CONTENTS
Message from the ChairmanAbout This Report
Annex I: IndexesAnnex II: FeedbackGlance at AVD
11ESG Management
Company ProfileCorporate CultureMilestonesHonorsPerformance in 2023
ESG Management SystemResponse to Sustainable Development GoalsCommunication with StakeholdersAnalysis of Substantive IssuesEnhancement of ESG Governance Awareness
Governance FrameworkInvestor Relations ManagementRisk ManagementBusiness EthicsParty Building Work
STANDARDIZINGGOVERNANCE ANDCONSOLIDATINGFOUNDATIONS
Enhancement of Environmental ManagementOptimization of Resource ManagementActions to Climate ChangeReduction of Pollution Emissions
LOW-CARBONOPERATION FOR AGREEN FUTURE
Establishment of Sustainable Supply ChainsOrientation to Product QualityInformation Security and Privacy ProtectionProtection of Customers’ Rights and InterestsR&D Innovation for Development
TAKINGRESPONSIBILITY ANDENSURING STEADYDEVELOPMENT
Employment ManagementEmployee Growth and DevelopmentSound Remuneration and Benefit SystemsEmployee CommunicationOccupational Health and Safety ProductionSocial Contribution
RESPECTING TALENTSAND PROFESSIONALS,AND ACTING IN GOODFAITH
Message from the Chairman
Dear friends,Thank you for reading AVD’s first Environmental, Social and Governance (ESG) Report. I really appreciate for your attention to AVD!Shenzhen AV-Display Co., Ltd. (“AVD”, “the Company” or “we”) has been listed on the Growth Enterprise Market (GEM) Board ofthe Shenzhen Stock Exchange for over three years since its debut on January 28, 2021. In recent years, the complex and volatilemacroeconomic environment, escalating climate risks, and deepening energy security crisis worldwide have profoundly impactedenterprises, individuals and their families. Given this backdrop, we deeply recognize that the coordinated advancement of environ-mental protection, social responsibility fulfillment, and corporate governance is of great significance to the sustainable develop-ment of the Company. Under the leadership of the management, all of our employees have consistently upheld the corporatemission of “presenting the world, restoring the truth, connecting things and creating value”, and steadfastly pursued the path tosustainable development. With the support of compliance governance and scientific decision-making systems, we are committedto fulfilling our mission and values, promoting AVD’s excellent development, and making every effort to generate greater value forour employees, partners, and communities.In 2023, despite persistent uncertainties and challenges, all employees of AVD worked together wholeheartedly and essentiallyachieved all expected results.This year, we actively practiced the philosophy of sustainable development and enhanced our ESG management system. AVDintegrated ESG into corporate strategies, governance, reform, development and daily operations and prioritized ESG managementto improve the quality and efficiency of enterprise development and competitiveness. We endeavored to enhance our conscious-ness and capability of fulfilling our comprehensive enterprise responsibility and realizing our sustainable development goals. Weestablished a top-to-down ESG governance framework, clarifying the responsibilities and duties of each management level andfacilitating the coordinated implementation of ESG strategies. Additionally, we enhanced the supervision and engagement of theBoard of Directors in ESG affairs, and improved the integration of ESG management into our development strategies and produc-tion operations.
This year, we effectively fulfilled our ecological environmental protection responsibility and contributed to the realization ofthe “carbon peaking and carbon neutrality” goals. AVD acted on the principle that “lucid waters and lush mountains are invalu-able assets”, and took practical actions to achieve “carbon peaking and carbon neutrality” goals. We prioritized the production ofgreen and environmentally-friendly products by promoting green manufacturing and establishing green factories. Additionally, weactively participated in the innovation of environmental technologies, and conducted research and development of green products.Alongside advocating for all employees to “work and live in a green and low-carbon way”, we endeavored to become the mosttrustworthy green and environmentally-friendly enterprise for all stockholders and contribute to the achievement of the “carbonpeaking and carbon neutrality” goals.
This year, we faithfully fulfill our social responsibility and enthusiastically engage in public welfare undertakings. All theresources needed for the survival and development of an enterprise come from society, and the essence of the survival of anenterprise is to create social value. AVD deeply integrated the fulfillment of social responsibility with the development strategy ofthe enterprise, closely linking enterprise development with social progress. We insisted on safe operations to safeguard ouremployees’ health, and conducted social responsibility assessments and surveys in our supply chain for responsible procurement.We optimized our remuneration system to promote value co-creation and benefit sharing with employees, strengthened thetraining for employees’ skill development, cared for their well-being, and offered comprehensive support for their growth. Further-more, we actively participated in public welfare, contributing to society and local communities through initiatives like socialdonations, rural revitalization and charity activities.
This year, we insisted on stable operations and improved corporate governance. As always, AVD insisted on lawful and honest
operations and prioritized product quality, providing responsible and high-quality products and services to meet the diversifiedneeds of our customers worldwide. We continued to optimize our corporate governance structure and improve our rules of proce-dure. Our governance structure, composed of the “General Meeting of Shareholders, Board of Directors, Board of Supervisors, andSenior Management”, operated orderly with clear responsibilities, effectively ensuring that every decision or action is transparent,fair and responsible. We strengthened internal control and risk management, striving to identify, assess, and address risks, whileclosely monitoring changes in the market environment. We held a steadfast commitment against any corruption, acted on theprinciples of integrity and legality, and strove to cultivate an environment of fair competition. At AVD, we valued the managementof investor relations and the protection of shareholders' rights and interests, made high-quality disclosures, actively managedinvestor relations, and built a good mechanism for communication and interaction in the capital market.In the future, we will continue to firmly follow the path of safe, green, low-carbon, and responsible development, further promotethe deep integration of ESG with our development strategy and production operation, and continuously optimize corporate gover-nance, enhance endogenous growth momentum. Additionally, we will deepen social responsibility management, explore ESGpractices together with stakeholders, and jointly embrace a sustainable and beautiful future.
Chairman of AVD Huang Zhiyi
Message from the ChairmanAbout This ReportGlance at AVDESG Management
Standardizing Governance andConsolidating Foundations
Low-carbon Operatiofor A Green Future
Taking Responsibility andEnsuring Steady Development
Respecting Talents and Professionals,and Acting in Good Faith
Annex
01 02
About This Report
The financial data in this report are sourced from the 2023 Annual Report of Shenzhen AV-Display Co., Ltd., and other informationand data come from statistical summaries of data from relevant departments or public documents. This report doesn’t contain anyfalse records, misleading statements, or material omissions. Unless otherwise specified, all amounts in this report are expressed inRMB.
Data Sources and Explanations
For the convenience of expression and reading, “Shenzhen AV-Display Co., Ltd.” is also referred to as “AVD”, “the Company”, “We”and similar terms. Please refer to the detailed names of its subsidiaries in the “Interpretation” column of the table below.
Appellation Description
This report is released in both Chinese and English electronic versions. For any discrepancy between the Chinese and Englishversions, the Chinese version shall prevail. You may access and download the electronic version of this report on the websites ofShenzhen Stock Exchange (www.szse.cn), cninfo (www.cninfo.com.cn) and the official website of AVD (www.av-display.com.cn).If you have any comments or suggestions on the report, please don’t hesitate to contact us:
Department: Securities Affairs DepartmentAddress: No. 39, Jinyuan Road, He'ao, Yuanshan Street, Longgang District, Shenzhen, ChinaTel.: 0755-86106838Fax: 0755-86106838E-mail: qiutw@av-display.com
Access and Feedback
TermInterpretationGanzhou AVDBeijing AVDAVD (Hong Kong)AVD (Thailand)Ruidisheng
Ganzhou AV-Display Co., Ltd.
Beijing AV-Display Co., Ltd.AV-Display International Co., Ltd.AV-Display (Thailand) Co., Ltd.Shenzhen Ruidisheng Technology Co., Ltd.
This is the first Environmental, Social and Governance (ESG) Report disclosed by Shenzhen AV-Display Co., Ltd. (Stock Code:
300939). In the principles of objectivity, standardization, transparency and comprehensiveness, this report details theenvironmental, social, and governance practices and achievements of AVD and its holding subsidiaries during 2023.
Introduction
Reporting Period: This report covers the period from January 1, 2023 to December 31, 2023. To improve the comparability andcompleteness, some sections of this report may extend beyond the reporting period.Scope of Organization: Unless otherwise stated, this report covers AVD and its holding subsidiaries (please see details in the 2023Annual Report of Shenzhen AV-Display Co., Ltd.).
Reporting Scope
This Environmental, Social and Governance (ESG) Report is released on an annual basis.
Release Cycle
!"#$%$&'()*+(,*-$".$/0*$10*,20*,$1/"34$56307,8*$."9$/0*$1*+.:)(-3(;+(,*$<*8'+7/(",$".$=(-/*)$>"?;7,(*-$:$1/7,)79)(2*)$@;*97/(",$".$>"?;7,(*-$=(-/*)$",$&9"A/0$5,/*9;9(-*$B794*/$C&5BD$E"79)!"#$F$&'()*+(,*-$".$/0*$10*,20*,$1/"34$56307,8*$."9$/0*$1*+.:)(-3(;+(,*$<*8'+7/(",$".$=(-/*)$>"?;7,(*-$:$E'-(,*--$G7,)+(,8 and its annexHI(-3+"-'9*$<*J'(9*?*,/-$."9$1"3(7+$<*-;",-(K(+(/L$<*;"9/-$".$=(-/*)$>"?;7,(*-M&'()*+(,*-$",$>"9;"97/*$1"3(7+$<*-;",-(K(+(/L$<*;"9/(,8$."9$>0(,*-*$5,/*9;9(-*-$(CASS-ESG 5.0) issued by the Chinese Academy of SocialSciences (CASS)1'-/7(,7K(+(/L$<*;"9/(,8$1/7,)79)-$C&<N$1/7,)79)-D issued by the Global Sustainability Standards Board (GSSB)Sustainable Development Goals (SDGs) of the United NationsIn preparing this report, we identified important stakeholders and analyzed significant sustainable development issues to determinereport boundaries. We collected, summarized, organized, and reviewed relevant materials and information to finalize the report.
Preparation Basis
03 04
Shenzhen AV-Display Co., Ltd. (“AVD”) is a nationalhigh-tech enterprise mainly engaged in the R&D,design, production and sales of liquid crystal displaysand touch control products. Adhering to thecorporate mission of “presenting the world, restoringthe truth, connecting things and creating value”, theCompany is committed to developing into aninfluential one-stop service provider of HMIs andintelligent control products, providing customers withstandard and customized touch and display solutions.The Company was incorporated in 2004 and listed onthe GEM board of the Shenzhen Stock Exchange inJanuary 2021 (stock abbreviation: “AVD”: stock code:
“300939”).The main products of the Company are liquid crystaldisplays (LCDs) and touch control products, includingmonochrome LCDs, monochrome LCD modules, colorLCD modules and capacitive touch screens. TheCompany has long been dedicated to the touchdisplay industry. After years of development andaccumulation, the Company has amassed a multitudeof core technologies including ARM control boards,industrial computers, industrial displays, intelligentserial port display modules, multi-platform embeddedcontrol systems, industrial IoT human-machineinterface systems, electronic paper materials anddisplay modules, special optical touch displaymodules, high-performance touch display modules,reflective TFT LCD display modules with front light,high-performance PMVA-LCDs, fast-response LCDshutters, vehicle anti-glare LCD shutters, automotiveautomatic dimming sun visor LCD shutters,high-reliability electric meters, industrial controlLCDs, and more. The Company's products possessstrong market competitiveness. The Company isheadquartered in Shenzhen, Guangdong Province,and has established industrial bases in Shenzhen andGanzhou, and marketing networks in South China,East China, North China, West China, Taiwan, Europe,North America, and the Asia-Pacific region. Ourproducts are sold all over the world through ourglobal sales network, providing technical support andservice guarantees for our customers worldwide.
Company Profile
Glance at AVD
Headquarter/ManufacturingBaseSales Subsidiaries/Manufacturing BasesSales SubsidiariesSales OfficesPartners/Representatives
UK
ChongqingGanzhou
Beijing
South KoreaDenmark
Poland
FranceTurkey
India
Thailand
Shenzhen
Japan
USATaipei
WuxiHong Kong
Ganzhou FactoryHeadquarters & Shenzhen FactoryShenzhen Industrial Base (under construction)
Message from the ChairmanAbout This ReportGlance at AVDESG Management
Standardizing Governance andConsolidating Foundations
Low-carbon Operatiofor A Green Future
Taking Responsibility andEnsuring Steady Development
Respecting Talents and Professionals,and Acting in Good Faith
Annex
05 06
Corporate CultureMilestones
MissionPresenting the world, restoring the truth, connectingthings, and creating value
Core ValuesTreating people with empathy, andhandling matters with precisionVisionTo be the leader of the human-computer interface industry
Code of Conduct
Adhering to laws and regulations, working diligently and responsibly; embracing teamwork, treating others withsincerity; learning to innovate, and striving for excellence
Enterprise SpiritIntegrity, Enterprisingness, Teamwork,Innovation
AVD established2004
Mono LCDproductioninstalled inShenzhen
2007
Capacitivetouch panelfacility builtup
2009
Groundbreakingceremony held forthe new factory inGanzhou
2013
TFT& EmbeddedMainboardBusiness Unitset up
2014New Investmentin Full LaminationProduction Line
2015
Touch display productionline expansion; successfulIPO in the GEM Board ofShenzhen Stock Exchange
2021
ShenzhenIndustrial Basebuilt
2023
3rd LCDproduction lineset up inGanzhou
2020
IndustrialintelligenceBU set up
2019
2nd LCDproductionline set up inGanzhou
2018
COG productionline set up inGanzhou
2017
1st LCD line putinto operationin Ganzhou
2016
Message from the ChairmanAbout This ReportGlance at AVDESG Management
Standardizing Governance andConsolidating Foundations
Low-carbon Operatiofor A Green Future
Taking Responsibility andEnsuring Steady Development
Respecting Talents and Professionals,and Acting in Good Faith
Annex
07 08
Honors
Performance in 2023
EconomicPerformance
Operating Income(in RMB 10,000)99,488.13
Net Profit Attributable to Shareholdersof Parent Company (in RMB 10,000)12,229.63Basic Earningsper Share (yuan/share)
1.02
Total Assets (in RMB 10,000)167,519.58Total Tax Payment (in RMB 10,000)4,571.25
Investment in Environmental ProtectionFacilities (in RMB 10,000)
169.00
Environmental EmergencyDrills Conducted (times)
Total Electricity Consumptionof Factories(10,000 kWh)2,999.13
Power Generation fromRenewable Energy (10,000 kWh)
26.18
Total Greenhouse Gas Emissions (tCO2e)27,874.39Increase in Recycling Efficiency of Reclaimed Waterfrom Workshop Wastewater Emission (%)
5.00
Increase in Reuse Rateof Reclaimed Water (%)
10.00
Decrease in Tap Water Consumptionfor Pure Water System (%)
40.00
Compliant Disposal Rate of Hazardous Waste (%)
100.00
In 2023, AVD won wide recognition and praise from the industry for its excellent corporate strength and outstandingmarket performance. AVD was granted the “2023 Most Promising Award” by Shenzhen H&T Intelligent Control Co., Ltd.,and honored as “2023 Excellent Supplier” by Green Energy Huichong Digital Technology Co., Ltd. and Beijing Yunji MediaInformation Technology Co., Ltd. This demonstrates our service quality has been highly recognized by our partners. TheShenzhen Public Companies Association recognized AVD as the “Member Unit of Shenzhen Public CompaniesAssociation”, highlighting AVD’s engagement and influence in the capital market. In addition, AVD was awarded thehonorary titles of “Top Ten Taxpaying Enterprises of Yuanshan Street in 2023” and “Top Ten Industrial Enterprises ofYuanshan Street in 2023” by the Yuanshan Street Office of Longgang District, Shenzhen. With outstanding innovationcapabilities, stable management strategies, and a high sense of social responsibility, AVD has made outstandingcontributions to promoting local economic progress.
Product Percentof Pass (%)
98.40
Training on QualityCulture (sessions)
CustomerSatisfaction Rate (%)
92.31
R&D Investment(in RMB 10,000)6,426.01
Total PatentsObtained (item)
Total Numberof Employees1,914
Number ofFemale Employees
Employee WelfareCoverage Rate（%）
100.00
Total Investment in EmployeeTraining (in RMB 10,000)
43.69
Total Training Hours(hours)32,721
Investment in SafetyProduction (in RMB 10,000)
274.21
Investment in SafetyTraining (in RMB 10,000)
3.36
Identification and Rectification Rateof Hidden Hazards (%)
100.00
Number of Safety EmergencyDrills Conducted (times)
General Meeting ofShareholders Convened (times)
Meetings of the Board ofDirectors Convened (times)
Meetings of the Board ofSupervisors Convened (times)
Percentage of Female Directors,Supervisors and Senior Executives
Percentage of Independent Directorsin the Board of Directors
Communicationswith Investors (times)
Replies on irm.cninfo.com.cn(pieces)
Training on Anti-Corruptionand Integrity (times)
Percentage of Employees who Signed the >"??(/?*,//"$B7(,/7(,$N,/*89(/L$(,$/0*(9$@O(3(7+$I'/(*-$7,)$P"94 (%)
100.00
GovernancePerformanceEnvironmentalPerformance
SocialPerformance
Message from the ChairmanAbout This ReportGlance at AVDESG Management
Standardizing Governance andConsolidating Foundations
Low-carbon Operatiofor A Green Future
Taking Responsibility andEnsuring Steady Development
Respecting Talents and Professionals,and Acting in Good Faith
Annex
09 10
AVD has been practicing the philosophy of sustainable development, integrating ESG into corporate strategies, governance, reform,development and daily operations, and prioritizing ESG management to improve the quality and efficiency of enterprisedevelopment and competitiveness. We continuously enhance our comprehensive corporate responsibility and awareness topromote sustainable development.
Highest authority and decision-maker for ESG affairs
Main responsible committee for ESG management
Management department of ESG reports
Implementers of specific ESG tasks
AVD continuously improves the ESG management system, and strengthens the supervision and participation of the Board ofDirectors in ESG affairs. By formulating the >"??(/?*,/$/"$1'-/7(,7K+*$I*Q*+";?*,/, we integrate the philosophy of sustainabledevelopment management into all aspects of our business operations, devoting to the construction of a sustainable developmentmanagement system. Furthermore, we adhere to ethical and compliant management, and continuously enhance thecommunication with stakeholders, so as to ensure the sustainable development of the Company and contribute to our customersand society.We established a top-to-down ESG governance framework, clarifying the responsibilities and duties of each management level andfacilitating the coordinated implementation of ESG strategies. The Board of Directors serves as the highest authority anddecision-maker for ESG affairs at AVD. The Strategy and ESG Committee under the Board of Directors assumes the primaryresponsibility for formulating and promoting the implementation of ESG strategies in alignment with AVD’s development strategies,goals and visions, and ensuring the effectiveness of ESG management practices. The ESG Special Working Group, overseen by theSecretariat of the Office of the Board of Directors, is responsible for the management of ESG reports. Composed of ESGRepresentatives from all functional departments and subsidiaries of AVD, the Special Working Group needs to regularly report ESGefforts to the Strategy and ESG Committee under the Board of Directors. Functional departments of AVD and its subsidiaries areresponsible for implementing specific ESG tasks.
ESG Management System
By proactively responding to the “carbon peaking and carbon neutrality” goals, enhancing our ESG brand image, and refining ourESG strategy framework, AVD aligns our development with the United Nations Sustainable Development Goals (SDGs), and guidesus to better focus on our sustainable development.
