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凌云光:2023Environmental,Social and Governance(ESG)Report 下载公告
公告日期:2024-04-30

董事长致辞走进

凌云光2023 年度荣誉可持续发展组织贡

规范治理人才培

养环境优化Stock Code: 688400

Knowledge and Reasons

are Our Arms to Embrace

the World

LUSTER LightTech Co., Ltd.Environmental, Social andGovernance Report

LUSTER

Knowledge and Reasons are Our Arms toEmbrace the World!

1 Sustainable DevelopmentContents

A Message from theChairmanAbout LUSTER2023 RemarkableAchievements 2023 Honors

?Sustainable Development Analysis andActions?Sustainable Development Goals?Stakeholder Communication?Analysis of Material Issues

2 OrganizationalContribution?Responsible Products?A Responsible Supply Chain?Responsible Brands?Digital Operations

3 Regulating Governance?Corporate Governance?Compliance Operation?Data Security and Privacy Protection?Organizational Change

4 Talent Training

?Human Rights Protection?Talent Attraction and Retention?Talent Training and Development?Employee Health and Safety?Establishment of Harmonious Workplace

5 Environmental Protection

?Innovation Driven Green Development?Green and Low-carbon Operations?Giving back to the Community with Love

A Message from

the Chairman

About LUSTER

2023 Honors

SustainableDevelopment

Organizational

Contribution

Regulating

Governance

Talent Training

Environmental

Protection

Consolidate the Power of Ordinary and Create Extraordinary Things

1. Actively creating value to serve the industry andmajor clients

In the field of 3C electronics, we have provided a large number of intelligent testing andproduction process solutions and products such as HyperTrain 8000 to top-tier customers in theindustry, greatly improving their production efficiency and liberating hardworking laborers. Wehave also strategically partnered with top-tier customers in intelligent visual appearanceinspection, achieving mass deployment from concept to reality. In the expansion of new displaybusiness, we have collaborated with BOE, Sharp, AUO, Tianma, and Lens to test car screensfor Tesla, Mercedes-Benz, and BMW. At the same time, we have actively expanded intooverseas markets, serving industry major customers with intelligent quality testing andmanagement solutions, building reputation and influence! As a representative of China'smachine vision industrial quality inspection, LUSTER appeared in a large-scale documentaryseries called "Smart Manufacturing in China" on CCTV and was hailed by CCTV as theindustrial version of "Li Zhu," bringing positive industry influence to the company!

In the field of new energy, LUSTER's industry-first online burr inspection system hasbeen validated by customers, establishing a positive influence in the industry. The square

In the direction of cultural metaverse with stereoscopic vision, LUSTER continues toenhance core capabilities such as motion capture, light field modeling, and XR virtual-physicalfusion shooting. We deepen cooperation with major customers such as Migu and CCTV, yieldingfruitful results. For three consecutive years, we have provided technical support for the shootingof XR programs for the CCTV Spring Festival Gala. The short film "Wang Bo's Return," createdin collaboration with the CCTV National Laboratory for National Defense, made its appearanceat the World VR Conference. Leveraging AI hyper-realistic digital human technology, we haveachieved highly detailed replication of digital humans at the level of 50-100μm hair thickness,receiving industry acclaim. Additionally, we have established a comprehensive metaverseecosystem with Tsinghua University and China Mobile's Migu company, as well as establishedthe MAC Metaverse Performance Technology Center at the Beijing Shougang Park Curling Hall.Furthermore, we have established the LUSTER Virtual Production Base in Malanshan and put itinto operation. The 2023 China Metaverse Conference, jointly organized with the MetaverseTechnology Committee of the Chinese Association for Artificial Intelligence, has achieved acomplete success. As a contributing unit to the core technology of XR virtual-physical fusion forthe "4K/8K Ultra HD TV Production and Presentation System and Industrial Application"project of the CCTV National Laboratory for National Defense, we collectively won the firstprize of the Science and Technology Progress Award from the Chinese Institute of Electronics.In the fiber optics and optics field, we have provided the industry with the OCS all-opticalexchange solution from the Intelligent Computing Center, which has been favored by theindustry. In the life sciences field, we have launched the groundbreaking Sminer droplet digitalPCR system, which enables absolute quantitative nucleic acid detection, contributing to the fieldsof life sciences and precision medicine.

