Riyue Heavy Industry Co.,Ltd.Environmental, Social andGovernance (ESG) Report
2023
STOCK CODE: 603218
0102
ABOUT THIS REPORT
This report, issued by Riyue Heavy Industry Co., Ltd. (also referred to in this report as "Riyue", "the Company," or "we"), representsour 2023 Environmental, Social, and Governance (ESG) Report to the society. It encompasses all stakeholders of Riyue and adheresto the principles of objectivity, standardization, and transparency. The report truthfully discloses Riyue's responsibility practicestowards shareholders, customers, partners, employees, and other key stakeholders in 2023, along with the Company's efforts in theESG domain, aiming to meet stakeholders' expectations and better fulfill our social responsibilities in the future.Reporting PeriodThis is an annual report covering the period from January 1,2023 to December 31, 2023 unless otherwise specified. Toenhance the comparability and completeness of this report,part of its data and content can be traced back to previousyears.Reporting Scope
Unless otherwise specified, the report includes information ofRiyue Heavy Industry Co., Ltd. and its wholly-owned andholding companies in the ESG domain, with an informationboundary consistent with the Company's annual report.References
This report is prepared in accordance with the Guidelines ofthe Application of Self-Regulation Rules for the ListedCompanies on the SSE STAR Market No. 1 – RegulatedOperation by Shanghai Stock Exchange (SSE), theCASS-ESG5.0 issued by Chinese Academy of Social Sciences(CASS), and the GRI Standards released by Global ReportingInitiative, taking into account the specific situation of theCompany in fulfilling its social responsibilities.
Data SourcesUnless otherwise indicated, all information and datareferenced in this report is based on the statistical reportsand relevant documents of the Company, as well as the ESGinformation on the basis of statistics and audit by theCompany. Unless otherwise indicated, all monetary amountsare listed in RMB for this report.
Assurance of ReliabilityRiyue guarantees that the report is free from false records,misleading representations, or material omissions, and theCompany is responsible for the completeness, accuracy,clarity, balance and comparability of its content. This reportwas approved at the Sixth Meeting of the Sixth Board ofDirectors (Board) of the Company on April 23, 2024.Access to the ReportThis report is available in Chinese. You can download itselectronic version and acquire more information on corporatesocial responsibility from the official website of ShanghaiStock Exchange (www.sse.com.cn) and the official website ofRiyue Heavy Industry Co., Ltd. (www.riyuehi.com). For anyfurther inquiries or suggestions on this report and theCompany's ESG work, please contact us via:
Website: www.riyuehi.comAddress: Beicun Village, Dongwu Town, Yinzhou District,
Ningbo City, Zhejiang Province, ChinaBoard Office, Riyue Heavy Industry Co., Ltd.Postal code: 315113Tel.: 0574-55007043Email: stock@riyuehi.com
Report Introduction
ABOUT THIS REPORT
MESSAGE FROM CHAIRMAN
ABOUT RIYUE07Company ProfileStrategy and CultureOrganizational StructureHistoryHonors in 2023
ESG MANAGEMENT19
ESG Management SystemAnalysis on Material TopicsCommunication with Stakeholders
GREEN OPERATIONS HELPEXPLORE A LOW-CARBON FUTURE
Environmental Management SystemStrengthening Resource ManagementReducing Pollutant EmissionsCombating Climate ChangeAdvancing Green Operations
STRENGTHENING LEADERSHIP TOENHANCE GOVERNANCE
Optimizing the Governance SystemEmphasizing Business EthicsStrengthening Internal Risk ControlInvestor Relations and Rights
JOINING HANDS WITH THE LOCALCOMMUNITY FOR INNOVATION-DRIVEN DEVELOPMENT
Technological Innovation DevelopmentProgressing Together with EmployeesConsolidating Safety FoundationsConsolidating Supply Chain ManagementUndertaking Social Responsibility
APPENDIX57
Key Performance Indicator (KPI)Table of Company Names and AbbreviationsIndicators IndexQuestionnaire
CONTENTS2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) REPORTRIYUE HEAVY INDUSTRY CO.,LTD
CONTENTS
0304
We adhere to the policy of "safety first, prevention foremost,and comprehensively governed," implementing workplacesafety responsibility systems at all levels to advance safetytarget management and enhance intrinsic safety, with theaccident rate reduced year by year and the occurrence ofoccupational diseases eliminated. The Company continuouslystrengthens employee care, broadens channels for employeedevelopment, consistently improves working conditions, andprovides employees with competitive compensation andbenefits. It emphasizes technological innovation, strengthenstalent recruitment, conducts technology research anddevelopment centered around market demands, and activelypromotes the transformation of achievements. The Companyactively collaborates with upstream and downstream partnersin the supply chain to jointly promote high-qualitydevelopment in the industry. It also participates in publicwelfare activities of local communities, contributing to socialdevelopment through its actions and sharing the fruits of theCompany's growth.We implement a corporate governance philosophy, which is"investors’ needs-oriented and compliance-based," andcontinuously refines and optimizes our governance system.The Company persistently drives process reengineering andcost optimization, enhancing management efficiency whilefurther improving the profitability of its casting products,values the protection of shareholders’ rights and interests,strengthens communication with investors, and activelyresponds to market concerns.
Hardships forge a lively spirit and achievements point towardsa new journey. 2023 is the year to fully implement the spiritof the 20th National Congress of the Communist Party ofChina, marking the commencement of comprehensivelyadvancing the Chinese-type modernization. Faced withcomplex and volatile domestic and international economicsituations and increasingly severe environmental challenges,we have always remained true to our original aspirations.Working together with all stakeholders, we actively fulfill ourresponsibilities as a corporate citizen with the mission of"leading the widespread use of clean and renewable energyto make a crucial contribution to the green and sustainabledevelopment of humanity", striving to achieve a win-winscenario that delivers both economic and social benefits.We implement the new concept of "innovative, coordinated,green, open and sharing development," paying close attentionto ESG management by integrating ESG developmentconcepts into our corporate planning and organizationalmanagement systems. We endeavor to practice ESG actiontargets and climate change-related management with clearimplementation pathways, standardized managementprocesses and professional execution levels. The Companyactively seizes development opportunities in the wind energyindustry, steadily advances the construction of the "Desert,Gobi and Wilderness" large base, accelerates thedevelopment of floating units and deep-sea wind turbineprojects, and reduces energy consumption and pollutantemissions, laying a managerial foundation for achieving the"dual carbon" strategy.
Time to set sail against the east wind and green mountains.2024 marks a pivotal year for implementing the "14thFive-Year Plan" and also marks forty years of the Company'sjourney through challenges and hardships. The Report of the20th National Congress of the CPC highlights "actively andprudently promoting carbon peaking and carbon neutrality" asa key to foster green development and promote harmoniouscoexistence between human and nature. We will continuefulfilling our social responsibilities actively, practice the ESGdevelopment concept, integrate ESG principles deeply intothe Company's operations and production, empower theCompany through ongoing technological innovation, createvalue for investors, contribute to the country's high-qualitydevelopment, and support global green and sustainabledevelopment.
Chairman of Riyue Heavy Industry Co., Ltd.
Fu Mingkang
0506
MESSAGE FROM CHAIRMAN
0708
ABOUT RIYUE
Company ProfileStrategy and CultureOrganizational StructureHistoryHonors in 2023
0910
Riyue Heavy Industry Co., Ltd. was established in December 2007, originally founded as Ningbo Yin County Tinplate Factory in 1984.Since its inception, the Company has been dedicated to the research, development, production and sales of large heavy industryequipment castings. Its main products are large wind turbine castings and core castings for injection molding machines. InDecember 2016, the Company went successfully listed on the Shanghai Stock Exchange, with the stock code 603218.The Company's products include wind turbine castings, plastic machinery castings, diesel engine castings and machining centercastings, which are used in various fields such as energy equipment, general machinery and marine engineering. While focusing onexpanding and strengthening its two main product lines of wind turbine castings and plastic machinery castings, the Company hasalso made breakthroughs in nuclear power equipment applications and alloy steel research through its technology in ductile ironwith thick cross-sections. It has been actively promoting a multi-field layout and forming a unique competitive advantage in theheavy industry equipment sector. Riyue is committed to becoming a leading supplier of basic materials for the global high-endequipment industry and high-end equipment components. Its production operations are characterized by "small batches, multiplevarieties, and high flexibility," offering tailor-made solutions that provide high-end and high-quality castings for industries such asenergy, marine engineering, general machinery and high-speed rail vehicles.The Company strives to build a "low-carbon, environmentally friendly and harmonious" high-tech heavy industry enterprise, aiming tobe a leader in promoting the widespread use of clean and renewable energy and making a crucial contribution to the green andsustainable development of humanity.
COMPANY PROFILE
MARINE HEARY INDUSTRY SOLUTIONS?KEY BASIC COMPONENTS OF DIESEL ENGINE
Housing (Free)Casing (Free)Main CasingDriving CasingHousing (Middle)Housing (Lower)
6X Torque Arm6X PlanetcarrierHousing (Middle)Model-x Main
Structure
QB Hub20 Hub
MK3E Base12MW BaseV20 Baes Frame9MW Main Shaft
V20 Main BearingHousing
6050 Main frame6X HubV12 Baes Frame
YC85 Main ShaftYC85 Main Bearing
Housing
6X Housing (Rear)Housing (Upper)Housing (Free)Mainshaftsleeve6X Planetcarrier6X End Cover
Diesel engine BlockGas outlet casingBearing CasingAir inlet Casing
Cylinder (Free)Crankshaft
?KEY COMPONENTS FOR
THE MARINE
?KEY COMPONENTS FOR WIND TURBINE
Rotor locking flangeStrutMain framePlanetary Carrier
THE SOLUTIONS TO ENERGY INDUSTRY
?KEY COMPONENTS FOR WIND TURBINE
Casing (Upper) forUltra supercriticalworking condition
Casing (Lower) forUltra supercriticalworking condition
?KEY GOMPONENTS FOR
THERMAL POWER,NUCLEARPOWER GENERATORMACHINES
RIYUE HEAVY INDUSTRY CO.,LTD2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) REPORTABOUT RIYUE
1112
GENERAL MACHINERY INDUSTRY SOLUTIONS
?KEY COMPONENTS FOR MACHINING CENTER
Lathe BedHorizontal Lathe BedColumnWorking BenchCross BeamConvertor
THE SOLUTIONS TO HIGH SPEED RAL TRACK VEHICLE INDUSTRY?KEY COMPONENTS FOR HIGH-SPEED RAIL,RAIL VEHICLE
PDM385 Housing(Lower)
PDM490 Housing
(Upper)
PDM490 Housing(Lower)PDM385 Housing
(Upper)
Grinding TableMill Head
(Feed & Discharge)
Roller WheelFlangeLocking ring
Ram
?KEY COMPONENTS FOR INJECTION MOLDING MACHINE
Moving Platen
Long CylinderStamping Cylinder
Fix PlatenOil CylinderPlatens Tationary
Injection
Platen StationaryInjectiorn
?KEY COMPONENTS FOR MINING MACHINE
Housing
Casting NoseDrive Spindle
(Casting)
TOOL EYE (Casting)First Cass CarrierDrive housingImpeller
Box bodySupportTurntable
?Key components for High-end Alloy Steel
HousingBodySteellngotBack roomWorking plate for
Air Plane
SlideblockMotorShell
?KEY COMPONENTS FOR OTHER MACHINES
RIYUE HEAVY INDUSTRY CO.,LTD2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) REPORTABOUT RIYUE
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STRATEGY AND CULTUREORGANIZATIONAL STRUCTURE
General Manager
Board of Directors
Board ofSupervisors
Board Secretary
Finance Director
Deputy GeneralManager
Sales Director
Factories
Technical Director
Shareholders’General Meeting
Strategy CommitteeAudit CommitteeNomination CommitteeRemuneration andAppraisal Committee
Chairman
COMPANY MISSION
EMPLOYEE PHILOSOPHY
CORE VALUESAFETY PHILOSOPHY
BUSINESS PHILOSOPHY
COMPANY SPIRIT
COMPANY VISION
Lead the widespread use of clean and renewableenergy to make a crucial contribution to the greenand sustainable development of humanity.
