and defined the reception, judgment and specific handling procedures forcomplaints and repo®îing. The Company resolutely implements the principle of hierarchical handling and dedicated management, and setup a special telephone, email and reception desk for the public to repo®î. Whether it is anonymous or not, the Company strictly abides bythe discipline of work and con®êdentiality, protects the identity and information security of whistle-blowers, prevents whistle-blowers frombeing retaliated in any form and protects their legitimate rights and interests.

The Company strictly abides byAnti-monopoly Law of the People's Republic of China, Provisions of the State Council on the Standardfor Declaration of Concentration of Business Operators, Interim Provisions on Prohibition of Monopoly Agreements, Interim Provisions onProhibition of Abuse of Dominant Position of the Market, and other laws, regulations and relevant provisions; strengthens and improves theanti-monopoly compliance management based onAnti-monopoly Compliance Guidelines of China Minmetals Corporationto e®ãectivelyprevent the legal risks of anti-monopoly.

In 2023, under the leadership of the audit department and accountability system leading group of the Company, the internal auditdepartment of the Company had always adhered to the work philosophy of strengthening supervision, promoting management,preventing risk and creating value; followed the key strategic direction of the Company; carried out the audit works by closely focusing onthe strategic goal and overall development plan, to give full play to the audit business capability, audit management capability and auditse®ïice capability. One is to organize leading group meetings, to deeply study and implement the spirit of the 20th National Congress ofthe Communist Pa®îy of China and 1st Meeting of the 20th Central Audit Committee, and the spirit of impo®îant speeches and impo®îantinstructions of the General Secreta®ñ Xi Jinping on audit works, and to study and implement the relevant audit works; another is that HuLiuquan, the Secreta®ñ of the Pa®îy committee and Chairman of the Company, always adheres to the high-level leading, attaches greatimpo®îance to the audit works, arranges, deploys, tracks and supe®ïises works by himself, actively promotes National Audit O®æce, State-owned Assets Supe®ïision and Administration Commission of the State Council and the group company to arrange, deploy and implementworks related to audit.

High-level leading

Supe®ïision and repo®îing mechanism

Anti-monopoly

2021

2021

2022

2022

2023

2023

Times of anti-corruption training

Number of person-times receiving training onanti-corruption-

Person

1,5931,398700

4218

2021

2021

2022

2022

2023

2023

Hours of anti-corruption training

Number of a®îicles and cases related toanti-corruption themes pushedHour

-

In 2023, the Company has revised and completed 2 internal audit systems. OneisMeasures for Management of Recti®êcation for Audit Problems and InternalControl Defects, and another isImplementation Measures for Accountability ofIllegal Operation and Investment of Hunan Changyuan Lico Co., Ltd.

In 2023, to highlight the independence principle of audit works, the Company had adjusted and optimized the management responsibilityof the original discipline inspection and audit department, i.e. the functions of discipline inspection, audit, inspection and law areseparated and managed by respective depa®îment, to ensure the specialization of audit works and the concentration of audit power; theCompany had merged the cost review responsibility for construction project of strategic planning depa®îment into the audit depa®îment,and 2 new engineering auditors are employed, by which the audit power is fu®îher optimized and strengthened.

System optimization

Optimization function

In 2023,the Company has revisedand completed

internal audit systems

and management cadres and front-line employees, and resolutely have "zero tolerance" for corruption, and strictly forbidden to resistany form of commercial bribe®ñ. The Company's Discipline Inspection Committee insists on pe®íorming responsibilities of supe®ïision ondiscipline enforcement and accountability; adheres to comprehensively strengthening pa®îy discipline; complies with disciplines, lawsand regulations; learns from past mistakes to avoid future ones, and cure the sickness and save the patient; accurately and e®ãectivelyconducts "four forms" of supe®ïision on discipline enforcement; implement ideological and political work throughout the whole process ofsupe®ïision on discipline enforcement; focuses on educational transformation; prevents and corrects violations of discipline by cadres andemployees; work hard to a build a clean and upright atmosphere.In 2023, the Company made a thorough warning education; persistently developed the strengthening of Pa®îy self-discipline in depth andbreadth; made careful organization and deployment; actively enriched and expanded the forms of honesty education; solidly carried outmore than 30 warning education activities with various forms and rich contents, such asthe series of monthly warning education activities in 2023, the training of new employeesand young cadres on honesty, and the special conference on combat corruption anduphold integrity; made great efforts to build the ideological defense line for all Partymember, cadres and employees of the Company against corruption and degeneration.

During the repo®îing period, the coverage

rate of pa®îicipants reached

%

3435

Changyuan Lico 2023Environmental, Social and Governance Repo®î

Message from theChairman

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ESGmanagement

Futureprospects

Series of monthly warning education activities of Changyuan LicoCaseIn October 2023, Changyuan Lico carried out aseries of monthly warning education activities;organized seminars, topical Party lectures andtheme exhibitions; concentrated on watchingwarning education videos; organized Partymembers, cadres and employees to car®ñ out studyand discussion, so as to guide Pa®îy members andcadres to ®êrmly establish a correct view of powerand interests; correct their cognitive deviationsand ideological concepts; enhance their abilityagainst corruption and degeneration, to esco®î theCompany to become a global leader in new energymaterial indust®ñ.

On March 18, Changyuan Lico held the 2023 Meetings on Pa®îy Conduct and Upholding Integrity Construction and Anti-corruptionWork, and Warning Education Conference; fully implemented the spirit of the 20th National Congress of the Communist Partyof China and 2nd Plenary Session of 20th CPC Central Commission for Discipline Inspection; conscientiously implemented therequirements proposed in 2023 Meetings on Pa®îy Conduct and Upholding Integrity Construction and Anti-corruption Work, andWarning Education Conference of the group company; summed up the works in 2022; carried out warning education; studied anddeployed key tasks in 2023.

To strengthen the management of investor relations, maintain the Company's honest, fair and transparent external image, improve thegovernance level and realize the fair enterprise value of the Company, Changyuan Lico has formulatedMeasures for Management ofInvestor Relationsaccording toCompany Law, Securities Law, Guidelines for Relations Between Listed Companies and Investors, A®îiclesof Association of Changyuan Lico, and other laws and regulations, and normative documents.The Company attaches great importance to information communication with investors and potential investors, answers investors'questions in time through SSE E-interactive, e-mail and investor hotline, and sets up an investor relation column in o®æcial website(website: www.cylico.com), through which investors can check the Company's stock information, corporate governance, periodicrepo®îs, tempora®ñ announcements and investor contact information. The Company organizes various activities, such as pe®íormancebriefings, collective reception day for investors, and approach to listed companies, to strive to strengthen the benign interactiverelationship between the Company and investors, enhance investors' understanding of the Company and recognition of the Company'svalue, form a good corporate culture that rewards investors and e®ãectively protect investors' interests. In 2023, the Company held fourpe®íormance brie®êngs and pa®îicipated in irregular research and strategy meetings for many times, and communicated with more than800 investment institutions. In addition, the Company responded nearly 200 questions from investors in SSE E-interactive, and activelyanswered calls from investors. Investors communicated on the Company's operating pe®íormance, development planning and othermatters fully and timely.

The Company attaches great importance to the information disclosure, strictly abides by various regulatory requirements of listedcompanies, strengthens main responsibilities, continuously strengthens the information disclosure management, and always adheresto the fair, impartial and open information disclosure standards, and proactively and timely releases all information that may havea significant impact on the decisions of shareholders and other stakeholders. The Company was granted an A-level rating in theevaluation of information disclosure for listed companies in Shanghai Stock Market of Shanghai Stock Exchange from 2022 to 2023. TheCompany designatesChina Securities Journal, Shanghai Securities News, Securities Daily, and the o®æcial website of Shanghai StockExchange (http://www.sse.com.cn) as special channels for information disclosure, to ensure that all shareholders can obtain companyinformation equally and conveniently, and to provide a solid guarantee for the transparency of corporate governance and the balancedprotection of the interests of all pa®îies.In 2023, the Company issued four regular announcements, more than 50 temporary announcements and a number of publiconline disclosure documents, including pe®íormance forecast, a®æliate transaction, use and management of raised funds and otherannouncement categories, e®ãectively ful®êlling the information disclosure obligations of listed companies.