A Message fromthe Chairman

About LUSTER

2023 Honors

SustainableDevelopment

Organizational

Contribution

Regulating

Governance

Talent Training

Environmental

Protection

2023 is a year of nurturing, cultivating, laying the foundation, and sowing hope. In the newsituation, artificial intelligence large models and spatial computing are emerging, allowingeveryone to see the hope and dawn of the future amidst the sustained pressure on the globaleconomy. All LUSTER people have worked hard and achieved remarkable results in varioustasks. 2023 is also a year of strategic layout and sowing hope. One stroke creates the universe,where nothing existed before. We started the construction of LUSTER Taihu Industrial ArtificialIntelligence Park in Suzhou. It carries the collective dream of all our colleagues for industrialartificial intelligence and lays the foundation for LUSTER's century-old foundation! Over the pastyear, LUSTER has centered its business around customers and aimed to promote the developmentof user industries, making significant contributions to various industries. In the 3C electronics,new energy, printing and packaging, and cultural metaverse with stereoscopic vision, which arethe strategic focuses of the company, we have gathered our superior resources and workedcollectively to achieve breakthroughs and remarkable results in current business.

Knowledge and Reasons are Our Arms toEmbrace the World!

appearance inspection equipment has achieved mass delivery. In the photovoltaic field, thenewly developed photovoltaic cell inspection system has been validated by customers, solvingindustry challenges. The company, in collaboration with CATL and Anman Times, strives toovercome multiple technical challenges in intelligent appearance inspection throughtechnological innovation. In the printing and packaging field, LUSTER actively serves the top10 major customers, achieving rapid growth in performance, and making breakthroughs ininternational markets. We have partnered with YIYAO PRINTING to create a leadingintelligent factory solution in the domestic Carton Packaging Industry, which has beenimplemented in Zhenjiang. We have also collaborated with Founder Group and GGSC tojointly serve HUNAN XINHUA PRINTING GROUP. Under the guidance of the Printing andGraphic Arts Association, the company has taken the lead in developing industry standards forintelligent visual quality inspection in offset printing.

2. In products and core technology: Accumulatingstrength, reaping abundant fruits

LUSTER has achieved significant breakthroughs in multiple fields with its focus on "vision+ AI + automation" products and core technologies. In 2023, we released more than 20 softwareand hardware products, delivering over 50,000 high-end vision devices to more than 3,000customers worldwide, as well as nearly 20,000 intelligent vision components, systems, andequipment, helping customers improve quality, increase efficiency, and reduce costs andpersonnel. In 2023, the company obtained 199 new patents, with a total of 709 patents.In the field of advanced optical computing and imaging, our high-end vision deviceproducts have made remarkable progress. The CB1000 short-wave linear array camera hasmaintained a leading position in fields such as photovoltaics and semiconductors. The CB2000short-wave infrared array camera has achieved breakthroughs in the laser industry. Intelligentvision systems and equipment have made new breakthroughs, and the VisionGLUE Dispensing& Inspection Integrated Vision Inspection System has been well received in the 3C businessmarket.The FZMotion motion capture system has been upgraded to stably support over 100smooth live broadcasts of digital humans. The InFision virtual-physical fusion production systemhas been successfully applied in major events such as the CCTV Spring Festival Gala, theNational People's Congress, and the Golden Rooster Film Festival. The LB6000 series 150million pixel global shutter camera has won the National Instrumentation Gold Medal, becominga star product in the industry.In the frontier technology fields of image artificial intelligence and large-scale models, wehave utilized deep learning technology to create the F.Brain platform, which has been applied in15 projects across industries such as printing and packaging, new energy, and 3C. At the sametime, we have launched an intelligent equipment cockpit, enabling equipment maintenanceprediction and pre-knowledge. LUSTER have also accumulated a database and model base oftens of millions of industrial data. LUSTER's Knowledge and Reason Research Institute and theMetrology Institute's Optoelectronic Imaging and Display Metrology Laboratory havecooperated to tackle industry challenges together. In the field of automation, we have overcomebottleneck processes such as soft wire connection in the 3C manufacturing process and 0.8mmmicro screw locking, striving to solve the key technological challenges in the last millimeter ofintelligent manufacturing factories.

In 2023, the company was granted 199 authorized patents, including 59 invention patents,and obtained a total of more than 700 authorized patents. We participated in the formulation andrelease of 4 industry and group standards, accumulating a total of 19 standards. We participatedin the writing of three white papers, including the "White Paper on the Development of AIIndustrial Quality Inspection Applications,""White Paper on AI Vision Empowering IntelligentManufacturing," and "2023 Silicon Carbide (SiC) Industry Research White Paper," totaling ninewhite papers. We have been honored with the