Collaboratively build a community of sharedcareers, enabling employees to spread theseeds of love and reap happiness.
Health, Loyalty,Creativity and Quality
Safety, Innovation,Efficiency, Cooperation,Striving for Excellence.All for customers, allfrom innovation.
Build the globally famous heavyindustry enterprise of hightechnology, low carbon, environmental
protection and harmony.
Safety first, preventionforemost, comprehensively
governed.
RIYUE HEAVY INDUSTRY CO.,LTD2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) REPORTABOUT RIYUE
1516
HISTORY
The Company relies on its advantages in technology, products, scale, quality and brand to establish a long-term stable customerbase and has secured a solid market position in the industry of castings for large heavy industry equipment.
Ningbo Yin County TinplateFactory was founded (Theformer name of Riyue HeavyIndustry Co., Ltd.).
1984
Honored as Ningbo High-techEnterprise and established theProvincial EnterpriseTechnology Center.
2002
Honored as the ProvincialHigh-tech Enterprise; "Heavysection ductile iron castings"included in the National Torch PlanProject; and identified as theNational-level High-tech Enterprise.
2003
The expansion of the largeworkshop, new productioncapacity of 30,000 metric tons,with the capacity of max pieceweight of 160 metric tons forductile iron castings.
2005
Annual output reached 100,000metric tons; honored as SafetyProduction StandardizationEnterprise in Zhejiang Province;and passed ISO14001Environmental ManagementSystem Certification.
2006
Rixing Foundry, a subsidiaryinvested and established bythe Company, was formally putinto production.
2008
Awarded the High & NewTechnology Key Enterprise ofNational Torch Plan.
2014
Passed GL, ABS, LR and otherChina Classification Society(CCS) certifications andcertified as the national testingcenter.
2013
The Safety ProductionStandardization (Country) Level 1Enterprise; China Green FoundryDemonstration Enterprise; TheGreen and Low-Carbon EconomicModel Enterprise in the 3rdcompetition of Zhejiang Province;and passed OHSMS18001.
2012
Certified by BV.
2011
Listed as a post-doctoralscientific research workstation(pilot) and elected as the vicepresident unit of ChinaFoundry Association.
2010
The National Machinery IndustryAdvanced Collective; the SafetyQuality Standardization(Country) Level 2 Enterprise; andestablished the physical andchemical testing center at theprovincial level.
2009
Successfully listed in A sharesof Shanghai Stock Exchange,stock code 603218, and raisedRMB 980 million from theinitial public offering.
2016
Approved as the "NationalEnterprise Technology Center"and won the honor of "GreenEnterprise" of the Ministry ofIndustry and InformationTechnology (MIIT).
2018
Successfully issued convertiblecorporate bonds, raising RMB
1.2 billion, and invested to
establish a subsidiary, RiyueNuclear Equipment.
2019
Invested to establish asubsidiary, PrecisionManufacturing.
2021
The hundred-metric ton ductileiron spent fuel transport containerwas successfully developed,which is unprecedented in China,and passed the "Domestic FirstSet" approval. Subsidiaries wereestablished by the Company,including Gansu Riyue, RiyiIntelligent and Zhixin Testing.
2022
The world's largest on-shore wind turbinegearbox 11MW casting was successfullydeveloped and mass-produced. TheCompany invested to establish asubsidiary, Jiuquan Zhexinneng. Theproject of key components for windturbine machine in Gansu Riyue wasofficially put into operation, with anannual output of 200,000 metric tons(100,000 metric tons for Phase 1).
2023
RIYUE HEAVY INDUSTRY CO.,LTD2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) REPORTABOUT RIYUE
Zhejiang Enterprises Federation,Zhejiang Entrepreneurs Association,Zhejiang Federation of Industrial
Economics
Top 100 Fastest Growing
Enterprises in Zhejiang
Province
MIITChina Federation of Industrial
EconomicsIndividual ChampionProduct in Manufacturing
Industry 2023-2025
China Association of Work SafetyNational Safety Culture
ConstructionDemonstration Enterprise
China Foundry AssociationChina Green FoundryDemonstration Enterprise
Ningbo Enterprises Federation,Ningbo Entrepreneurs Association,Ningbo Federation of Industrial
Economics2023 Top 100 CompetitiveEnterprises in Ningbo
Ningbo Enterprises Federation,Ningbo Entrepreneurs Association,Ningbo Federation of Industrial
Economics2023 Top 100Manufacturing Enterprises
in Ningbo
Ningbo Enterprises Federation,Ningbo Entrepreneurs Association,Ningbo Federation of Industrial
Economics
2023 Top 100Comprehensive Enterprises
in Ningbo
MIIT
National Five-Star Green
Factory
1718
Honors in 2023
Economy and InformationTechnology Department of
ZhejiangZhejiang Provincial Department
of FinanceZhejiang First Set -Domestic First Set
National Development and ReformCommission, Ministry of Science
and Technology, Ministry ofFinance, General Administration of
Customs, and State Taxation
Administration
State-Accredited Enterprise
Technology Center
RIYUE HEAVY INDUSTRY CO.,LTD2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) REPORTABOUT RIYUE
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ESG
MANAGEMENT
ESG Management SystemAnalysis on Material TopicsCommunication with Stakeholders
2122
The Company actively responds to national policies such as "carbon peaking and carbon neutrality," clearly defines its sustainabledevelopment strategy, and establishes a sustainable development framework. It is vigorously developing an ESG managementsystem at all company levels. The Company actively builds a sustainable corporate culture, shapes a responsible image that meetssocial expectations, and integrates ESG governance throughout the corporate strategy, decision-making and operational processes,creating a top-down ESG regulatory framework. By setting ESG strategic goals, identifying ESG-related risks, disclosing information,and managing and assessing ESG performance, the Company continuously enhances its environmental, social and governancecapabilities, optimizes its ESG governance structure, and vigorously promotes the efficient implementation of ESG initiatives.
The Company actively performs social responsibilities, pays great attention to the expectations and demands of stakeholders,engages in in-depth communication through various channels, fully understands opinions and suggestions of governments andregulatory authorities, shareholders, partners, communities and employees, and specifically enhances the Company's ESGperformance, continually adjusts its sustainable development strategy and actions.
ESG MANAGEMENT SYSTEM
To better respond to the expectations and demands from stakeholders, the Company regularly employs methods such asbenchmarking against other companies, and internal interviews to identify, assess, prioritize, and confirm ESG issues, which help usto assess the level of stakeholder interest in the relative issue, and understand their expectations of the Company's ESGperformance. In 2023, the Company's material topic determination process is as follows:
ANALYSIS ON MATERIAL TOPICS
ESG MANAGEMENTRIYUE HEAVY INDUSTRY CO.,LTD2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) REPORT
COMMUNICATION WITH STAKEHOLDERS
?Response to national
strategies?Serving regional economy?Compliance operation
Governments andregulatory authorities
?Implementing national policies?Cooperating with locals?Establishing and improving
anti-corruption governance system?Observing business ethics
Stakeholders ExpectationsStakeholdersCommunication and Feedback
?Improving corporate governance?Protection of shareholders’ rights?Investor relation management?Information disclosures
Shareholders andinvestors
?Enhancing operation management level?Investor research and exchange?Publishing periodic report, interim
announcement?Holding investor exchanges?Dividends to shareholders
?Product quality and safety?Honesty and regulatory compliance in
business practices?After-sales service
Customers
?Optimizing industrial chain layout?Improving product quality?Communication and Q&A dedicated to
certain project?Routine communication?Customer service hotline?Fair competition?Integrity and mutual benefit?Transparent procurement
Partners
?Fulfilling contract with integrity?Signing collaborative agreement?Improving supply chain management?Observing business ethics
?Guarantee of basic rights and
benefits?Individual development?Employee benefits?Employee care
Employees
?Establishing fair promotion paths?Professional training and career
development?Employee satisfaction survey?Implementing workplace safety?Routine communication
?Promoting community development?Participating in public welfare
activitiesCommunities andpublic
?Community construction?Charity work?Volunteer service
?Green and low-carbon development?Protect the ecological environment
Environment
?Green transformation development?Green technology innovation
Identify major trends pertinent tothe Company through policyanalysis, industry research, peercomparison, stakeholdercommunication and survey, thenidentify the material topics basedon the national polices and keypoints of high concern in thecapital market.
Topic Identification
Perform rational analysis of theresults obtained from thequestionnaires and give a finalranking for the material topics ofstakeholders by fully consideringthe relevant national policies, keypoints of high concern in thecapital market and peerperformance.
Importance Analysis
The management of the Companyperforms careful perusal andreview of the results from theanalysis of material topics tofinally confirm the accuracy of thekey information, objectives offuture ESG management andspecific implementation plans inthis report.
Confirmationby the management
Combating climate changeApplication and promotion of energy-saving technologyEnvironmental information disclosureEco-environmental impactGreen operationsWaste emission managementUse of resourceCustomer serviceStability of product qualityOccupational health development
Environmental
Social
General
HighHighGeneralMedium
HighHighMedium
HighMedium
Material TopicsImportance Ranking
Employee carePublic welfareWorkplace safetySupply chain managementImproving governance systemStrengthening Party buildingEnhancing profitabilityInvestor relation managementInformation disclosuresRisk management
Social
Governance
HighMedium
HighMediumMediumMedium
High
High
HighGeneral
Material TopicsImportance Ranking
2324
Riyue steadfastly adheres to a development strategy that balances economic and social benefits, unwaveringlyfollowing the path of sustainable development. It drives green transformation from both operational and productionaspects of the Company as a response to dual-carbon policy targets. The Company vigorously promotes greentechnological renovations, actively prevents industrial pollution through technological advancement, and promotesclean production to achieve continuous, rapid, and healthy development across the entire production chain.