Information disclosure

Investor relations managementChangyuan Lico held the 2023 Meetings on Pa®îy Conduct and Upholding Integrity Construction and Anti-corruption Work, and Warning Education Conference

AppendixSocialFutureprospects

GovernanceEnvironment

Protect Shareholders' equity

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Futureprospects

Putting people ®êrstand creating abetter future

Social

The year of 2023 is the beginning year of implementing thespirit of the 20th National Congress of the Communist Partyof China. The Company fully implements the spirit of the 20thNational Congress of the Communist Party of China, resolutelyimplements the decisions and deployments of the Company'sPa®îy committee, focuses on the talent team construction basedon the actual production and operation of the Company, provideshigh-quality client services, strengthens data security andprivacy protection, sets up sustainable supply chain, promotesdigital innovation and conveys positive social energy.

SDGs

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AppendixSocialGovernanceChangyuan Lico 2023Environmental, Social and Governance Repo®î

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ESGmanagement

Environment

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Protect employee happinessLegal employment

Talent team training

Changyuan Lico attaches great impo®îance to social responsibility in employment and strives to create a fair, just and inclusive workingenvironment for employees. The Company adheres to the principles of equality and respect, and does not discriminate against any jobseeker based on age, gender, race, etc., providing equal development oppo®îunities for all employees. In the process of recruitment, theCompany pays attention to the diverseness and inclusiveness of talents, and encourages talents from di®ãerent backgrounds and majorsto join the team of Changyuan Lico. As of the end of 2023, the Company has 2,330 employees and 148 employees from minority groups.

In 2023, Changyuan Lico vigorously implemented special talent cultivation projects such as the Elite 300 talent project, Lico new star talentproject and skilled talent cultivation project. Through a series of measures such as job rotation exercise, mentorship and skill competitions,we aim to accelerate employee growth and strive to build a talent team with su®æcient quantity, reasonable structure and excellent quality,to rese®ïe and accumulate strength for the high-quality development of Changyuan Lico.In the employees' career development, based on the growth law of talents, the Company combines with the advanced practice in themarket, scienti®êcally plans the career development channel and development path of employees, guiding their growth. The Companyprovides employees with a multi-channel career development system, including management sequence, professional sequence,specialist sequence and operation sequence. The Company also provides employees with a systematic training system and organizes skillcompetitions to assist in their career development and ability enhancement.

In the ®êeld of new energy material, as a member enterprise of the World's Top 500, we strive to become an indust®ñ leader and a promoter.We hope that outstanding talents will work together with us to strive ahead and create a green new world together with technology,wisdom and sweat.The Company is committed to building a high-quality employee team with passion, emotion, ambition, competence, success. Scienti®êcallyformulate appraisal and incentive mechanism of the Company, providing oppo®îunities for those who is ambitious, platforms for those iscompetent and incentives for those who is successful.

The Company pays attention to the common growth of employees and the enterprise. Based on the nature and characteristics of thepost, combined with the career and expe®îise of employees, we establish multiple career development channels, including management,technology, production (operation), etc. Through ve®îical job promotion, horizontal channel transition, and horizontal movement towardscore posts, we provide multiple career development channels for various talents, ensuring that the career development of employeesis consistent with the development of the Company to the maximum extent. At the same time, the Company establishes the relativelyscienti®êc talent evaluation mechanism and the selection and elimination mechanism, promoting the echelon construction of talent teamsand the plan for rese®ïe management cadres, providing a broad platform for employee growth.

Pre-job training, regular post business guidance, shift training and school-enterprise cooperation trainingMentorship guidance, case analysis, simulation drill and shift training

Indust®ñ training exchange meeting, personnel fu®îher study, and academic and degree improvement platform

Talent concept

Development channel

Employee training

Management learning and trainingSkilled talents trainingBackbone talents (professional and technical personnel, middle managementand rese®ïed talents) training

Total number ofemployees

Production andpurchasing personnelTechnician

30 years old(inclusive) below

Propo®îionof doctor

Propo®îion ofmale employees

30-50 years old(inclusive)

Propo®îionof postgraduate

Financial personnel

Propo®îion offemale employees

Managementand administrativepersonnel

Over50 years old

Propo®îion ofundergraduateand below

Seller

2,330

1,590

34.68

%

0.60

%

77.68

%

60.00

%

8.88

%

22.32

%

5.32

%

90.52

%

2023

Employee structure

Age structure

Educational structure

Personnel structure for types of work

4041

AppendixSocialGovernanceChangyuan Lico 2023Environmental, Social and Governance Repo®î

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ESGmanagement

Environment

Futureprospects

2023 Electrician skills competitionCaseIn order to fully implement the decision and deployment of the 20th National Congress of the Communist Party of China tostrengthen the construction of skilled talent teams, deeply implement the requirements of the 2023 working conference of ChinaMinmetals, e®ãectively promote the action plan of innovative Minmetals construction and strengthening enterprises with talents,and accelerate the implementation of the "Craftsman Casting Plan of Minmetals", the Company organized the 2023 electricianskills competition. The Company will actively establish a broad platform for skilled talents to show themselves, and actively build ahigh-quality skilled talent team to suppo®î the Company's high-quality development in the new era.

Occupational health of employeesOccupational healthsystem ce®îi®êcation

Prevention and control of employee safety risk

Chemical safety management

In 2023, the Company continued to promote the construction of a dual prevention mechanism of classi®êed management and control ofrisk and investigation and control of potential hazard, integrating pa®îy building and safety production. Taking theme education as anoppo®îunity, we conduct research on the dual prevention mechanism of classi®êed management and control of safety risk and investigation

The Company focuses on key safety links such as the storage, use and disposal of hazardous chemicals during the production. In accordancewith relevant laws and regulations on work safety, the Company carries out the potential risk identi®êcation on the full process of hazardouschemicals such as natural gas, liquid oxygen and hydrogen peroxide, lists problems and formulates recti®êcation measures to ensure thatthe recti®êcation is implemented e®ãectively. At the same time, we pay special attention to the recycling of waste batteries and the safetymanagement of high-risk production areas. Strictly implement the recruitment standards, raise the approval level for ®êre work in the area,strengthen the on-site security access control system, and formulate an enhanced version of management regulations for work safety inspecial areas.

Average traininghours of employees

Annual trainingexpenses

Total annualtraining hours

Times ofemployee trainingEmployee training rate

Propo®îion of trainedgrassroots employees

Propo®îion of trainedmale employees

Propo®îion of trainedsenior managementemployees

Propo®îion of trainedmiddle management

25.01

38.4

%

58,282

1,320

2023

Both of Changyuan Licoand Jinchi Energy haveobtained industry relatedoccupational health andsafety management activityce®îi®êcation.

Each subsidiary formulates and improves the emergency response plan system for sudden risks based on actual production situations,revises and improves emergency rescue plans for work safety accidents, and files them with government regulatory departments.Continuously strengthen risk prediction and warning, issue warning information 24 times, and improve emergency management organizationand emergency duty mechanism. In 2023, the Company carried out 87 emergency exercises in 14 categories, including hazardous chemicalleakage, ®ìood prevention, ®êre evacuation, con®êned space, solution leakage and gas leakage, with a total of 3,306 pa®îicipants. There were noserious injuries or above work safety accidents throughout the year.

?

and control of potential hazard, summarize advanced practices, identify problems and proposesolutions. Take the construction of a dual prevention mechanism as an impo®îant sta®îing pointto improve the safety management level of the Company, and organize hazard identi®êcation andnormalized potential hazard investigation. According to the process ®ìow, identify the safety risksin production processes, equipment and facilities, operating environment, personnel behaviorand management system in a comprehensive and full process manner, with a total of 1,088identified risks. Divide the identified risk points into levels, formulate control measures, andincorporate them into normalized supe®ïision. Through the "one meeting, three cards (pre-shiftmeeting, key operation point card, risk warning card and emergency instruction card)", promotethe implementation of the dual prevention mechanism, and enable employees to understand thebasic situation of their post risk points and preventive and emergency measures. Throughout theyear, a total of 26 special investigations and qua®îerly, monthly and holiday safety inspectionson ®êre-®êghting, gas safety, hazardous chemicals, special equipment, special operations, ce®îi®êedspecial operations and ®ìood prevention were carried out. 604 hidden dangers were identi®êed,and the completion rate of hazard recti®êcation reached 100%.

the completion rateof hazard recti®êcation reachedhidden dangers were identi®êed

Number of pa®îicipants inemergency exercises

%

3,306

4243

AppendixSocialGovernance

Changyuan Lico 2023Environmental, Social and Governance Repo®î

Message from the

Chairman

AboutChangyuan Lico

ESGmanagement

Environment

Futureprospects

Series of activities of Changyuan Lico "Work Safety Month"CaseJune 2023 is the 22nd National "Work Safety Month". Changyuan Lico continues todeeply study and implement the important discourse and instructions of GeneralSecreta®ñ Xi Jinping on work safety, and closely revolves around the spirit of the ChinaMinmetals Work Safety Committee meeting and the theme of "everyone talks aboutsafety, eve®ñone knows emergency" to car®ñ out various forms and rich content activities,fu®îher solidifying the safety bottom line and red line, consolidating the responsibilitychain from the main principal "the ®êrst kilometer" to the on-site management "the lastkilometer", and consolidating the foundation of the Company's work safety.