3. Promoting talent development within the organizationwhile making progress

2023 is a crucial year for the company's human resources development. With the mission ofundertaking business strategy implementation and serving major clients, significantimprovements have been made in the field of human resources. In terms of IPD2.0transformation and meeting the organizational capability demands of major clients, furtheroptimization and design have been completed for the business processes and organizationalstructure of product development. Clarifying the organizational responsibility and powerrelationship between the front, middle, and back ends has promoted the efficient utilization ofhuman resources. In response to the problems in the process of serving large customers, the keyweaknesses that currently affect the improvement of customer satisfaction have been identified;The company has reorganized its job system, established 7 job families, 34 job categories, 210professional positions, and more than 200 management positions, laying the foundation for thenext step of personnel position matching and salary return matching corresponding to job levels.This will effectively support value evaluation and value distribution work, and stimulateorganizational vitality.In terms of cadre development, the company has released the "LUSTER CadreManagement System 4.0", which improves the concept and requirements of cadre management.This will effectively support the development and appointment of more outstanding cadres andhigh-potential reserve talents. At the beginning of the year, the cadre succession plan wasinitiated, identifying over 100 key positions and more than 200 high-potential cadre talents. 35new cadres were boldly promoted and utilized, laying the foundation for cultivating anddeveloping more top talents.

first prize of the Science and Technology Invention Award from the China Graphics and ImageSociety, the leading service organization in intelligent manufacturing in Jiangsu Province, the2023 Typical Case of Artificial Intelligence Integration and Security Application - NavigationType, and the 2023 Beijing Artificial Intelligence Industry Empowerment Typical Case - Large-scale Model Type, among other national and provincial honors. We have also undertaken fivekey technology projects from the Ministry of Science and Technology and the Ministry ofIndustry and Information Technology.

LUSTER's Knowledge and Reason Research Institute's vision pre-training large-scalemodel technology took the lead in accuracy and efficiency in the recognition of industrial imagesin the IEEE Conference on Computer Vision and Pattern Recognition CVPR 2023 IndustrialQuality Inspection Challenge, winning the first place in the VISION Track competition. Thelithium battery cylindrical cell appearance inspection equipment and the VisionGLUEDispensing & Inspection Integrated Vision Inspection System have won the Innovation GoldAward from "Vision Systems Design" magazine.

A Message fromthe Chairman

About LUSTER

2023 Honors

SustainableDevelopment

Organizational

Contribution

Regulating

Governance

Talent Training

Environmental

Protection

Knowledge and Reasons are OurArms to Embrace the World!

Regarding talent development, opportunities for growth andlearning have been provided to 222 cadres through programs such asthe Talent Elite Plan, BU/SPDT General Manager's BusinessManagement Series, and grassroots cadre training camps. Trainingcamps for PDT/PM/SE have been completed for 93 individuals.Additionally, over 100 recent graduates were hired, and trainingprograms were implemented for their onboarding and integration intothe company. These efforts provide momentum for the company's long-term development. The company continues to deepen its Dajue TempleTrust Program, strictly conducts key business audits, and continuouslyimproves its management and governance capabilities. All employeeshave been determined to actively implement the organizational bottomline requirements of "Three-self, one criticism, and four commitments",laying a foundation for continuously improving organizationalcapabilities.

Those who seek the growth of wood must solidify its foundation;Those who wish to flow far must dredge their springs. 2024 will continueto be a year of quality improvement for LUSTER. We need to cultivateinternal skills to enhance the core competitiveness of our products,achieve end-to-end integration of TQRDC, design 5 layers of QualityAssurance products, and launch specialized projects such as reliability,quality, organizational capabilities, and internal GMQM1.0. Whileaddressing symptoms, we can fundamentally solve the core problems ofvisual problems and product development management, and achieve theSmartPQD strategic demands of customer ODS and intelligentproduction. In terms of business management, we focus on serving majorcustomers, improving quality and efficiency, and reducing costs anddeposits; Developing organizational capabilities to improve efficiency,continuously optimizing organizational design and job responsibilities,implementing IPD business processes and organizational changeevolution, and strengthening organizational leadership and managementcapabilities; Organizational development:Three-self, one criticism, andfour commitments, clarifying the business behavior benchmark withbottom line for career growth. In 2024, all colleagues actively face thechallenge, walk with giants, and work deeply!

Consolidate the power of ordinary and createextraordinary things. For many years, the company hasadhered to the general policy of promoting quality in businessdevelopment: by continuously improving the value andquality of work, the company can achieve a healthy leapforward in scale. In the context of the overall environment,machine vision is a key element of artificial intelligence! Ourwork revolves around the continuous strategic investment inproduct and technology development of intelligent visualdevices, systems, and equipment, supporting customers inintelligent production transformation and cultural metaversebusiness production in multiple industry fields. We seedevelopment opportunities behind the great crisis. Togetherwith top industry clients, we aim to overcome various AIapplication technology challenges in various fields. We arewell aware that only organizations with quality can win, andthe company's management actively organizes together tocarry out product development organizational changes. In2024, we will strengthen the construction of processes andquality. The management team will assess the situation andmake correct decisions. Employees will have benchmarks andplans in their work, and work will be done in one go; Eachcolleague becomes better, contributing to customers,developing the team, and achieving personal success.