GREEN OPERATIONSEXPLORE A LOW-CARBONFUTURE
Environmental Management SystemStrengthening Resource ManagementReducing Pollutant EmissionsCombating Climate ChangeAdvancing Green Operations
2526
The Company has prepared the Energy Management Manual in accordance withGB/T23331-2020 Energy Management Systems – Requirements to clarify the requirements ofthe energy management system and establish a management framework. The manual detailsthe scope and boundaries of the Company's energy management system, and specifies theenergy management policy, objectives, system architecture, responsibilities and controlrequirements within the energy management system. The Company has obtained certificationfor the GB/T24001-2016/ISO14001:2015 Environmental Management System.
ENVIRONMENTAL MANAGEMENT SYSTEM
The Company places a high emphasis on the management andconservation of resources, using efficient resourcemanagement as a lever to minimize resource and energyconsumption and promote the sustainable development of theenterprise. The Company has established the Energy andResource Management Procedures, which specifies themanagement and control requirements for various types ofenergy and resources such as water, electricity, gas, liquid,paper and materials. These procedures clarify the managementresponsibilities and duties concerning each resource type toensure normal supply and reasonable use of energy andresources, enhance their utilization rates, and achieve theCompany's energy consumption management goals.
Note: Calculations are based on the General Rules for Calculation of the Comprehensive Energy Consumption (GB/T 2589-2020).
STRENGTHENING RESOURCE MANAGEMENT
GREEN OPERATIONS EXPLORE A LOW-CARBON FUTURERIYUE HEAVY INDUSTRY CO.,LTD2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) REPORT
Riyue's Energy Policy:
Low Carbon and Environmental Protection, Clean Recycling,Conservation and Efficiency Enhancing, Green Casting
In 2023the Company's total energy consumption was
57,765.39metric tons of standard coal
the total water consumption was
850,943.26 metric tons
Riyue's Energy Management System
Resource management measures taken by Riyue
The top management isprimarily responsible for
formulating the energy policy,appointing managementrepresentatives, approving theenergy managementleadership team, providingresources required for theoperation and improvement ofthe energy managementsystem, determining thescope and boundaries of theenergy management system,conveying the importance ofenergy management, ensuringthe establishment of energyobjectives and indicators andappropriate energyperformance parameters,considering energyperformance issues inlong-term planning, ensuringthe reporting of energymanagement results to higherauthorities and governmentagencies as required, andconducting annualmanagement reviews.
The managementrepresentatives’ mainresponsibilities include
establishing, implementing,maintaining, and continuallyimproving the energymanagement system as requiredby relevant standards;designating relevant personnel tojointly conduct energymanagement activities asauthorized by the management;reporting energy performanceand the performance of theenergy management system tothe top management; planningeffective energy managementactivities; enhancing awarenessof the energy policy andobjectives among all employees;clearly defining and conveyingresponsibilities and authoritiesrelated to energy managementwithin the Company to effectivelydrive energy management; anddeveloping guidelines andmethods to ensure effectivecontrol and operation of theenergy management system.
Each department isresponsible for organizing all
employees to implement andmaintain the energymanagement system, andurging all units to carry outwork related to the energymanagement systemaccording to specificrequirements.
Water
?Water should be conserved while
ensuring cleaning effectiveness.?Drinking water is poured
according to individual needs.?The water supply system is
inspected regularly; and the
water supply equipment can
prevent dripping and
overflowing.?Any abnormalities in water use
are analyzed to find reasons and
required to be improved within a
set deadline.
Electricity
?The electricity has to be saved
while ensuring lighting orpower effectiveness.?Power supply equipment
should be safe andeconomical.?Any abnormalities in electricityuse are analyzed to findreasons and required to beimproved within a set deadline.
Gas and Liquid
?The transportation and use of
energy, as well as theinstallation and maintenance ofenergy equipment should beconducted according torelevant procedures.?Relevant departments should
be notified in advance in caseof difficulties in energy supply.?Any abnormalities in energyuse are analyzed to findreasons and required to beimproved within a set deadline.
Paper andMaterial?Transportationand storagemust bequality-ensuring, includingprotectionagainstmoisture,water, andsunlight.
Total energy consumption
Fossil energy consumption (direct)
Non-fossil energy consumption (direct)
Outsourced energy (indirect)
Electricity consumption
Indicator2023Unit
57,765.3910,444.86
1,774.6745,545.86370,592,899
TCETCETCETCEkWh
2728
Total GHG emissions (Scope 1 & 2)GHG emissions (Scope 1)GHG emissions (Scope 2)
Indicator2023Unit
289,076.3627,964.84261,111.52
tCO
etCO
etCO
e
Discharge of wastewater Discharge of industrial wastewater Discharge of domestic wastewater
Indicator2023Unit
40,067
1,22738,840metric tonmetric tonmetric ton
Total hazardous wasteHazardous waste generated per RMB 10,000 of revenueIndicator2023Unit
332.09
0.0007
metric tonmetric ton/RMB 10,000
Total non-hazardous wasteNon-hazardous waste generated per RMB 10,000 of revenue
Indicator2023Unit
55,086.02
0.1183
metric tonmetric ton/RMB 10,000
The main sources of the Company's greenhouse gas (GHG) emissions are the combustion of fossil fuels, industrial productionprocesses, and carbon dioxide emissions from purchased electricity consumption. In 2023, the Company's carbon emissions were asfollows.
Note: The electricity emission factor is calculated based on the Notification on Management of Greenhouse Gas Emissions Reporting by PowerGeneration Enterprises from 2023 to 2025 (Environment Office Climate Circular [2023] No. 43) issued by the Ministry of Ecology and Environment, onthe basis of 0.5703 tCO2/MWh. The emission factors for natural gas, gasoline and diesel are calculated according to the Accounting Methodology andReporting Guide for Greenhouse Gas Emissions by Machinery Equipment Manufacturing Enterprises (Draft for Comments).
REDUCING POLLUTANT EMISSIONSThe Company places great emphasis on environmental protection, strictly adheres to the environmental laws and regulations enactedby national and local governments, and conducts production and business activities in strict accordance with relevant policyrequirements. It has established comprehensive environmental protection-related systems, considering environmental protection needsin the design of production processes, selection of production equipment, configuration of environmental protection facilities, andrecycling of waste materials. In 2023, Riyue significantly improved its industrial wastewater treatment rate, waste gas purification rate,and solid waste comprehensive utilization rate, achieving notable success in environmental protection.
It has developed the Exhaust Emission Control Procedures, specifying the management departments, responsibilities, and executionstandards on exhaust pollutants produced during the production process, such as those generated by sand mixing, moldingcore-making, melting, casting, sand falling and sand regeneration as well as cafeteria fume. In 2023, the Company emitted 5,579.8kilograms of exhaust pollutants, with all pollutant emission concentrations below the limits.
Exhaust Emission
The Company has developed the Wastewater Discharge Control Procedures, analyzed the impact on the aquatic environment andstandardized the wastewater treatment processes and requirements. In 2023, the Company produced a total of 40,067 metric tons ofwastewater.
Wastewater Discharge
The hazardous waste generated by the Company are mainly waste paint drums, laboratory waste liquid, reagent bottles, waste oil andoil-containing wastes. The Company has established the Hazardous Waste Storage Management Regulations to specify the types ofhazardous waste and storage requirements. In 2023, the Company produced a total of 332.09 metric tons of hazardous waste, all ofwhich were well disposed by a qualified entity.
The general waste generated by the Company included furnace slag, dust collection ash and waste sand. The Company has developedthe Solid Waste Pollution Control Procedures to clarify the recyclable and non-recyclable waste. In 2023, the Company produced a totalof 55,086.02 metric tons of general waste.
Solid Waste Emission
Riyue advances the conversion from cupola furnaces to electric furnaces to reduce emissions ofexhaust pollutants
For the #3 cupola furnace within the industrial park, the Company pushed forward a project to convert it to an electric furnace.This involved demolishing the cupola furnace and all associated equipment and facilities (such as dust collectors), as well asbuildings in related areas. New buildings and foundations for equipment were constructed on the original site, and an electricfurnace and accompanying power transformer and distribution systems, dust collector, double-beam bridge crane and ingredientaddition system were installed. Calculations show that the use of this facility can save 1,740 metric tons of standard coalannually, reduce GHG emissions by 4,558 metric tons of carbon dioxide equivalent, decrease particulate matter (PM) emissionsby 0.728 metric tons, sulfur dioxide emissions by 2.679 metric tons, and nitrogen oxide emissions by 0.527 metric tons.
CASE
GREEN OPERATIONS EXPLORE A LOW-CARBON FUTURERIYUE HEAVY INDUSTRY CO.,LTD2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) REPORT
2930
The Company has prepared the Assessment Report of Emergency Environmental Accident Risks to assess the risks of leaks, fires andaccidental risks caused by abnormal discharges and natural disasters that may occur during production, operations, storage, use anddisposal processes. Furthermore, it has developed the Emergency Plan of Environmental Pollution Accidents and the EnvironmentalAccidents Emergency Plan, specifying the management responsibilities, contents and emergency response procedures of eachfunctional department.Riyue's Workplace Safety Contingency Plans
Layout Diagram of Emergency
Monitoring Points
The Emergency Drill Site
The Company recognizes the potential impacts of climate change on business operations and prepares contingency plans for possibleclimate-related risks. Meanwhile, it actively implements national policies on dual carbon goals, enhancing technological innovation andthe implementation of energy-saving and emission reduction technologies. The Company strictly implements laws and regulations suchas the Energy Conservation Law of the People's Republic of China and the Environmental Protection Law of the People's Republic ofChina, as well as relevant requirements of higher-level authorities, to enhance energy utilization efficiency and promote ecologicalcivilization and sustainable economic development, further strengthening our energy conservation and ecological environmentalprotection efforts.
COMBATING CLIMATE CHANGE
PhysicalRisks
Contingency Risks:
Extreme weather
1. Factory, workshops, office buildings
and equipment might be damaged tocause asset loss, and even employeesafety accidents;
2. Facility damage, service interruption
or major equipment damage maydirectly or indirectly sabotage thecontinuity of business operations andeconomic interests.
1. Regularly identify environmental factors that may
impact the climate, and strengthen control over theseidentified environmental factors;
2. Focus on extreme weather alerts, develop targeted
emergency plans, conduct regular emergency drills, andemphasize the routine storage of disaster preventionmaterials;
3. Regularly inspect production equipment and facilities
for potential hazards, upgrading and retrofitting asneeded to enhance disaster protection levels.
Policies andLaws Risks
New policies and regulations ongreenhouse gas (GHG) emissions mayincrease the Company's compliancecosts and related litigation or claimsmay also increase in numbers.