Response toSustainable Development Goals
ESG Management
Board ofDirectorsStrategy andESG CommitteeESG Special Working GroupFunctional Departmentsof AVD and its Subsidiaries
ESG Governance Framework
ESG Governance Framework of AVD
SDGsContent of SDGsChaptersInitiatives
End poverty in all its forms everywhere
Respecting Talents andProfessionals, and Acting inGood FaithRespecting Talents andProfessionals, and Acting inGood FaithRespecting Talents andProfessionals, and Acting inGood Faith
Respecting Talents andProfessionals, and Acting inGood Faith
Respecting Talents andProfessionals, and Acting inGood Faith
Supporting employees with
difficultyParticipating in social welfareImplementing safety productionGuarding occupational healthEnsure healthy lives and promotewell-being for all at all ages
Offering clear career development
channelsImproving employee training
mechanismsEnsure inclusive and equitable qualityeducation and promote lifelong learningopportunities for all
Opposing gender discriminationCaring for female employeesAchieve gender equality and empower allwomen and girls
Low-carbon Operationfor A Green FutureLow-carbon Operationfor A Green Future
Low-carbon Operationfor A Green Future
Strengthening water resources
protectionEmphasizing wastewater treatmentEnsure availability and sustainablemanagement of water and sanitation forall
Taking actions for energyconservation and emission reduction
Using clean energyEnsure access to affordable, reliable,sustainable and modern energy for all
Upholding equal employmentProtecting the rights and interests
of employeesPromote sustained, inclusive andsustainable economic growth, full andproductive employment and decent workfor all
Taking Responsibility andEnsuring Steady DevelopmentTaking Responsibility andEnsuring Steady Development
Taking Responsibility andEnsuring Steady Development
Establishing innovation systemsEncouraging R&D and innovationProtecting intellectual property rightsBuild resilient infrastructure, promoteinclusive and sustainable industrializationand foster innovation
Prioritizing quality managementProtecting the rights and interests
of customersEnsure sustainable consumption andproduction patterns
Promoting energy efficiency andcarbon reductionAdvocating for green offices
Engaging in green R&DTake urgent action to combat climatechange and its impacts
Standardizing Governanceand Strengthening Foundations
Standardizing the governance through theGeneral Meeting of Shareholders, Board ofDirectors, and Board of SupervisorsPrioritizing investor relations managementStrengthening risk management and controlUpholding compliant operationsAdhering to business ethics
Promote peaceful and inclusive societiesfor sustainable development, provideaccess to justice for all and buildeffective, accountable and inclusiveinstitutions at all levels
Building sustainable supply chainsAdhering to responsible procurementStrengthen the means ofimplementation and revitalize the GlobalPartnership for Sustainable Development
Message from the ChairmanAbout This ReportGlance at AVDESG Management
Standardizing Governance andConsolidating Foundations
Low-carbon Operatiofor A Green Future
Taking Responsibility andEnsuring Steady Development
Respecting Talents and Professionals,and Acting in Good Faith
Annex
11 12
The Company always places the expectations and demands of stakeholders in an important position. During the reporting period,the Company continuously communicated with stakeholders, by means such as questionnaire surveys and field interviews tounderstand and respond to stakeholders' concerns and demands. The concerns and demands of stakeholders were consideredimportant factors in the decision-making process, helping the Company continuously improve the management of sustainabledevelopment efforts and achieve win-win cooperation.
Communication with Stakeholders
Corporate governanceCompliant operationBusiness ethicsEconomic performanceR&D and innovation
General Meeting of Shareholders
Public disclosureHotlines for investorsirm.cninfo.com.cnSurveys on specific targetsPerformance briefings and othercommunication activities
Shareholders/Investors
Salary and welfareTraining and developmentOccupational health and safetyDemocratic communication
Employee satisfaction surveys
Employee activitiesPerformance assessments and promotions
Employees’ CongressOccupational health management
Employees
Responsible supply chainInformation security and privacy protection
Product quality and safetyBusiness ethics
Supplier audit reportsPurchasing & quality agreementsRoutine visits and communication with
suppliers
Suppliers
Product quality and safetyResponsible supply chainProtection of customers' rights and interests
Responsible marketingInformation security and privacy protection
Customer satisfaction surveysCustomer complaint channelsCustomer service hotline
Customers
Lawful tax paymentCompliant operationSupport for green andlow-carbon initiatives
Tax returnsOn-site inspectionsVerification of test reportsPublic disclosure
Government and regulatory agencies
Engagement in social welfareEnhanced environmental protection
Reduction of pollution emissions
Volunteer service activities
Public disclosure
Communities
Stakeholders
Issues of Concern
Communication Methods and Channels
Message from the ChairmanAbout This ReportGlance at AVDESG Management
Standardizing Governance andConsolidating Foundations
Low-carbon Operatiofor A Green Future
Taking Responsibility andEnsuring Steady Development
Respecting Talents and Professionals,and Acting in Good Faith
Annex
13 14
Every year, AVD continuously updates and improves the process for identifying and evaluating the importance of ESG issues.Through comprehensive assessments, the Company determines the importance of ESG issues, and fully integrates them into dailyoperation and management. This enhances the sustainable development management and practices across the Company. Weprioritize ESG rating indicators in the capital market. Taking account of national policies, industry trends, and company strategies,we analyze our own sustainable development challenges, and establish a mechanism for identifying substantive issues. Every year,we determine important issues by analyzing and researching internal and external stakeholders.
Analysis of Substantive Issues
To enhance ESG management capabilities and governance awareness,AVD actively provides ESG-themed training, incorporating ESG-relatedknowledge into training for the management, business backbones, andgrassroots employees. During the reporting period, we organizedmeetings to discuss newly formulated ESG policies, substantial issueassessment, and other important ESG matters. Additionally, weprovided ESG training to all employees to improve their understandingof the Company’s ESG management strategy and related work.
Enhancement of ESGGovernance Awareness
In light of national policies, company development, disclosure standards, capitalmarket and peer benchmarking, we have recognized and sorted out importantissues for the current year in multiple dimensions and formed a comprehensivelibrary of important issues.
Identification andEstablishment of an Issue
Library
Based on assessment outcomes and daily communications with stakeholders, weinvited internal and external stakeholders to participate in assessing the importanceof ESG issues through interviews and online survey questionnaires. We collected atotal of 1,004 questionnaires from government and regulatory agencies,shareholders, customers, employees, agents, suppliers, and communities, and fullyunderstood the expectations, demands and opinions of stockholders on ESGinitiatives.Communication
with Stakeholders
Taking into account the opinions of the management and the requirements ofstakeholders, the Company developed a matrix of substantive issues based on their“Importance to Company Development” and “Importance to Stakeholders”, andreviewed the screening and analysis results through the management and externalexperts.Analysis and Reviewof Important Issues
The Company formulated and implemented actions to address important issues, andprovided crucial responses and disclosures in this report.Response and Disclosureof Important Issues
Importance to Company Development
Importance to Stakeholders
Actions againstClimate Change
Contribution to Communities
ESG GovernanceCompliant DisclosureSupply Chain Systems
EnergyManagementWater resourcemanagement
Training and development
Material and Waste Management
Waste Gas Management
Wastewater Management
Protection of customers' rightsand interests
Occupational healthand safetyBusiness ethics
R&D and innovationEnvironmentalManagement
Risk Management
Labor Relations ManagementProduct ResponsibilityInformation security andprivacy protection
Identification Process of Substantive Issues
Communication Meeting ofESG Special Working Group
Matrix of Important Issues
Message from the ChairmanAbout This ReportGlance at AVDESG Management
Standardizing Governance andConsolidating Foundations
Low-carbon Operatiofor A Green Future
Taking Responsibility andEnsuring Steady Development
Respecting Talents and Professionals,and Acting in Good Faith
Annex
15 16
StandardizingGovernance andConsolidatingFoundations
SDGs Responded in this Chapter
Key Achievements in 2023
Key ESG Issues Covered in this Chapter
Percentage of Female Directors,Supervisors and Senior Executives:
Percentage of Independent Directorsin the Board of Directors:
Organization and Reception of Investorsfor Research and Exchange Purposes:
times%
(in RMB 10,000)
Reply Rate toInvestors’ Online Questions:
100.00
Dividend Plan for 2023:
4,750.08
Number of External InformationDisclosure Announcements:
Governance through the GeneralMeeting of Shareholders, Board ofDirectors, and Board of Supervisors
Investor Relations ManagementRisk ManagementBusiness Ethics
17 18
A sound governance structure is the cornerstone and important guarantee for the sustainable development of an enterprise. TheCompany has implemented a modern corporate governance framework comprising the General Meeting of Shareholders, theBoard of Directors, the Board of Supervisors, and the Management, and clearly defined their respective responsibilities andauthorities in decision-making, execution, and corporate oversight. This framework helps the Company establish a robustgovernance mechanism with defined responsibilities and standardized operations, and ensures each governance entity carries outits duties in an orderly manner, thereby ensuring the effective and compliant operation of the Company.
In strict compliance with the requirements of the >"?;7,L$=7A$".$/0*$R*";+*S-$<*;'K+(3$".$>0(,7, the 1*3'9(/(*-$=7A$".$/0*$R*";+*S-$<*;'K+(3$".$>0(,7, and the <'+*-$."9$/0*$&*,*97+$B**/(,8$".$1079*0"+)*9-$".$=(-/*)$>"?;7,(*-, and other applicable laws and regulations, theCompany has formulated a series of internal control regulations such as /0*$T9/(3+*-$".$T--"3(7/(", and the <'+*-$".$R9"3*)'9*$".$/0*$&*,*97+$B**/(,8$".$1079*0"+)*9-, clearly standardizing the organization, convocation and voting procedures of the General Meeting ofShareholders. We ensure that all shareholders enjoy equal status and fully guarantee the voice of minority shareholders in thedeliberation process of each proposal.
1On December 13, 2023, the Board of Directors of Shenzhen AV-Display Co., Ltd. held a meeting to deliberate and approve theadjustment of the “Strategy Committee” to the “Strategy and ESGESG Committee”.
Governance Framework
General Meeting of Shareholders
The Board of Directors is the decision-making body of the Company and answers to the General Meeting of Shareholders. Thedirectors of the Company conscientiously perform their duties and make decisions in accordance with applicable laws andregulations, as well as the <'+*-$".$R9"3*)'9*$".$/0*$E"79)$".$I(9*3/"9-. The Board of Directors sets up four specialized committees,namely the Audit Committee, the Remuneration and Assessment Committee, the Strategy and ESG Committee1, and theNomination Committee. The members of each committee perform their duties in accordance with applicable working rules, andprovide full support to the professional and efficient deliberation and decision-making of the Board of Directors.
Board of Directors
Key performance
Key performance
During the reporting period, the Company held3 General Meetings of Shareholders and deliberated 18 proposals.
During the reporting period, the Board of Directors held 6 meetings and deliberated 33 proposals, with an attendancerate of 100.00%. The special committees convened 12 meetings and deliberated 27 proposals. In particular,the Audit Committee convened 6 meetings and deliberated 18 proposals. The Remuneration and Assessment Committeeconvened 1 meeting and deliberated 3 proposals. The Strategy and ESG Committee convened 3 meetings and deliberated
4 proposals. The Nomination Committee convened 2 meetings and deliberated 2 proposals.
General Meeting of Shareholders
Board of Supervisors
Board Secretary’s
OfficeSecurities Affairs
Department
Beijing AVDAVD (Hong Kong)Ganzhou AVDAVD (Thailand)
Deputy GeneralManager
Assistant to DeputyGeneral Manager
General Manager’sOffice
Board of Directors
ManagementRepresentative
Assistant toGeneral Manager
Organizational Structure Chart
Strategy andESG Committee
Nomination Committee
Audit CommitteeAudit Department
Procurement Center
Touch Display BU
MonochromeDisplay BU
Quality CenterFinance Center
Sales Center
Management Center
Technology Center
E-Paper BU
IOT BU
ESG SpecialWorking GroupStrategic DevelopmentDepartment
Remuneration andAssessment Committee
Message from the ChairmanAbout This ReportGlance at AVDESG Management
Standardizing Governance andConsolidating Foundations
Low-carbon Operatiofor A Green Future
Taking Responsibility andEnsuring Steady Development
Respecting Talents and Professionals,and Acting in Good Faith
Annex
19 20
The Company emphasizes the independence of the Board of Directors and has formulated the 1L-/*?$".$P"94$".$N,)*;*,)*,/$I(9*3/"9-to give full play to the positive role of independent directors in the standardized operations of the Company. When planning thecomposition of the Board of Directors, the Company gives full consideration to the diversity of members in the Board of Directors,including but not limited to gender, age, culture, educational background, professional experience, and skills. The current Board ofDirectors of the Company consists of experts from fields such as applied chemistry, fine chemicals, environmental monitoring,precision electronics, electronic physics and devices, jurisprudence, and financial management, who have rich work experience anddiverse professional backgrounds. They are utilizing their knowledge to provide support for the decision-making of the Company.Key performance
Key performance
Independence and Diversity
Investor RelationsManagement
In the principles of fairness, impartiality and openness to all shareholders, and in compliance with the >"?;7,L$=7A$".$/0*$R*";+*S-$<*;'K+(3$".$>0(,7, the 1*3'9(/(*-$=7A$".$/0*$R*";+*S-$<*;'K+(3$".$>0(,7, the B*7-'9*-$."9$/0*$T)?(,(-/97/(",$".$N,."9?7/(",$I(-3+"-'9*$KL$=(-/*)$>"?;7,(*- and other applicable laws and regulations, AVD has formulated internal rules and regulations such as the N,."9?7/(",$I(-3+"-'9*$B7,78*?*,/$1L-/*?$and the$N,/*9,7+$<*;"9/(,8$1L-/*?$."9$1(8,(.(37,/$N,."9?7/(",, clearly defining the scope and content ofsignificant information and ensuring the fairness of information disclosure. The Company has designated the Secretary of theBoard of Directors as the main contact person for the information disclosure, and clarified the responsible person for the reportingof significant information in each related department. Meanwhile, recognizing the importance of maintaining the confidentiality ofundisclosed information, we foster employees’ awareness of compliance, reduce the risk of information disclosure and preventinsider trading by strengthening publicity and training initiatives and enhancing daily management efforts.Distribution ofDirectors by Type
AVD prioritizes communication with investors. In strict compliance with the requirements of regulatory authorities, we haveestablished the N,Q*-/"9$<*+7/(",-$B7,78*?*,/$1L-/*? to standardize investor reception procedures. We address the concerns ofinvestors and ensure effective communication with investors by various means, including replying by calls, hosting online collectivereceptions on designated days, holding performance briefing sessions, sending emails to IR mailboxes.
Communication with Investors
During the reporting period, the Company issued a total of 116 announcements and related documents.
In 2023, the Company communicated investors via4 initiatives, including holding 1 performance briefing session, hosting1 online collective reception, receiving 2 offline surveys of institutions, and provide 248 replies on irm.cninfo.com.cn.
Distribution ofDirectors by Gender
Non-Independent Directors 57.14%Independent Directors 42.86%Male Directors 85.71%Female Directors 14.29%
The Board of Supervisors is the highest supervisory body of the Company. AVD’s Board of Supervisors consists of 3 supervisors,including 1 employees’ representative supervisor and 2 non-employees' representative supervisors. All supervisors of the Companyconscientiously fulfill their duties in accordance with the requirements of the T9/(3+*-$".$T--"3(7/(",, the <'+*-$".$R9"3*)'9*$".$/0*$E"79)$".$1';*9Q(-"9-, etc. They effectively supervise the legality and compliance of material matters, financial conditions, and theperformance of directors and officers at AVD, and safeguard the legitimate rights and interests of all shareholders.
Board of Supervisors
During the reporting period, the Company convened a total of 6 meetings of the Board of Supervisors to deliberate on 22proposals.
In 2023, AVD’s Board of Directors comprised 7 directors, including 3 independent directors and 1 female director.
Information Disclosure
Key performance
Key performance
Message from the ChairmanAbout This ReportGlance at AVDESG Management
Standardizing Governance andConsolidating Foundations
Low-carbon Operatiofor A Green Future
Taking Responsibility andEnsuring Steady Development
Respecting Talents and Professionals,and Acting in Good Faith
Annex
21 22
The Company endeavors to deliver returns to shareholders, and diligently follows the profit distribution provisions outlined in theArticles of Association. We have devised the Three-Year (2023-2025) Shareholder Return Plan of Shenzhen AV-Display Co., Ltd. toclarify the rationality of AVD’s return on investment for new and old shareholders. This plan increases the transparency andoperability of our profit distribution decisions, and facilitates shareholders to supervise the operations and profit distribution of theCompany.
In the process of making major operating decisions, the Company fully considers the legitimate rights and interests of creditors toensure financial stability and asset/fund safety, effectively protecting the legitimate rights and interests of creditors andmaintaining our good reputation.
Key Performance202320222021
0.40
4,800.00
30.14
0.40
4,750.08
38.84
0.60
4,800.00
43.77
Cash Dividend per Share
(RMB)Total Cash Dividend Distributed
(in RMB 10,000)Proportion to Net ProfitAttributable toShareholders of the ListedCompany in ConsolidatedFinancial Statements (%)
Returns to Shareholders
Protection of Creditors’ Rights and Interests
Protection of the Rights andInterests of Shareholders and Creditors
Cash Dividend Distributed by the Company in the Past Three Years
Since its listing on the GEM Board, the Company has consistently distributed cash dividends annually. The cumulative cashdividends distributed amount to RMB 14,350.08 (in RMB 10,000), with a cumulative dividend distribution rate of
36.68%.
Key performance
Message from the ChairmanAbout This ReportGlance at AVDESG Management
Standardizing Governance andConsolidating Foundations
Low-carbon Operatiofor A Green Future
Taking Responsibility andEnsuring Steady Development
Respecting Talents and Professionals,and Acting in Good Faith
Annex
23 24
Effective risk management and internal control systems is an important guarantee for AVD to realize sustainable development.Based on our realities, we have established the N,/*9,7+$>",/9"+$B7,78*?*,/$1L-/*? in accordance with the >"?;7,L$=7A$".$/0*$R*";+*S-$<*;'K+(3$".$>0(,7U$the 1*3'9(/(*-$=7A$".$/0*$R*";+*S-$<*;'K+(3$".$>0(,7, the &"Q*9,7,3*$>")*$."9$=(-/*)$>"?;7,(*-, and other applicable lawsand regulations. The system covers all operation stages of the Company, including environmental control, business control,accounting system control, information system control, information transmission control, and internal audit control.We have established an internal control organization system under the ultimate responsibility of the Board of Directors and thesupervision of the Board of Supervisors, wherein functional departments and subordinate organizations bear the primaryresponsibility. The system enables the Board of Directors and internal management to continuously improve and strengthenfunctions such as risk identification, monitoring and prevention, and inspect and assess whether the internal control systemestablished by the Company is operating effectively. In conjunction with AVD’s$N,/*9,7+$>",/9"+$1L-/*? and assessment methods, weconducted a self-evaluation of internal control effectiveness as of December 31, 2023 on the basis of daily and special supervisionof internal control. The Board of Directors believes the Company has maintained effective internal control in all material aspectsof financial reporting in accordance with the requirements of our internal control management system and other applicableregulations, and no significant deficiencies or material weaknesses in internal control over non-financial reporting have been found.We regularly identify, analyze, and evaluate internal and external factors that may lead to the failure in achieving internal controlobjectives in business activities, to determine the impact and likelihood of these factors, thereby reasonably establishing strategiesfor addressing risks. Furthermore, based on the risk assessment results, we ensure that relevant directives have been executed bytaking corresponding control measures, including approval, verification, adjustment, review, regular validation, record reconciliation,function segregation, safeguarding asset security, and comparison with plans, budgets and previous results. These measures helpto keep risks within an acceptable scope.AVD continues to strengthen risk management training to further solidify risk management awareness. We provide special trainingsessions on a regular or irregular basis, such as training for chief financial officers of listed companies, to get a full understandingof the latest changes in enterprise accounting standards, the latest regulatory policies and trends regarding listed companies, aswell as risk points in the disclosure and regulatory review of annual financial information. This enhances our risk management andresponse capabilities, and supports the steady development of the Company.