Yao Yi, Chairman of LUSTER

4. In 2024, we will continue to adhere tothe principle of promoting industrythrough quality, and win in intelligence

A Message fromthe Chairman

About LUSTER

2023 Honors

SustainableDevelopment

Organizational

Contribution

Regulating

Governance

Talent Training

Environmental

Protection

Knowledge and Reasons are OurArms to Embrace the World!

About LUSTERCompany Profile

LUSTER is committed to growing into a global leader in the field of visual artificialintelligence and optoelectronic information. The Company has always adhered to theapplication innovation of light technology, used AI+ vision to implant the eyes andbrain into machines, strategically focused on machine vision business, actively builtpresence in strategic business segments such as electronic manufacturing, new energyand cultural metaverse, and empowered industrial intelligent manufacturing andintelligent production of cultural metaverse content.

Mission Implant the eyes and brain into machines, empower light speed

interconnection, create and realize customer dreams.

Vision Grow into a global leader in the field of visual artificial intelligence

and optoelectronic information.

Core Values Promote the development of the industry as the responsibilityand work hard together. Turn knowledge into wealth, and attribute wealth to itstrue creators.

Knowledge and Reasons are Our Arms toEmbrace the World!

A Message fromthe Chairman

About LUSTER

2023 Honors

SustainableDevelopment

Organizational

Contribution

Regulating

Governance

Talent Training

Environmental

Protection

2023 Remarkable AchievementsAnnual Events in Vision and Artificial Intelligence

2023.01

The Co-edited "White Paperon Industrial Intelligence"has been Officially Released

2023.06

Product Release of Lithium

Cell Product AppearanceInspection Equipment andPole Piece Burr All-in-oneInspection System

2023.03

LabelHERO-F Offline QualityInspection System NewProduct Appeared at ChinaInternational Label Exhibition

2023.07

LUSTER SignsStrategic CooperationAgreement with HBIS

Digital

2023.03

Cigarette Packet OfflineQuality Inspection System and

Printing Intelligent Factory

Solution Newly Unveiled

2023.07

The New HyperTrainProduct has Achieved

Bulk Delivery

2023.05

Ranked first in the

CVPR 2023Industrial QualityAssurance Challenge

2023.08

LUSTER Appeared in CCTV "SmartManufacturing in China" with Mobile

Phone Middle Frame AppearanceInspection Equipment Known As theArtificial Intelligence Version of "Li Zhu"

2023.06

The Taihu Industrial ArtificialIntelligence Park FoundationLaying Ceremony andInnovation and Development

Summit

2023.06ImportantInternationalCustomerCommunication

2023.06Product Release of 3DCamera and VisionGlueGlue Spot CheckerInspection System

2023.06Key Technologies and SystemIntegration Applications in theQuality Inspection of LithiumBattery Industry won the FirstScientific Award in Fujian Province

A Message from the Chairman

About LUSTER

2023 Honors

SustainableDevelopment

Organizational

Contribution

Regulating

Governance

Talent Training

Environmental

Protection

Knowledge and Reasons are OurArms to Embrace the World!

2023.01

InFisionXR Intelligent Virtual

Real Fusion TechnologyCreated a Digital Creative Stagefor the Spring Festival Gala at

the Main Station

2023.07

Joined the China MobileMetaverse Industry Alliance

2023.03InFisionXR VirtualBroadcasting SystemAppeared on CharmingBeijing Stage

2023.10LUSTER Virtual ProductionBase in Malanshan was

Launched

2023.03Joined Hands with CCTVDigital Virtual Anchor C toEmpower the Live Broadcastof the Two Sessions

2023.11"Reproduced" the Grand Viewof Tengwang Pavilion withDigital Technology

2023.04InFisionXR Assisted the Completionof the Central Radio and TelevisionStation XR Virtual Real Integration

Production and Broadcasting

Demonstration Platform

2023.064K/8K Ultra HD TV Production andPresentation System and IndustrialApplication Won the First Prize of theScience and Technology Progress Awardfrom the Chinese Institute of Electronics

2023.12

The MAC Metaverse StudioProduction and BroadcastingTechnology Center, China's FirstDemonstration Base of OpticalField Generic Technology Platform,Officially Established

2023.12Joined Hands with the ThayerSystems Laboratory of theChinese Academy of Informationand Communications Technologyto Assist in the Standardization

Process of Humanoid Robots

Memorabilia of the Cultural Metaverse

A Message from the Chairman

About LUSTER

2023 Honors

SustainableDevelopment

Organizational

Contribution

Regulating

Governance

Talent Training

Environmental

Protection

Knowledge and Reasons are OurArms to Embrace the World!