Staying on top of the changes in the regulations andpolicies related to the climate and “dual carbon”,establishing a list of laws and regulations, and adjustinginternal management measures in a timely manner toactively address the changes.
Technology Risks
Increasing environmental,performance, and production processrequirements and the acceleration oflow-carbon transition necessitatecostly technological innovations.
Continuously conducting energy-saving andcarbon-reducing technology transformation andoptimizing production processes and equipment inconsideration of the current level of technology. Installingfault prevention facilities and carrying out regularmaintenance of equipment so as to facilitate the use ofclean technologies.
Market Risks
Shifts in upstream and downstreamsupply chains and customerpreferences may intensify the focuson green and low-carbon products.
Scientifically assess market conditions, continuouslymonitor the price trends and supply and demand changesin the product and raw material markets, and conductpreliminary research.
Reputation risks
Poor performance in combatingclimate change and sustainabilitygiving rise to negative feedback fromassociated stakeholders.
1. Being devoted to sustainable development, actively
taking up social responsibilities, reinforcing greenproduction, maintaining green ecology and burnishing thegreen image of the Company.
2. Regularly publishing ESG reports of the Company and
disclosing information on the status of the Company'senergy saving and emission reduction objectives.
Higher temperatures may result in theneed for additional cooling equipmentand maintenance costs, increasingoperational costs;
1. Improving the R&D and application of carbon emission
reduction technologies and being equipped with moreenergy-efficient cooling technology and system;
2. Promoting green development to mitigate associated
climate change risks.Chronic Risks:
Lasting heatwave,drought, etc.
Climate-related RisksResponse
TransitionRisks
GREEN OPERATIONS EXPLORE A LOW-CARBON FUTURERIYUE HEAVY INDUSTRY CO.,LTD2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) REPORT
3132
Enterprises under Riyue establishand implement energy-saving andemission reduction targets
An enterprise under Riyue, Rixing Foundry, hasformulated the 2023 Energy Saving and EmissionReduction Plan, which includes projects for dustcollector technology renovation, and wind andphotovoltaic power plants construction, with acumulative energy-saving target of 12 millionkilowatt-hours, striving to promote energy saving andemission reduction. The actual annual electricitysaving was 17.23 million kilowatt-hours, achieving
143.58% of the electricity saving target.
CASE
Riyue advances the waste heatrecovery project in the drying roomto reduce fossil energy consumptionRiyue has added a new heat exchanger at the outletsof heat treatment furnace chimneys in the factoryarea. Thanks to this equipment, the heat is recoveredthrough pipes into a water tank to heat the water,which is then circulated to the tube heat exchanger inthe drying room for heat dissipation and temperatureincrease. As calculated, this project has saved 88metric tons of standard coal annually and reducedcarbon emissions by approximately 69 metric tons ofCO2 equivalent.
CASE
A Riyue subsidiary is awarded the first three-star carbon label certification in the industry
On January 19, 2024, Rixing Foundry, a subsidiary of the Company, received the wind turbine casting industry's firstthree-star carbon label product certification at the 2nd " Carbon in Xiangshan" Annual Meeting of Carbon Label and theRelease Conference of Staged Results of Carbon Footprint and Carbon Label. This certification, awarded by the ChinaElectronics Energy Saving Technology Association, represents the highest recognition in carbon label. Based on itscutting-edge low-carbon technologies, the Company has successfully unlocked new achievements in energy saving andlow-carbon efforts within the industry.At the conference, Technical Specification for Carbon Label Evaluation of Ductile Iron Castings for Wind Generators, thefirst national group standard to evaluate wind generators and their low-carbon castings, was officially released, as led anddrafted by Rixing Foundry, a Riyue subsidiary. This Specification establishes a quantitative analysis framework andnormative standard for the carbon footprint development pattern, major influencing factors and the environmental impactof carbon emissions over the full lifecycle of key casting components for wind generators. It fills a gap in both domesticand international fields, propels carbon emission reductions in wind generator products and promotes high-quality andsustainable development in the industry.
CASE
A Riyue subsidiary undertakes the construction of green factories
Rixing Foundry, a subsidiary of the Company, focuses on constructing an environmentallyfriendly factory by addressing six aspects: infrastructure, management systems, energyand resource input, products, environmental emissions and performance.In terms of infrastructure, the factorymakes full use of natural lighting andventilation to save resources.In terms of management systems,the Company continuously improvesquality, environmental, and occupationalhealth management systems andconducts corresponding reviews.
In terms of energy and resource input,it undertakes various energy-savingrenovations such as oxygen-enriched airsupply, waste heat recovery, lightingfixtures and smart energy efficiencymanagement, and uses recirculatingcooling water to reduce energyconsumption and save resource usage.In terms of products, the Companyengages in eco-design of productsto ensure compliance withregulations on the utilization ofharmful substances, maximizesenergy saving and carbon reduction,and enhances the recycling of rawmaterials.
In terms of environmental emissions,the Company strengthens themanagement of waste gas pollutants,wastewater pollutants, solid waste,noise and GHG emissions to ensurecompliance with the law.
In terms of performance, it tracksand manages performance indicatorssuch as green material usage,pollutant emission intensity, energyconsumption intensity and GHGemission intensity.
CASE
A Riyue subsidiary introduces the industry's first carbon label standard for wind generator castings
Rixing Foundry, a subsidiary of the Company, is the world's largest producer and supplier ofwind generator castings, with an annual capacity exceeding 450,000 metric tons. Its mainproducts, wind generator castings, hold the world's highest market share, with around 25% ofits products exported to overseas original equipment manufacturers. Rixing Foundry, driven bythe fostering of green factories, development of green products, and construction of greensupply chains, participates in the "Industrial Carbon Labeling Flagship Action." It takes the leadin exploring and establishing the carbon label standards for ductile iron castings for windgenerators, aiming to be a pioneer in carbon footprint management in the casting industry.
CASE
As the Company promotes green operations, its subsidiary Rixing Foundry is working to improve production processes, adoptenvironmental technologies, reduce environmental pollution and enhance resource efficiency, so as to acquire the "Green Factory"certification.
The Company actively conducts energy-saving training and encourages employees to adopt energy-saving actions in work and life,enhancing their awareness of resource conservation. The Company's energy-saving training starts with details, showing employeespractical energy-saving tips and methods, in order to actively contribute to the sustainable use of resources and work together withemployees towards a more environmentally friendly and efficient future.
ADVANCING GREEN OPERATIONS
Riyue's Energy Saving Initiatives
Saving paper
The Company advocatesfor online officepractices, double-sidedprinting and copying ofdaily documents, andreusing discarded paper.
Saving electricity
The Companyencourages employeesto turn off electricitywhen leaving a room toreduce electricalhazards.
Saving water
The Company promotesrational and recycledwater use, encouragesemployees to turn offtaps well after use, andto report any issuessuch as burst pipes torelevant departmentsfor prompt repair toprevent leaks.
Saving resources
The Company activelyadvocates theresource-saving principleof "no discard norabandon usable things,"encourages employees touse "ink-saving printing"mode, replace pen refillswith water-based options,reuse binder clips andpaper clips, and recycleused folders, amongothers.
GREEN OPERATIONS EXPLORE A LOW-CARBON FUTURERIYUE HEAVY INDUSTRY CO.,LTD2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) REPORT
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Riyue takes technological innovation as its guiding force and safety as the bottom line to strengthen innovation-drivendevelopment and collaborate with employees for mutual growth. Some of the Company's products have filleddomestic gaps and are at an international leading level. The Company continuously strengthens supply chainmanagement, focuses on customer satisfaction, and actively promotes high-quality development throughout theupstream and downstream of the industrial chain, providing momentum for its own development. Additionally, itactively participates in public welfare activities of the local community, striving to benefit local residents with itsdevelopmental achievements, and demonstrating corporate social responsibility and commitment.
JOINING HANDS WITHTHE LOCAL COMMUNITYFOR INNOVATION-DRIVENDEVELOPMENTTechnological Innovation DevelopmentProgressing Together with EmployeesConsolidating Safety FoundationsConsolidating Supply Chain ManagementUndertaking Social Responsibility
3536
JOINING HANDS WITH THE LOCAL COMMUNITY FOR INNOVATION-DRIVEN DEVELOPMENTRIYUE HEAVY INDUSTRY CO.,LTD2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) REPORT
TECHNOLOGICAL INNOVATION DEVELOPMENT
Riyue places great emphasis on technological innovation and has establisheddocuments such as 1+4 New Product Development Management System, NewProduct Trial Production Process Control Procedures, New Product and New ProcessTrial Production Regulations, Process Change Management System, and ProductQuality Review Control Procedures, to regulate scientific researches. These documentsclarify the main bodies and processes of new product development, responsibilities ofrelevant departments, along with corresponding R&D incentive mechanisms tostimulate creativity and initiative in teams and employees. Currently, the Company hasfostered a good atmosphere for design innovation, achievement summary,communication enhancement and awareness improvement of intellectual propertyprotection.
Institutional Development
The Company cultivates and introduces high-level technical and skilled talents through various channels and methods in a “going outand bringing in” manner, establishes an efficient intellectual property talent team, and enhances the overall capability for intellectualproperty creation. Furthermore, the Company significantly improves the overall level of scientific research projects, creates anexcellent platform to foster intellectual properties, and facilitates the rapid emergence of intellectual property results. It strengthensthe awareness of intellectual property creation and protection among the employees, especially technical and skilled talents,fostering a positive atmosphere for intellectual property creation. By the end of 2023, the Company's R&D staff accounted for 8.99%of its workforce, with annual R&D expenditures amounting to RMB 258 million, representing 5.55% of the investment ratio.
Talent Cultivation
The Company owns more than 140 sets of large and medium-sized productionequipment, including advanced resin sand casting production lines, cupola furnaces,induction electric furnace melting equipment, large shot blasting machines, heattreatment furnaces, and casting post-processing equipment etc.. It also has over 70sets of testing instruments, and advanced German-imported direct-readingspectrometers, infrared carbon-sulfur analyzers, mechanical property testingmachines, a large horizontal microscope and an ultrasonic flaw detector, providing asolid equipment foundation for research and production.
Equipment Foundation
With its National Enterprise Technology Center functioning as the main body, theCompany has established an industry-academic-research combined R&D innovationsystem that closely links technological innovation with the market while focusing onthe latter to continuously transform innovation achievements into significant social andeconomic benefits. By the end of 2023, the Company has established threenational-level R&D platforms: the National Enterprise Technology Center, the NationalIntelligent Casting Industry Innovation Center, and the National Postdoctoral ResearchWorkstation; two provincial-level R&D platforms: the Zhejiang Provincial EnterpriseTechnology Center and the Zhejiang High-Tech Enterprise R&D Center; and twomunicipal-level R&D platforms: the Ningbo Riyue Heavy Industry Casting EngineeringTechnology Center and the Ningbo Riyue Heavy Industry Castings Research Institute.The Experimental Center of Riyue Heavy Industry Co., Ltd. and the Testing Center ofNingbo Rixing Foundry Co., Ltd. are laboratories and testing institutions accredited bynational (international) organizations. Additionally, the Company and some of itssubsidiaries have been recognized as high-tech enterprises.