Risk ManagementBusiness Ethics
In compliance with the >9(?(,7+$=7A$".$/0*$R*";+*S-$<*;'K+(3$".$>0(,7, the R'K+(3$1*3'9(/L$T)?(,(-/97/(",$R',(-0?*,/-$=7A$".$/0*$R*";+*S-$<*;'K+(3$".$>0(,7 and other application laws and regulations, the Company abides by and supports the ten principles of the UnitedNations Global Compact, and opposes all forms of corruption, including extortion, blackmail, and bribery. We have formulatedsystems such as the >")*$".$5/0(3-$B7,78*?*,/U$the$@;*97/(",7+$&'()*+(,*-$."9$<(-4$5Q7+'7/(",$".$=7K"9$5/0(3-U$and the TVI$>")*$".$>",)'3/,which provide specific provisions on anti-corruption, anti-bribery, anti-unfair competition, reporting principles, etc.The Company has set up a Code of Conduct Working Group and an Office of the Code of Conduct Working Group, which consistsof the General Manager, Deputy General Manager, the heads of first-level departments such as the Securities Affairs Department,Audit Department, and General Manager’s Office. At the same time, all departments have appointed respective supervisors forintegrity and self-discipline to comprehensively supervise and promote the integrity efforts of the Company.
Strengthening Integrity ManagementInternal Control
Management of Related Transactions
AVD regularly organizes special audit and supervision of business activities and promptly identifies integrity risks. We focus oninspecting key areas such as sales and collection, procurement and payment, production, research and development, inventorymanagement, fixed asset management, and fund management, with the aim of fostering a culture of transparency within theCompany. To further strengthen the integrity and self-discipline of the Company, we organize employees to sign the >"??(/?*,/$/"$B7(,/7(,$N,/*89(/L$(,$/0*(9$@O(3(7+$I'/(*-$7,)$P"94, with a signing rate of 100.00%. Throughout the reporting period, the Company didnot have any major violations of integrity management, any incidents of corruption, or any litigation involving violations of businessethics worldwide.
Prevention and Control
of Corruption Risks
The Company endeavors to open channels for internal monitoring, reporting, and complaints. We encourage employees, suppliers,customers, and other stakeholders to report, in an open or anonymous manner, any violation of laws, disciplines, or businessethics-related regulations in the Company, through our official website, consultation and complaint hotlines, and email addresses.At the same time, the Company has established a whistle-blower protection mechanism to protect the legitimate rights andinterests of whistle-blowers. We are firmly committed to not disclosing the personal information of whistle-blowers to prevent anypossibility of retaliation.
Whistle-blowing Management
To standardize the decision-making procedures for related-party transactions between the Company and its holding subsidiariesand related parties, prevent related-party transactions from harming the interests of the Company and minority shareholders, theCompany has formulated the I*3(-(",:B74(,8$1L-/*?$."9$<*+7/*)$W97,-73/(",- and the 1L-/*?$."9$R9*Q*,/(,8$/0*$56;+"(/7/(",$".$X',)-$KL$1'K-/7,/(7+$1079*0"+)*9-$7,)$@/0*9$<*+7/*)$R79/(*- to specify the review and disclosure procedures, pricing principles and other aspectsof related-party transactions, in accordance with the >"?;7,L$=7A$".$/0*$R*";+*S-$<*;'K+(3$".$>0(,7, the T9/(3+*-$".$T--"3(7/(", of theCompany and other applicable regulations. The Company strictly implements the mechanism of avoiding conflicts of interest. Whendeliberating on related-party transactions, related directors and shareholders must abstain from voting. We always adhere to theprinciples of fairness, impartiality, and openness in transactions with all related parties, ensuring that such related-partytransactions do not harm the interests of the Company and shareholders thereof.
Hotline:
0755-86106838
Email:
qiutw@av-display.comChannels
Message from the ChairmanAbout This ReportGlance at AVDESG Management
Standardizing Governance andConsolidating Foundations
Low-carbon Operatiofor A Green Future
Taking Responsibility andEnsuring Steady Development
Respecting Talents and Professionals,and Acting in Good Faith
Annex
25 26
AVD has always attached great importance to the integrity training for employees and continuously promoted the construction ofa culture of integrity within the Company. The Human Resources Department and related departments of the Company regularlyprovide training on the Code of Conduct, utilizing online learning platforms. They also assess the training outcomes throughtargeted tests to ensure that employees have an in-depth understanding of the code of conduct and guidelines of the Company.
Fostering a Culture of Integrity
AVD strictly abides by applicable laws and regulations, respects the principle of market competition, strengthens anti-monopolyand anti-unfair competition, and supports and maintains a fair and free market competition environment. The Companyconsistently provides training on laws and regulations, creating a healthy and transparent operating atmosphere and a goodbusiness competition environment.
Anti-monopoly andAnti-unfair Competition
AVD Provided Training on Integrity and Self-Discipline
CaseIn August 2023, the Company organized training on integrity for departments and centers to enhance their awareness ofinternal integrity and self-discipline. The training covered laws and regulations on integrity, self-discipline and internal rulesof the Company, and clarified the requirements of integrity and self-discipline. It reinforced employees’ awareness ofintegrity and self-discipline, and enabled the Company to maintain standardized business operations and a good corporateimage.
AVD Provided Training to Promote the Implementation of the !"#$%&'()*+,(-$.(/01++2CaseDuring the reporting period, in order to strengthen theprofessional quality and standardized work behavior ofemployees, the Company organized a special training onpromoting the implementation of the TVI$E*07Q("97+$G7,)K""4. The training aimed to enable all employees todeeply understand and master the specific requirementsof the handbook regarding work norms and professionalethics. Through case analysis, interactive discussions andother forms, the company aimed to help employeesinternalize the contents of the handbook and apply themin their daily work. This was done in order to promote theconstruction of an honest and upright culturalenvironment, establish a good corporate image, andjointly promote the healthy development of the Company.
During the reporting period, the Company provided 1 training on anti-corruption and integrity for 10 participants, and theaverage duration of the training on anti-corruption and integrity was 1.50 hours.
AVD Provided Training on the Measures for Anti-Monopoly Compliance ManagementCaseIn October 2023, to strengthen the awareness andexecution capabilities of all employees regardinganti-monopoly regulations, the Company providedtraining on the measures for anti-monopoly compliancemanagement. The training included an overview ofanti-monopoly laws, an analysis of relevant cases, andan introduction to anti-monopoly compliance measures.
Key performance
Message from the ChairmanAbout This ReportGlance at AVDESG Management
Standardizing Governance andConsolidating Foundations
Low-carbon Operatiofor A Green Future
Taking Responsibility andEnsuring Steady Development
Respecting Talents and Professionals,and Acting in Good Faith
Annex
27 28
Party Building Work
The Party branch of the Company strengthened the ideological education of party members through a range of party buildingactivities and themed education sessions, including learning sessions on party history, aiming at continuously enhancing its politicalleadership and organizational strength and effectively guiding high-quality enterprise development with high-quality party buildingwork.To thoroughly implement Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and the spirit of the 20thNational Congress of CPC, the Party branch of the Company adheres to standardizing organizational construction, normalizesideological education, deepens corporate management, and enriches party building activities. Party members attend party branchmeetings, sing the national anthem together, and participate in learning under the Three Meetings and One Lecture system, reviewthe party admission oath, and strengthen ideals and beliefs, laying a solid ideological foundation. During the reporting period, theParty branch of the Company actively promoted the ideological, organizational and working-style improvement of its Partymembers and drove the progress and growth of employees, laying a solid foundation for fulfilling various tasks of the Company.
AVD Organized Employees to Participate in Themed Party Day Events,and Created a Distinctive Corporate Culture
CaseIn 2023, the Company organized employees to participate in the themed party day events of the two new partybranches in Yuanshan Street and visited the Dongjiang Column Memorial Hall for learning and visiting. This activity notonly made the employees more deeply aware of the glorious history of the Party, but also inspired them to pursue ahigher level of corporate mission and responsibility.
High-quality Party Building Leads Listed Enterprises in Longgang to Embark on a New JourneyCaseIn August 2023, the unveiling ceremony of the Party Committee of Listed Enterprises in Longgang District was held inTian'an Yungu Industrial Park, Bantian Street. The committee was established by Longgang District with 13 listedenterprises. In November 2023, AVD attended the first party member congress of the Party Committee of ListedEnterprises in Longgang District and successfully elected a complete leading body with “two committees”. Before thecongress, all party members of the committee visited the Dongjiang Chaohong Cultural Museum located in the servicecenter, reflecting on the arduous exploration and unremitting struggle of the Communist Party of China for the interestsof the people.
The Party branch provided training under the Three Meetings and One Lecture system
Message from the ChairmanAbout This ReportGlance at AVDESG Management
Standardizing Governance andConsolidating Foundations
Low-carbon Operatiofor A Green Future
Taking Responsibility andEnsuring Steady Development
Respecting Talents and Professionals,and Acting in Good Faith
Annex
29 30
Low-carbon Operationfor A Green Future
SDGs Responded in this Chapter
Key Achievements in 2023
Key ESG Issues Covered in this Chapter
Environmental ManagementEnergy ManagementWater Resources ManagementManagement of Wastewater, Waste Gases and Residues
Actions against Climate Change
Investment in EnvironmentalProtection Facilities:
RMB
169.00
Environmental EmergencyDrills Conducted:
times(in RMB 10,000)
Power Generationfrom Renewable Energy:
kWh261,775
Compliant Disposal Rateof Hazardous Waste:
%
100.00
31 32
We have always adhered to the ecological and environmental protection principle that “lucid waters and lush mountains areinvaluable assets” and the responsibility policy of “improving the environment, conserving resources, reducing hazards, andproducing in a green way”, and regarded the protection of the environment and the conservation of resources as our ownresponsibility. We will establish a sound environmental management system to lay an important foundation for the greendevelopment of the Company. Additionally, we will formulate and strictly implement environmental management systems,continuously improve environmental management levels, and contribute to environmental protection and ecological balance.
AVD strictly implements national environmental protection policies and regulations, and adheres to the responsibility policy of“improving the environment, conserving resources, reducing hazards, and producing in a green way”. Focusing on greendevelopment, the Company has formulated systems procedures such as &'()*+(,*-$."9$5,Q(9",?*,/7+$R9"/*3/(",$B7,78*?*,/ and5,Q(9",?*,/7+$R"++'/7,/$5?(--(",$1/7,)79), to ensure the efficient operation of the environmental management system. During thereporting period, the Company has obtained ISO 14001:2015 certification for its environmental management system. The Companyhas set up the Environmental Protection Office to coordinate the management and handling of environmental protection-relatedmatters, and established environmental protection-related KPIs for regular functional assessment of relevant responsible persons.
Undertaking daily liaison, contact, data collection anddissemination, internal and external coordination andarrangements with government environmentaldepartments or agencies; conducting daily spotinspections on environmental system-related facilities,operations, records, storage, and data; demandingrectification and follow-up if any problems are found, andinforming the leads of divisions of the rewards orpublishment of relevant responsible persons according tothe seriousness of damages; leading the publicity andtraining of environmental protection events, the receipt,renewal or replacement of environmental certificationcertificates, and the organization of environmentalemergency rescue drills; assisting in the documentationand management of environmental management systemcertification; promptly conveying and updating therequirements of government environmental agencies, andupdating ledgers and records (both dynamic and static)related to environmental protection efforts.
Responsible for operations ensuring the scheduled andquantitative emission of wastewater and waste gas duringproduction and machine-washing processes on theproduction line, and promptly notifying the EquipmentDepartment of any abnormal emission.
Undertaking the daily operation, maintenance, safetymanagement, troubleshooting, renovation, upgrading,environmental operation data recording, process waterquality testing, problem feedback, operation documentpreparation and modification for industrial wastewater andwaste gas facilities, and cooperating the EnvironmentalProtection Office in organizing third-party testing, mutualinspection, verification, environmental drills, etc.
Providing information on chemical material composition,wastewater types, main components, production quantities,introducing new technologies and new products involvingmaterials with industrial wastewater and waste gas emissions,and participating in environmental safety assessments, etc.
Undertaking the daily operation, maintenance and repair ofdomestic wastewater and waste gas facilities, and thetransfer of domestic waste and general recycling wastes;signing transfer agreements, and quickly notifyinginformation on visits by external inspectors, etc.
Construction of EnvironmentalProtection System
Visits by External Regulatory AgenciesCaseIn May 2023, Longgang Environmental Protection Bureau conducted a spot inspection at AVD to check relevantdocuments and sites, and found no abnormality. During the reporting period, AVD received a total of 16 inspectionssuch as notified inspection, spot inspection, double random inspections (random selection of both inspectors andinspection targets), and double random re-inspections from a number of external regulators, including the EnforcementSection of Yuanshan Street and the Environmental Monitoring Association. No abnormality was found during theseinspections.In 2023, Ganzhou AVD received 23 inspections from relevant regulators (mainly including local EnvironmentalProtection Bureau, Emergency Management Bureau, Fire Brigade, Market Supervision Bureau, etc.). A total of 6 itemsrequiring general rectification by these regulators have been rectified in accordance with the requirements.
Enhancement ofEnvironmental Management
Equipment Department
Process Department
Administration DepartmentManufacturing Department
Environmental Protection Office
AVD attaches great importance to the management of environmental risks. The Company regularly inspects and supervises thedaily operation of each set of its environmental protection facilities, and ensures that the pollutants discharged from each factorycomply with the requirements of the EIA approval, emission standards, and discharge permits. These efforts ensure legal andcompliant discharges and enhance the awareness of environmental protection. The Company has formulated the &'()*+(,*-$."9$N)*,/(.(37/(",$7,)$5Q7+'7/(",$".$5,Q(9",?*,/7+$X73/"9-. Through regular internal environmental inspections, commissioned tests bythird-party organizations, and special environmental inspections by external regulatory agencies, the Company identifies andevaluates its environmental factors, and controls the identified important environmental factors, to rectify adverse environmentalhazards in a timely manner. During the reporting period, the Company did not incur any environmental penalties and violations.
Management of Environmental Risks
AVD Environmental Management
System Certification Certificate
Ganzhou AVD Environmental Management
System Certification Certificate
Message from the ChairmanAbout This ReportGlance at AVDESG Management
Standardizing Governance andConsolidating Foundations
Low-carbon Operatiofor A Green Future
Taking Responsibility andEnsuring Steady Development
Respecting Talents and Professionals,and Acting in Good Faith
Annex
33 34
The Environmental Protection Office has formulated the 5?*98*,3L$<*-;",-*$R+7,$."9$1'))*,$5,Q(9",?*,/7+$N,3()*,/-$(“EmergencyResponse Plan”), which covers things like responses to actual emergencies and accidents, measures to reduce the consequencesof emergencies, measures to reduce the consequences of emergencies, and actions to prevent environmental emergencies andaccidents. The Emergency Response Plan aims to standardize the requirements for handling potential environmental emergenciesor potential accidents. The Company conducts a detailed feasibility assessment of the items identified and established in theEmergency Response Plan and includes them in its annual plan for execution of drills. To ensure the effectiveness of the drills, weinvite the participation of personnel from relevant departments. After the drills are completed, we will comprehensively summarizeproblems and results during the execution process and assess the feasibility of the emergency plan. If necessary, we will updatethe Emergency Response Plan to ensure that it complies with the Company’s latest environmental protection standards and bestpractices, which will help improve the Company’s resilience against environmental emergencies and ensure the timely and effectivehandling of emergencies.
During the reporting period, the Company conducted a total of 3 environmental emergency drills.
Emergency Drill for Wastewater Emission Concentration Exceeding the Limits at Discharge PortsCaseIn November 2023, the Company conducted an emergency drillfor wastewater emission concentration exceeding the limits atdischarge ports, and a total of 9 relevant personnel participatedin the drill. Through the emergency drill, the Company assessedits ability to respond to emergencies, evaluated the responsespeed of relevant personnel, assessed their mastery ofexpertise related to environmental emergencies, and enhancedtheir awareness of environmental emergency safety.
Establishment of EnvironmentalProtection Goals
AVD attaches great importance to the production of green andenvironment-friendly products, actively conducts environmental technologyinnovation, and actively conducts innovations in environmental technologiesand the R&D of green products. During the reporting period, the Companydeveloped green display products, such as reflective/semi-transparent TFTmodules, and extensively applied and promoted them in outdoor andsemi-outdoor scenarios such as vending machines and walkie-talkies.In addition, with the acceleration of economic digitization, e-paper (a new typeof green and low-carbon material) can significantly reduce environmentalpollution. AVD is actively promoting the research and development of “e-paperfilms and modules”. During the reporting period, the Company continued toincrease its research and development efforts and trial production investmentin the e-paper project. It has completed the initial construction of the e-papermaterial research and development laboratory, film coating workshop, andautomated coating production line. Teams for the production, process, andquality control of e-paper films and modules have been established, advancingthe trial production of e-paper films and improving yield rates. Standard modulesamples have been developed and tested, facilitating promotion to small-scalecustomers and sample testing. As of the disclosure date of this report, theCompany has completed the procurement of production equipment for e-paperfilms and modules, and is in the stage of equipment installation and debugging.
AVD actively promotes the construction of green corporate culture, insists on advocating employees to perform green behaviors inthe workplace, guides all employees to comprehensively and deeply practice the concept of green office and green lifestyle,creates a good trend of energy conservation, rational consumption, and green healthy living, and contributes to the constructionof a green home. The Company constantly publicizes the principles of energy conservation and consumption reduction toemployees, prompting them to take the initiative to turn off lights and other office equipment when leaving the workplace andmeeting rooms. We have formulated the Guidelines for Office Management, advocating employees to adopt actions such as savingelectricity and setting the air conditioning temperature not lower than 26 °C. This enhances the environmental protectionawareness of all employees.To thoroughly promote environmental awareness and implement environmental actions, the Company continuously providestraining on environmental protection for all employees during the establishment of the environmental management system. Weorganize environmental training activities to introduce environmental laws and regulations in the past three years to employees, sothat the concept of “green and low carbon” is deeply ingrained in the hearts of all employees. Our training covers the requirementsof applicable laws and regulations, basic knowledge of environmental protection, as well as expertise and special skills required forimportant positions. This ensures that participants have a full understanding of environmental management-related knowledge. Thetraining covered all management and ordinary employees from top to bottom within the Company.
Research and Developmentof Green Technologies
Promotion of Environmental Awareness
During the reporting period, the Company invested RMB 1,690,000.00 in environmental facilities and paid RMB5,922.00 in environmental protection-related taxes and fees.
ContentIndicator
100.00%
0 timesQualification Rate of Environmental Testing Data (Third Party)Times of Penalties for Non-Compliance Found in Verification by Government Agencies
Reflective TFT Modules
AVD’s Environmental Protection Goals in 2024
Key performance
Key performance
Message from the ChairmanAbout This ReportGlance at AVDESG Management
Standardizing Governance andConsolidating Foundations
Low-carbon Operatiofor A Green Future
Taking Responsibility andEnsuring Steady Development
Respecting Talents and Professionals,and Acting in Good Faith
Annex
35 36
Optimization ofResource Management
We actively assume responsibilities and consciously shoulder the historical mission of promoting green development. Wecontinuously promote the construction of a green manufacturing system, improve energy management and water resourcesmanagement systems, strengthen energy conservation and emission reduction, improve energy utilization efficiency, promotewater conservation, and contribute to pollution reduction and emission reduction.