The main principal's "Five Leading" activity

Lecture on the theme of work safety

Emergency exercise skills competition and special exercises

Work safety promotion activities

Hu Liuquan, the Secreta®ñ of the Pa®îy committee and Chairman of the Company, leads ateam to conduct on-site inspections of investigation and remediation for accident hazards,work safety post responsibilities, implementation of hazardous operations, managementof outsourced units, and implementation of emergency exercises. Zhang Zhen, the generalmanager and deputy secretary of the Party committee of the Company, leads a team toconduct a comprehensive investigation and so®îing of major accident hazards, focusing onspecial operations such as con®êned spaces, storage and use of hazardous chemicals, metaldissolution, lithium batte®ñ storage, extraction production lines, oxygen production stations,special equipment, and ce®îi®êed personnel, in order to prevent and resolve safety risks.

On June 30, Zhang Zhen, the general manager and deputy secretary of the Partycommittee of the Company, gave a public lecture on the "Impo®îant Discourse of GeneralSecreta®ñ Xi Jinping on Work Safety".

Work safety accident warning education and training

During the Work Safety Month, the main principals of the subsidia®ñ conducted four "Work Safety Accident Warning Education andTraining" sessions.

On June 16, the Company organized andparticipated an emergency exercise skillscompetition organized by the governmentdepartment. The participating team of theCompany won the first prize in the electricshock accident exercise and the third prizein the mechanical injury accident exercisewith excellent professional skills and a calmcompetition mentality.At the same time, each subsidiary has carriedout emergency exercises such as sudden fireaccidents, heat stroke, confined space rescue,and gas leaks in accordance with the currentkey controlled risks, effectively improving thecomprehensive response and rapid responsecapabilities for emergencies.

The Company has solidly carried out work safety promotion activities, including the launch ceremony of the Work Safety Month,themed signatures, and safety publicity consultation days. Through hanging promotional slogans and distributing promotionalmaterials, the Company has widely promoted knowledge of safety laws and regulations, ®êre safety, occupational health, and postwork safety responsibilities to employees.

Employee safetyeducation andtraining

The Company has established a Level¢ótraining system for occupationalhealth and safety. In 2023, a total of756 people completed the Level¢ósafety training before starting workand passed the exam. In 2023, nationalactivities such as "Work Safety Month","Fire Propaganda Month", "EnergyConservation Propaganda Week","National Low Carbon Day", "OnlineKnowledge Competition", and online"Escape Exercise Training Camp"were organized. Changsha fire safetypropaganda and education expertswere invited to conduct special trainingonFire Safety Knowledgeand otherrelated topics. New media such as "LicoIdeal School" were used to organizeonline training in rotation of laws andregulations such asWork Safety Lawof the People's Republic of China,Amendment to Criminal Law andJudicial Interpretation. Through a seriesof online and offline education andtraining, we further guide employeesto establish a solid concept of worksafety and enhance their awarenessof safety responsibility. A total of 161trainings are conducted throughout theyear, with a total of 13,930 person-timepa®îicipants. At the same time, based onthe accident cases that have occurredin the Company and peers, a warningeducation manual is prepared and sentto each team, and warning educationis organized for all employees. Throughreviewing the accidents, efforts aremade to promote improvement andgovernance through case studies.

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AppendixSocialGovernanceChangyuan Lico 2023Environmental, Social and Governance Repo®î

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ESGmanagement

Environment

Futureprospects

Employee's rights and interests

Employee care and communication

Remuneration and bene®êts

Democratic management

The Company provides competitive salaries in the industry, allowing employees who strive for their ideals to have no worries. It hasestablished a scienti®êc and reasonable incentive oriented sala®ñ distribution model and dynamic adjustment mechanism, respecting thevalue di®ãerences of each post, and adopting di®ãerent sala®ñ systems for di®ãerent post categories. Intend to enhance the Company'sresearch and development and scienti®êc and technological innovation capabilities, and stimulate the work enthusiasm, positivity, andcreativity of professional and technical personnel. The Company provides relevant rewards for various scientific and technologicalinnovation awards, inventions and creations that have been granted patent rights, national or indust®ñ standards that have been o®æciallypromulgated and implemented, academic monographs that have been o®æcially published, scienti®êc papers published, and approvedtechnology projects outside the group. At the same time, it provides medium - and long-term incentive plans and education and trainingfunding plans for core talents.The Company has a comprehensive welfare system, pays various social insurance and housing provident fund, commercial supplementa®ñmedical insurance, conducts regular health examinations, provides free work meals, holiday life benefits, shuttle buses to and fromwork, organizes a variety of activities, and enriches the employees' life outside of work. The Company's work environment is clean andcomfo®îable, green and environmentally friendly, equipped with fully equipped employee apa®îments (equipped with internal sanitation,air conditioning, water heater, WiFi), and complete cultural and ente®îainment facilities (football ®êeld, basketball cou®î, badminton cou®î,table tennis room, dance room, gym, etc.), allowing employees to enjoy and relax their body and mind in their spare time.

Changyuan Lico focuses on democratic management, safeguarding the democratic rights and legitimate rights and interests ofemployees. Changyuan Lico strictly regulates the construction of the Sta®ã & Work Conference and improves the democratic managementsystem and mechanism, organizes three Sta®ã & Work Conferences during the repo®îing period to hear and review impo®îant issues suchas the Company's work repo®î, as well as impo®îant matters such as the detailed implementation rules of the enterprise pension plan.

In 2023, labor union of Changyuan Lico earnestly studied and implemented the spirit of the 20th National Congress of the Communist Pa®îyof China and the 18th National Congress of the Chinese labor union, deeply implemented Xi Jinping's Thought on Socialism with ChineseCharacteristics for a New Era and General Secreta®ñ Xi Jinping's impo®îant discourse on the work of the working class and labor unions,adhered to the work orientation of centering around the center and se®ïing the overall situation, adhered to the work orientation of puttingemployees at the center, highlighted main responsibilities and main business, seized key points and di®æculties, conscientiously ful®êlled theirduties, and promoted the Company's labor union work to achieve higher quality development, adding new momentum to the Company'shigh-quality development. This year, the Company was awarded the "May 1st Labor Medal for Hunan Provincial Units in 2022", the civilengineering team of the Company's 80,000 ton project was awarded the "Advanced Team in Hunan Province Key Project Labor Competition",and Zhang Jinjin, the assistant to the general manager of the Company and the general manager of its subsidia®ñ Hunan Changyuan LicoNew Energy Co., Ltd., was awarded the "May 1st Labor Medal for Hunan Provincial Units in 2022"; The Company's labor union was awardedthe "Advanced Labor Union Committee of the Ninth Provincial Area in 2023"; Li Gang, the vice chairman of the Company's labor union, hasbeen awarded the title of "Most Trusted Member from Mother's Family of Workers in Hunan Province" by the provincial labor union.The Company's labor union, based on practical work, closely focuses on solving the "urgent and difficult needs" of the workers andmasses, solidly promotes the practical activity of "I do practical things for the people", and achieves practical results, fu®îher deepening thedeep integration of labor union work and production and operation.

Sending coolness activitiesCaseIn the scorching summer, the scorching sun is like ®êre. Labor union of Changyuan Lico deeply studies and implements the spiritof the 20th National Congress of the Communist Party of China, the important discourse of General Secretary Xi Jinping onthe work of the working class and labor unions, and the impo®îant instructions of General Secreta®ñ Xi Jinping on the eve ofthe International Labor Day. We solidly car®ñ out the "I do practical things for the people" practical activity, and combine withthe actual production situation of the Company to organize the "labor union sends coolness, heatstroke prevention and healthprotection" heatstroke prevention and cooling activity.