Scientific Research Platforms
STRENGTHENINGTHE FOUNDATIONFOR INNOVATION
R&D investmentProportion of R&D investmentProportion of R&D personnelPatents
Indicator2023Unit
2.59
5.56
8.99
RMB 100 million
%%—
3738
INNOVATIVE ACCOMPLISHMENTSThe Company has jointly established provincial-level enterprise engineering technologycenters with universities such as Tsinghua University and Hunan University. Its FoundryTechnology Center has been recognized as a Zhejiang Provincial Enterprise TechnologyCenter. The "Thick Section Ductile Iron Mold Castings for Injection Molding Machines"developed by the center has been included in the national list of Torch Projects. By the end of2023, the Company has received more than 14 science and technology awards, including theThird Prize of Zhejiang Provincial Science and Technology Awards. In 2023, the project"Research and Industrialization of Key Technologies for Large High-Strength Ductile IronCastings" received the Third Prize of Science and Technology Progress Awards of Ningbo City.
INTELLECTUAL PROPERTY PROTECTIONThe Company actively implements the Administration of Intellectual Property Rights of Enterprises (GB/T29490-2013), hasestablished a comprehensive work organization and developed a series of intellectual property management systems including TradeSecrets Protection System, Patent Management System, Copyright Management System, Intellectual Property Management Methods,Intellectual Property Risk Reserve Fund Management System, and Intellectual Property Special Funds Management System. This hasformed a relatively complete work and management system, initially realizing the institutionalization and standardization ofintellectual property management. In 2023, the Company led with its brand and followed the main thread of technologicalinnovation, protecting and utilizing intellectual properties to enhance its core competitiveness.
The Company adheres to the principle of "generating patents through projects and practice," ensuring that all patents applied areutilized in production. By the end of 2023, the Company held 156 valid patents, including 80 intellectual property patents and 59core patents, and has received 17 provincial, municipal, and industrial science and technology progress awards. The Company hasparticipated in drafting 19 national and industrial standards such as Methods for Chemical Analysis of Silica Sand for Foundry andSpheroidal Graphite Iron Castings. In 2023, the Company owned 35 new granted patents, of which 9 are invention patents and 26are utility model patents. The Company's wind turbine casting products are sold to the United States, Japan, Germany, Denmark,Finland, Spain, India, and other countries and regions, enjoying a high reputation both domestically and internationally.
Riyue products have passed production approval
In 2023, the Company developed the "KY1693 hundred- metric ton ductile iron spentfuel transport container cylinder castings" and passed the domestic first setapproval. This project represents the first domestic development of thick newsurface ductile iron castings for spent fuel transport containers, filling a domesticgap and achieving international advanced technical standards with itscomprehensive technical indicators.
CASE
Riyue's subsidiariespractice the principleof fair recruitmentRixing Foundry, a subsidiary ofthe Company, forms EmployeeRecruitment Control Proceduresthat explicitly prohibits anydiscriminatory terms in itsrecruitment. Job advertisementsare published through the labormarket and other channels.Effective methods must beadopted to verify identity cardsand determine the true ages ofemployees to ensure that theyare at least 16 years old at thetime of hiring to prevent theinadvertent hiring of child labordue to false age documentation.Those who cannot provide valididentifications will not be hired.Recruitment must notdiscriminate on the basis ofrace, social status, nationality,religion, disability, gender, sexualorientation, union membershipor political affiliation. Any formof discrimination against femaleworkers, particularly pregnantwomen, is prohibited.
CASE
PROGRESSING TOGETHER WITH EMPLOYEES
The Company strives to build an institutionalized and standardized recruitmentmanagement process, constructing a scientific and reasonable human resourcesmanagement system to ensure that human resource needs are fully met. TheRecruitment Management System stipulates the requirements for the preparation ofannual and monthly recruitment plans, selection of recruitment channels, employeescreening and hiring, probation evaluation and regularization, ensuring a reasonabletalent structure and talent reserve, and providing sufficient and appropriate humanresources for operations.
Employee RecruitmentEQUAL ANDDIVERSEEMPLOYMENT
Resume Screening/Voluntary Application
First Interview
/Second Interview
Selection
Result Feedback
Hiring
Initial
Communication
TalentReserve Pool
NO
NO
Selection Flow Chart
JOINING HANDS WITH THE LOCAL COMMUNITY FOR INNOVATION-DRIVEN DEVELOPMENTRIYUE HEAVY INDUSTRY CO.,LTD2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) REPORT
3940
The Company pays attention to the development of its employees, providing a diversified career developmentplatform for all types of employees to continuously discover their potential. Employees can enhance their jobskills and professional capabilities through participation in various training, and showcase themselves andexchange experiences in various competitions of professional capabilities and vocational skills. The Companyhas established a Training Management System to ensure that employees have opportunities to improve theirquality and job skills, achieving the goal of mutual growth of employees and the Company. In 2023, theCompany organized 871 training sessions for employees, with training expenditures totaling RMB 885,600,and the total duration of training was 44,371.94 hours.
The Company completes employee recruitment through recruitment websites, labor markets, and local human resources serviceplatforms. By the end of 2023, the Company had 4,070 employees, with males comprising 79.36% and females 20.37%.
Employee Growth
Under
61.30%
26.73%11.97%
30-50
Over 50Age group
Total numberof employees4,070Male
79.63%20.37%
Female
Gender group
Total numberof employees4,070
Ethnic minorities
BROADENING DEVELOPMENT CHANNELS
Replicable Leadership—Cadre Management Skills Training
In September 2023, the Labor Union of Riyue, in conjunction with the HumanResources Department, invited training experts to deliver a course on "ReplicableLeadership" for the Company's cadres at middle and higher levels.
CASE
The Major Cadre Exchange Meeting of Riyue's Business DivisionsIn June 2023, the first batch of research and exchangedelegation composed of key cadres from various businessdivisions visited the factory of Northwest Division. Theyvisited the casting workshop, machining workshop andpainting workshop to thoroughly understand the currentproduction operations of each unit and conducted on-siteinspections and learning.
CASE
Riyue's subsidiaries provide a comprehensive training system for employees
New employeetraining.
Pre-job trainingfor variouspositions.
On-the-job workskills andrelated safetytraining.
Job skills training: To learnabout standard operationprocedure, performance ofthe equipment used,operating instruction,environmental protectionknowledge, safety issuesand emergency responsemeasures, with written andoperational assessmentsrequired before beingallowed to start work.
Units may contactand register forjob-relatedtraining accordingto their actualneeds and makerelevant reports.
Rixing Foundry, a subsidiary of Riyue, provides a comprehensive career development training system for employees, whichincludes:
JOINING HANDS WITH THE LOCAL COMMUNITY FOR INNOVATION-DRIVEN DEVELOPMENTRIYUE HEAVY INDUSTRY CO.,LTD2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) REPORT
Employee training coverageNumber of employee trainingTotal training expenditure in the yearTotal length of training in the year
Indicator2023Unit
2,520
88.56
44,371.94
%timeRMB 10,000hour
4142
Learning Technology, Practicing Skills, Creating Efficiency, Striving for Excellence—Employee SkillsCompetition
Rixing Foundry, a subsidiary of the Company, organized a skills competition titled "Learning Technology, Practicing Skills, CreatingEfficiency, Striving for Excellence" to provide a platform for employee learning and exchange, enhancing the employees' attentionto practical skills and effectively defining the focus of future skill training for employees.
CASE
The Company adheres to a people-oriented approach, respects the rights of employees to self-development,and provides transparent and smooth promotion channels for all types of talent. Based on the nature ofemployees' work, the Company divides promotion channels into three categories: for operators, professionaltechnicians, and management personnel. Operators and professional technicians can choose either professionaltechnical grades or management positions as their promotion path according to their own career planning.Employee transfers (borrowing) must be consented by the employees themselves and duly recorded.
Employee Promotion
In line with actual production needs, the Company provides employees with labor protection welfare goods, summer welfare goods, etc.Production Work
It has established a differentiated compensation structure. In addition to receiving their monthly salary, employees also enjoy anannual leave cash-back benefit. The Company provides employees with timely payments of "five insurances and one housing fund",and offers holiday benefits on statutory holidays, birthday benefits, annual free medical check-ups, transportation subsidies, rentsubsidies, communication subsidies, free shuttle buses for commuting, hospital visitation for work-related injuries, and relief foremployees in difficulty, all aimed at significantly enhancing their sense of gain and improving employee care.
Riyue provides employees with good welfare benefits and organizes sophisticated and thorough employee care activities to enhanceemployees' sense of belonging and happiness, further improving the Company's cohesion.
Remuneration and Benefits
EMPLOYEE CARE
Employees move happily into their newly built dormitoriesThe Company invested over RMB 60 million to construct the new Lingang Home as part of the newly built supporting project forkey components of marine equipment. The project includes 700 rooms providing facilities such as air conditioning, beds,wardrobes, bathrooms, communal clothes drying areas, as well as supporting amenities like basketball courts, convenience stores,bathrooms and laundries. After the project was put into use, it effectively raised the happiness index of employees, giving them asense of warmth of home, and laid a solid foundation for the Company to build an enterprise of sustainable development.
CASE
The Labor Union carries out the "Cool Summer Care” Activity
In August 2023, the Company's Labor Union, in cooperation with the localvillage union, carried out a "Cool Summer Care” Activity for employees whoremained at their posts during the peak summer season, bringing them a touchof coolness for the hot summer days.
CASE
JOINING HANDS WITH THE LOCAL COMMUNITY FOR INNOVATION-DRIVEN DEVELOPMENTRIYUE HEAVY INDUSTRY CO.,LTD2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) REPORT
4344
The Company advocates a work style that combines labor with leisure and organizes culture and sports activities from time to time invarious holidays and festivals, encouraging employees to actively participate.
Culture and Sports Activities
The "Praying for Safety and Health" Event on Dragon Boat FestivalIn June 2023, the Company held the "Praying for Safety and Health" Eventon Dragon Boat Festival. The event was lively and filled with festiveatmosphere, strengthening the cohesion and sense of collective honoramong various units and departments, and fostering team spirit amongemployees.
CASE
Fun Sports Meet to Welcome the Labor Day on May 1st
In April 2023, the Company held its 5th "Unity, Youth andFun"-themed sports meet, allowing employees to experience thejoy of sports activities while fostering a spirit of team cooperation,thereby creating a pleasant and vibrant company atmosphere.