Energy management is the key for enterprises to achieve operational carbon reduction and green development. To reasonably andeffectively use resources and minimize waste, the Company controls its resource and energy consumption by establishing theenergy management system and formulating the @;*97/(",7+$&'()*+(,*-$."9$>",/9"+$".$<*-"'93*$7,)$5,*98L$>",-'?;/(",$733"9)(,8$/"$/0*$5,*98L$B7,78*?*,/$1L-/*?$:$<*J'(9*?*,/-$A(/0$&'()7,3*$."9$Y-*. The Product Department, Planning and Material Control Department,Equipment Department and other departments cooperate and perform their respective duties to continuously promote the orderlyenergy management of the Company.
Energy Management System
The use of fossil fuels such as coal and natural gas results in the emission of a large amount of greenhouse gases into the atmosphere,leading to global warming. It is urgent for us to shift our energy structure to clean energy. In response to national policies and followingthe requirements of relevant industry standards and norms, the Company vigorously promotes the use of clean energy to further reducegreenhouse gas emissions. We prioritize energy conservation and emission reduction and vigorously take action for energy conservationand emission reduction. During the reporting period, we have increased equipment operating efficiency and reduced energyconsumption by using energy-saving equipment and upgrading and upgrading production processes.
Actions for Energy Conservation andEmission Reduction
Indicator2Unit202320222021
3,145.352,857.413,017.772,788.692,999.132,687.67Total Electricity Consumptionof FactoriesTotal Electricity Consumptionof Large-scale Manufacturing
10,000 kWh10,000 kWh
Energy Conservation and Consumption Reduction of Central Air Conditioning SystemCaseThe Company took measures for energy conservation andconsumption reduction, including increasing the operating efficiencyof air conditioning units and terminal cabinets, improving the coolingeffect affected by the aging of water collectors in the cooling systemof air conditioners, and enhancing the automatic switching control ofair conditioning systems and the air exhaust systems in workshops,etc. In 2023, the total power consumption of the central airconditioning system decreased by 580,000 kWh over that of 2022,including 510,000 kWh in the TP central air conditioning system, and70,000 kWh in the TFT central air conditioning system.The average COP energy efficiency ratio of the air conditioning unit inthe No. 1 plant of Ganzhou AVD was approximately 4.5. By replacing itwith Haier Magnetic Bearing Chiller Units, and conducting theenergy-saving transformation of cooling towers, and optimizing theintelligent group control management system of the central airconditioning system, AVD increased the energy efficiency ratio toabout 6.9. After the improvement project was put into operation in July2023, electricity consumption significantly decreased. The electricityconsumption in the Ganzhou factory during the Q3 peak perioddecreased by 840,000 kWh compared to the same period of theprevious year.
Power-saving of air conditioning system: Reducing power consumption by increasing thetemperatures of water freezers at stages and using fixed-frequency and adopting fixedfrequency and differential pressure frequency conversion for air-conditioning air cabinets;Power-saving of compressed air system: Saving electricity by adopting a "0" airconsumption adsorption dryer, increasing the end cache tank to stabilize the pressure ofair supply, and regularly (quarterly) checking the air tightness of pipelines in thecompressed air system.
Collecting relevant measured data toform documents for subsequentparameter setting when correspondingto environmental temperature, andregularly checking and addressing thebreakage, percolation, seepage andleakage in each area.
Collecting energyconsumption in variousareas of the entire factoryto monitor whether thereare abnormal fluctuations;
Performing inspections invarious areas of the factoryfrom time to time every weekand giving timely feedback tothe working group on energyconservation and consumptionreduction;
Organizing relevantdepartments to convenemeetings for energyconservation andconsumption reduction;
Promoting energy-savingawareness and postingenergy-saving signs.
Energy Conservation and Consumption Reduction of Compressed Air EquipmentCaseThe Company saves electricity by realizing the integrated operation control of air compressors, enabling automaticstart/stop of air pressure equipment, optimizing and adjusting air supply pressure of the compressed air system,transforming 1 fixed-frequency air compressor to variable-frequency operation, and organizing production lines toeliminate the high power-consumption static electricity bars and replacing them with energy-saving static electricity bar,etc. The total electricity consumption of the compressed air system in 2023 was reduced by 430,000 kWh compared withthat of 2022 on a year-on-year basis.
Power-saving MeasuresDocumentation Related toEnergy Conservation
Daily Inspection and Audit Management
2Electricity Consumption of Factories includes Electricity Consumption of Large-scale Manufacturing. The consolidated standard for electricity consumption includes ShenzhenAVD, Ganzhou AVD, and Ruidisheng. Ruidisheng was established in August 2022, therefore, the electricity consumption data for 2021 does not include Ruidisheng.
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Annex
37 38
Energy Improvement of Pre-laminating Machine for Water-based Adhesive Bonding
CaseIn the design of the machine at the ShenzhenIndustrial Base, each of the drug-washing tanksand the water-washing tanks was equipped withan independent pump, and there was excess flowwhen the drug-washing tank was not filled withdrugs, resulting in electricity waste. Uponevaluation, the spray pipes of the two tanks wereconnected, a switching valve was added, andthen only one pump was required, which saveselectricity 1.50 kWh per hour.
Photovoltaic Power GenerationCaseThe Company erected rooftopphotovoltaic power generationequipment to increase the use ofclean energy and further reducecarbon emissions. In 2023, the powergeneration of such solar photovoltaicequipment was 261,775 kWh.
power generation of solarphotovoltaic equipment261,775 kWh
AVD strictly follows applicable laws and regulations such as the P7/*9$=7A$".$/0*$R*";+*S-$<*;'K+(3$".$>0(,7, and continuously promotesthe comprehensive control of water resources. The Equipment Department prevents water waste by inspecting various equipmentand facilities daily and timely repairing equipment and facilities with breakage, percolation, seepage and leakage. The waterconsumed by the Company mainly comes from municipal water supply. During the reporting period, the Company continuouslystrengthened the whole-process water-saving management from water intake to water use and achieved the recycling of waterresources by realizing equipment transformation and increasing the recycling efficiency of reclaimed water.
Protection of Water Resources
ItemResult
The recycling efficiency of reclaimed water increased by 5.00%.
Tap water consumption decreased by 40.00%.The recycling efficiency of reclaimed water increased by 5.00%.
Conducting classified collection and treatment ofwastewater discharged from workshops to increasethe recycling efficiency of reclaimed waterIncreasing the supply efficiency of pure water with apure water systemImproving the reuse efficiency of reclaimed water
Data about Water Consumption
Water-saving Measures and Effects Thereof
Indicator2023
436,835
Industrial Water ConsumptionFire-fighting Water Consumption
Unit
m3m3
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Annex
39 40
Actions to Climate Change
In recent years, with the frequent occurrence of extreme weather events and the exacerbation of global climate risks, addressingclimate change has become a global consensus. We actively respond to the economic opportunities and challenges that climatechange may bring to the Company, integrate climate change response into the Company's management and operational practices,and consider reducing greenhouse gas emissions as an important part of our environmental management efforts. Additionally, weincorporate carbon management into the whole-lifecycle operation of the Company, and seek economic models to address climatechange risks.
To quantify and report the greenhouse gas emissions, the Company has formulated the B7,78*?*,/$R9"3*)'9*-$."9$/0*$Z'7,/(.(37/(",$7,)$<*;"9/(,8$".$&9**,0"'-*$&7-$5?(--(",-, to clarify the quantification and reporting scope of greenhouse gas emissions, thecategories for identifying and quantifying greenhouse gas emissions, the quantification and reporting methods and steps, the datacollection methods for quantification, and the calculation of emissions, etc. This ensures that the data and data sources forquantification and reporting of greenhouse gas emissions comply with the principles of relevance, consistency, completeness,transparency, and accuracy.The Company has established a GHG Management Team led by the Director of the Safety Committee, and convened alldepartments to form an informal organization for the quantification and reporting of GHG emissions. The Greenhouse GasManagement Team is responsible for drafting and maintaining the B7,78*?*,/$R9"3*)'9*-$."9$/0*$Z'7,/(.(37/(",$7,)$<*;"9/(,8$".$&9**,0"'-*$&7-$5?(--(",-, clarifying requirements for the data collection, statistical calculation, and reporting of greenhouse gasemission. It should organize the quantification of greenhouse gas emissions, prepare greenhouse gas quantification reports, applyfor third-party verification, and disclose greenhouse gas-related information to customers and other target users.
Approving quantification reports and related documents
Procedure and Organization
To standardize the requirements for greenhouse gas management in the Company, AVD conducts internal carbon emissioninvestigations, scientific statistical evaluations, and annual greenhouse gas verification for the previous year, and publicly releasesrelevant reports. Through mechanisms such as data mapping and tracking verification, the overall planning of greenhouse gasesand the implementation of emission reduction mechanisms are effectively implemented.In accordance with the requirements of standard SZDB/Z 69-2018, the Company has established procedures such as the I"3'?*,/$7,)$<*3"9)$B7,78*?*,/$R9"3*)'9*- and the I7/7$Z'7+(/L$B7,78*?*,/$R9"3*)'9*-, and conducted annual GHG footprint verificationunder the planned greenhouse gas management system and standard requirements. The Company invites third-party organizationsto conduct inspections on its carbon emissions. Through document review and on-site inspection, the Company ensures that theinformation and data regarding the greenhouse gas emission of AVD are verifiable and compliant with the standardization guidelineof Shenzhen City: SZDB/Z 69: &'()7,3*$."9$Z'7,/(.(37/(",$7,)$<*;"9/(,8$".$/0*$@987,(27/(",S-$&9**,0"'-*$&7-$5?(--(",-.In 2023, the Company completed the <*;"9/$",$/0*$V*9(.(37/(",$".$@987,(27/(",S$&9**,0"'-*$&7-$5?(--(",- for 2022. In 2024, based on theEmission-Factor Approach, we conducted preliminary calculations of the carbon emission data for 2023, and the carbon footprintverification for 2023 is underway3.
3If there are discrepancies or conflicts between thecarbon emission-related data in this report and that inthe 2023 Report on the Verification of Organization’ sGreenhouse Gas Emissions, the latter shall prevail.
Management of Carbon Emission
Uploading data to the systemand submitting raw data ofwater, electricity and energyconsumption of productionlines, etc.
Equipment Department |Head
Recording financial data ofpayments for emissionsources, collecting evidence,submitting forms, etc.
Finance Department |Head
Providing data on oil andgas consumption, as well asenergy consumption byadministrative affairs
AdministrationDepartment | Head
Identifying emission sources,selecting emission factors,auditing boundary changesand data consistency
System Department |Head
Safety Committee | Director
Preparing GHG quantification reports andconveying relevant information from governmentagenciesEnvironmental Protection Office |
Administrator
2022
30,00029,00028,00027,000
2023
Unit: tCO2eUnit: tCO2e
2022
2023
190.22
29,236.51
27,874.39
207.47
Scope 1 Emissions (Direct)Total Emission of Greenhouse Gases
2022
30,00029,00028,00027,000
2023
Unit: tCO2e
29,045.29
27,666.92
Scope 2 Emissions (Indirect)
Structure and Responsibilities ofthe Greenhouse Gas Management Team
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41 42
Reduction ofPollution EmissionsWe have formulated company-wide internal management procedures for wastewater, waste gas, plant noise and solid wastegenerated in the course of production and operation, including the 5?(--(",$1/7,)79)$".$5,Q(9",?*,/7+$R"++'/7,/-, the &'()*+(,*-$."9$@;*97/(",$7,)$B7(,/*,7,3*$".$X73(+(/(*-$."9$P7-/*A7/*9$5?(--(",, the &'()*+(,*-$."9$N,-;*3/(",$",$P7-/*A7/*9$5?(--(",U$/0*$&'()*+(,*-$."9$@;*97/(",$7,)$B7(,/*,7,3*$".$X73(+(/(*-$."9$P7-/*$&7-$5?(--(",, the R9"3*)'9*-$."9$>",/9"+$".$/0*$P7-/*A7/*9U$P7-/*$&7-*-U$<*-()'*-$7,)$!"(-*,the >0*34+(-/$."9$>+7--(.(37/(",$".$1"+()$P7-/*-, and the <'+*-$."9$",$/0*$B7,78*?*,/$".$I7,8*9"'-$P7-/*-. These efforts ensure the normaloperation of environmental protection facilities, the emission of wastewater and exhaust gas, and the compliant disposal of solidwastes.
AVD prioritizes wastewater management, establishes wastewater treatment systems during the production process, and introducesadvanced wastewater treatment equipment and technologies to achieve the compliant emission of wastewater. The EquipmentDepartment is responsible for the daily operation, inspection, maintenance, and troubleshooting of the system. The EnvironmentalProtection Office samples the discharged water from the wastewater station every day. If abnormalities are found, theEnvironmental Protection Office will immediately request the wastewater station to stop operations, and report the findings torelevant leaders for handling. The Company has set up dedicated sewage treatment facilities for post-production wastewater, andtreated production wastewater using physical, chemical, and biological treatment methods.In order to make the operators and inspectors of the wastewater system understand the operation status of the system andwhether the water quality discharged from the metering outlet meets the requirements of environmental protection, so as toensure the normal operation of the wastewater system, we have carried out wastewater monitoring and inspection. The EquipmentDepartment and Quality Control Center collect and analyze samples from wastewater systems and discharge ports, to checkwhether they meet emission standards.
Management of Wastewater
Chemical waste gases in the Company mainly come from volatile organic compounds, tin welding gases, and acidic and alkalinegases used in production workshops. Ordinary waste gases mainly include hot gases, water vapor, dust, and odors, as well as burntgas from the use of fuel in the canteen, oil fumes, waste gases from internal motor vehicles, etc.In accordance with applicable laws and regulations such as the =7A$".$/0*$R*";+*[-$<*;'K+(3$".$>0(,7$",$/0*$R9*Q*,/(",$7,)$>",/9"+$".$T/?"-;0*9(3$R"++'/(",, the N,/*897/*)$5?(--(",$1/7,)79)$".$T(9$R"++'/7,/- and applicable laws and regulations, we have established the&'()*+(,*-$."9$/0*$@;*97/(",$7,)$B7(,/*,7,3*$".$P7-/*$&7-$5?(--(",$X73(+(/(*- and built waste gas neutralization towers and organic wastegas purification towers to treat the waste gases generated by factories. We control the emissions of acidic and organic waste gasesgenerated by the factories to meet the requirements of applicable laws and regulations, and conduct regular monitoring tofacilitate timely and effective handling of abnormalities.The Equipment Department is responsible for the treatment of factory waste gas emission systems and the handling of abnormalsituations in waste gas emission systems and facilities. The Safety Office arranges third-party organizations to take samples andtest the waste gas emission outlets quarterly and issue testing reports. The Environmental Supervision Team inspects waste gasemission systems to determine whether they comply with daily operational requirements.
Management of Waste Gases
Reuse of Reclaimed WaterCaseTo reduce wastewater emission, the Company set up reclaimed waterreuse facilities and prioritized the classification and recycling ofwastewater discharged from workshops. We reinstalled wastewatercollection pipelines in the existing factory area, and conducted classifiedcollection and treatment of different types of wastewater to increase thereuse rate of reclaimed water. Additionally, we realize compressed reusemanagement by installing instruments that can automatically identify andswitch the conductivity at the concentrated water outlet of the secondreclaimed water reuse system. This measure enabled the Company toincrease the reuse rate of reclaimed water from 50.00% to over 65.00%.
Facilities in Reclaimed Water System
In 2023, the Company treated 135,739 tons of wastewater, with COD and ammonia nitrogen as the main pollutants,discharging 2.75 tons of COD and 0.05 tons of ammonia nitrogen.
In places where waste gases are generated, operations are carried out only when the exhaustequipment is functioning normally; all cleaning lines must be covered with sealed protective coversduring operation; the etching room must form an obvious negative pressure to prevent acidic gasesfrom leaking outward.
Chemicals used for production must be checked during packaging, storage, and use to ensure thatthe bottle caps are tightly closed, thereby minimizing the volatilization of chemicals inside thecontainers.Employees who are long exposed to volatile chemical solvents in the workshop, or operators whoprepare such chemical solutions, should receive relevant training to ensure that they consciouslyreduce gas emissions during their daily work.The Administration Department and the Safety Office regularly inspect, clean, and maintain thestoves, exhaust system, gas pipelines and other appliances used in the canteen, and make recordsof the repair and maintenance of the equipment.
Motor vehicles within the factory should undergo annual inspections to ensure that their exhaustemissions meet relevant regulatory requirements.
On-Site Control of Waste GasesKey performance
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On the premise of simplicity and feasibility, each department sets up its own temporary storage place for general waste. For thecollection of general waste, the Company clearly specifies that general waste should be classified to avoid mixing, disorderlyplacement, and odor generation. At the same time, the temporary storage area at each site needs to be provided with clearclassification signs that are easily understood at a glance. We require that all collected general waste must be properly placed indesignated garbage stations. Dumping wastes outdoors is strictly prohibited to prevent sewage from entering the rainwater pipesdue to rainwater flushing. In sites where many types but few quantities of general waste are generated, recyclable andnon-recyclable waste should be separated for better waste management and treatment. In addition, the sewage discharge outletof the canteen must be equipped with a filter to block domestic garbage from entering the sedimentation tank, and the filteredsubstances should be treated in accordance with the requirements for general waste treatment. The filter should be cleaned twicea day on each working day. In 2023, AVD generated 205 tons of general industrial solid waste, and recycled and disposed of 251tons of general industrial solid waste.
In 2023, the Company processed455,660,000.00 m3 of organic waste gas (of which the main pollutant isvolatile organic compounds, with a total emissions of 0.61 ton) and 114,780,000.00 m3 of acidic waste gas(of wvhich the main pollutants are hydrogen chloride and nitrogen oxides, with a total emission of 2.26 tons and
0.40 ton, respectively).
In accordance with the =7A$".$/0*$R*";+*[-$<*;'K+(3$".$>0(,7$",$R9*Q*,/(",$7,)$>",/9"+$".$5,Q(9",?*,/7+$R"++'/(",$KL$1"+()$P7-/*-U$W*30,(37+$&'()*+(,*-$."9$1"+()$P7-/*$W9*7/?*,/$\$I(-;"-(/(",$5,8(,**9(,8U$and other applicable laws, regulations and standards, the Company hasestablished rules and procedures such as the <'+*-$."9$>",/9"+$".$/0*$P7-/*A7/*9U$P7-/*$&7-*-U$<*-()'*-$7,)$!"(-*$7,)$/0*$>0*34+(-/$."9$>+7--(.(37/(",$".$1"+()$P7-/*-. These procedures are formulated to standardize the basic requirements for the management,classification, treatment, and comprehensive utilization of wastes, clarify the responsibilities of the generating unit, using unit, anddisposal unit of wastes, and reduce environmental risks.
Management of Wastes
The Safety Committee and the Environmental Protection Office and the Administrative Departmentare responsible for monitoring the quantity of each type of waste every month. When the wasteemissions increase significantly, the Environmental Protection Office will promptly give feedback tothe relevant departments, and the responsible departments will take targeted management orrecycling measures to reduce waste emissions.
General waste can be recycled by recycling companies. When selecting waste recycling companies,it is necessary to verify that their business scope aligns with the approved business scope.
Hazardous waste can be disposed with internal sewage treatment facilities or additional equipment.Internal treatment measures and methods should be established on the basis of economy andoperability assessment results, to reduce the wastes requiring consigned disposal.