We organize activities such as "single gatherings" and convenient se®ïices in the park to continuously enhance the sense of belonging andhappiness of employees.

Pay attention to the life, health,and safety of employees

Highlighting the achievements of women and genuinely caringfor the growth of female employeesWe organize over 240 employees toparticipate in annual health examinationsand assisted the Company's safety andenvironmental department in conductingoccupational health su®ïeys for employees.Organize and participate in employeemedical mutual assistance activities toenhance employee medical security.

Car®ñ out the 2023 Women Workers Legal Popularization Month activity, earnestlystudy and implement Xi Jinping Thought on the Rule of Law, promote and implement

Law of the People's Republic of China on the Protection of Rights and Interests ofWomen, and vigorously create a good atmosphere of respecting the law, learningthe law, abiding by the law, and using the law. Carry out a series of activities on"charming women and happy women", organize female workers health care lectureson "caring for the health of female workers, being beautiful and happy women" and"lotus lecture room" employee health lecture- How to Balance Work and Life.

"Charming women and happy women" series activitiesCase

"Caring for the health of female workers, being beautiful and happy women" female worker health lecture activity

"Lotus lecture room" employee health lecture activity

We organized condolence activities such as "labor unions providing coolness, heatstroke prevention andhealth protection" to supe®ïise the distribution of high-temperature allowances and heatstroke preventionand cooling supplies, and coordinate the logistics suppo®î for heatstroke prevention and cooling.

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Chairman

AboutChangyuan Lico

ESGmanagement

Environment

Futureprospects

Exciting and diverse culturaland spo®îs activitiesOrganize pa®îicipation in superior laborunion activities. Actively participate invarious cultural and sports activitiesin the ninth area of the provinciallabor union. Participated in the "tenthousand steps per day" brisk walkingactivity and the "accompanied day andnight, valuable companion" marathon,with multiple members receivingrewards; organize participation in theprovincial station race of 2nd provincialemployee badminton carnival in 2023and the 10th "Hunan DevelopmentCup" badminton team competition ofHunan listed companies; organizedparticipation in the Xiangjiang newarea basketball league and won thesecond prize. At the beginning ofthe year, we formulated a activityschedule for the 2023 "Building a LicoDream Together, Every Month is Redin Cultural and Sports Activities" eventfor the Company, and held cultural andsports activities such as tug of war,volleyball games, badminton games,the "Changyuan Lico Cup" basketballgames, chess tournament, footballgames, table tennis games, and billiardsgames to enrich the sparetime life ofcadres and employees, improve theirphysical ®êtness, showcase the spiritualstyle of employees in the new era,and create a harmonious and healthyworking atmosphere.

Adhere to inclusive use offunds for employeesIn 2023, 94.29% of the labor unionexpenditure is used for the welfare ofthe Spring Festival, the Dragon BoatFestival, the Mid-Autumn Festival,birthday benefits and other inclusivebene®êts for employees, as well as dailyvisits and condolences.

2023 Employee recreational and spo®î activitiesCase

2023 Workers tug of war competition

The 6th "Changyuan Lico Cup" employee basketball game of "Always Follow the Pa®îy and Make Merits in a New Era"

Holding a Changyuan Lico Football Friendship Tournament

2023 Employee Chess Activities

2023 Employee Volleyball Games2023 Employee Badminton Games

2023 Employee Table Tennis and Billiards Competition

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AppendixSocialGovernance

Changyuan Lico 2023Environmental, Social and Governance Repo®î

Message from the

Chairman

AboutChangyuan Lico

ESGmanagement

Environment

Futureprospects

Strictly adhere to product qualityProduct quality control system

Product quality management policy

Digitalization empowers quality managementBig data platforms help achieve quality visualizationChangyuan Lico has introduced ISO9001:2015 and IATF16949:2016 quality management system standards, developed systems such as

Control Procedure for Product and Se®ïice Release, Product Exception Management Measures, and Product Control Line ManagementSystem, and established a comprehensive and effective quality control system. The system covers the entire process of product andse®ïice quality control, from raw material management, process management, ®ênished product quality control, to ®ênal product inspectionand release. It scientifically and rigorously manages the quality of products and services. By continuously improving institutionalmechanisms and establishing an excellent management evaluation system, we promote the enhancement of our quality managementawareness and capabilities, and implement quality assurance from all dimensions including Client requirement identi®êcation, productdevelopment, production manufacturing, product delive®ñ, and se®ïice.

Changyuan Lico takes the spirit of craftsmanship to create products and services that exceed Client expectations as its qualitymanagement policy. Adhering to Client needs as the guide, with a professional attitude, standardized management, precise control,continuous innovation in management mode, and continuous improvement motivation, we strive to create products and se®ïices thatexceed Client expectations and achieve common development.In order to implement the Company's quality management policy, the Company has formulated theQuality Management Manual, QualityManagement Measures of Hunan Changyuan Lico Co.,Ltd., as well as various levels of procedural documents, management methods,and quality objectives; The system clari®êes the quality responsibilities at the general manager level, depa®îment director level, engineerlevel, and team employee level, ensuring standardized quality on duty and implementing a multi-level and multi-dimensional qualityresponsibility control system.

The Company fully recognizes the impo®îance of information empowerment, with the construction of intelligent factories as the core andthe integration of business and ®ênance as the foundation, continuously improving the level of delicacy management, process automation,and business collaboration. At present, OA, SAP, MES, DCS, LIMS, WMS and other systems have been completed or are under construction.In the future, we will continue to promote the construction of PLM, EHS, contract management platform, cost control system and othersystems to continuously promote the Company's digital transformation and constantly empower business. All information systems, withMES as the core and driver, achieve data exchange and linkage through API inte®íaces, and create the full process information platform forthe Company's core business.

Changyuan Lico ISO9001 Changyuan Lico IATF16949

Quality managementsystem ce®îi®êcation

Information system architecture

IT

OT

Enterprise po®îal network

Digital facto®ñ screen

Present and decision-making level

Data andcomprehensivemanagement

Businessoperation level

Productionoperation layer

Automationcontrol layer

Workshopequipment layer

L6L4

L4L3

L3L2

L2L1

L1Master datamanagement

Master datamanagementBig data

platform

Big data

platformOther

Other

Integrateddevelopment,operation andmaintenance

Integrateddevelopment,operation andmaintenanceFinance, fund and

tax management

Finance, fund and tax management		Human resource management (HR)

Warehouse managementsystem (WMS)

Warehouse managementsystem (WMS)Device

DeviceAutomated guidedvehicle (AGV)

Automated guidedvehicle (AGV)Manufacture execution

system (MES)

Manufacture execution

system (MES)Sensor

SensorProgrammable logiccontroller (PLC)

Programmable logiccontroller (PLC)Enterprise resource planning (ERP)

Enterprise resource planning (ERP)Digital facto®ñ vi®îual simulation

Digital facto®ñ vi®îual simulationSupe®ïiso®ñ control and data acquisition (SCADA)

Supe®ïiso®ñ control and data acquisition (SCADA)O®æce automation(OA)

O®æce automation(OA)Laborato®ñmanagement (LIMS)

Laborato®ñmanagement (LIMS)Machine

MachineHuman-machineinte®íace (HMI)

Human-machineinte®íace (HMI)Energy managementsystem (EMS)

Energy managementsystem (EMS)Full budgetmanagement

Command module leading		Full budget management

B1 businessintelligenceanalysis

B1 businessintelligenceanalysisEnvironmental andhealth management(EHS)

Environmental andhealth management(EHS)Customer relationshipmanagement (CRM)

Customer relationshipmanagement (CRM)Transpo®îation management

system (TMS)

Transpo®îation management

system (TMS)Archives and knowledge

management

Archives and knowledge

managementProduct lifecyclemanagement (PLM)

Product lifecyclemanagement (PLM)Risk management

and audit

Risk managementand auditSupplier relationshipmanagement (SRM)

Supplier relationshipmanagement (SRM)Advanced planning and

scheduling (APS)

Enterprisemanagementandcontrol layer

Advanced planning and

scheduling (APS)L5

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AppendixSocialGovernance

Changyuan Lico 2023Environmental, Social and Governance Repo®î

Message from the

Chairman

AboutChangyuan Lico

ESGmanagement

Environment

Futureprospects

Digitalization empowers quality management

Improving the quality atmosphereProduct quality management culture

Under the policy promotion of deep integration of informatization and manufacturing indust®ñ, the Company combines the characteristicsof large production scale and high quality requirements in the indust®ñ, as well as the needs of its own high-quality development strategy,vigorously transforms and upgrades towards digitization, networking, and intelligence, creates a new capability system, on the basis ofenhancing traditional value and bene®êts, promotes the formation of new models and formats, and obtains sustainable competitive andcooperative advantages.The Company takes the OA system, SAP system, and MES system as its core, and constructs an automated, digital, and information-based control system for the entire process of operation - production through methods such as "full access of key equipment", "automaticcapture of production data", and "automatic analysis of key data". This ensures that quality planning has data guidance, quality controlhas data reference, quality assurance has data suppo®î, and quality improvement has data feedback. By digitalized management of theproduction process, fu®îher improve the Company's quality management system and enhance its quality management capabilities.