China Information Technology Industry

Federation

Comprehensive Strength-based Brand-name

Enterprise of Intelligent Empowerment

2023 Global Digital Economy

ConferenceTypical Cases of ArtificialIntelligence Industry Empowerment

in Beijing

Ministry of Industry and Information

Technology

"Intelligence Empowers All Industries" 2023Typical Case of Integrated Development andSecurity Application of Artificial Intelligence Pilot

The Chinese Institute of

ElectronicsFirst Prize for Science andTechnology Progress

2023 HonorsIn the 2023 IEEE Conference on Computer Vision and Pattern Recognition (CVPR2023)Industrial Quality Inspection Challenge, the company stood out and won first place in the

VISION Track 1 competition, demonstrating the high-precision, low-cost, and high flexibility

of industrial quality inspection "gatekeepers" in the new intelligent manufacturing scene toglobal peers.

Based on years of practical experience in the field of AI industrial quality inspection,LUSTER participated in the "Industrial Visual Inspection Seminar" data challenge andwon the first place in the "VISION Track 1" competition with the "Data Efficient

Industrial Defect Detection" project. The "Data Efficient Industrial DefectDetection" project is a technological innovation and application direction thatLUSTER has been deeply cultivating in the industrial field for a long time. Thisaward not only demonstrates that LUSTER's theoretical research and technologicalapplication in the field of industrial quality inspection have reached an internationalleading level; At the same time, it also demonstrates LUSTER's attention to the"quality inspection" challenges in the digital transformation process of traditionalindustrial manufacturing.

A Message fromthe Chairman

About LUSTER

2023 Honors

SustainableDevelopment

Organizational

Contribution

Regulating

Governance

Talent Training

Environmental

Protection

Knowledge and Reasons are OurArms to Embrace the World!

The full name of CVPR is "IEEEConference on Computer Vision andPattern Recognition". As a topconference in the field of computer visionand pattern recognition worldwide,CVPR attracts a large number of topenterprises, research institutions,universities, and others to participateevery year. It is not only a touchstone forglobal AI research teams to demonstratetheir scientific and technologicalinnovation capabilities and test their basicresearch achievements, but also known asthe "Oscar" in the field of computervision.

YiouPioneer List IntelligentManufacturing TOP10

Hangjiashuosandaiban2023 Hangjia Aurora AwardOutstanding Product of the Year

China Securities JournalESG Golden Bull Awards Top

50 Technology Leaders

Chinese Society of OpticalEngineeringChina Photoelectric Instrument BrandList Gold Sui Awards—Silver Award

Comein FinanceBest Innovation Practice

IR Team

"Vision Systems Design"2023 Innovation Award Gold

Award

iiMedia Research

2023 China's Most Popular Virtual Human Full

Stack Service Provider Award

Gaogong Robotics2023 Machine Vision Industry

Chain TOP30

A Message from

the Chairman

About LUSTER

2023 Honors

SustainableDevelopment

Organizational

Contribution

Regulating

Governance

Talent Training

Environmental

Protection

Knowledge and Reasons are Our Arms toEmbrace the World!

知识和理性是我们事业腾飞

Knowledge and Reasons are Our Arms toEmbrac

的e theW

董事长致辞走进凌云光2

023 年度荣誉可持续发展组织贡献

规范治理人才培养环境优

翅膀

orld!

Adhere to both businessdevelopment and sustainable

developmentTake sustainable development as a

key core competency

SustainableDevelopment

Sustainable Development Analysis andActionsThe Company is committed to integrating ESG sustainability concepts into its operationsand management. By identifying key ESG objectives in each operation process, such assupply chain, products, employees, production, and research and development, theCompany drives the realization of the overall ESG objective with objectives and keyimplementation measures.

Subject Content

Sustainable Development Goals

Continuous improvement of the governance structure and enhancementof the overall governance levelCompliance with laws, regulations, and professional code of ethicsFocus on information security network construction to protect customerprivacyFull respect for and protection of human rightsCommon growth of employees and the enterprise, and attribution ofwealth to the real endeavorsCreation of a harmonious office environment and attention to thephysical and mental health of employeesAdvocating and leading a responsible industrial ecosystemBuilding a responsible supply chain, products and brands

Technology and product innovation as the driving force of enterprisedevelopmentImplementing low-carbon green operationsGiving back to the community with love

Harmony

Win-winSituation

Greenness

RegulatingGovernance

Talent Training

OrganizationalContribution

Environmental

Protection

Knowledge and Reasons are Our Arms toEmbrace the World!

A Message fromthe Chairman

About LUSTER

2023 Honors

SustainableDevelopment

Organizational

Contribution

Regulating

Governance

Talent Training

Environmental

Protection

Sustainable Development Goals

Knowledge and Reasons are Our Arms toEmbrace the World!