For hazardous waste that can be recycled by the original suppliers (e.g., empty chemical barrels,used engine oil, etc.), it is necessary to clearly agree on the recycling requirements with thesuppliers to ensure that the whole process complies with the requirements of relevant hazardouswaste management procedures as well as applicable laws and regulations.
The Safety Committee and the EnvironmentalProtection Office are responsible for the consign-ment of hazardous waste disposal
Selecting qualified recycling and disposal suppliersthat shall have the required business licensesissued by the competent government departmentsand sign formal agreements on hazardous wastedisposal with the Company.
The Administration Department is responsible forthe consignment of general waste disposal
Selecting qualified recycling and disposal suppliers.
Consignment of waste disposal
Management of General Waste
Reduction and Recycling of Wastes
Key performance
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45 46
AVD regularly provides training on waste management, and each department communicates the importance of waste managementto personnel at all levels to ensure that waste classification becomes the consensus of all employees.
Through diversified training programs, the Company encourages all employees to deeply understand and agree with theimportance of waste management and integrating the waste management into the corporate culture, providing a solid foundationfor the Company to achieve sustainable development and fulfill social responsibilities.
Special lectures on waste managementrequirements in the daily three-level training foremployees, to ensure that every employeeunderstands and is able to correctly implementwaste disposal procedures.
Explanations given by professionals invitedfrom external organizations on laws andregulations concerning waste management,to improve employees knowledge andunderstanding of laws and regulationsconcerning waste management.
Warning and instructions for waste managementduring accidents or special periods, giventhrough lectures and case study, to raise thealertness of employees to the importance ofwaste management.
Warnings and missions
Special education and training
External agencies preachDaily education of employees
Special straining on waste management on aregular basis, which include systematic coursesexplaining in-depth the relevant knowledge ofwaste classification, treatment and management,to improve the employee’s professionalism andexecution power for waste management.
To standardize the daily management of hazardous waste, clarify the responsibilities of hazardous waste management, stipulatethe disposal requirements of hazardous waste, ensure the strict implementation of relevant laws and regulations on hazardouswaste, and reduce the risk of environmental pollution, the Company formulated the Rules for on the Management of DangerousWastes to clarify the responsibilities among relevant departments, and provided detailed explanations on the requirements andprecautions for the identification, collection, storage and disposal of hazardous waste.The Safety Committee and the Environmental Protection Office prepare hazardous waste management plans and establishesledgers for hazardous waste disposal in each contract period and submits them to the Environmental Protection Agency for record.We synchronize and update the data on the environmental supervision information platform for solid wastes, and update themonthly report data on the platform every month, and the annual report data every year. In addition, we keep the data of hazardouswaste disposal in the last three years for the inspection and audit by the government as well as related parties in the future.To prevent risks, the Safety Committee organizes the formulation of the emergency response plan for environmental abnormalities,and specifies on-site emergency disposal plans for hazardous wastes in the plans. It also organizes relevant departments toconduct emergency drills for addressing abnormalities occurring in hazardous waste disposal every year and retains relevantrecords.
Training onWaste Management
IndicatorUnit202320222021
50.43
50.24
94.89
94.62
69.07
69.64
Quantity of Hazardous Waste GeneratedQuantity of Hazardous Waste Transferred
tonton
Management of Hazardous WasteTraining on Waste Management
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Annex
47 48
Taking Responsibility
and Ensuring Steady
Development
SDGs Responded in this Chapter
Key Achievements in 2023
Key ESG Issues Covered in this Chapter
Product Percentof Pass:
%sessions
98.40
Quality CultureTraining:
CustomerSatisfaction:
%
92.31
Investment in R&D: RMB 6,426.01 (in RMB 10,000), accountingfor 6.46% of operating incomeNumber of R&D Personnel:
Total Patents Obtained:
Supply Chain SystemR&D and InnovationProduct ResponsibilityInformation Security and Privacy Protection
Protection of Customers’ Rightsand Interests
49 50
In accordance with the laws and regulations such as the !"#$%&$'()$*)%+,)-.$/)+01,23$%&$4(25"$%5$6)57)8259$"57$:277259 and the/)90,"'2%5.$%5$'()$;<+,)<)5'"'2%5$%&$'()$6)57)8259$"57$:277259$!"#$%&$'()$*)%+,)-.$/)+01,23$%&$4(25", the Company has formulated the*083(".259$4%5'8%,$*8%3)708). and the =0++,2)8$>..)..<)5'$"57$4%5'8%,$*8%3)708). and set up a Purchasing Center which controls thesupplier screening and assessment, the purchasing of raw materials and other related activities to ensure that the suppliers followthe Company's requirements in terms of ethics, environmental protection, safety and quality.Local purchasing is of great significance for cost-effectiveness, energy saving and emission reduction, supply stability, qualitycontrol, risk management, and local economic development. During the reporting period, AVD cooperated with a total of 354suppliers nationwide. Among them, 225 suppliers are located in Shenzhen, contributing to 68.39% of our local purchasing, and 11suppliers in Ganzhou, contributing to 44.00% of our local purchasing.
Establishment ofSustainable Supply Chains
Number of suppliers 1，Percentage of suppliers0.28%Southwest China
Number of suppliers 3，Percentage of suppliers0.85%Hong Kong, China
Number of suppliers 4，Percentage of suppliers1.13%Taiwan, China
Number of suppliers 5，Percentage of suppliers1.41%North China
Number of suppliers 17，Percentage of suppliers4.80%Central China
Number of suppliers 20，Percentage of suppliers5.65%East China
Number of suppliers 304，Percentage of suppliers85.88%South China
The Company continuously strengthens the management of supplier admission, continuously develops and introduces high-qualitysuppliers, and carries out multi-stage assessments as per the =0++,2)8$>..)..<)5'$"57$4%5'8%,$*8%3)708). in stages including: thepreliminary selection, investigation, qualification confirmation, sample delivery and assessment of suppliers. By doing this, we canensure that the products and services provided by suppliers meet our requirements and that we can establish a healthy, stableand mutually beneficial cooperative relationship with relevant suppliers.
Supplier Management MechanismAdmission of Suppliers
We assess and select suppliers based on their qualifications, delivery capabilities, integrity, honesty and other literacy, incombination with our own business plans and strategic goals. The Company organizes the quality and technical departments toconduct semi-annual comprehensive performance assessments on Tire 1-4 material suppliers, and formulates an annual supplieraudit plan for a 5-year period, especially focusing on key controlled suppliers, outsourced processing plants, and suppliers withsignificant quality abnormalities in the previous year. Real-time on-site audits for important quality improvements can be arrangedwhen products from non-key controlled suppliers have quality issues. We implement a mechanism for the survival of the fittest topromote continuous improvement of suppliers at each level while ensuring fair and just assessment.
Assessment and Evaluation of Suppliers
The Company strengthens the management of qualified and non-qualified suppliers, follows up and guides the improvement ofthe approved, unqualified, and Class-C suppliers to help them avoid being eliminated. If the assessment of performance orimprovement results indicate that some suppliers are unable to meet the Company's needs, we will terminate the cooperation withsuch suppliers.
Elimination of Suppliers
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51 52
Key performanceResponsible PurchasingWe consistently integrate the philosophy of sustainable development throughout our purchasing process. We have developed a!"##$%&'()*+,"-.(/0+,1**2, focusing on key aspects like environmental protection, anti-discrimination, health and safety, labor, wageand salary, and business integrity, to establish corresponding sustainable purchasing processes and capabilities. Guided by ourvalues of “integrity and mutual benefit”, we engage in resource sharing and deep collaboration with various suppliers on quality,delivery, and cost, aiming to build a symbiotic and mutually beneficial ecosystem together.
We strictly adhere to laws andregulations regarding environmentalprotection and dispose of waste fromour plants according to relevantrequirements to create a sound workand social environment.
Environmental protection
We prohibit discrimination based onpersonality, age, religious beliefs,ancestry, social status, socialbackground, disability, race,nationality, political affiliation,sexual orientation, or any personalcharacteristic.
Anti-discrimination
We are dedicated to developingand refining rules and proceduresrelated to occupational health andsafety and ensuring their strictenforcement to protect employeehealth and safety.
Health and safety
We strictly prohibit forced or prisonlabor and any form of physicalpunishment, psychological orphysical coercion, and verbal abuse.Our approach to rewards anddiscipline prioritizes psychologicaland educational aspects, supportedby material means when necessary.
Labor
We strictly adhere to local governmentstandards for minimum wages andcomply with the requirements onovertime payment under the LaborLaw of the People’s Republic of Chinato ensure that our employees’ earningssuffice for their normal living expenses.We guarantee that wages are neitherwithheld nor delayed in any form.
Wage and salary
We prohibit any forms of corruption,extortion, bribery, and embezzlementin our operations. We adhere to theprinciples of fairness in marketing,sales, and competition, ensure theprotection of customer information,and forbid unfair competitive practicessuch as slander, defamation, orcollusion.
Business integrity
We enforce guidelines requiring our purchasing staff to maintainintegrity, objectivity, and fairness in all work-related activities,while adhering to professional ethics, safeguarding businesssecrets, and loyally protecting our interests. Additionally, we haveestablished anti-corruption reporting and whistleblower protectionmechanisms, which are strictly monitored through our online emailcomplaint channels. During our interactions with suppliers, wecontinuously emphasize the importance of anti-corruptionpractices and engage in mutual oversight with our partners topromote a cooperative and mutually beneficial supply chain.To foster transparent collaboration with suppliers and encouragetheir integrity, we've agreed upon a !"##$%&'()*+,"-.(/0+,1**2embodying principles of clean and transparent cooperation. Weare committed to respecting the cooperative interests of oursuppliers under the principles of legality, legitimacy, and mutualbenefit. We firmly oppose any entity or individual usinginappropriate means, such as enticements or promises, toinfluence our staff for personal gain. Such actions are regarded asunfriendly and potentially malicious. Our employees are prohibitedfrom soliciting or accepting any form of cash, monetary gifts,negotiable securities, payment vouchers, shopping cards, gifts,tobacco, alcohol, valuable items, kickbacks, benefits, gratuities,intermediary fees, or commissions (remunerations). Ouremployees are strictly prohibited from accepting any form ofcommercial bribery, whether directly from suppliers or indirectlythrough third parties.
Clean purchasing
AVD is committed to responsible mineral sourcing. Our products align with the Conflict-Free Sourcing Initiative (CFSI), ensuringcompliance with the 34)5(5"&(5%$%6&+-&(7"%,0+-&(8*'(9&:#*+:%1$&(!"##$;()<0%+:(*8(=%+&'0$:(8'*>()*+8$%-.?@A&-.&,(0+,(/%6<?9%:2(@'&0:, orequivalent recognized due diligence frameworks. We ensure that tantalum, tin, tungsten, and gold used in our products are notsourced, directly or indirectly, from the Democratic Republic of Congo or neighboring regions.
Management of Conflict Minerals
During the reporting period, we worked with
88 suppliers certified under quality
management systems, 57 supplierscertified under environmental managementsystems, and 12 suppliers certified underoccupational health and safety managementsystems. There were no supplierssuspended or prospective suppliers rejecteddue to non-compliance. We had signed atransparent cooperation agreement with
96.00% of our suppliers.
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Annex
53 54
Orientation to Product Quality
Quality Management MechanismsEnsuring high-quality products is crucial for our sustained corporate growth. We adhere to a quality policy that prioritizes “customerfirst, quality foremost, innovative development, and continuous improvement” to ensure strict quality control. We strictly adhere tolaws and regulations such as the !"#$%&$'()$*)%+,)-.$/)+01,23$%&$4(25"$%5$*6%703'$80",2'9. Relying on a scientific and stringent qualitymanagement system, we have successively obtained certifications in several quality management systems, including ISO 9001:2015and IATF16949:2016. Furthermore, we have established a Quality Center, serving as the organizational body for our qualitymanagement and quality system construction. The Quality Center is responsible for coordinating and managing the overall qualitythroughout our company, establishing our quality culture, preparing strategic quality plans, and constructing whole-process qualitysystems. We have prepared a suite of quality assurance documents, including the 4%5'6%,$*6%3)706).$&%6$*6%703'$:).2;5$"57$:)<),%+=)5'>$4%5'6%,$*6%3)706).$&%6$?7<"53)7$*6%703'$80",2'9$*,"5525;$@?*8*A, and$4%5'6%,$*6%3)706).$&%6$B%53%5&%6=25;$*6%703'., to ensurequality control throughout the entire process, from raw material acceptance and storage to product manufacturing and inspection,and nonconforming product handling and recall.
Quality Management MeasuresAVD meticulously oversees and administers the complete life-cycle of products and services in a scientific manner to realizescientific, standardized, regulated quality management. We continuously apply methodologies, such as Design for Six Sigma (DFSS)and Lean Six Sigma management, to establish scientifically sound systems across product design, material purchasing,manufacturing, quality control, and sales, thus ensuring that our management systems operate efficiently and orderly and ourproduct quality meet the demands of our customers.We have developed the 4%5'6%,$*6%3)706).$&%6$?7<"53)7$*6%703'$80",2'9$*,"5525;$@?*8*A according to the IATF16949:2016 qualitymanagement system to carry out quality management efforts based on systems and policies.
During the reporting period, AVD achieved an average incoming product pass rate of 98.40%.
Our Technical Department conducts feasibility analyses based on information from the Sales Department to achieve thewhole-process control of product and service realization processes, thus guaranteeing the quality and safety of products inmass production and enhancing user experience and satisfaction.R&D phase
We implement strict system standards and quality control measures. Products requiring new materials and processes shouldbe strictly inspected according to the C"')62",$:)<),%+=)5'$D027),25).. Meanwhile, product and reliability tests need to beconfirmed and test plans need to be prepared, which will be recorded in the E"=+,)$F).'$*,"5., to enhance the detection powerof our products. To ensure high-quality products, we perform multi-dimensional inspections of goods to guarantee that ourproducts meet the optimal user experience.
Production phase
In the improvement stage, we organize our Quality Control and Quality Centers to review internal anomalies and customerfeedback, updating and implementing the necessary documents accordingly. These centers annually review and updatecontrol plans, as well as failure mode and effects analyses. Additionally, the Quality Center and Sales Department assess theachievement of customer targets and trends each year to foster continuous improvement. Post-mass-production changes aremanaged in accordance with the D027),25).$&%6$'()$C"5";)=)5'$%&$*6%G)3'$4("5;).. The necessary document updates related tothe approval of production parts should adhere to the D027),25).$&%6$'()$4%5'6%,$%&$*6%703'2%5$*"6'.$?++6%<", and require customerre-approval. Through corrective and preventive actions, along with diligent implementation tracking, we effectively eliminatethe causes of actual and potential nonconformities.
Prevention and correction phases
The Company and Ganzhou AVD have obtained ISO 9001:2015 andIATF16949:2016 certifications for its quality management system.Ruidisheng has obtained ISO 9001:2015 certification for its quality management system.
Key performance
Message from the ChairmanAbout This ReportGlance at AVDESG Management
Standardizing Governance andConsolidating Foundations
Low-carbon Operatiofor A Green Future
Taking Responsibility andEnsuring Steady Development
Respecting Talents and Professionals,and Acting in Good Faith
Annex
55 56
Quality Culture TrainingAVD places a high emphasis on developing a team of highly qualified and skilled quality professionals. To improve our productquality, we consistently organize quality training sessions to enhance employees' awareness and continuously elevate theirprofessional skills. In 2023, utilizing both online and offline modes, we integrated internal and external resources to conducttargeted training for quality personnel across various product lines, levels, and needs, and have achieved significant results.
AVD’s “Do It Right the First Time” Quality Culture SeminarCaseIn 2023, AVD organized a “Do It Right the First Time” seminar for middle and senior management to deepen andstrengthen the construction of our quality culture. Participants actively shared experiences and insights, collectivelyexploring how to apply the “Do It Right the First Time” philosophy in their work.
During the reporting period, we held 303 quality culture training sessions, with 6,189 instances of participation anda total of 10,050.50 hours dedicated to the training.
Additionally, our IT Department has established acomprehensive data backup strategy and strengthensemployee training on computer usage, therebyenhancing the overall security awareness of ouremployees. Regular or occasional technical trainingand emergency drills for professionals are conductedto improve our capabilities in emergency security andensure the effective implementation of ourcontingency plans. In May 2023, we carried outinformation security training for employees to raisetheir awareness of preventing information securityincidents.
Information Securityand Privacy Protection
Concept and SystemAVD has prepared and continuously improved the !"#$%&#'%()*+,)-.%)/+'-,+&)+*)0'*+,12-#+')3%4",#-5)0'4#$%'-( according to applicable lawsand regulations, such as the 6%,(+'2&)0'*+,12-#+')6,+-%4-#+')728)+*)-.%)6%+9&%:();%9"<)+*)/.#'2 and the =%-8+,>)3%4",#-5)728)+*)-.%)6%+9&%:();%9"<)+*)/.#'2, to ensure the safe and stable operation of our information systems and devices and prevent the incidentsof information loss or leakage.We have established an IT Department to be responsible for organizing the preparation of information security incident processingsystems, investigating information security incidents, and proposing handling measures, rewards, punishment, and corrective andpreventive actions. The department includes roles such as the information security situation and incident discoverers andinformation security specialists, thereby reinforcing our management of information security.
Emergency Incident ManagementTo enhance our responsiveness to emergency incidents, we have developed contingency plans and response mechanisms,including the !"#$%&#'%()*+,)-.%)019&%1%'-2-#+')+*)=%-8+,>)3%4",#-5)/+'-#'?%'45)6&2'(. In case of any leakage of personal information orsecurity risk, we will promptly initiate remedial actions and follow up efficiently to minimize the damage and impact of the incident.We regularly inspect servers and key network equipment, promptly update the virus database of antivirus software of servers,regularly conduct vulnerability scans and patch repairs on all servers, back up critical data on a routine basis, and enforce a dutysystem during special periods. Those violating our 0'*+,12-#+')3%4",#-5)@2'2?%1%'-)35(-%1 and resulting in damages will be heldaccountable in accordance with the !"#$%&#'%()*+,)A#(4#9&#'2,5)B4-#+'()2?2#'(-)C#+&2-#+'()+*)A#(4#9&#'%(.
Information Security Training Site
Key performance
Message from the ChairmanAbout This ReportGlance at AVDESG Management
Standardizing Governance andConsolidating Foundations
Low-carbon Operatiofor A Green Future
Taking Responsibility andEnsuring Steady Development
Respecting Talents and Professionals,and Acting in Good Faith
Annex
57 58
Protection of Customers’ Rightsand Interests
Customer Service ManagementSince our establishment, we have been committed toproviding professional services and high-quality products tomeet the diverse needs of our customers. Leveraging ouradvanced product R&D and manufacturing capabilities, weoffer comprehensive services from design to distribution,striving to ensure customer satisfaction with our productsand services. We have established internal standarddocuments such as !"#$%&#'%()*+,)-.%)/,+0%((#'1)+*)2"(-+3%,)2+34&5#'-(6)!"#$%&#'%()*+,)-.%)75'51%3%'-)+*)2"(-+3%,)5'$)81%'-)9%:%&+43%'-6)!"#$%&#'%()*+,)2"(-+3%,);%,:#0%6)5'$)!"#$%&#'%()*+,);5&%()2+'$"0-.