Full chain data collection and analysisChangyuan Lico has carefully studied and understood the strategic decision-making and deployment of the Party Central Committee onthe development of the digital economy and the requirements for the construction of the "Digital China Minmetals" of the group company.Combining with the actual needs of the Company's business, it has vigorously promoted intelligent and digital transformation, and has formedrich practical achievements in data collection, detection and analysis throughout the entire business process and chain on various fronts.The Company's "Test Center LIMS System and Sma®î Laborato®ñ System" integrates MES, LIMS, and Sma®î Laborato®ñ systems through4G/5G networks or data interfaces, interconnecting various types of data and achieving full process visualization of data collection,transmission, calculation, storage, display, and analysis. It solves the problems of di®æcult data collection, manual control methods, andlack of traceability in the experimental process, e®ãectively improving the supe®ïision e®æciency of quality management personnel on thelaborato®ñ, fu®îher consolidating the compliance and traceability of test work, providing necessa®ñ data suppo®î for e®æcient supe®ïision ofproduction quality, and advancing the automation, standardization, and informatization level of laborato®ñ work to a new level.

Spread quality cultureThe Company has formulated Implementation Plan for Publicizing and Implementation of Corporate Culture of Hunan Changyuan LicoCo., Ltd. Through systematic and comprehensive publicizing and implementation, the enterprise culture dissemination project, landingproject, and evaluation project are implemented step by step.Car®ñ out the cultural "three on" work of "putting culture on the wall, culture on the internet, and culture on the speech", compile CompanyCorporate Culture Handbook, standardize the precise use of enterprise visual recognition systems such as slogans, markings, andCompany logos in o®æce and production places, and form a standardized material culture; complete the exhibition hall layout, set upa corporate culture display wall, continuously update promotional PPTs, create brochures and other work, enrich cultural propagandacarriers, and introduce the Company's corporate culture to pa®îners and other pa®îies and implement corporate culture disseminationprojects through more than 60 Client visits throughout the year, organizing "State-owned Enterprise Open Days" and pa®îicipating invarious exhibitions, exchanges and other activities. . At the same time, we car®ñ out corporate culture propaganda, essay solicitation andknowledge contest of required technical knowledge and skills, create "culture on the wall", "cultural corridor" and other atmosphere andpromotional activities, take the OA intranet and o®æcial WeChat account as the propaganda position, and all sta®ã pa®îicipate in, deepenlevel by level, implement the Company's mission and core values step by step and e®ãectively, implement the corporate culture landingproject, take root in the corporate culture, continue to organize and car®ñ out various employee spo®îs games such as basketball games,imperceptibly publicize and implement the corporate culture concept, and pool the strength of striving.

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The Company emphasizes the construction of high-quality corporate culture, establishes a leadership group for corporate culture construction, andformulatesManagement Measures for Corporate Culture Construction of Hunan Changyuan Lico Co., Ltd. and Work List for Quantitative EvaluationSystem and Standard of China Minmetals' Corporate Culture Construction in 2023 Implemented by the Company.Quality culture is included inthe development plan of corporate culture construction, and regular research on corporate culture construction work is conducted to e®ãectivelyintegrate corporate culture construction into various aspects of production and operation management. In order to comprehensively publicize andimplement the Company's corporate culture concept, deepen the understanding of the Company's corporate culture concept system among allemployees, fully integrate corporate culture into the corporate body, enhance the suppo®î of corporate culture for the Company's development, andpromote the dissemination of quality culture and the creation of a quality atmosphere in multiple places and all aspects.Zhang Zhen, the general manager and deputy secreta®ñ of the Pa®îy committee of the Company, personally discussed the six speci®êc requirementsof 2023 for promoting high-quality work in the 2023 annual work conference, which are closely related to high quality. At the opening ceremony ofthe Quality Month and other oppo®îunities, the executive directors of the two subsidiaries advocated for all employees to value quality and ®êrmlyestablish the quality concept of "quality for su®ïival, ce®îi®êcation for the market, details for success or failure, and quality for the future".

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Chairman

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ESGmanagement

Environment

Futureprospects

Carefully organize quality debate competitionsIn a series of debates with the theme of production quality and delive®ñ e®æciency, the contestants exchange with each other and talkcon®êdently, and the audience applauds continuously and gains a lot. "The more the truth is debated, the clearer it becomes", the tenseand lively debate competition not only left a deep impression on the attending employees, but also sparked active discussion and deepthinking on a series of quality management issues and standards, fu®îher pushing the learning atmosphere of quality management for allemployees in the Company to a climax.

In 2023, we continued to promote leaner productionwork and organized various departments toconduct in-depth diagnosis and analysis of variousaspects of leaner production. We collected a totalof 31 lean improvement proposals from the entireCompany. Through organizing 4 meetings of thelean improvement leadership group, we evaluatedthe feasibility of the proposals and the e®ãectivenessof programme implementation. Finally, we selected15 high-quality lean improvement projects topa®îicipate in the evaluation, we voted and selected2 first prizes, 4 second prizes, and 6 third prizes.We saved over RMB 20 million in production coststhroughout the year, effectively reducing operatingcosts of enterprise, improving production e®æciencyand product quality, and improving the Company'soverall management level.

Changyuan Lico has established management systems for non-conforming products, such asControl Procedure for Non-conformingProducts, Control Procedures for Corrective and Preventive Measures, Product Exception Management Measures, and Incoming MaterialException Management Method. It has established a non-conforming product review system with the quality control department asthe core, realizing the handling and control process for incoming non-conforming products, process non-conforming products, ®ênishedproduct non-conforming products, post-delive®ñ non-conforming products, and other non-conforming products. Clearly identify ande®ãectively dispose of non-conforming products, prevent them from ®ìowing into the next process, ensure the quality of products deliveredto Clients, and prevent the recurrence of non-conforming products.In 2023, the Company continued to strengthen the timeliness and e®ãectiveness of preventing and improving non-conforming products.Through project maturity management and design risk identification, quality prevention was implemented, problem oriented andprevention oriented management were implemented to eliminate variation, implemented defect prevention, controlled hierarchicaldeterioration, and achieved product consistency assurance. Ensure that product indicators meet Client specifications, improve Clientsatisfaction, and reduce the risk of Client complaints.

Improve the product qualityConduct skill competitionsCarry out activities such as quality data analysis,test theoretical knowledge and practical operationPK, battery pack disassembly, hot melt welding,forklift skill competition, 5S evaluation, etc. Throughcompetitions and evaluations to commend theadvanced, give full play to the demonstration anddriving e®ãect, inspire employees to practice qualitycommitments with practical actions, deeply embedthe concept of "all staff quality management" inpeople's hearts, further promote the continuousstrengthening of company team construction, andsteadily improve quality and e®æciency.

Continuously strengthening quality awareness

Qualitymanagement ofall personnel

15 high-quality lean improvement projects

In order to enhance the quality awareness of all employees in the Company and create a good atmosphere where everyone paysattention to quality, Changyuan Lico attaches great importance to the publicizing and implementation of quality culture. Seizing theprecious oppo®îunity of the annual "Quality Month", a series of quality culture themed activities are widely carried out. Rolling broadcastof the feature documenta®ñQuality in Big Count®ñin the cafeterias of employees at various bases of the Company, using "fragmented"time to guide employees to pay attention to and understand the quality story; each department effectively enhances the sensitivityand sense of responsibility of employees towards quality issues by conducting quality awareness training and discussion sessions; weorganize employees to pa®îicipate in quality essay competitions, "Online Quizzes Activity for Central Enterprise Total Quality ManagementKnowledge Competition", and "Quality Month Quizzes Activity of Lico Ideal School", successfully creating a strong learning atmosphere of"enterprises pursuing quality and eve®ñone paying attention to quality".