CASE
CONSOLIDATING SAFETY FOUNDATIONS
Riyue has developed the Work Injury Accident Reporting, Handling and ManagementSystem, the Rotation Assessment Methods of Work Injury Accident AssessmentManagement and Safety Supervision Personnel and the Repetitive Accident ControlRegulations. Adhering to the "four no-pass" principle and a quantified assessmentmechanism, it strengthens the supervisory duties and assessment intensity of safetymanagement personnel. The Company has prepared emergency plans and special plans,enhances all staff's awareness and education on prevention, risk avoidance and disasterreduction, conducts training drills to solidify basic emergency handling skills, andimproves employees' abilities to respond to emergencies and take self-protectionmeasures. The number of safety and environmental protection accidents has shown adecreasing trend year by year. Since its establishment, the Company has had nofatalities, serious injuries or major occupational disease accidents.
Response to accidents and work-related injuries
The Company adheres to the workplace safety policy of "safety first, prevention foremost andcomprehensively governed", places workplace safety as its top priority and comprehensively organizesactivities to create a standardized first-level enterprise in workplace safety. It has established a long-termmechanism for the construction of workplace safety standardization on the basis of a people-orientedapproach, enhances safety management, improves the work environment, and continuously achievesgood performance. The Company has been approved as a "First-Level Enterprise of Workplace SafetyStandardization (Machinery)."The Company has established and keeps improving a series of workplace safety management regulations,while strictly implementing the Workplace Safety Responsibility System that clarifies safety responsibilitiesat all levels. All staffs are required to sign the Responsibility Statements of Safety and EnvironmentalProtection Objectives that break down and quantify the responsibility objectives. The implementation ofresponsibilities is strengthened following the principles of "equal responsibilities of Party and government,dual responsibilities for one post, joint management and accountability for negligence."The Company actively implements supervisory management responsibilities, adopts the "7S" visual sitemanagement model and "Team Safety Construction" management, holds monthly safety andenvironmental protection production meetings and shift meetings, so as to promptly grasp the workplacesafety situation, strengthen on-site communication and coordination, immediately resolve problems andimprove execution. In such ways, the individual responsibilities of workplace safety may fall into place,achieving a comprehensive safety management that covers all employees, with the safety objectivesshouldered by all and specific indicators designated per person.
Policies and measures of productionstandard management
ENSURINGWORKPLACESAFETY
JOINING HANDS WITH THE LOCAL COMMUNITY FOR INNOVATION-DRIVEN DEVELOPMENTRIYUE HEAVY INDUSTRY CO.,LTD2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) REPORT
Number of work-related fatalitiesRate of occupational deathsNumber of major safety accidentsWorkplace safety investment
Indicator2023Unit
1,636.83
person%—RMB 10,000
4546
The Company insists on a system of rewards and punishments, strictlycontrols the "three violations" behaviors, and has formulated the SafetyRewards and Penalties System, Management Regulations on 'Three Violations'Control, Standardized Job Responsibilities for Safety and EnvironmentalProtection, and Workplace Safety Department Management Handbook. Whendealing with personnel who commit these violations, the Company conductsinterviews and admonitions for those who repeatedly violate rules andassesses their suitability for their positions. We also encourage employees tocultivate a refusal-to-overload mentality, with area managers simultaneouslyevaluated to enhance their sense of responsibility and supervisory awareness.
Riyue Conducts the "Workplace Safety Month" CampaignThe Company conducts the "Workplace Safety Month" Campaign. The Company provides employees with traffic safety trainingunder the theme of "Everyone Talks About Safety and Knows How to Respond" to promote knowledge of traffic safety regulations;and, organizes online workplace safety quizzes to enhance employees' awareness of traffic safety, curb the occurrence of trafficaccidents, and create a good traffic safety environment within the Company.
CASE
The Company actively carries out occupational disease prevention and control knowledge promotion andtraining work to implement its occupational disease prevention responsibilities. We place highimportance on employee health, conduct annual occupational health examinations for employees onduty, maintain comprehensive occupational health surveillance records for each employee, strictly adhereto pre-employment, during-employment, and post-employment medical examinations, and strictlyimplement the Occupational Disease Prevention Management System, Occupational Safety and HealthEducation System, and Labor Protection Supplies Management System. We regularly distribute laborprotection supplies for free and strictly standardize the wearing of labor protection gear.
Occupational Health Management
Riyue has established the Safety Inspection and Potential Hazards Investigation and Management System and Hazard Identification, RiskAssessment and Risk Control Procedures. Each year, it organizes hazard identification and risk assessment at all workplaces, conductingthorough, meticulous and comprehensive potential hazards investigation and management activities, without formalism, leaving no blindspots or loopholes. It ensures that special equipment, electrical facilities, hazardous chemicals and flammable and explosive areas undergosafety-special inspections. For identified potential hazards, risk-categorized control measures are taken and corrective actions are enforcedwithin a specified timeframe, with continuous tracking of the rectification progress. Employees’ abilities to identify hazards and theirawareness of self-protection are also enhanced to promptly eliminate potential hazards. In 2023, the Company eliminated 3,416 potentialhazards and distributed RMB 10,560 in rewards for identification of potential safety hazards .
Safety Hazard Screening
Skill Competition during the Workplace Safety Month Campaign
The Company has organized a variety of safety education and trainingactivities to advance the construction of a safety culture and enhanceemployees' awareness of safety. Bulletin boards, electronic screens,promotional posters, Feishu app and other platforms are used, in combinationwith activities such as "Fire Safety Day," "Safety Calendar," "Anniversary," and"Workplace Safety Month" competitions, to engage employees in promotingsafety culture, creating a good atmosphereof "everyone shouldering responsibilities andtaking part in workplace safety", with theirsafety awareness enhanced.
CASE
In 2023the Company organized1,733 safetyeducation and trainingsessions
training a total of29,187 participants
In 2023the Company distributedspecial safety rewards of
443,100 RMB
invested
16,368,300 RMB
in workplace safety
In 2023the Company's total investmentin employee occupational injuryinsurance was
7,859,800 RMB
Riyue and its subsidiaries have obtained occupational health system certification.
JOINING HANDS WITH THE LOCAL COMMUNITY FOR INNOVATION-DRIVEN DEVELOPMENTRIYUE HEAVY INDUSTRY CO.,LTD2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) REPORT
Total investment in occupational injury insuranceNumber of employee mental health assistanceCoverage of physical examinations and medical records
Indicator2023Unit
785.98
RMB 10,000
time
%
Duration of workplace safety trainingNumber of workplace safety trainingAttendances for workplace safety trainingCoverage of workplace safety training
Indicator2023Unit
1,733
29,187
hourtimeattendance
%
4748
The Company pays high attention to information security and has guided its subsidiary, Rixing Foundry, to establish Backup and RecoveryManagement Regulations, Computer and Network Use Management Regulations, and Computer Room Management System, to ensure thesafe operation of computer systems, email systems, file systems and networks, protecting rights and interests of the Company and usersfrom infringement and preventing the leakage of our documents. The Company strengthens the operation, maintenance and managementof computers and networks to ensure that the computer systems and networks operate safely, reliably and stably, enhancing its overallmanagement level.
The Company has established process documents such as Supplier Management Procedures and Material Procurement BiddingManagement Methods to clearly specify the timing for supplier development, sources of new suppliers, methods to collect new supplierinformation, qualification assessment of suppliers and management requirements for the development of new suppliers. Additionally, basedon the different importance of the procurement materials, the Company categorizes suppliers into different types and adopts variedfrequencies of audits and performance evaluations for them. In the meantime, different performance levels of suppliers are set withcorresponding reward and punishment methods, thus forming a complete closed-loop supplier management system.As for supply chain risk management, the Company consistently adheres to a robust supply chain layout, with most materials supplied bymore than three suppliers, to minimize the risks associated with sole-source suppliers.In 2023, the Company implemented the SRM system, established a comprehensive supplychain database, and initially achieved transparency in the procurement process anddigitalization of performance evaluations. The Company enhanced research and assessmentof suppliers' EHS (Environment, Health, and Safety) aspects and took it as one of the criteriafor new supplier introduction. Throughout the year, the Company reviewed 11 suppliers andterminated cooperation with one of them due to non-compliance.
FOCUSING ON INFORMATION SECURITY
CONSOLIDATING SUPPLYCHAIN MANAGEMENTSUPPLIERS MANAGEMENT
The Company focuses on communication and interaction withcustomers, collects feedback and opinions through variouschannels to better understand customers' needs and expectationsand make timely improvements. It continuously improves thequality of products and services and provides comprehensiveafter-sales service. The Company actively engages in customerrelationship management to maintain long-term partnerships withcustomers. Through regular customer satisfaction surveys andfollow-ups, the Company promptly understands customersatisfaction levels and implements targeted measures forimprovement, continuously enhancing the customer experience.In 2023, the Company's product qualification rate was 97.7%, andcustomer satisfaction reached to 91.07%.
ENHANCING CUSTOMER SATISFACTION
As of the end of 2023the Company had a total of
942 suppliers
In 2023the Company's productqualification rate was
97.70 %
customer satisfactionreached to
91.07 %
The Company actively assumes its social responsibilities, fully utilizes its own resources and capabilities to build public welfare initiativestogether with employees and all sectors of society, continuously transmits positive corporate energy, and achieves the integration ofeconomic and social benefits.
UNDERTAKING SOCIAL RESPONSIBILITY
"Giving Love and Receiving Happiness" —Riyue employees participate in blood donation
In August 2023, the Company's Labor Union organizedemployees to participate in a blood donation activity.
CASE
JOINING HANDS WITH THE LOCAL COMMUNITY FOR INNOVATION-DRIVEN DEVELOPMENTRIYUE HEAVY INDUSTRY CO.,LTD2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) REPORT
Number of suppliers by geographical region Number of suppliers in China (the Chinese mainland) Number of suppliers in China (Hong Kong, Macao and Taiwan) and foreign countriesNumber of suppliers reviewedNumber of suppliers suspended for non-compliance
Indicator2023Unit
—————
Product percent of passNumber of Products Recalled andRecall RateNumber of customer complaintsAverage Time to AddressCustomer ComplaintsComplaint resolution rateNumber of Customers Participatingin Satisfaction SurveysCustomer satisfaction
Indicator2023Unit
97.70
1,251
91.07
%—timeminute
%person
%
4950
Remaining committed to enhancing the level of corporate governance, Riyue has made significant progress inenvironmental, social and governance aspects by strengthening the leadership of the Party, optimizing theconstruction of the Board of Directors and the Board of Supervisors, enhancing internal business ethics management,and increasing operational transparency. The Company will continue to improve governance mechanisms to achievesustainable development goals and create long-term value for stakeholders.