Customer DemandsWe prioritize the response and satisfaction of customer’sdemands. For customer complaints, we have establishedeffective handling channels. Customers can file complaintswith product quality and services by various means includingphone and email, or in written, oral, or other forms ofcommunication. We optimize our customer complaint-handlingmechanisms and processes based on product or servicefeedback. Issues raised by customers are documented in the;"335,<)+*)95#&<)2"(-+3%,)2+34&5#'-(,and their impact isassessed to determine the level of action required. Incollaboration with responsible departments, we investigateand analyze the root causes, rectify issues raised bycustomers, and prevent their recurrence. We treat theresolution of customer complaints as a starting point forenhancing our products and services and actively listen andrespond to customer suggestions and opinions. We commit toan initial response within 2 hours after the receipt of acustomer complaint to confirm the details of the complaint ofthe customer. Within 24 hours, we provide a second response,offering preliminary improvement measures. Within 5 days, athird response is issued, presenting a detailed analysis andplanned improvement strategies. Should these time limits notbe met, the complaint is escalated to higher-level personnelfor resolution.
Within 2 hours,
Within24 hours,
Within5 days,
we commit to an initial response after the receipt of acustomer complaint to confirm the details of thecomplaint of the customer.
we provide a second response, offering preliminaryimprovement measures.
a third response is issued, presenting a detailedanalysis and planned improvement strategies. Shouldthese time limits not be met, the complaint isescalated to higher-level personnel for resolution.
!"#$%&#'%()*+,)-.%)/,+0%((#'1)+*)2"(-+3%,)2+34&5#'-(!"#$%&#'%()*+,)-.%)75'51%3%'-)+*)2"(-+3%,)5'$)81%'-)9%:%&+43%'-!"#$%&#'%()*+,)2"(-+3%,);%,:#0%!"#$%&#'%()*+,);5&%()2+'$"0-
During the reporting period, we received and successfully resolved 80 customer complaints, achieving a customersatisfaction rate of 92.31%.
Customer Satisfaction
We continuously strengthen customer service in the pre-sale, sale, and post-sale stages to build a high-quality customer servicesystem. We have prepared customer relationship management procedures such as the !"#$%&#'%()*+,)2"(-+3%,);5-#(*50-#+');",:%<)toclarify the responsibilities of each department, meet customer needs, and enhance our customer service level.We focus on effective communication with our customers and conduct annual customer satisfaction surveys, covering the entireyear. Customer satisfaction questionnaires are disseminated to our customers through our customer service team. We ensurediligent tracking and collection of these questionnaires within a month of distribution, aiming for a minimum recovery rate of
80.00%. Our Quality Center, informed by the ;"335,<)+*)2"(-+3%,);5-#(*50-#+');",:%<(, directs responsible departments to conduct
specific analyses and countermeasure reviews of items requiring improvement. The Sales Center responds to customers withinternal analyses and planned or completed improvement measures via phone, WeChat, email, etc. They also monitor customerfeedback to these responses. Furthermore, our Quality Center is committed to ensuring the completion and fine-tuning of anyunfinished internal improvement plans. When customers are not satisfied with the responses provided, the Quality Center willproactively follow up on these improvement plans, or may even organize visits to customers for direct discussions andimplementation of further enhancements.
Responsible MarketingWe strictly follow national laws and regulations concerning product sales and promotions and have established the ;5&%()75'51%3%'-)2+'-,+&)/,+0%$",%(. We adhere to responsible marketing principles, standardize product identification, advertising, andsales activities, provide comprehensive and detailed information about our products and services to our customers, and train oursales staff in responsible marketing practices to effectively safeguard the legitimate rights and interests of our customers.
Key performance
Regulatory Documents
Message from the ChairmanAbout This ReportGlance at AVDESG Management
Standardizing Governance andConsolidating Foundations
Low-carbon Operatiofor A Green Future
Taking Responsibility andEnsuring Steady Development
Respecting Talents and Professionals,and Acting in Good Faith
Annex
59 60
R&D Results
Encouraging R&D and Innovation
To standardize the performance appraisal system for our technical department employees and motivate them to exceed annualoperational goals, we have established the !"!#$%&'()*$+*$+*,&*-(.&$/,0&1&. This scheme clearly defines the academic achievementsand subjects eligible for rewards, conditions, criteria, and detailed implementation guidelines. The evaluation and awarding ofacademic achievements adhere to the principles of openness, fairness, and justice. We recognize and reward individuals andgroups that have made significant contributions to technological progress and academic research, thus fully engaging and inspiringour researchers and promoting the creation of significant achievements.
As a national high-tech enterprise, the Company consistently prioritizes innovation and independent research and development. Toenhance product competitiveness, the Company continues to increase investment in research and development, improve theinnovation system, actively explore cutting-edge industry technology, and focus on technological innovation based on policydirection, industry characteristics, market demand, and the Company's own status quo of cutting-edge application technology todrive future development through technological innovation. In 2023, the latest progress and achievements of the Company's mainresearch projects (excluding completed projects in the market promotion stage) are as follows:
E-Paper Films and Modules: The Company's e-paper focuses on the research and development of small to medium-sized products,which can be applied in various fields such as price tags, name badges, and smart homes. In the early stages, key optoelectronicmaterials research was completed through collaborations with the Shenzhen Qinghua Research Institute, Southern University ofScience and Technology, and the Hong Kong University of Science and Technology. The Company has achieved full-chainindependent research and development from pigment particle modification, electrophoretic fluid formulation, capsule synthesis,film coating to electronic paper module processing. As of December 31, 2023, the Company has filed 24 patents for electronicpaper technology, obtaining 4 invention patents and 8 utility model patents.Direct Current (DC) Charging Station Control Board: Expanding into the charging station market has always been one of theCompany's key business development directions. As of now, the Company has achieved mass production and sales of chargingstation Human-Machine Interface (HMI) modules. As of the disclosure date of this report, the Company's DC charging stationcontrol board project has entered the small-scale trial production stage. The product quality and technical performance meetexpectations and are progressing in market expansion.
During the reporting period, our total R&D investment amounted to RMB 6,426.01 (in RMB 10,000), a 7.80%increase compared to the previous year and representing 6.46% of our operating revenue.
Key performance
R&D Innovationfor DevelopmentAs a nationally recognized high-tech enterprise, we always prioritize innovation and independent research and development. Tocontinuously enhance our products’ competitiveness, we have been increasing our investment in R&D and improving ourinnovation system. We actively explore cutting-edge technologies in the industry and base our technological innovations onadvanced application technologies that align with policy development directions, industry characteristics, market demands, and ourcurrent resource status, thereby driving our future development with technological innovation. We maintain our competitive edgein the industry by keeping track of industry-leading technologies and exploring, researching, developing, and extending theapplication fields of related products.We have always emphasized investment in technological R&D, the perfection of experimental equipment, and the construction ofour R&D team. We possess numerous invention and utility model patents, alongside advanced production equipment, diversifiedproduct lines, and intelligent testing equipment, enabling us to offer comprehensive and customized touch display solutions to ourclients. With our solid technical capabilities and high-quality R&D team, we actively work on improving our existing products,researching and developing new ones, and are committed to becoming a leader in the HMI interface industry.
Investment in R&DInnovation is an essential support for the enhancement of product and service quality. We highly value R&D investment toconsolidate our continuous innovation capability and then provide a strong impetus for independent R&D.
R&D TeamInnovation is our primary driver, and talent is our foremost resource. Our high-quality R&D team provides a solid foundation forour innovation efforts. Since our establishment, AVD has rapidly grown, now boasting a total of 228 R&D personnel. We havebecome a specialized R&D institution that integrates scientific and technological innovation, product R&D, and internationalexchange, laying a solid groundwork for our technological advancement.
40 years old or above
15.35%
30-40 years old
51.32%
Under 30 years old
33.33%
Below bachelor’s degree
47.81%
Bachelor’s degree
50.44%
Master’s degree
1.75%
Percentage of the Number of R&D Personnel (by Age)
Percentage of the Number of R&D Personnel(by Academic Qualification)
Message from the ChairmanAbout This ReportGlance at AVDESG Management
Standardizing Governance andConsolidating Foundations
Low-carbon Operatiofor A Green Future
Taking Responsibility andEnsuring Steady Development
Respecting Talents and Professionals,and Acting in Good Faith
Annex
61 62
Protection of Intellectual Property Rights
Intellectual property rights, as our most important intangible assets, are crucial for promoting our scientific and technologicalinnovation and enhancing our core competitiveness. We strictly abide by intellectual property-related laws and regulations such asthe !"#$%#&'"(&)*&#+$&!$),-$./&0$,12-34&)*&5+3%", the 67"8$9"7:&'"(&)*&#+$&!$),-$./&0$,12-34&)*&5+3%", and the 5),;73<+#&'"(&)*&#+$&!$),-$./&0$,12-34&)*&5+3%". We focus on building a robust intellectual property rights protection system, ensuring that while protecting ourbusiness intellectual property rights, we do not infringe upon the intellectual property rights of others.
We have formulated and implemented a series of systems, including the&5)%#7)-&!7)4$817$/&*)7&#+$&=4>13/3#3)%&)*&?%#$--$4#1"-&!7),$7#;&03<+#/@&5)%#7)-&!7)4$817$/&*)7&#+$&0$/)-1#3)%&)*&A3/,1#$/&)B$7&?%#$--$4#1"-&!7),$7#;&03<+#/, 5)%#7)-&!7)4$817$/&*)7&#+$&C"3%#$%"%4$&"%8&D/$&)*&?%#$--$4#1"-&!7),$7#;&03<+#/, and 5)%#7)-&!7)4$817$/&*)7&#+$&03/:&C"%"<$9$%#&)*&?%#$--$4#1"-&!7),$7#;&03<+#/E Our Technology Center isresponsible for the management of our intellectual property rights. Based on the nature and causes of risks relating to corporateintellectual property rights, we adopt targeted measures to reinforce control over these risks. To effectively implement intellectualproperty protection, our Technology Center serves as the department for the centralized management of patents, copyrights, andtrademarks. It is responsible for managing and evaluating patents, copyrights, and trademarks and reviewing and controllingrelevant changes, transfers, wavering, and licensing. As a national high-tech enterprise and an AEO advanced certified enterpriseby the General Administration of Customs of China, we have obtained the GB/T29490-2013 Intellectual Property ManagementSystem Certification. This accomplishment reflects our establishment of a core technology and product system rooted in ourindependent intellectual property rights.
Mechanism for the Protection of Intellectual Property Rights
In our operations, we use authentic software and instruments for research and development, ensuring that our procurement ofproduction equipment and software does not infringe on the intellectual property rights of others. We maintain a system fortracking and searching domestic and international intellectual property rights during our R&D activities. This system enables us toregularly assess both domestic and international technological progress and intellectual property application statuses related toour R&D projects, guiding us in developing unique designs and effectively avoiding redundant developmental endeavors.
Non-infringement of others’ intellectual property rights
We attach great importance to protecting our intellectual property rights, adhere to the relevant requirements of intellectualproperty laws and regulations, and defend our legitimate interests and rights through patent applications, trademark registrations,and legal actions, among other channels, to prevent the infringement of our R&D achievements by others.
Protection of Intellectual Property Rights
By the end of the reporting period, we had obtained a total of 154 patents, comprising 19invention patents, 132 utility model patents, and 3 design patents. Additionally, we have secured15 computer software copyrights.
Intellectual Property Management System CertificationAEO advanced certified enterprise
Key performance
Message from the ChairmanAbout This ReportGlance at AVDESG Management
Standardizing Governance andConsolidating Foundations
Low-carbon Operatiofor A Green Future
Taking Responsibility andEnsuring Steady Development
Respecting Talents and Professionals,and Acting in Good Faith
Annex
63 64
Respecting Talents
and Professionals,
and Acting in Good Faith
SDGs Responded in this Chapter
Key Achievements in 2023
Key ESG Issues Covered in this Chapter
Total Number of Employees:
1,914
Number of Participantsin Employee Training:
13,236Total Training Hours:
hours%
RMB
274.21（in RMB 10,000)RMB 3.36（in RMB 10,000)
32,721
Employee Welfare Coverage Rate:
100.00
Investment in Safety Production:Investment in Security Training:
%sessionsHidden Danger Investigationand Rectification Rate:
100.00
The Number of
Security Emergency Drills:
The Number of New Occupational Diseases:
Occupational Health and SafetyLabor Relation ManagementEmployee Training and DevelopmentCommunity Contribution
65 66
During the reporting period, we achieved a 100.00% employment contract signing rate and social insurance cov-erage rate of employees.
In 2023, AVD reported no incidents of employing child labor, hiring minors for hazardous work, or any forced labor.
We treat our employees humanely, opposing all forms of sexual harassment, abuse, corporal punishment, mental or identitycoercion, and verbal abuse. Relevant regulations are in place to prevent and address such behaviors.
Anti-harassment and anti-abuse
We highly value the protection of employee rights and maintain an equal employment management guideline. We treat employeesfrom different backgrounds with respect and equality, ensuring no discrimination based on race, skin color, age, gender, sexualorientation, race, disability, pregnancy, religious belief, political affiliation, union relationship, or marital status. Discrimination in theworkplace or other work platforms is prohibited. We have established a complaint and grievance mechanism, allowing employeesto report unfair treatment (if any) to the management, who are committed to providing reasonable responses according to realityand providing a handling solution within one week. Additionally, a “Suggestion Box” and an “Official WeChat Account” are availablefor employees to report unfair treatment. Our HR department, labor union, and management will handle and investigatediscrimination incidents and take action in accordance with internal policies, laws, and regulations.
Anti-discrimination
We treat all employees equally throughout the recruitmentprocess, production process, and promotion, makedecisions based on qualifications and competenciesrelevant to the position, and strictly prohibit any form oftargeted discrimination.
Employment Management
Diversity, Equality, and InclusionAVD has formulated the !"#$%&#'%()*+,)-.%)/#(0)123&"3-#+')+*)-.%)4+$%)+*)1-.#5()*+,)637+, in strict accordance with the 637+,)638)+*)-.%)9%+:&%;()/%:"7)+*)4.#'3, the 637+,)4+'-,35-)638)+*)-.%)9%+:&%;()/%:"7)+*)4.#'3, the 638)+*)-.%)9%+:&%;()/%:"7)+*)4.#'3)+')-.%)9,+-%5-#+')+*)/#<.-()3'$)='-%,%(-()+*)>+?%', the /%<"&3-#+'()+')9,+.#7#-#'<)-.%)@(%)+*)4.#&$)637+,, and other applicable national or local laws andregulations. We explicitly prohibit using child labor and forced labor, uphold an equal and non-discriminatory employment policy,and ensure no differential treatment in employment, wages, benefits, and promotions based on gender, race, religious belief,disability, nationality, pregnancy, etc. We are dedicated to respecting and protecting human rights and integrating these principlesinto our HR management, business ethics, and other relevant systems.
Complying with relevant laws, we avoid recruiting underage individuals and strictly forbid employing child labor (persons under 16years old), focusing on protecting minors’ rights and health. Before hiring employees, we inspect, verify, and retain legally certifiedage documents. In the event of inadvertently hiring a child, we promptly report to the local labor department and provide a freemedical examination for the child. Should the child fall ill, we offer free medical care until recovery. Following this, in collaborationwith the labor department, we ensure the child is safely returned to their original residence and handed over to their parents orguardians.
Prohibition of using child labor
AVD is committed to the core values of “treating people with emotion and dealing with things rigorously”. We respect and care foreach employee and are dedicated to creating a diverse, equal, and inclusive workplace, providing a safe, healthy, and high-qualitywork environment for every employee. By strengthening democratic communication and enriching employee activities, we haveestablished a scientific and just personnel management system. We are committed to a people-centered approach and humanisticcare, fostering a harmonious and high-quality enterprise development.
Equality in employment
We uphold the principle of equal pay for equal workregardless of gender. During recruitment, we do notrefuse to employ women or raise their hiring standardsbased on gender, except for roles not suitable for womenas per national regulations. There is no discriminationagainst female employees regarding their marital orchildbearing status. Women shall be equal with men inthe allotment of housing and enjoyment of welfarebenefits.
Gender equality
Key performance
Key performance
Message from the ChairmanAbout This ReportGlance at AVDESG Management
Standardizing Governance andConsolidating Foundations
Low-carbon Operatiofor A Green Future
Taking Responsibility andEnsuring Steady Development
Respecting Talents and Professionals,and Acting in Good Faith
Annex
67 68
Diverse Staff CompositionWe believe that “talent” is key to our company’s development. Starting with an overall analysis of our human resources, includingaspects like the gender, age, education, and positions of our employees, we consistently analyze the reasonableness of thestructure of each department and continuously improve our workforce, which is instrumental in facilitating our company’ssustainable development.
In 2023, we welcomed 1,608 new employees.
Talent RecruitmentAnnually, we develop a recruitment plan based on business growth planning and job demands to strengthen workforceconstruction and maintain a stable and dynamic workforce. We absorb new talents through various recruitment modes such ason-campus recruitment, social recruitment, and internal referrals. We respect differences, encourage diversity, and strive to fosterour growth and ensure sustained profitability through our strict, open, fair, equitable, and standardized recruitment process.
Male 48.28%Female 51.72%
The Senior Management
0.47%
Middle management
4.18%
Junior management
20.01%
Ordinary employees
75.34%
Below bachelor’s degree
89.71%
Bachelor’s degree or above
10.29%
Production 76.38%Technology 11.91%Administration 7.00%
Sales 3.45%Finance 1.25%
Under 30 (exclusive) years old 33.39%30 to 40 years old (including 30 but not 40) 44.36%40 to 50 years old (including 40 but not 50) 20.11%50 years old or above 2.14%
Number of Employees
(by AcademicQualification)
Number of Employees
(by Gender)
Female 47.64%Male 52.36%Social recruitment 96.82%On-campus recruitment 3.18%
By Gender
ByRecruitment
Channel
Key performance
Number of Employees(by Age)
On-Campus Recruitment Campaign
of Ganzhou’s Key Enterprises
at Nanchang UniversityOn-Campus Recruitment Campaign
of Ganzhou’s Key Enterprisesat Nanchang Hangkong University
“Longgang’s Premier Enterprises at Top Universities”
On-Campus Recruitment Campaign
at Southwest Jiaotong University“Longgang’s Premier Enterprises at Top Universities”
On-Campus Recruitment Campaign
at Sichuan University
By the end of 2023, AVD had 1,914 full-time employees, including 153 employees of minority nationalities.
Number of Employees(by Profession)
Number of Employees
(by Employee Level)
Key performance
Message from the ChairmanAbout This ReportGlance at AVDESG Management
Standardizing Governance andConsolidating Foundations
Low-carbon Operatiofor A Green Future
Taking Responsibility andEnsuring Steady Development
Respecting Talents and Professionals,and Acting in Good Faith
Annex
69 70
AVD upholds a principle of valuing both talent and virtue in employment, considering talent training and development as core toour competitiveness and a driving force for future development. We aim to provide employees with opportunities for continuousgrowth. A comprehensive employee training system has been established, including the!"#$%&%&'!($&$')*)&+!,-%.)/%&)0!and!1*2/34))!5#3*3+%3&!($&$')*)&+!640+)*. These systems, alongside rich, flexible, and diverse training courses, systematically support andbroaden the career advancement pathways for our employees.
Smooth Career Development SequencesTo address the diverse career development needs of our employees, motivate self-improvement, and enhance job enthusiasm, wehave established and disseminated the!1*2/34))!5#3*3+%3&!($&$')*)&+!640+)* and 7-/+%8$+%3&!()9:$&%0*!$&.!($&$')*)&+!()$0-#)0!;3#!<#)0:!,#$.-$+)!=)0)#8)!7$.#)0. We have created three career development channels: Management Sequence (M), TechnologySequence (T), and Sales Sequence(S), to strengthen the internal selection and development of talents to optimize careeradvancement pathways.