We saved over RMB

million in production coststhroughout the year

2®êrst prizes,

second prizes,

third prizes

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AppendixSocialGovernanceChangyuan Lico 2023Environmental, Social and Governance Repo®î

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ESGmanagement

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Futureprospects

Building a sunshine chainSupplier management principles

Access and review of suppliers

Supply chain risk management

Prevention and emergency plan for interruption of rawmaterial supply

In order to optimize supplier resources, ensure procurement quality, reduce procurement costs, control procurement risks, and ensureprocurement implementation, under the uni®êed management of China Minmetals Corporation, in accordance withSupplier ManagementMeasures of China Minmetals Corporation andProcurement Management Regulations of Hunan Changyuan Lico Co., Ltd.,the Companyhas formulatedSupplier Management Measures. The Company's supplier management follows the principle of "uni®êed management,dynamic assessment, and selecting the best and eliminating the worst":

Supplier admission adopts a review system, which is divided into two stages: prelimina®ñ review and detailed review. Prelimina®ñ reviewis a qualitative compliance review of the basic conditions and rejection clauses of suppliers; detailed review is a quantitative scoringevaluation of review standards. The procurement platform company implements an "admission system" management for suppliers, andonly suppliers who have passed the admission approval can pa®îicipate in the Company's procurement business.The Company implements a "dynamic assessment, selecting the best and eliminating the worst" evaluation management for suppliers,and adopts a combination of daily management and quantitative assessment for evaluation. The annual evaluation mechanism se®ïes asan impo®îant basis for supplier grading and exit. The procurement depa®îment conducts annual evaluations of suppliers who have enteredor established se®ïice relationships.The procurement depa®îment reviews and supe®ïises the admission of quali®êed suppliers and the con®êrmation of "blacklisted" suppliers.When reopening, the supplier should provide a corresponding recti®êcation repo®î, open and use can only be carried out after being reviewed.

The Company implements full cycle management of suppliers, ensuring their excellent quali®êcations, legality, and integrity from introductionto exit. At the same time, the compliance management requirements are extended to the daily operations of suppliers, covering multipleaspects such as environmental protection, labor law compliance, anti-monopoly, anti-corruption and commercial bribe®ñ, intellectual prope®îyprotection, data security, etc., in order to comprehensively improve the level of supplier management. By strictly monitoring potential risks inthe supply chain, the Company has avoided adverse consequences caused by supplier compliance issues.

The Company has a clear distribution of prima®ñ, seconda®ñ, and subsequent suppliers in the supply of raw materials. This distribution canensure the ®ìexibility and stability of the Company in the supply chain, avoiding the risk of a single supplier. The Company has establishedclose cooperative relationships with various suppliers to ensure timely and stable supply.In addition, in order to better respond to market ®ìuctuations and production needs, the Company establishes safety stock in advanceaccording to the production plan. This approach can e®ãectively prevent sho®îages of raw materials and delays in supply, ensuring thatthe Company's production demand is not a®ãected. The Company will always maintain control and management of invento®ñ to ensurereasonable allocation and use of invento®ñ, in order to maximize production e®æciency and Client satisfaction.

Total number of suppliersStatistics of supply chain risk eventsNumber of suppliers reviewed

Nos.Nos.Nos.

Delivering high-quality se®ïices

Responding to client needs

Quality improvement se®ïices

Maintaining privacy and information security

Changyuan Lico always adheres to the se®ïice philosophy of "looking at the market with care and treating Clients with sincerity", providingClients with high-quality products. Regarding Client se®ïice, the Company has formulatedImplementation Rules for the Client ManagerMechanism of Hunan Changyuan Lico Co., Ltd.A high-quality Client se®ïice team based on the "Client manager system" provides Clientswith full process and high-quality se®ïices, continuously improving Client satisfaction and loyalty.The Company has established an e®æcient Client information processing mechanism, following the process ofControl Procedure for ClientFeedbacks, and has formed a full flow system of "information acceptance - classification transmission - feedback processing". Clientfeedback content is timely classi®êed by depa®îment and responded to. The Client manager team categorizes Client feedback, organizesanalysis and processing, responds to Client feedback, develops and implements corrective and preventive measures, and distributesClientSatisfaction Questionnaire. By providing feedback on product quality and pe®íormance from Clients, we can understand their true opinionsor demands on the product, helping the Company better meet Client needs, improve Client satisfaction, and increase Client stickiness.

Changyuan Lico has established Control Procedure forContinuous Improvementand Management Measures for Lean Improvementin qualityimprovement management, covering all aspects of the product lifecycle, with Client needs as the center and se®ïice improvement as the core,striving to continuously enhance the Company's core competitiveness. To this end, a lean improvement leadership group is established to beresponsible for the approval and evaluation of improvement projects. At the same time, the quality assurance depa®îment is responsible forproject management and supe®ïision, while the ®ênance and material control depa®îments calculate the economic bene®êts of the project toensure that all depa®îments actively pa®îicipate in improvement activities. The continuous improvement project has not only comprehensivelyoptimized product quality, environment, and occupational health and safety, but also achieved the goals of e®æciency improvement, costreduction, energy consumption reduction, and service quality improvement through measures such as process and production processimprovement, environmental protection awareness enhancement, and work environment safety improvement.

Changyuan Lico strictly adheres toData Security Law of the People's Republic of China and Personal Information Protection Law of thePeople's Republic of China, and has built and ce®îi®êed an information security management system based on the ISO/IEC 27001:2013standard, demonstrating a continuous commitment and e®ãective management of information security.

SuppliersUnit202320212022

The Company's procurement depa®îment is the uni®êed and specialized management depa®îment for suppliers;

When the Company purchases materials, engineering, and se®ïices, in principle, it selects suppliers within thescope of quali®êed suppliers through the procurement e-commerce platform of China Minmetals Corporation(hereinafter referred to as the procurement platform) for procurement;The Company achieves information management and digital monitoring of the entire lifecycle, includingsuppliers sourcing, admission, use, evaluation, and exit, through procurement platforms and procurementmonitoring platforms, and rigorously manages suppliers o®èine.

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AppendixSocialGovernanceChangyuan Lico 2023Environmental, Social and Governance Repo®î

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Chairman

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ESGmanagement

Environment

Futureprospects

In 2023, the Company continued to invest in technological research and development, continuously achieving scienti®êc and technologicalinnovation and project results. The development of lithium iron phosphate business has achieved a milestone breakthrough "from 0 to1", forming industrialization and new economic growth points. Develop mass production and delivery channels for sodium electricalmaterials, and achieve ton level shipments. We have ®êrmly implemented the "going global" strategy, introduced new power type terna®ñmaterial products into international Clients through mass production, made signi®êcant progress in international market development, andachieved a historic high in overseas market sales.The Company has completed two project approvals for key manufacturing products including "open competition mechanism to select thebest candidates" in Hunan Province. Three scienti®êc and technological achievements have been evaluated, including the "developmentand industrialization of key technologies for the preparation of high specific energy and high nickel ternary single crystal cathodematerials", and the "key technologies and industrialization for the preparation of high voltage and high rate multi-component cathodematerials and their precursors for lithium-ion batteries". The Company's project "key technologies and industrialization for the preparationof high voltage and high rate multi-component cathode materials and their precursors for lithium-ion batteries" won the ®êrst prize of the2023 China Nonferrous Metals Indust®ñ Science and Technology Award.

Strengthening innovation driveContinuously creating a scienti®êc and technologicalinnovation platform

Promote the transformation of scienti®êc andtechnological innovation achievements

Strengthen the protection of intellectual prope®îy rights

Actively pa®îicipate in indust®ñ standard construction

Promote the green development ofthe new energy indust®ñ

The "Hunan Province New Energy Batte®ñ Positive Electrode Materials and Recycling Engineering Technology Research Center" declaredby the Company was selected as the 2023 Hunan province engineering technology research center. Changyuan Lico has been recognizedas a benchmark enterprise of "increase variety, improve quality, and create a brand" in the raw material industry of Hunan Province.Changyuan Lico New Energy has been recognized as the "Hunan Province New Materials Pilot Platform" and "Hunan Province NewMaterials Enterprise".