Scope of Goal

LUSTER Sustainability Risks

Key Actions and Measures

Products

?Leakage of key innovation technology

?Raise awareness of patent protection and establish closed-loop measures for patent requirement clarification, patent mining,

patent application and patent protection

?Inadequate market competitiveness of

products

?Conduct IPD consulting, establish an IPD management system and process, carry out IPD training, and strengthen the IPD

team's ability to undertake the strategic intent of the products?Regularize project management and efficiency, and strengthen the pull of incentives on project quality and results

?Nonconformance of product quality to

customer requirements

?Obtain the certification of ISO9001 Quality Management System, and develop a number of ex-factory key link testing

standards and quality improvement closed-loop processes?Establish a complete after-sales management system to strengthen product delivery and service quality

SupplyChain

?Instability of supply of core materials in

the supply chain

?Formulate unified standards and processes to standardize the management of procurement, production and delivery, and

strengthen supervision and management?Extend to the upstream industry chain through investment + independent R&D, ensure the stability of the supply of core

components through investment in the Gpixel and CHIOPT and independent R&D of industrial cameras and light sources

?Poor quality of supply chain materials

?Conduct regular supplier audits such as incoming material quality assessment, improvement, audit closure.?Regularly visit suppliers and organize supplier training sessions

?Non-compliance with environmental

and safety management requirements

during delivery and installation of

products

?Sign the Safety and Environment Agreement with suppliers to regulate the quality of services and production safety

?Bribery of the buyer and the seller in the

supply chain

?Require both the purchaser and supplier in the supply chain to sign the Transparent Procurement Agreement, and

establish relationships of mutual management, mutual supervision, common development, mutual benefits and win-win

cooperation

Employees

?Loss of backbone and core employees

?Establish a culture of respect for the individuality of employees and fully respect and safeguard human rights?Establish market-competitive remuneration + long-term and short-term incentive programs?Value corporate culture, strengthen cultural cohesion and the overall centripetal force of the Company

?Insufficient growth of employee

competence, and breakage in key positions

?Establish diversified promotion channels and unified promotion standards?Establish targeted and effective training plans for employees at the grassroots, middle and senior levels, and strengthen

core competence training for key positions

?No guarantee for employees' physical and

mental health

?Build a diversified, inclusive and equal workplace environment, improve the channels for employees to express their

opinions and complaints, and carry out regular employee communication?Conduct regular checkups and provide gratuitous consultation for occupational diseases prevalent among employees?Eliminate hidden hazards regarding fire and office and work safety, constantly improve the safety hidden hazard training

system, and expand training personnel?Organize team building, holiday activities, and regular club activities to combine work and play

A Message from

the Chairman

About LUSTER

2023 Honors

Sustainable

Development

Organizational

Contribution

Regulating

Governance

Talent Training

Environmental

Protection

Scope of Goal

LUSTER Sustainability Risks

Key Actions and Measures

?Inadequate or deficient operational and decision-making systems that provide no guarantee forindependence

?Improve the internal control management system and establish a two-way line of defense between internalcontrols and operations for risk management

?Enhance the professional diversity and independence

of Board members

?Ensure the professionalism of internal and external performing directors at the business, legal, accounting,

technical levels?Strengthen the norms and roles of independent directors in the Three Mechanisms of the Company and in the

proceedings of major events

?Untimely disclosure of information and leakage of

insider information

?Establish information disclosure and inside information management systems and norms, and strengthen

monitoring and consolidation

?Inadequate communication of corporate value and

communication with investors

?Improve the Company's ability to mine and deliver value, and continue to communicate with small and medium-

sized investors through a variety of channels

?Leakage of important information

?Enhance the level of information system security operations to prevent major information leakage and major

information security faults

?Corruption of employees and internal related parties

?Strengthen the anti-corruption awareness of the Company's personnel, strengthen anti-corruption publicity,

improve anti-corruption means and anti-corruption system, and regularly carry out special anti-corruption

activities

?Lack of attention and assistance to vulnerable groups

in the society

?Make donations to widows and orphans, and fund the establishment of nursing homes

?Corporate business lack of value guidance to the

society

?Give play to the role of machine vision in assisting the upgrading of intelligent manufacturing, contribute to the

main theme of Industry 4.0?The cultural meta-universe enriches the AR/VR/XR content presentation, adding luster to human life

?Corporate business lack of value guidance to the

industry

?Actively advocate the establishment of industry standards, and build an industry ecosystem with influential

enterprises

?Uncontrolled use of nonrenewable energy

?Deepen the role of machine vision products in energy conservation and cost reduction for production intelligence

in industrial downstream industries?Reduce energy consumption for production and work through water, energy and power conservation measures?Strengthen the publicity of energy conservation and environmental protection, and develop the employees' habit

of green life and green office operation

ComplianceOperation

Society

Environment

Knowledge and Reasons are Our Arms toEmbrace the World!