To meet the diverse development needs of our employees, we have abandoned the “job-for-life” approach to position management.We actively encourage career development planning, support, and motivation and have established a job management systemcharacterized by “clear sequences for roles, defined pathways for growth, and ample room for development”. Our system enablesboth “vertical and horizontal progression” across management, technology, and sales sequences. By adopting a "multi-sequence"strategy, we continually refine the pathways for employee development, offering a holistic array of opportunities for advancement.
Improving Employee Training MechanismsAVD prioritizes the cultivation of top talent. We conduct essential training for all employees to ensure they possess the skills,service quality, and environmental awareness needed for their roles, aligning employee quality with the demands of managementand customer service. Our Human Resources Department is dedicated to continually refining our internal training system andmanaging all training-related activities, so as to meet our employees’ needs for enhancing professional knowledge and basicvocational skills, and encourage our employees to learn autonomously and contribute to the sustainable development of ourcompany while enhancing their own value.For this purpose, we design training plans tailored to various roles such as managers, technicians, and production staff, consideringdifferent management levels, business functions, and educational backgrounds. We utilize a blend of internal and external trainingresources, encompassing in-house instructors, external professional lecturers, external training programs, and team developmentexercises, which significantly enhance our employees’ overall quality and provide robust human resource support for theimplementation of our corporate development strategy.
Employee Growth andDevelopment
Management personnelTargeted traineeTraining contents
Professional technicians
Internal system auditorsPersonnel engaging in design,
process, production,QC, or intellectual propertyInformation security-related
personnelLegal representative of theCompany,executives responsible
for customs affairs,and trade-related personnel
Modern business management theory, cutting-edge technicalknowledge, organizational decision-making ability, and thestrategic management of the Company and each systemProfessional technical training, basic theory training, andpractical business trainingSystem-related knowledge, internal auditor skills, andsystem-related laws and regulations
Expertise in certification systemsInformation security-related knowledgeCustoms laws and regulations and other relevant provisions; andtrade security, information security, supply chain security, andcrisis management relating to the relevant job responsibilities
M7M6-2M6-1M5-2M5-1M4-2M4-1
M3
M2
M1
General Manager
Senior DeputyGeneral ManagerDeputy General
Manager
Senior Director
Director
Senior Manager
Manager
Section Chief
Administrator
Shift Head
Management Sequence (M)
T6-2T6-1T5-2T5-1T4T3T2T1
Senior Chief Engineer
Chief EngineerPrincipal EngineerSenior EngineerEngineerAssistant/Assistant Engineer
Clerk/TechnicianTeam Leader/Quality Controller/Material Management Officer/Machine Debugging Officer
Multi-skilled Operator/Machine OperatorGeneral Operator (including Cleaning Personnel/Caterer/Security Staff)10-310-210-1
Technology Sequence (T)
S6-2S6-1S5-2S5-1S4S3S2S1
Senior Vice President of Sales
Vice President of SalesSenior Director of SalesSales Director
Senior EngineerSalesman/Customer Service DirectorCustomer Service Representative/Marketing Specialist
Sales Manager/Customer Service Manager/
Marketing Manager
Sales Sequence (S)Employee Career Development SequencesPositiongrade
Position
grade
PositiongradeManagement
R&D/Equipment/Process/Quality
Sales
Remarks
Promotionpathwaysavailable acrossthree sequences
GrassrootsPosition
Message from the ChairmanAbout This ReportGlance at AVDESG Management
Standardizing Governance andConsolidating Foundations
Low-carbon Operatiofor A Green Future
Taking Responsibility andEnsuring Steady Development
Respecting Talents and Professionals,and Acting in Good Faith
Annex
71 72
Training on Management Communication Skills
Case
In November 2023, AVD implemented a managementcommunication skills training program covering efficientcommunication strategies. The core goal was to improvethe communication abilities of the management ineveryday management, enabling them to lead moreeffectively and drive comprehensive enhancement inteam collaboration and execution, thus contributing tothe steady achievement of our strategic objectives.
We are actively developing our in-house instructor team with a focus on reducing cost, improving efficiency, tapping into thepotential of internal training, enriching our training resources, and steering our training system toward standardization,systematization, and formalization. Our!"#$%&%&'!($&$')*)&+!,-%.)/%&)0!encompasses criteria for internal instructor selection andassessments, teaching processes, responsibilities, and incentive standards.
Construction of an in-house instructor team
To enhance the leadership and professional management capabilities of our management, AVD conducts specific training formiddle-level reserve leaders and newly promoted managers.
We cater to the distinct training needs of various new employee groups to facilitate them to rapidly integrate into our teams,acclimate to our corporate culture, understand their job responsibilities, and improve their vocational skills, thereby building apotential talent reserve for our company.
Employee training
During the Reporting Period, our in-house instructor team included 118 internal instructors, with 14 new certifiedinstructors.
New Employee TrainingCaseIn June 2023, AVD organized comprehensive training programs for new employees, encompassing induction training,plant-level safety training, and quality awareness and quality training. The induction training included foundationalknowledge about our company’s culture, values, and regulations, which helped new employees understand our historyand future direction, enhancing their sense of belonging and identification with our company. The plant-level safetytraining equipped employees with knowledge about safety operation procedures and emergency response to accidents,thereby elevating their safety awareness and skills. The quality awareness and quality training emphasized theimportance of product quality, fostering quality management awareness and skills among employees. These trainingsessions not only assisted new employees in quickly adapting to the work environment but also enhanced their workefficiency and quality, laying a solid foundation for the development of our company.
Training on Sales Skills
CaseIn April 2023, AVD organized a sales skill training session focused on the popularization of basic knowledge in the fieldof industrial intelligence and a deep understanding of our products. This training detailed the core features, technicalspecifications, and key parameters of our industrial intelligence products, ensuring that the sales team fully grasped theperformance indicators of our products. The training emphasized a detailed analysis of the product manufacturingprocess, allowing the sales team to thoroughly grasp the entire production cycle and technical advantages and thenprovide professional and comprehensive explanations of products during customer interactions. Through this focusedand extensive training, AVD has enhanced the professional expertise of our sales staff. They are now adept at not onlyaccurately promoting our existing products but also offering specialized consultancy services based on productprocesses, further strengthening our competitive edge and brand presence in the industrial intelligence market.
Training in Xiahe ClassCaseIn 2023, Ganzhou AVD launched the first phase of theXiahe Class Grassroots Technology Management Trainingto advance the development of grassroots technicalpersonnel, enhance their professional skills, and cultivatetheir logical and behavioral standards in problem-solvingand analysis. The program saw the participation of 79individuals, out of which 21 successfully completed thetraining.
AVD emphasizes training effectiveness and adopts an institutionalized approach to managing various training-related processes,including demand identification, planning, application, resource development, implementation, and effectiveness evaluation. TheHuman Resources Department is in charge of efficiently managing all types of training resources and records. Furthermore, acomprehensive training quality monitoring mechanism is in place. Post-training, employees undergo evaluations through writtentests, oral exams, practical operations, and experience reports. This process aids in the iterative improvement of the trainingsystem, continuously enhancing the overall effectiveness of our training initiatives.
To enhance the professional capabilities of our employees, AVD provides systematic professional training for employees acrossvarious sequences. To promote the comprehensive development of our employees, we develop tailored training plans focused onprofessional knowledge and skills for various business units and job roles, aligning with their unique characteristics andresponsibilities.
Training and assessment
Key performance
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Annex
73 74
During the reporting period, we supported 6 employees with our educational enhancement allowance, with the total subsidyamounting to RMB 6,000.00.
AVD encourages our employees to pursue further academic qualifications, offering allowances for educational enhancement tosupport their personal growth. Our eligible employees have the option of participating in the exams for self-taught students, thenational higher education exams for self-taught adults, or other exams, to enhance their on-the-job academic qualification.Educational enhancement
Total investmentin employee training:
RMB
43.69(in RMB 10,000)
Total training hours:
32,721hours
Total number ofpersons trained:
13,236Total number oftraining sessions:
Summary of AVD’s Overall Training Performance in 2023
Remuneration and AppraisalTo standardize salary and benefits management, motivate employees, and ensure fairness and reasonableness, AVD hasestablished internal salary and benefit systems in accordance with laws and regulations, including !"#"$%&'"(")*+*(,&-./0*#/(*12&3*(*4/,1&'"(")*+*(,&-./0*#/(*12&567*8,/9*&'"(")*+*(,&:;;$"/1"#&"(0&<*="$0&'*"1.$*1. We have created a salary structure for employeescomprising both basic and variable income, with the latter linked to individual performance appraisals. We continuously refine oursalary and benefits system, providing our employees with a compensation structure that is competitive externally and motivatingand fair internally.Aligned with our annual operational goals approved by the Board of Directors, we conduct regular quarterly and annual KPI indexperformance appraisals for all employees and establish corresponding standards for bonuses and commissions. These appraisalsinclude aspects like employee work performance and serve as objective criteria for performance bonus distribution, salaryadjustments, job promotions or demotions, recognition of outstanding employees, and job adjustments.
According to our !"#"$%&'"(")*+*(,&-./0*#/(*1, our employee remuneration is structured as follows:
Sound Remuneration andBenefit Systems
The salary is composed of basic salary, job grade salary, overtime salary, various allowances, fullattendance bonus, performance appraisal-related pay, and other additional and deductive salary items.
Welfare SystemIn terms of social security, we actively implement various welfare policies to ensure the statutory rights and interests of ouremployees. We fully declare and pay social insurance and the housing provident fund, including pension insurance, medicalinsurance, and work-related injury insurance. Moreover, we offer a variety of benefits like job allowances, technical allowances,high-temperature allowances, and a diversified welfare system that includes annual leave, marriage leave, sick leave, maternityleave, and other statutory holidays. During festivals like the Spring Festival and Lantern Festival, as well as on employee birthdays,we present holiday benefits and birthday gifts.
Welfare classificationWelfare type
Diversified Welfare System
CoveragePension insurance, medical insurance,work-related injury insurance,unemployment insurance, maternity insurance,
and housing provident fundHoliday benefits, job subsidies, birthday parties,high-temperature subsidies, night shift subsidies,technical subsidies, female employee benefits, team
building, dining benefits, and medical checkupsHousehold registration support for recruited ortransferred employees, talent housing, educationalenhancement subsidies, couple dormitories, marriage
subsidies, and service awards
Basic welfare
Care and benefits
Special welfare
All employeesof the Company
All employeesof the Company
Eligible employees
Hourlysalarysystem
The salary is composed of basic salary, post/job allowance, job grade salary, overtime salary, fullattendance bonus, night shift allowance, performance-related pay, and other additional and deductivesalary items.
Monthlysalarysystem
sessions
Key performance
Key performance
Message from the ChairmanAbout This ReportGlance at AVDESG Management
Standardizing Governance andConsolidating Foundations
Low-carbon Operatiofor A Green Future
Taking Responsibility andEnsuring Steady Development
Respecting Talents and Professionals,and Acting in Good Faith
Annex
75 76
Yoga class
Employee Care
AVD consistently focuses on “employee well-being” by fostering a “warm and harmonious” work environment. We fully respect andcare for our employees, take the initiative to support those in difficulty, and ensure the legal rights of female employees areprotected. We also engage in diverse cultural and sports activities to enhance employee happiness and strengthen corporatecohesion.
We support employees in hardship, focusing on resolving their urgent and challenging issues. By taking practical actions, we aimto do good deeds for our employees, striving to precisely cover the needs of employees in difficulty and those of specialemployees’ families.
Supporting employees with difficulty
To safeguard the rights and interests of femaleemployees, our Labor Union Committee has signed the!"#$%&'()*''#$+%,#()*-+.&$+(/*.(0#1&'#(21"'*3##4. To nurtureand care for our female employees, and to genuinelyattend to their well-being, we aim to inspire theirdedication and passion for their roles. During the 2023“Goddess Festival”, we issued holiday red packets andbouquets to our female staff, while also arrangingenjoyable activities such as yoga and aerobics classesspecifically for them. These efforts not only relievework-related stress but also add joy to their lives.
We are dedicated to creating a comfortable work environment and safeguarding the lawful rights of female employees duringmenstruation, pregnancy, childbirth, and breastfeeding periods, ensuring they receive the necessary special labor protection.During menstruation, female employees are not assigned to work at heights, in low temperatures, in cold water, or in work withGrade III physical labor intensity as stipulated by national regulations. We provide special meals and designated seating forpregnant employees. Those complying with the provisions of the Regulations on Family Planning are entitled to two dailybreastfeeding breaks, each lasting 0.5 hours. These breaks can be combined, allowing employees the flexibility to leave work anhour early or start an hour later.
Caring for female employees
Employee birthday party
In 2023, the employee welfare coverage rate of the company is 100%, with an average of 5.44 paid annualleave days per employee.
In 2023, we had 31 employees take maternity leave and 21 employees take paternity leave.
Key performance
Key performance
Message from the ChairmanAbout This ReportGlance at AVDESG Management
Standardizing Governance andConsolidating Foundations
Low-carbon Operatiofor A Green Future
Taking Responsibility andEnsuring Steady Development
Respecting Talents and Professionals,and Acting in Good Faith
Annex
77 78
Communication Meeting for Ganzhou AVD Management Trainees and Grassroots ManagementCase
Employee Communication
Ganzhou AVD’s Human Resources Department regularlyhosts communication meetings tailored to newly hiredcollege graduates. These meetings are designed tounderstand their adaptation process and address anychallenges they face, offer guidance and support to facilitatetheir transition from students to professionals, and ensurethat every new employee can swiftly integrate into our teamand then contribute to the development of our company.
Democratic Governance
AVD is committed to establishing an open and democratic communication mechanism for our employees, safeguarding their rightsto information, participation, expression, and supervision. We ensure the rights of our employees by signing the !"##$%&'($)!"*&+,%&)"-)&.$)/,0"+)1*'"* and actively listening to their opinions and suggestions through the Employee Congress. The decisions made inthe assembly are implemented after thorough voting. In compliance with the !"23,*4)/,5, the 6+&'%#$7)"-)677"%',&'"*8 and relevantregulations, one Employee Supervisor was elected in the Employee Congress to help employees legally exercise their democraticmanagement rights. We proactively support the labor union in its legal activities and ensure that it plays a pivotal role insafeguarding employee interests and enhancing internal coordination, thus fostering a sense of belonging and loyalty among ouremployees and cultivating a positive and supportive corporate atmosphere.We keep enhancing our employee communication channels through our Official WeChat Account, suggestion boxes, and employeecommunication meetings, so as to timely understand and address employee needs and concerns. Employee feedback is alsogathered through annual satisfaction surveys. We value employee input and continuously refine our workplace environmentaccording to obtained feedback and suggestions.
To balance our employees’ work and life and cater to their growing spiritual and cultural needs, we actively encourage theestablishment of cultural and sports clubs to continuously a variety of cultural and sports events, thus enhancing our employees’happiness and sense of belonging and strengthening our cohesiveness and unity. Additionally, we regularly organize sports meetsand competitive activities for our employees, who also participate in various cultural and sports events arranged by labor unionsand governmental organizations.
Enrichment of employee activities
In addition, Ganzhou AVD regularly organizes communicationmeetings with grassroots management to deeply understandtheir work status and address the challenges they face, thusensuring the efficient functioning of the management team.
An Event of AVD Basketball ClubAn Event of AVD Badminton Club
An Event of AVD Football Club“Labor Union Cup” Table Tennis Competition
for Enterprise Employees
Outdoor Activities for EmployeesSelection of “Employee Stars” in Longgang District
In 2023, AVD conducted one Employee Congress Meeting and 18 employee communication meetings and maintained a
100.00% processing and response rate.
Key performance
Message from the ChairmanAbout This ReportGlance at AVDESG Management
Standardizing Governance andConsolidating Foundations
Low-carbon Operatiofor A Green Future
Taking Responsibility andEnsuring Steady Development
Respecting Talents and Professionals,and Acting in Good Faith
Annex
79 80
We strictly adhere to applicable laws and regulations, including the !"#$%&$'()$*)%+,)-.$/)+01,23$%&$4(25"$%5$*6)7)5'2%5$"58$4%5'6%,$%&$9330+"'2%5",$:2.)".)., '()$!"#$%&$'()$*)%+,)-.$/)+01,23$%&$4(25"$%5$;%6<$="&)'>, and the *6%72.2%5.$%5$'()$?8@252.'6"'2%5$%&$9330+"'2%5",$A)",'($"'$;%6<+,"3).. Our safety management policy is built around the principles of “prioritizing safety and prevention, fulfillingresponsibilities, ensuring safety, complying with laws, reinforcing management, improving the environment, and protecting health”.We have established several occupational health and safety management systems such as 9330+"'2%5",$A)",'($9+)6"'2%5$B$=067)2,,"53)$4%5'6%,$*6%3)806).C$A"D"68$E8)5'2&23"'2%5$"58$/2.<$?..)..@)5'$F028),25).C$G"5"H)@)5'$*6%3)806).$&%6$="&)'>$E5.+)3'2%5$"58$?3328)5'$?..)..@)5'C$/0,).$%&$I26)$="&)'>$G"5"H)@)5'C$9330+"'2%5",$A)",'($G%52'%625H$='"58"68.C$?33%05'"12,2'>$=>.')@$&%6$="&)'>$*6%803'2%5C$JK02+@)5'$="&)'>$G"5"H)@)5'$*6%3)806).C$/0,).$%&$="&)'>$G"5"H)@)5'$%&$A"D"68%0.$4()@23",.C$"58$/0,).$%&$="&)'>$G"5"H)@)5'$&%6$4%5.'603'2%5$"58$A2H(L/2.<$;%6<M$These systems consistently integrate safety management into all aspects of our operations, effectively ensuring thehealth and safety of our employees.
Employee Grievance MechanismTo ensure open channels for employee feedback, we have established comprehensive compliant and grievance mechanisms instrict accordance with the F028),25).$&%6$'()$G"5"H)@)5'$%&$J@+,%>))$4%@+,"25'.$"58$F62)7"53) to offer smooth and confidentialchannels for employees to submit their grievances and support all employees to submit a grievance against or report anycorruption, abuse of power, confidentiality breach, illegal order, misuse of authority, and other issues causing dissatisfaction. Wehave constructed a comprehensive protection mechanism for complainants, ensuring that no one retaliates against employees fortheir legitimate grievances. If any such retaliation is discovered, we impose severe penalties, potentially including the terminationof employment. For grave violations, the relevant personnel will be investigated for legal responsibilities according to law.
Employee Satisfaction Survey
We have established a safety production Committeeresponsible for overseeing and guiding our safetyproduction and supervising and implementingsignificant decision-making and deployment relating tosafety production to ensure adherence to essentialsafety standards at work. AVD has established acomprehensive safety accountability system, ensuringaccountability in safety production management. Wesign a Letter of Responsibility for safety production,periodically evaluate our adherence to safetyproduction standards, and conduct thoroughassessments of our achievements in meeting safetyproduction objectives and benchmarks.
Health and Safety Management
Management Hierarchy
AVD conducts an annual employee satisfaction survey, thoroughly collecting opinions and suggestions to assess employeesatisfaction. In 2023, 40 aspects were evaluated for the employee satisfaction survey, including performance policies, welfaresystems, living environment and management, the developmental prospects of our company, and our employees’ sense ofbelonging and identification with the company.4 In 2023, our employee engagement survey, involving all employees of our group,achieved an 84.33% response rate. The overall satisfaction score stood at 71.45, marking a 0.60% increase from 2022.