STRENGTHENLEADERSHIP ANDENHANCEGOVERNANCE
Optimizing the Governance SystemEmphasizing Business EthicsStrengthening Internal Risk ControlInvestor Relations and Rights
5152
Riyue's Party Building Activities in 2023
STRENGTHEN LEADERSHIP AND ENHANCE GOVERNANCERIYUE HEAVY INDUSTRY CO.,LTD2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) REPORT
OPTIMIZING THE GOVERNANCE SYSTEM
The Company consistently adheres to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, deeply understandsthe "Two Establishes” (Comrade Xi Jinping's core position on the Party Central Committee and in the Party as a whole, and the guiding role of Xi JinpingThought on Socialism with Chinese Characteristics for a New Era,) and resolutely upholds General Secretary Xi Jinping's core position on theParty Central Committee and in the Party as a whole, and the Party Central Committee's authorityand its centralized, unified leadership. We pay strong attention to theoretical learning, strengthenpolitical leadership and implement political responsibilities, and continuously improve the politicaljudgment, comprehension, and execution abilities of the central Party organization and Partyofficials. Continuous efforts are made to enhance the functions of the Party organization in settingdirection, overseeing the overall situation and ensuring implementation, with steady improvementsachieved in Party-building levels. The Company remains committed to uniting and inspiring peoplewith the Party's innovative theories, deeply studying, promoting and implementing the Xi JinpingThought on Socialism with Chinese Characteristics for a New Era. The study and implementationof the spirit of the 20th National Congress of CPC is taken as the primary political task for Partybranch learning, to ensure thorough learning, understanding and implementation.
Reinforcing the Leadership of the Party
The Company has established and keeps improving the corporate governance structure where the Shareholders’ General Meeting actas the highest authority, the Board of Directors serves as the decision-making body, special committees of the Board of Directorsprovide decision-making support, the management executes decisions, and the Board of Supervisors oversees operations. With allresponsibilities and rights clearly delineated, the Shareholders’ General Meeting, Board of Directors, Board of Supervisors, and themanagement perform their respective duties and responsibilities, coordinate with each other and maintain checks and balances.
In accordance with the Company Law of the People's Republic of China, the Securities Law of the People's Republic of China, theRules Governing the Listing of Stocks on Shanghai Stock Exchange, Articles of Association of the Company, and other relevant lawsand regulations, the Company has established internal control systems such as Rules of Procedure for the Shareholders’ GeneralMeeting, Rules of Procedure for Board of Directors, Rules of Procedure for Board of Supervisors, Independent Director System,Detailed Rules of Work for the General Manager, and strictly implements them.
Improving the construction of the Board of Directors and the Boardof Supervisors
1.Timely followed up and studied
latest important addresses andinstructions of General Secretary XiJinping throughout the year.
2.Developed the Party building work
plan and plan of thematic Party dayactivities for the year.
3.Held democratic consultation
meetings to widely solicit opinionsand suggestions from Partymembers and employees.
Jan
1.Arranged and published the annual
Party building tasks.
2.Held seminars to inspire outstanding
talents to join the Party.
Feb
Studied and conveyed the spirit of thenational "Two Sessions" and meetingsat higher levels.Mar
1.Evaluated and recommended
excellent Party members.
2.Carried out the "Book Reading
Season" activity to build alearning-oriented enterprise.
Apr
Conducted specialized training onParty affairs for Party branches.
Aug
Implemented the "Vanguard Index"work to honor and showcaseoutstanding Party members andemployees.
Jul
1.Conducted comprehensive training
and rotational training for Partymembers through "Party Secretary'sLectures."
2.Carried out a series of activities to
celebrate the 103rd anniversary ofthe founding of the CPC.
Jun
1.Discussed and determined Party
activists and potential candidates.
2.Organized celebration activities for
the Labor Union and the CommunistYouth League.
May
Held the thematic activity of"Endeavoring Month to Excel at Posts"to encourage Party members andemployees to offer ideas andsuggestions.
Sept
1.Carried out educational activities on
socialist core values and patriotism.
2.Had heart-to-heart talks and
demotic consultation meetings withParty members.
Oct
Discussed and determined Partyactivists and potential candidates.
Nov
1.Conducted a collective vote on
matters such as receivingprobationary Party members andconversion of probationarymembers to full membership.
2.Made the year-end summary.
Dec
As of the end of 2023Party committee
Party branches
Party members
General Manager
Board of Directors
Board ofSupervisors
Board Secretary
Shareholders’General Meeting
Strategy Committee
Audit CommitteeNomination Committee
Remuneration andAppraisal Committee
Chairman
5354
The Company has nine members on its Board of Directors, including threeindependent directors, with women making up 22.2% of the Board of Directors. TheCompany held 9 meetings of the Board of Directors in 2023. The independentdirectors have all paid proactive attention to learn the Company's production,operation and management before related meetings, acquired necessary informationand materials for decision-making, and made full preparations for significant decisionsat meetings. They fully leverage their professional experience and expertise to provideindependent judgment, knowledge and experience on matters discussed at themeetings, actively participate in discussions and offer practical and feasiblerecommendations, positively contributing to making scientific decisions at the Board ofDirectors and Shareholders’ General Meeting.
The Board of Supervisors consists of 3 supervisors, 1 of which is employee supervisors.The Company held 9 meetings of the Board of Supervisors in 2023.The Company actively organizes training for directors, supervisors and seniorexecutives to enhance their professional knowledge and leadership abilities, ensuringthat they perform their duties according to standards, better adapt to market changes,and promote the Company's continuous development. In 2023, the Companyorganized six training sessions for directors, supervisors and senior executives,covering policy trends, behavioral norms and governance improvement, among othertopics. These trainings helped them gain the latest industry information andmanagement experience, broaden their perspectives and strengthen theirdecision-making capabilities.
EMPHASIZING BUSINESSETHICS
The Company pays close attention to anti-corruption and anti-bribery efforts in its business activities, strengthens systemsupervision, advances institutional anti-corruption measures, and intensifies supervision and management of personnel in keysections and positions prone to corruption. This ensures the enforcement of commitments to govern business bribery, strictlyadheres to fair competition rules, and guides managers and related interest groups, such as customers and suppliers, to act legallywith integrity, and to consciously resist negative corrupt behaviors such as profiteering, embezzlement, dishonesty and fraud, therebyestablishing a positive corporate image.
Anti-corruption and Anti-bribery
The Company strengthens the construction of internal control mechanisms to ensure honesty and integrity, establishing a businessphilosophy centered on lawful and honest conduct and quality service. Rixing Foundry, a subsidiary of the Company, has developed aBusiness Ethics Control Procedure, required employees to adhere to the highest ethical standards, forbade the establishment of pricealliances, discrimination or insult to others, and set clear requirements regarding conflict of interest, acceptance of gifts, protectionand use of company assets and intellectual properties, competition and fair trading, and whistleblower protection.
Business Ethics
Riyue's Anti-Corruption and Anti-Bribery Policies
Personnel in key sectionsand positions are coveredby a commitment systemof commercial briberyprevention, with personnelat key positions signing anIntegrity CommitmentLetter for ProcurementPersonnel with theCompany;
All customers, suppliers,service providers andcontractors doingbusiness with theCompany must sign anAnti-Bribery CommitmentLetter for Suppliers;
The Company has set upintegrity monitoringstations within itsorganization;
Each business divisionconducts training anddissemination of integritypolicies.
The Company has established an Anti-Corruption and Anti-Bribery Control Procedure, clearly stipulating
A Riyue subsidiary incorporates business ethics into new employee training
In February 2023, Rixing Foundry, a subsidiary of the Company, conducted training for newly hired employees. The trainingincluded a themed lecture on business ethics, detailing the code of conduct for employees, the consequences of violationsand the methods for filing appeals.
CASE
In 2023The Company held
9 meetings of the Board of Supervisors
In 2023The Company held9 meetings of the Board of Directors
STRENGTHEN LEADERSHIP AND ENHANCE GOVERNANCERIYUE HEAVY INDUSTRY CO.,LTD2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) REPORT
Number of directors in the Board of DirectorsAverage tenure of Board of Directors membersMale directors in the headquartersFemale directors in the headquarters
Indicator2023Unit
7.7
77.78
22.22
person
year
%%
5556
The Company places high importance on risk management and consistently prioritizes the prevention of major risks. The AuditCommittee of the Company's Board of Directors assesses operational risks, supports and urges the management team to improve itsinternal control, risk management and enhancement. At the same time, the Company has clearly defined the roles andresponsibilities of the Board of Directors, Audit Committee, Board of Supervisors and the management within the internal controlmechanisms. It establishes and continuously improves the risk management and internal control system, actively carries out riskcontrol training, and adopts multiple measures to strengthen risk management.It will continue to refine its internal control system centered on internalenvironment, risk assessment, control activities, information andcommunication and internal monitoring, aimed at a "comprehensivecoverage, highlighted focus and effective control”. It continuouslydeepens the "negative list" management mechanism, intensifiescompliance training and education, builds a compliance managementsystem that is "well-regulated, powerfully executed, tightly controlled andconsistently effective," and strictly maintains a baseline against anysignificant regulatory penalty and major risk.In 2023, the Company organized an annual risk and internal controlmaturity evaluation to identify internal control deficiencies, prepared the2023 Internal Control Evaluation Report and continued follow-up work.
STRENGTHENING INTERNAL RISK CONTROL
INVESTOR RELATIONS AND RIGHTS
Investor relations management is a crucial means for positive interaction between a listed company and its investors, playing a significantrole in enhancing the quality of the listed company and protecting the legitimate rights and interests of its investors. Riyue highly valuesthe management of investor relations and has established the Investor Relations Management System, Internal Reporting System forSignificant Information, Information Disclosure Management System, and Accountability System for Significant Errors in Annual ReportInformation Disclosure. These systems define the content, principles, and management forms of investor relations, standardize theCompany's information disclosure practices, ensure the fairness of information disclosed, strengthen information communication withexisting and potential investors, achieve integrity and self-discipline, regulate operation procedures and enhance the intrinsic value.The Company values communication with investors, strengthens connections with them, and continuously drives the professionalizationand refinement of investor relations management. The Board Secretary is designated as the person responsible for managing investorrelations, organizing the day-to-day management activities of investor relations; the Board Office is designated as the specific organresponsible of investor relations management; efforts were made to enhance communication and interaction with investors, explore andestablish diversified channels for investor relations management, and set up various communication channels including in-person,telephone, and online. Through performance presentations, investor research visits, investor hotlines, emails, and SSE e-interactionplatforms, the Company conducts various forms of investor reception and communication activities, and engages in multi-channel opencommunication with investors, firmly establishing the awareness of "respecting and protecting investors," and fully ensuring that allinvestors are well-informed. The Company requires its staff to “listen to, remember, and clearly respond to” investor inquiries with"patience, politeness and reasonableness," taking each communication with investors seriously.In 2023, the Company actively responded to 30 investor queries through SSE e-interaction platform, with no investor questions leftunanswered. The Company answered 459 calls on the investor hotline; conducted 12 offline institutional reception activities, hosting atotal of 67 institutions with 112 individuals; and, held three performance presentations, and two financial analysis meetings, with anaverage attendance of over 200 institutions and individuals per event. The Company proactively reported on quarterly, semi-annual andannual operating results, as well as the strategic planning for the upcoming period to investors. The Company proactively addressedinvestors’ inquiries regarding the Company's operations, capacity projects and macroeconomic and industry conditions, providingthorough and extensive responses, which helped investors know better about the Company.