In terms of intellectual prope®îy, Changyuan Lico strengthens its enterprise intellectual prope®îymanagement and patent infringement warning work, introduces excellent patent engineers andpatent ®êrms, and expands the e®ãectiveness of patent protection. Introduce a professional patentretrieval system, strengthen the internal patent retrieval and analysis work of the Company, andstrengthen the construction of the Company's patent database. During the repo®îing period, theCompany had a total of 141 valid patents, including 100 invention patents and 41 utility modelpatents. 32 new domestic patents have been applied for, including 25 invention patents and7 utility model patents; apply for one patent through Patent Cooperation Treaty (PCT); 18 newauthorizations have been granted, including 11 domestic invention patents, 1 Japanese inventionpatent, and 6 utility model patents.The high-level protection of intellectual prope®îy rights is the institutional guarantee for innovativedevelopment, and protecting intellectual property rights is protecting innovation. In 2023,

Implementation Rules for Intellectual Property Management of Hunan Changyuan Lico Co.,Ltd.andImplementation Rules for Scientific and Technological Achievement Management ofHunan Changyuan Lico Co., Ltd. were revised, and the intellectual prope®îy management systemcertification of its subsidiary, Hunan Changyuan Lico New Energy Co., Ltd., was completed,achieving comprehensive coverage of the intellectual prope®îy management system in both theparent and subsidia®ñ companies.

In terms of standard construction, as a representative of the ternary cathodematerial indust®ñ, Changyuan Lico has always been committed to the developmentof the industry, actively participating in industry standard construction, andassisting in the standardized development of the indust®ñ. During the repo®îingperiod, a total of 50 technical standards drafted by it are implemented and 21technical standards are drafted by it and implemented. This year, we have wonthree awards for excellence in technical standards from the National NonferrousMetals Standardization Technical Committee. Among them, the national standards

Electrochemical Pe®íormance Test of Lithium-ion Batte®ñ Cathode Materials - HighTemperature Performance Test Method andPowder Compressive Strength TestMethodthat we pa®îicipated in won the "Second Prize", and the national standards

Nickel Manganese Acid Lithium Electrochemical Pe®íormance Test - First Speci®êcDischarge Capacity and First Charge Discharge Efficiency Test Methodthat wepa®îicipated in won the "Third Prize".

The development of the lithium-ion batte®ñ indust®ñ is of great signi®êcance for achieving the transformation of the new energy indust®ñand the "carbon peaking and carbon neutrality" goal. With the advancement of technology and the expansion of the market, lithium-ion batteries will play an increasingly impo®îant role in the future energy structure. Changyuan Lico is an impo®îant pa®î of the lithium-ion battery industry chain, its products are mainly used in downstream energy storage systems and new energy vehicles, and is thebackbone driving the overall development of the new energy industry. By building "green factories", adopting advanced cleanerproduction technologies and equipment, strengthening energy management, car®ñing out digital production construction, implementingcarbon footprint supply chain traceability, and car®ñing out batte®ñ recycling, the Company can not only provide low-carbon and high-quality products for the new energy indust®ñ, help achieve the "carbon peaking and carbon neutrality" goals, but also promote itself tocontinuously advance towards carbon neutrality goals, demonstrating the Company's green responsibility and sustainable developmentcapabilities.

During the repo®îing period,

The "carbon peakingand carbon neutrality"

goal

a total of

technical standardsdrafted by it are implemented

technical standards aredrafted by it and implemented

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Take on social responsibility bravely

Pa®îicipate in rural revitalization

Suppo®î the education indust®ñ

Investigation and su®ïey

Pairing co-building

Pove®îy alleviation in consumption

Donation for education

During the repo®îing period, the Company actively conducted research on rural revitalization, carefully studied and determined speci®êcmeasures to implement the rural revitalization strategy, and carried out targeted assistance and pa®îner assistance work, demonstratingthe Company's sense of responsibility and mission through practical actions.

Changyuan Lico deeply understands the impo®îant signi®êcance of doing a good job in employment assistance for pove®îy alleviation andcomprehensively promoting rural revitalization. In 2023, the research team of the Company went to Shuzishan prese®ïed meat facto®ñand morchella base in Huayuan County for on-site investigation, and also went to Changle Township to inspect the construction ofrural residential environment improvement projects. During the research process, Lu Yaohui, deputy secreta®ñ of the Pa®îy committee ofthe Company, carefully listened to the introductions of relevant enterprise leaders on production capacity scale, employment situation,and sales channels. He fully recognized the contributions made by various enterprises to help the people overcome di®æculties, achievecommon prosperity, and build a harmonious society through the revitalization of rural industries. He also encouraged all enterprises tostrengthen infrastructure construction, cultivate and introduce talents, and expand sales channels, in order to open up the market withmore cost-e®ãective and high-quality agricultural products.

In 2023, the headqua®îers and subsidiaries of Changyuan Lico actively mobilized and guided cadres and employees to actively pa®îicipatein consumption assistance and purchase products from poverty-stricken areas. Using the Company's holiday benefits, we purchasedholiday welfare supplies from Huayuan County, a targeted assistance county, and spent more than RMB 300,000 on consumptionassistance throughout the year. Organize employees to actively pa®îicipate in the Central Enterprise Consumption Assistance Week andpurchase materials spontaneously.

The Changyuan Lico Pa®îy committee continues to pay attention to the education issues of impoverished students in targeted assistancecounties and districts, vigorously suppo®îing impoverished students to complete their studies, visiting Minle Town in Huayuan County,visiting villages and households to comfo®î disadvantaged groups, and on behalf of the Company, donating RMB 34,000 in ®ênancial aid toa college student from a ma®îyr's family in di®æculty and three high school students from disadvantaged families.

Changyuan Lico Pa®îy committee conducts rural revitalization research in Huayuan CountyCaseIn 2023, Lu Yaohui, deputy secreta®ñ of the Pa®îy committee of Changyuan Lico, led a team to car®ñ out rural revitalizationresearch in Huayuan County, which is targeted for assistance. ¢ñ. The research team went to Lianghe Village and Mala Villagein Minle Town, visiting households to comfort the disadvantaged, understand the sources of economic income and livingconditions of the disadvantaged families, and on behalf of the Company, donated RMB 10,000 and RMB 24,000 in ®ênancial aidto a college student from a ma®îyr's family in di®æculty and three high school students from disadvantaged families in HuayuanCounty. ¢ò. The research team went to Shuzishan prese®ïed meat facto®ñ and morchella base in Huayuan County for on-siteinvestigation, and also went to Changle Township to inspect the construction of rural residential environment improvementprojects. In the future, Changyuan Lico will continue to deeply implement the impo®îant speeches and instructions of GeneralSecreta®ñ Xi Jinping on the rural revitalization strategy, actively demonstrate the responsibility of state-owned enterprises,ful®êll social responsibilities, give full play to their own advantages, deepen consumption suppo®î, talent education, and provideemployment, and solidly promote rural revitalization work to a new level and achieve new results.

Donation foreducation

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Future prospects

The year of 2024 is the crucial year for fully implementing thespirit of the 20th National Congress of the Communist Pa®îyof China and is the decisive year for deeply implementingthe 14th Five-Year Plan. The Company will always adhereto the guidance of Xi Jinping Thought on Socialism withChinese Characteristics for a New Era, deeply implement thespirit of the 20th National Congress of the Communist Pa®îyof China, adhere to the overall keynote of seeking progresswhile maintaining stability, fully and accurately implementthe new development concept. Adhere to a high position anda big pattern, systematically plan for the current and long-term, and enhance the suppo®îing capacity of core business;adhere to increasing momentum and activating vitality, buildthe advantages in technology research and development,and accelerate the formation of new quality productivity;adhere to stable growth and strong profit, play a goodcombination of increasing income and reducing expenditure,and continuously improve the level of high-quality operation;adhere to promoting integration and gathering public feeling,promote the down-to-ea®îh attitude, make e®ão®îs to createa high-quality team, gather strength and work practically,accelerate towards the objective of establishing a leader inthe global new energy material indust®ñ, and contribute moreto the comprehensive construction of the modern socialistcountry and the comprehensive promotion of the greatrejuvenation of the Chinese nation!

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AppendixReference remarks

Key pe®íormance indicators

Abbreviation of companyFull name of companyChina MinmetalsChina Minmetals CorporationHNGHunan Nonferrous Metals Holding Group Co., Ltd.China Minmetals CapitalChina Minmetals Capital Co., Ltd.