Occupational Health andSafety Production
Grievance flowchart
Employee grievance
flowchart
Department Head(Section Chiefand Manager)
Human ResourcesDepartmentGrievance ongeneral issues
General ManagerHuman ResourcesDepartmentGrievanceson significant issues
If resolved: OK
Investigation concludedand results announced
Investigation concludedand results announced
within five days
Grievanceson special issues
General Manager
If resolved: OK
If resolved: OK
If unresolved
If unresolved
Shift LeaderDepartmentSupervisor
DepartmentManager
Manager ofthe HumanResources Department
General Manager
Employees
EmployeeRelationship
Specialist
4The satisfaction survey is specifically focused on the employees of Shenzhen AVD.
Grievance channels
The first personin charge(Legal Representative)The primary person in charge
(General Manager)Actual person in charge(Director of the Security Committee)
Safety Production Leading GroupDepartment heads and all employees
Huang ZhiyiChen Wenjian
Zheng RongInvestigation concludedand results announced
Employee RelationshipSpecialist
Employeecommunication
meetings
Official AccountsHotline
Employeesuggestion box
Message from the ChairmanAbout This ReportGlance at AVDESG Management
Standardizing Governance andConsolidating Foundations
Low-carbon Operatiofor A Green Future
Taking Responsibility andEnsuring Steady Development
Respecting Talents and Professionals,and Acting in Good Faith
Annex
81 82
In 2023, we established occupational health and safetygoals including “zero work-related fatalities, zerochemical leak incidents, 100.00% coverage ofthree-level safety education for new employees, and
100.00% completion rate for safety contingency plan
drills”, to quantify and implement requirements onsafety production. To achieve our annual safetyproduction management objectives, we focused onimplementing our safety accountability system,enhanced risk control for safety production, conductedtraining relating to safety production, and improved thesafety awareness of all employees to minimize oursafety risk. During the Reporting Period, Ganzhou AVDwas recognized as a “Healthy Enterprise of GanzhouCity” for 2024-2026.
Implementing Safety Production
An Emergency Drill for Injury Accidents from Motorized ForkliftCaseIn April 2023, the Company conducted an emergency response drill simulating an injury accident resulting from amotorized forklift. The training encompassed reporting procedures, vigilance and protection, first aid for the injured, andthe use of emergency medications. In addition, emergency response and first aid drills were conducted through the on-sitesimulation of an injury accident resulting from the forklift. The drill significantly improved our employees’ emergencyresponse skills and methods for handling forklift injury accidents. It also helped them become proficient in our contingencyplans for such accidents, ensuring that in the event of an incident, the injured can be promptly treated to minimizesecondary injuries.
An Emergency Drill for the Disposal of a Hazardous Chemical Leakage AccidentCaseIn May 2023, we conducted a drill for hazardous chemical leaks, covering crucial aspects like evacuation, vigilance andprotection, rescue operations, medical aid, the sealing of leaks, and on-site evaluation and summary. The drill enhanced ouremployees’ ability to handle hazardous chemical leaks and ensured their familiarity with emergency procedures and properuse of emergency facilities, thereby ensuring both employee safety and normal company operations. Moreover, the drillfacilitated the further refinement of our contingency plans, preparing us for any potential hazardous chemical leaks thatmight occur in the future.
We implement a dual prevention mechanism in accordance with the !"#$%&'()*+,-%.*/'0"1'*#'%2$'($*34$56'7$3,84.-'*#'92./". In addition,we have established and implemented the 7,4$6'*#'%2$':"/";$<$/%'*#'=">")+'?+$/%.#.-"%.*/'"/+'7.6@'A66$66<$/%B'C--,3"%.*/"4'=$"4%2'C3$)"%.*/'D'!,)E$.44"/-$'9*/%)*4'()*-$+,)$6, and 7,4$6'*#'%2$':"/";$<$/%'*#'!"#$%&'?/63$-%.*/'"/+'A--.+$/%'A66$66<$/% to identify potentialhazards in our production process and assess risks, thus guiding our company to continuously improve our safety risk identificationand control mechanisms, minimize our safety risks, and safeguard the life safety of our employees.
Risk identification
We deeply engage in special rectification and improvement actions for safety production and refine and implement theinvestigation of internal hidden dangers and cross-location hidden dangers according to our internal regulations to promote therectification of hidden dangers in safety production. We intensify our focus on identifying and rectifying safety risks, conductingcoordinated annual safety production inspections, and guiding related departments to perform self-inspections and corrections.We place a high emphasis on safety production, rigorously address hidden dangers in safety production, and investigate and rectifyhidden dangers in electrical safety, fire safety, chemical safety, and electrical safety, thus intensifying governance at the sourceand governing dangers systematically and comprehensively.
Identification of hidden hazards
We have formulated contingency plans for events such as fires, chemical leaks, forklift accidents, and pressure vessel explosions.Meanwhile, we organized training and drills and summarized and evaluated drill outcomes to maximize the safety awareness andcapacity to handle emergency safety incidents of our employees, thus safeguarding their safety. In 2023, we have conducted 19emergency training and drills.
Contingency plan and drills
During the Reporting Period, we have conducted 52 special safety inspections, identified and addressed 613 hiddendangers in safety, and achieved a rectification rate of 100.00% for hidden dangers.
AVD has been certified to ISO 45001:2018 Occupational Healthand Safety Management System.
Key performance
Message from the ChairmanAbout This ReportGlance at AVDESG Management
Standardizing Governance andConsolidating Foundations
Low-carbon Operatiofor A Green Future
Taking Responsibility andEnsuring Steady Development
Respecting Talents and Professionals,and Acting in Good Faith
Annex
83 84
Safety Production Month
CaseDuring the reporting period, AVD organized a “Safety Production Month” campaign themed “Everyone Speaks of Safety,Everyone Knows Emergency Response”. The campaign emphasized the fundamental knowledge of safety production,related laws and regulations, and the sharing of in-plant safety incident cases. These efforts were aimed at fortifyingour responsibility towards safety production, enhancing our employees’ safety awareness and expertise, fostering arobust safety culture, and establishing a solid foundation for safety production practices.
Safety Re-education Training CampaignCaseDuring the reporting period, AVD carried out an all-employee safety re-education campaign, providing annual safetyeducation to everyone in the company. The education covered a range of topics including: responsibilities in safetyproduction, industrial safety, occupational health, environmental protection, and fire safety. This training played asignificant role in strengthening safety awareness across all levels of our company.
AVD prioritizes employees’ occupational health, strictly abides by national and local laws and regulations, implements andcontinuously improves our internal management systems, such as the !"#$%&'(&)*+',&-*($./&0,'.$1.2'3 and 411"5*.2'3*#&6$*#.7&8'32.',239&-.*3:*,:%, and identifies, analyzes, and controls occupational hazards that may arise from or present in work processes.Key occupational health hazards in our workshops include hydrochloric acid, noise, sodium hydroxide, and acetone. Each year, weengage certified occupational health technical service organizations to assess potential occupational disease hazards in ourworkplace. For roles identified as having occupational health risks, we implement various measures to ensure the occupationalsafety and health of employees. These include making technological modifications to reduce sources of hazards, providingpersonal protective equipment, limiting daily exposure times, conducting regular health checkups, and strengthening themanagement of occupational health assessments.
In 2023, AVD implemented a variety of measures to safeguard employee health and safety.
Guarding Occupational Health
We endeavor to deeply embed a culture of safety in every employee, organize extensive safety production training activities,diligently adhere to the safety production policy of “safety first, prevention foremost”, and strictly follow the !"#$%&'(&.7$&8*3*9$;$3.&'(&-*($./&<,*23239. In 2023, tailored to the needs of different types of employees, we conducted various training sessions such as“Training on the Promotion of the -*($./&0,':"1.2'3&)*=&'(&.7$&0$'5#$>%&!$5"+#21&'(&?723*”, “Training on the Prevention of MechanicalInjury”, and “Training on the Use and Management of Hazardous Chemicals” to enhance our employees’ safety awareness, avoidpotential risks, and safeguard our safety production and the life safety and health of our employees.
Security awareness promotion
Priority measures for the prevention of occupational diseases
In 2023, we invested RMB 2,742,100.00 in safety production and RMB 33,600.00 in safety education andtraining. A total of 7,669 instances of employee participation were recorded in 146 safety training sessions,accumulating 3,279 hours. We achieved a 100.00% coverage rate for safety training. There were 10 cases ofwork-related injuries among employees, with no fatalities reported. The total number of workdays lost due to work-relatedinjuries was 188.5.
Key performance
Message from the ChairmanAbout This ReportGlance at AVDESG Management
Standardizing Governance andConsolidating Foundations
Low-carbon Operatiofor A Green Future
Taking Responsibility andEnsuring Steady Development
Respecting Talents and Professionals,and Acting in Good Faith
Annex
85 86
Beyond physical health, we also focus intently on our employees’ mental well-being. Upholding the principle of “developing andpromoting mental health knowledge within our factory and community, and serving the mental health of our employees andcommunity members”, we established the Shenzhen AVD Psychological Aid Association to create a “Soul Station” for ouremployees to help them “develop and improve themselves, gain knowledge about mental health, and improve problem-solvingabilities and the capacity to assist others”.Regularly, we organize educational campaigns on mental health, coupled with activities like psychological growth workshops,one-on-one counseling sessions, and mental health guidance. These initiatives form a platform that fosters both corporatecommunication and the psychological development of our employees, thus driving and spearheading innovation in corporatemanagement, significantly contributing to the healthy development of our employees within the community.
Soul Station For employees in roles associated with occupational hazards, we arrange corresponding occupa-tional health checkups before their employment begins, annually during their tenure, and beforethey leave their positions. These checkups effectively monitor their health conditions and enhancetheir awareness of self-protection.
Occupational health checkups
In accordance with occupational disease risk prevention standards, we equip workers in positionswith potential occupational disease hazards with the necessary protective tools, such as faceshields, earplugs, and safety footwear. We also ensure that employees are supervised to use theseprotective tools.
Equipping with protective tools for occupational diseases
The Safety Office identifies points of occupational hazards within our company based onoccupational health assessment reports from third-party organizations and conducts routine safetyinspections according to the requirements of laws and regulations.Detection of occupational hazard factors
Our Technical Department considers measures to prevent occupational injuries and diseases duringthe product design process. During the design and review stages, we assess the environmental andoccupational health and safety risks that may arise in the use or production of our products. Weadvocate using non-toxic and harmless technologies and replacing toxic substances with non-toxicor less toxic alternatives wherever feasible.
Product design phase
We replaced high-noise equipment with low-noise alternatives and installed vibration and noisereduction facilities. Measures such as sound insulation or absorption have been employed to preventnoise levels from exceeding standards. We also systematically upgrade or phase out equipment thatfails to meet safety requirements.
Equipment renovation for harm reduction
In 2023, we achieved a 100.00% occupational health checkup rate for employees, with 0 new case of occupationaldiseases reported.
Key performance
Message from the ChairmanAbout This ReportGlance at AVDESG Management
Standardizing Governance andConsolidating Foundations
Low-carbon Operatiofor A Green Future
Taking Responsibility andEnsuring Steady Development
Respecting Talents and Professionals,and Acting in Good Faith
Annex
87 88
Social Contribution
Supporting Zhuozhou in Flood Control and Disaster ReliefCaseIn July 2023, heavy rains began in North China due to the residual circulation of Typhoon Doksuri. Influenced by thesecontinuous downpours and upstream floods, Zhuozhou in Hebei Province confronted a critical situation in flood controland disaster relief efforts. Responding to the crisis, we directed a donation of RMB 80,000.00 to Zhuozhou City throughthe Zhuozhou Civil Affairs Bureau’s disaster relief account, providing aid and comfort to the people in thedisaster-affected area, and helping them overcome this difficult time.
Supporting Gansu in Earthquake ReliefCaseIn December 2023, Jishishan, Gansu Province was struck by a sudden 6.2 magnitude earthquake. In response to thedisaster, we donated RMB 100,000.00 to the earthquake-stricken area. This donation was allocated for emergencyrescue efforts, assistance to affected residents, and post-disaster reconstruction, providing aid to those impacted bythe disaster.
Purchasing as a Form of DonationCaseTo actively support rural revitalization, we implement strategies such as “purchasing as a form of donation” and “purchasingas a form of assistance” to purchase agricultural products from regions undergoing poverty alleviation, thus facilitating thedisposal of challenges faced by farmers in these regions regarding the sale of their agricultural by-products and incomegeneration. By stimulating consumption, we contribute to their development and ignite the inherent momentum for ruralrevitalization.
Volunteer ActivitiesCaseWe embody the volunteer spirit of “dedication, friendship, mutual assistance, and progress”, consistently engage involunteer services, and demonstrate our corporate ethos. While our corporate leaders engage in various charitableactivities, our employees also actively perform social responsibilities in the community. They participate in differenttypes of volunteer activities to contribute their power to build a better society. During the Reporting Period, ourvolunteers carried out activities such as cleaning roads and picking up trash to foster a clean, comfortable, and healthyliving environment for the community.
Visit by Students from the Daliangshan RegionCaseEvery year, our company partners with students from the Daliangshan region to conduct a unique social welfarecampaign. We present the students with advanced technological equipment and production processes, while alsoarranging for interactive exchanges between the students and our employees. This allows us to gain a deeperunderstanding of their lives, academic pursuits, and dreams. These activities broaden the student’s perspectives andestablish a communication bridge between our company and the youth of the Daliangshan region.
Since our inception, we have consistently focused on integrating corporate development with social responsibility, seizing strategicopportunities like rural revitalization, playing a leading role in our industry, actively participating in social welfare activities, andcontributing substantially to social value. In 2023, we continued our commitment to public welfare by advancing social donations,rural revitalization, and various charitable activities, thereby sharing warmth and love with society.
Message from the ChairmanAbout This ReportGlance at AVDESG Management
Standardizing Governance andConsolidating Foundations
Low-carbon Operatiofor A Green Future
Taking Responsibility andEnsuring Steady Development
Respecting Talents and Professionals,and Acting in Good Faith
Annex
89 90
Annex I: Indexes
Chapters and Sections
!"#$%&'%(&)&$*+,-./0$&'1+!$%'2%02#+/3+4)/(%)+!"#$%&'%(&)&$*+!$%'2%02#+5/%02+64!!57
（GRI Standards）
4"&2-)&'-#+/'+8/0./0%$-+!/9&%)+,-#./'#&(&)&$*+,-./0$&'1+3/0+8:&'-#-+
;'$-0.0&#-#
P2.1-2.2P1.1-1.3P4.1-4.4
P4.1P4.3-4.4G3.11A2
G2.1-2.2，G2.4，G3.1，G3.3
G3.2G3.6-3.7
G3.5
G3.9G1.1-1.4，G1.9-1.10，G3.6G1.10，G3.6
G1.3G1.6-G1.7
P3.1E1.1，E1.3-1.4，E1.6，E2.14E2.1-2.2，E2.9E2.1-2.2，E2.4-2.5，V4.1，V4.3E3.1，E3.3，E3.5
2-222-2，2-32-1，2-6——————201-12-12，2-14——2-222-29——3-3，2-9，2-10，405-13-3，2-27，203-23-3，2-27，207-23-3，2-27，205-2，205-3
——
3-33-3，302-2，303-1，303-5
3-3，302-13-3，306-2
Message from the Chairman
About This Reportv
Company ProfileCorporate Culture
Milestones
HonorsPerformance in 2023Sustainable Development
SystemResponse to Sustainable
Development GoalsCommunications with
StakeholdersAnalysis of Substantive
IssuesEnhancement of ESGManagement AwarenessOrganizational Structure
Investor Relations
ManagementRisk Management
Business ethicsParty Building Work
Enhancement ofEnvironmental Management
Optimization of Resource
ManagementActions against Climate
ChangeReduction of pollution
emissions
Glance at AVD
ESGmanagement
StandardizingGovernance and
Strengthening
Foundations
Low-carbonOperation for A
Green Future
S5.1-5.2S4.1-4.2
S4.6S4.3，S4.5
V2.1-2.3S1.1-1.5，S1.8
S2.1-2.4S1.7，S1.10
S1.6
S3.1-3.11
V3.4，V3.6-3.7
A4A5
3-3，414-1，414-2
——3-3，418-13-3，416-2
3-33-3，401-1，405-1，406-1，408-1，
409-13-3，404-1，404-23-3，401-2，401-3
3-3
3-3，403-1，403-2，403-3，403-5，403-6，403-7，403-9，
403-10
3-3，413-1
————
Building sustainable supply
chainsOrientation to Product
QualityInformation security and
privacy protectionProtection of customers'
rights and interestsR&D and InnovationEmpowering Development
Management of Staff
EmploymentEmployee Growth and
DevelopmentSound Remuneration and
Benefit SystemsEmployee Communication
Occupational Health and
Safety Production
Contribution to Society
IndexesFeedback
TakingResponsibilityand Ensuring
SteadyDevelopment
RespectingTalents andProfessionals,and Acting inGood Faith
Annex I
Annex II
Chapters and Sections
!"#$%&'%(&)&$*+,-./0$&'1+!$%'2%02#+/3+4)/(%)+!"#$%&'%(&)&$*+!$%'2%02#+5/%02+64!!57
（GRI Standards）
4"&2-)&'-#+/'+8/0./0%$-+!/9&%)+,-#./'#&(&)&$*+,-./0$&'1+3/0+8:&'-#-+
;'$-0.0&#-#
Message from the ChairmanAbout This ReportGlance at AVDESG Management
Standardizing Governance andConsolidating Foundations
Low-carbon Operatiofor A Green Future
Taking Responsibility andEnsuring Steady Development
Respecting Talents and Professionals,and Acting in Good Faith
Annex
91 92
We appreciate your time in reading the 2023 Environmental, Social and Governance (ESG) Report of Shenzhen AV-Display Co., Ltd.To continuously improve our ESG efforts and further enhance sustainable development management, we cordially invite you toprovide your valuable feedback by filling out the relevant questions in the feedback form through the following modes.Your insights are crucial for our ongoing improvement in ESG work and sustainable development management. We are grateful foryour strong support of our ESG initiatives.Department: Securities Affairs Department of AVDTel.: 0755-86106838Email: qiutw@av-display.comAddress: No. 39, Jinyuan Road, He'ao, Yuanshan Street, Longgang District, Shenzhen, China
Annex II: Feedback
2. Your overall assessment of this year’s ESG report:
□ Excellent □ Good □ Average □ Below Average □ Poor
1. Which type of stakeholders do you belong to:
□Employee □ Client & Consumer □ Shareholder or Investor □ Supplier □ Government & Regulatory Authority □ Media/Industry
Association □ Others (please specify)
6. Which topics are of most concern to you? (You may select 3 items)
□ Energy Saving and Emission Reduction □ Climate Change □ Green Production □ Safe Operation □ R&D Innovation
□ Quality Service □ Standardized Governance □ Product Quality □ Employee Care □ Community Care
7. Does this ESG report provide any information that you are interested in:
□ Yes □ No (What additional information would you like to see _______)
8. Do you have any other comments or suggestions regarding our ESG report, ESG work, or sustainable development management?
____________________________________________________________________________
3. Your opinion on this report’s information disclosure：
□ Excellent □ Good □ Average □ Below Average □ Poor
4. Your opinion on this report’s layout design：
□ Excellent □ Good □ Average □ Below Average □ Poor
5. Your opinion on this report’s readability：
□ Excellent □ Good □ Average □ Below Average □ Poor
If you have any suggestions on this report or thesustainable development management of ourCompany, please scan the QR code below to providefeedback. Your suggestions will help Qiu Tian Weicontinuously improve the level of sustainabledevelopment of the Company.
Message from the ChairmanAbout This ReportGlance at AVDESG Management
Standardizing Governance andConsolidating Foundations
Low-carbon Operatiofor A Green Future
Taking Responsibility andEnsuring Steady Development
Respecting Talents and Professionals,and Acting in Good Faith
Annex
93 94