Investor Relation Management
The Company actively monitors capital market developments, persists in creating value for shareholders, and continues to improvethe shareholder return mechanism. We tried all efforts to reward investors actively through transparent, stable, and sustainabledividend distributions and performance growth, with the long-term interests of the Company, the overall interests of all shareholdersand sustainable development taken into consideration. The Rules of Procedure for the Shareholders' General Meeting are establishedto ensure the protection of shareholders’ rights and interests. In 2023, the Company totally held 5 Shareholders’ General Meetings,with the attendance rate of directors reaching 100%.
In June 2023, the Company distributed a cash dividend of RMB 2 (tax-inclusive) per 10 shares, totaling RMB 206 million in cashdividends.
Safeguarding Shareholders’ Rights
The Company, with an investors’ needs-oriented approach and compliance-based guideline, established systems such as theInformation Disclosure Management System and Internal Reporting System for Significant Information to fulfill all informationdisclosure obligations required by law, ensure that all disclosures are truthful, accurate, complete and timely, and guarantee thatinvestors have equal access to company information. In 2023, the Company continued to strengthen the management of informationdisclosure affairs, timely and lawfully fulfilled its disclosure obligations, ensuring full and proper disclosure. Its information disclosureefforts received the highest category A rating.In 2023, the Company proactively disclosed a total of 189 public documents, including 4 periodic reports, 91 interim announcements,and 94 other online documents, allowing investors to fully understand and correctly interpret the Company's operational situation,and aiding them better in making informed investment decisions.
Information Disclosure Management
Riyue's Information DisclosureWork Receives Category A RatingIn October 2023, the SSE released the EvaluationResults of Information Disclosure Work for ListedCompanies on the Shanghai Stock Exchange for2022-2023. The Company's information disclosure workfor the fiscal year 2022-2023 received a Category Arating, laying a solid foundation for the Company'scommitment to becoming a "low-carbon,environmentally friendly and harmonious" high-techheavy industry enterprise and a leading supplier ofbasic materials and equipment components in theglobal high-end equipment industry. This rating furtherenhances the Company's influence andcompetitiveness.
CASE
STRENGTHEN LEADERSHIP AND ENHANCE GOVERNANCERIYUE HEAVY INDUSTRY CO.,LTD2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) REPORT
Number of Shareholders’ General MeetingsAttendance rate of directors at the Shareholders’ General Meeting
Indicator2023Unit
time%
Periodic reports compiled and publishedInterim announcements releasedOther online documents
Indicator2023
IndicatorUnit2023
Outsourced energy (indirect)TCE45,545
Electricity consumption10,00037,05929Energy consumption per RMB 10,000 of revenueTCE/RMB01241Total water consumptionmetric850,94326Water consumption per RMB 10,000 of revenuemetric18278
IndicatorUnit2023
Total number of employeesperson4,070Male%
Male directors in the headquarters%7778Female%2037Female directors in the headquarters%2222Age group——— Ratio of employees aged 30 and below%2673 Ratio of employees aged above 30 to 50%
Ratio of employees aged over 50%1197Ethnic minoritiesperson
Departmentperson—— Number of employees in sales and marketingperson
Number of employees in product R&Dperson
Number of employees in customer serviceperson
Number of employees in administrationperson
IndicatorUnit2023
Exhaust pollutant emissionskg5,579
Sulfur dioxidekg2,77480 Nitrogen oxidekg
PMkg2,272Wastewater dischargemetric ton40,067GHG emissions (Scope 1 & 2)tCO
e289,076
GHG emissions (Scope 1)tCO
e27,964
GHG emissions (Scope 2)tCO
e261,111
tCO
e/RMB 10,000
6209Total hazardous waste and disposalmetric ton33209
GHG emissions per RMB 10,000 of revenue (Scope 1 &2)Hazardous waste generated per RMB 10,000 ofrevenue
metric ton/RMB 10,000
0007Total nonhazardous wastemetric ton55,086
Hazardous waste generated per RMB 10,000 ofrevenueTotal nonhazardous waste generated per RMB 10,000of revenue
metric ton/RMB 10,000
1183Total energy consumptionTCE57,76539 Fossil energy consumption (direct)TCE10,44486 Coke consumptionTCE6,59919 Gasoline consumptionTCE2012 Diesel oil consumptionTCE49999 Natural gas consumptionTCE3,12523 Liquefied petroleum gas consumptionTCE20034 Nonfossil energy consumption (direct)TCE1,774
Photovoltaic powerTCE1,77467
5758
APPENDIX
KEY PERFORMANCE INDICATOR (KPI)Environmental
Social
APPENDIXRIYUE HEAVY INDUSTRY CO.,LTD2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) REPORT
IndicatorUnit2023Number of suppliers reviewed—11Number of suppliers suspended for noncompliance—
Product percent of pass%
Number of Products Recalled and Recall Rate—
Number of customer complaintstime1,251Average Time to Address Customer Complaintsminute
Complaint resolution rate%
person
Customer satisfaction%
R&D investmentRMB 100 million
Proportion of R&D investment%
Proportion of R&D personnel%
Patents—
IndicatorUnit2023
Educational background——— Master’s degree or above%
Bachelor degree or below%9963Social insurance coverage%
Employee satisfaction rate%
Number of workrelated fatalitiesperson
Rate of occupational deaths%
Number of major safety accidents—
Workplace safety investmentRMB 10,0001,636
Duration of workplace safety traininghour1,733Number of workplace safety trainingtime
Attendances for workplace safety trainingattendance29,187Coverage of workplace safety training%
Total investment in occupational injury insuranceRMB 10,00078598
Number of Customers Participating in SatisfactionSurveysTotal number of people covered by occupational injuryinsurance
person3,093Number of employee mental health assistancetime
Coverage of physical examinations and medical records%
Employee training coverage%
Training coverage of male employees%
Training coverage of female employees%
Number of employee trainingtime2,520Total training expenditure in the yearRMB 10,000
Total length of training in the yearhour44,37194Average length of training per employeehour7502Number of suppliers by geographical region—
Number of suppliers in China (the Chinese mainland)—
Total number of people covered by occupational injuryinsuranceNumber of suppliers in China (Hong Kong, Macao andTaiwan) and foreign countries
—
IndicatorUnit2023
Number of meetings of the Board of Supervisorstime9Average tenure of Board of Supervisors membersyear
Number of directors in the Board of Directorsperson
Number of meetings of the Board of Directorstime
Average tenure of Board of Directors membersyear
Number of compliance trainingtime
Length of compliance traininghour
Attendances for compliance trainingattendance1,358
5960
Governance
APPENDIXRIYUE HEAVY INDUSTRY CO.,LTD2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) REPORT
IndicatorUnit2023Anticorruption trainingstime29Length of anticorruption traininghour
Number of participants receiving anticorruption
attendance
Number of articles and cases related to anticorruption
| training |
| themes pushed |
time
Number of Shareholders’ General Meetingstime
Attendance rate of directors at the Shareholders’
%
Periodic reports compiled and published—
Interim announcements released—
Other online documents—
Report FrameworkGRI Standards
About this Report2-22-3Message from Chairman2-22About Riyue—Company Profile2-1Strategy and Culture2-22Organizational Structure2-9History2-1Honors in 20232-6ESG Management—ESG Management System2-142-22Analysis on Material Topics3-13-23-3Communication with Stakeholders2-162-29Green Operations Help Explore a Low-Carbon Future—Environmental Management System2-122-132-142-27Strengthening Resource Management302-1302-4302-5303-3305-1305-2Reducing Pollutant Emissions303-2303-4305-5305-7306-1306-2306-3Combating Climate Change2-27201-2Advancing Green Operations302-4302-5Joining Hands with the Local Community for Innovation-Driven Development
—Technological Innovation Development2-6Progressing Together with Employees
2-72-192-20201-3401-2403-1403-3403-4403-5
403-6403-8403-10404-1404-2405-1
AbbreviationFull Name
RiyueRiyue Heavy Industry Co., Ltd.Rixing FoundryNingbo Rixing Foundry Co., Ltd.Essence MetalNingbo Essence Metal Machinery Co., Ltd.Yuexing MetalNingbo Yuexing Metal Machinery Co., Ltd.Riyue Nuclear EquipmentNingbo Riyue Nuclear Equipment Manufacturing Co., Ltd.Precision ManufacturingNingbo Riyue Essence Precision Manufacturing Co., Ltd.Mingling TechnologyNingbo Mingling Technology Co., Ltd.Riyi IntelligentNingbo Riyi Intelligent Equipment Co., Ltd.Gansu RiyueRiyue Heavy Industry (Gansu) Co., Ltd.Jiuquan ZhexinnengJiuquan Zhexinneng Wind Power Co., Ltd.Zhixin TestingXiangshan Riyue Zhixin Testing Technology Co., Ltd.Riyue New EnergyNingbo Riyue Rixing New Energy Technology Co., Ltd.
6162
TABLE OF COMPANY NAMES AND ABBREVIATIONS
INDICATORS INDEX
APPENDIXRIYUE HEAVY INDUSTRY CO.,LTD2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) REPORT
Report FrameworkGRI StandardsConsolidating Safety Foundations403-4416-1Consolidating Supply Chain Management308-1414-1Undertaking Social Responsibility2-6Strengthening Leadership to Enhance Governance—Optimizing the Governance System2-9413-1Emphasizing Business Ethics205-2Strengthening Internal Risk Control2-9Investor Relations and Rights2-27
6364
Dear reader,Hello!Thank you for reading the 2023 Environmental, Social and Governance (ESG) Report of Riyue Heavy Industry Co., Ltd. If you haveany comments or suggestions concerning this report, please do not hesitate to inform us. Help us improve our sustainabledevelopment management in the future!Multiple-choice questions (Please place a check mark (√) in the answer box that corresponds to your response)
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Address: Beicun Village, Dongwu Town, Yinzhou District, Ningbo City, Zhejiang Province, China
Board Office, Riyue Heavy Industry Co., Ltd.Postal code: 315113Tel: 0574-55007043Email: stock@riyuehi.com
QUESTIONNAIRE
APPENDIXRIYUE HEAVY INDUSTRY CO.,LTD2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) REPORT
Address: Beicun Village, Dongwu Town, Yinzhou District, Ningbo City, Zhejiang Province, ChinaTel: 86-574-55007043Fax: 86-574-55007008Website: www.riyuehi.com