CATLContempora®ñ Amperex Technology Co., Limited (CATL)BYDBYD Co., LtdEVEEVE Energy Co., Ltd.SunwodaSunwoda Electronic Co., Ltd.Jinchi EnergyJinchi Energy Materials Co., Ltd.Changyuan Lico New EnergyHunan Changyuan Lico New Energy Co., Ltd.

IndicatorUnit202320222021

Environmental indicator

EmissionExhaust pollutant emissions(pa®îiculate matters)

Ton1.541.421.30Exhaust pollutant emissions(ammonia)

Ton0.690.730.72Exhaust pollutant emissions(sulfuric acid mist)

Ton0.060.590.40

Industrial waste water emission10,000 t02.535.21

COD

Equivalent value/totalemission of pollutant (ton)

01.614.79

Ammonia nitrogen

Equivalent value/totalemission of pollutant (ton)

00.070.18

Greenhouse gas emissions(catego®ñ I) - emission sourcesowned or controlled

Greenhouse gas emissions(catego®ñ I) - emissionsources owned or controlled

1.711.280.20Natural gas

10,000 m

295.7966.7513.8810,000 tCO

e0.640.140.03Gasoline

Ton0.710.861.38tCO

e2.162.624.2Carbonate

10,000 t1.821.920.2910,000 tCO

e1.071.130.17

Greenhouse gas emissions(catego®ñ II) - purchased energy

10,000 tCO

e31.3634.1922.77Outsourced electricity100 million kWh5.495.833.70Outsourced heat (steam)10,000 GJ22.9232.2530.26

Resource useTotal energy consumption10,000 tons of standard coal7.918.355.59Outsourced steam convertedstandard coal quantity

10,000 tons of standard coal0.781.091.03Natural gas conve®îed standard coalquantity

10,000 tons of standard coal0.390.100.02Electricity converted standard coalquantity

10,000 tons of standard coal6.747.164.54

Total water consumption10,000 t128.78150.87121.69Fresh water consumption10,000 t94.49101.9974.47Total circulating water10,000 t34.2948.8847.22

Propo®îion of total circulating water%26.6332.3938.80

IndicatorUnit202320222021

6465

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Social indicatorsEmploymentTotal number of employeesPerson2,3302,0531,503Number of full-time employeesPerson2,3302,0531,503Number of employees in the Chinesemainland

Person2,3302,0531,503Percentage of male employees tototal employees

%77.6876.8677.45Percentage of female employees tototal employees

%22.3223.1422.55Propo®îions of employeesby age group

¡ª¡ª¡ª¡ª¡ª¡ª¡ª¡ªPropo®îion of employeesunder 30 years old (inclusive)

%34.6832.4927.88Propo®îion of employees aged30-50 (inclusive)

%63.0260.4564.40Propo®îion of employeesover 50 years

%5.327.067.72Number of employeesfrom minority groups

Person14811781

Personnel structurefor types of work

Person¡ª¡ª¡ª¡ª¡ª¡ªProduction and purchasing personnelPerson1,5901,454887TechnicianPerson558433481Management and administrativepersonnel

Person139129106Financial personnelPerson231915SellerPerson201814

Number of new jobsPerson¡ª¡ª¡ª¡ª¡ª¡ªNumber of new female employeesPerson11818296Number of new male employeesPerson498615463Number of fresh graduate employeesPerson805711Number of employeesby social recruitment

Person536740548

Educational background ofemployees

¡ª¡ª¡ª¡ª¡ª¡ª¡ª¡ªPropo®îion of doctoral student%0.60.590.53Propo®îion of postgraduate%8.886.977.32Proportion of undergraduate andbelow

%90.5292.4492.15

Social insurance coverage%100100100

Average days of paid leave per yearper employee

Day555Employee satisfaction%97.2993.2896.22

Health and safetyWork safety inputRMB 10,000533.4411.0380.7

Hours of training on work safetyHour53,60043,20026,400

Times of training on work safety¡ª¡ª16110465

Number of person-times receivingtraining on work safety

Person13,93011,3507,965

Coverage rate of employees receivingtraining on work safety

%100100100

Development and trainingEmployee training rate%100100100Propo®îion of trained male employees%100100100Propo®îion of trained femaleemployees

%100100100Propo®îion of trained seniormanagement employees

%100100100Propo®îion of trained middlemanagement

%100100100Propo®îion of trained grassrootsemployees

%100100100Times of employee training¡ª¡ª1,3201,2541,155

Annual training expensesRMB 10,00038.460.340.2

Total annual training hoursHour58,282223,87484,339

Average training hours of employeesHour25.0125.0956.11

IndicatorUnit202320222021IndicatorUnit202320222021

6667

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Supplier managementNumber of suppliersby geographical region

Nos.128108105Statistics of supply chain risk eventsNos.000Number of suppliers reviewedNos.201911

Scienti®êc and technological innovationR&D investmentRMB 100 million3.776.612.87

Propo®îion of R&D investment%3.513.674.19Governance indicatorCorporate governanceNumber of meetingsof Board of Supe®ïisors held

¡ª¡ª7107Board of DirectorsNumber of the Board of DirectorsPerson999Number of meetingsof the Board of Directors held

¡ª¡ª91010Compliance operationTimes of law-abidingand compliance training

¡ª¡ª1285

Hours of law-abidingand compliance Training

Hour20108Number of person-timesreceiving training on law-abiding and compliance

Person488280188

Times of anti-corruption training¡ª¡ª454218Hours of anti-corruption trainingHour605536

Number of person-times receivingtraining on anti-corruption

Person1,5931,398700Number of articles and casesrelated to anti-corruptionthemes pushed

¡ª¡ª171210Management of investor relationship and shareholder rightsNumber of shareholders'meetings held

¡ª¡ª357

IndicatorUnit202320222021

Index of indicatorsTable of ContentsGRI

Reference index system forESG special repo®îs of listedcompanies controlled bycentral enterprisesAbout the repo®î2-3G4.1Message from the Chairman2-22G4.1About Changyuan Lico2-1¡¢2-6G4.1ESG management

2-9¡¢2-10¡¢2-11¡¢2-12¡¢2-13¡¢2-14¡¢2-16¡¢2-17¡¢2-23¡¢2-24¡¢2-29¡¢3

E5.1¡¢E5.6

Environment:

Low carbon and environmentalprotection, harmonious coexistence

¡ª¡ª¡ª¡ªImprovement of environmental management2-27¡¢3¡¢E.5Reduction of resource consumption3¡¢302¡¢303E.1Prevention and control of pollution emissions3¡¢303¡¢305-7¡¢306-2¡¢306-3¡¢306-5E.2¡¢E.5Climate risk response3¡¢201-2¡¢305-1¡¢305-2¡¢305-5E.3

Governance:

E®æcient governance withstable footsteps and forward thinking

¡ª¡ª¡ª¡ª

Optimize governance structure2-9¡¢2-10G1Adhere to the guidance of Pa®îy building2-12G1.1.4Strengthening of risk management2-15¡¢2-26¡¢2-27¡¢3-3G5.2Adhere to compliance operation2-15¡¢2-26¡¢2-27¡¢3-3G2.1¡¢G5.1Conduct internal audit205-1G2.1.1Deepen honesty construction3¡¢205¡¢206G2.2Protect Shareholders' equity2-16¡¢2-23G3.1¡¢G3.2¡¢G4

Social:

Putting people ®êrst and creating abetter future

¡ª¡ª¡ª¡ª

Protect employee happiness

2-7¡¢3¡¢401-1¡¢403¡¢404-1¡¢404-2¡¢405¡¢406¡¢408¡¢409¡¢418

S1Strictly adhere to product quality302-5¡¢203S2.1Delivering high-quality se®ïices3¡¢204-1¡¢308S2.2Building a sunshine chain3¡¢204-1¡¢308S3Strengthening innovation drive2-6S2.3Take on social responsibility bravely3¡¢413¡¢415S4Future prospects¡ª¡ª¡ª¡ªKey pe®íormance indicatorsIndex of indicatorsFeedback

AppendixSocial

FutureprospectsGovernanceChangyuan Lico 2023Environmental, Social and Governance Repo®î

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Our contact information£º

Hunan Changyuan Lico Co., Ltd.Website: http://www.cylico.com/E-mail: [e-mail]

Tel.: [phone]Address: No. 61 Yan'gao Road, Yuelu District,Changsha City, Hunan Province