A Message from

the Chairman

About LUSTER

2023 Honors

Sustainable

Development

Organizational

Contribution

Regulating

Governance

Talent Training

Environmental

Protection

Stakeholder Communication

LUSTER is deeply aware of the significance of each stakeholder to the Company.Through the identification of the existing and potential impact of eachstakeholder on the Company, we have identified the government and regulatoryagencies, shareholders and investors, customers, suppliers, society, the media andother major stakeholders. Through the establishment of open communicationchannels with each stakeholder, we understand the expectations of thestakeholders, and then make targeted responses.

Government

Suppliers

Investors

Society

Customers

Media

Stakeholders

Issues ofConcern

CommunicationChannel

Government andRegulatoryAgencies

Corporate GovernanceCompliance OperationInnovation Driven GreenDevelopmentEmployee Health and Safety

RegulationRegular ReportsDirected ResearchRelevant Meetings

Shareholders andInvestors

Innovation Driven GreenDevelopmentTalent Attraction and RetentionBrand Building

Regular/ProvisionalAnnouncementsField SurveyTelephone CommunicationPerformance Briefing

Customers

Product Quality ManagementInnovation Driven GreenDevelopmentSupply Chain Management

On-site VisitOnline CommunicationCustomer ExchangeSatisfaction Survey

Suppliers

Product Quality ManagementSupply Chain ManagementCompliance Operation

Supplier InspectionOpen TenderingSupplier Training andCommunication

Society

Innovation Driven GreenDevelopmentProduct Quality ManagementBrand BuildingGiving back to the Society

Disclosure of InformationHotlinePublic Benefit Activities

Media

Innovation Driven GreenDevelopmentEstablishment of HarmoniousWorkplaceHuman Rights ProtectionGiving back to the Society

Disclosure of InformationPublic Opinion InformationSurveys and Interviews

Knowledge and Reasons are Our Arms toEmbrace the World!

A Message from

the Chairman

About LUSTER

2023 Honors

SustainableDevelopment

Organizational

Contribution

Regulating

Governance

Talent Training

Environmental

Protection

Analysis of Material Issues

1 Identification of Issues

Importance to Stakeholders

Emissions Management

CorporateGovernance

Brand Building

Innovation Driven GreenDevelopment

Establishment of HarmoniousWorkplace

Talent Training andDevelopment

Employee Health andSafety

Giving back to theSociety

Importance to LUSTER's Sustainable Development

In order to select ESG issues and assess the importance of the issues, theCompany has adopted various communication methods such as interviews andemails to understand the needs and expectations of each stakeholder, andidentified 15 issues by referring to third-party consulting opinions in the light ofinternal operations, the overall situation of the industry, and the needs of eachbusiness segment. The ESG issues have been evaluated, ranked, and confirmedon this basis.

We identified 15 issues that reflect economicdevelopment and business substance by referring to theESG Guidelines and analyzing benchmarks in the sameindustry.

2 Assessment of Issues

On the basis of the established stakeholdercommunication plan, we have contacted andcommunicated with the relevant parties to rank theimportance of the selected issues, and finally drawn theissue matrix.

3 Confirmation of Issues

The Company's management is responsible forreviewing and confirming the results of the issue matrixand reflecting the importance of the Company's issues inthis Report.

Compliance Operation

Human RightsProtectionSupply ChainManagement

Talent Attraction andRetentionData Security and PrivacyProtection

Product QualityManagementEnergy Management

High Importance

Moderate Importance

Low Importance

Data Security and Privacy

ProtectionHuman Rights ProtectionTalent Attraction and RetentionTalent Training and DevelopmentEmployee Health and SafetySupply Chain ManagementInnovation Driven GreenDevelopmentCompliance Operation

Product Quality Management

Brand BuildingCorporate GovernanceGiving back to the SocietyEstablishment of Harmonious

Workplace

Emissions Management

Energy Management

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Protection

董事长致辞走进

凌云光2023 年度荣誉可持续发展组织贡献规范治理人才培养环境优

知识和理性是我们事业腾飞的翅膀

Knowledge and Reasons are Our Arms to Embrace the World!

Continuous optimization and construction ofcorporate responsibility and value system

Realization of responsible products, aresponsible supply chain and responsible brands

Organizational

Contribution

Responsible ProductsQuality is the foundation of the Company's products,and is the most important part of the Company'sattention and efforts to improvement. The Companyadheres to the quality policy of "benchmarkoptimization by scientific measurement, continuousimprovement by seeking truth from facts, leading byleadership and responsibility by all, creating andrealizing customers' dreams", constantlystrengthening the quality system and improving thequality awareness of all employees. During thereporting period of 2023, the main production basesunder the Company were certified by the ISO9001Quality Management System.

Quality Management System

QualityManagementR&D QualityManagement

Supply Chain Quality

Management

After-sales QualityManagementIPD ProductDevelopment

Planning

ProcurementWarehousing

Production

Delivery

InspectionAcceptance

Service

Group

The Company's quality management extends to the whole process of research anddevelopment, procurement, warehousing, production and delivery, with quality controlfor each link and key process related to product quality, and quality control workdecomposed to and implemented in each link. The person in charge of each link furtherdecomposes the granularity of the work to different scenarios and products, and thequality responsibility to the specific person in charge, so as to build the overall qualitycontrol performance management system from the big goals to the small details.

OverallQualityImprovement Goalsand Plans

PrimaryDepartments

Decompose theGroup quality goalto the goals ofprimarydepartments

SecondaryDepartments

Decompose thegoals of primarydepartments tospecific link andKPI

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In order to manage quality management standards uniformly and improve qualitymanagement efficiency, the Company has established a unified information platform toconnect the key links of quality management from research and development,procurement to production and delivery. It can assist with systematic management ofbusiness flow and production flow, and make quality management more streamlinedand transparent.

Product DesignRequirements andConcept Review

Manufacturing

Commissioning,Installation andVerification

ProductTraining

ProductDeliveryRepair

RequirementsSpecification andSystem DesignReview

Outline Designand Program

Review

R&D IPDQuality Goal

Review

Supply Chain Whole Process

Quality Inspection

After-sales Quality

Management

Complaint Closure Rate:

100%Number of Product Quality Improvements:

1,462

Closure Rate for Product Quality Problems:

92%

Handling of Nonconforming Products

The feedback of detected nonconforming products will be notified to the warehouse, and thewarehouse will check the replacement of the same batch of products, or contact the supplier forrework. If necessary, the R&D and Process Departments can be organized to review thenonconforming products and decide the disposal method of the nonconforming products.The Quality Inspection Department is responsible for determining the development of non-conforming products in the production process. If it is determined that the nonconformity is causedby poor engineering technology, the change management process will be triggered for rework. If itis determined that the nonconformity is caused by material quality, the scrapping or replacementprocedures will be selected according to the degree of impact of the materials.

If the finished products are found to be nonconforming, the Manufacturing Department shall conduct a self-inspection of the equipment and submit it to the Quality Inspection Department for inspection. The QualityInspection Department shall determine the nonconforming finished products. If the nonconforming finished productcannot be determined, the project manager shall be notified to organize the relevant departments to review thefinished products, and the review conclusion report shall be formed for implementation by the responsibledepartments.

Nonconforming RawMaterialsNonconfo

rmingProcessesNonconforming FinishedProducts

Detailed Designand DevelopmentRealizationReview

Functional Test

Review

Performance and

DFX TestReview

WarehousingIncoming Material

Inspection

Finished ProductsPlanned

Procurement andQuality Planning

Process InspectionFinished ProductsFinished Product

Inspection

WarehousingPre-delivery

Inspection

The Company takes product quality as its lifeblood, strictly controls the quality ofeach stage, traces back the causes and degree of impact of the nonconformingproducts in different stages and chooses different solutions accordingly, and handlesthe nonconforming products with the attitude of being responsible for the customers.Meanwhile, the Company summarizes and reviews the nonconformities caused byscale, improves and repairs the original quality process, so as to achieve the effect ofreducing quality defects and process vulnerabilities, and deliver satisfactory results tocustomers to the greatest extent.

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Quality Promotion

On March 15, 2023, LUSTER Developer Conference was held in Beijing, Suzhou,Shenzhen, Wuhan, Xi'an, Shanghai. The conference aimed to improve the Company'sIPD-driven R&D development and demand, carry out the establishment andimprovement of product quality zero defect quality system, and guide and release thekey work measures of the Company's R&D and the key work tasks of each productline to achieve quality improvement, efficiency reduction and cost reduction. TheOutstanding Individuals and Projects of the IPD Program for 2022 were alsocommended.

Developer Conference 2023

A Responsible Supply ChainEstablishing a Supply Chain System

In order to enhance the procurement management capability and guarantee thequality of procurement decision, the Company has established the ProcurementManagement Committee for proper management of procurement strategy,procurement tactics and supplier selection, so as to realize the success ofprocurement of strategic materials, strategic suppliers and key projects, andenhance the competitiveness of the products in a sustained manner.

Board of Directors

BU ProcurementSub-Committee

Integrated Procurement

Sub-Committee

Supply Chain Management

Department

Company ProcurementManagement Committee

The Company has carried out IPD consulting project since 2022, and during the projectperiod, the quality management concept, process and awareness of IPD have beenpublicized in LUSTER official account for 21 issues. Contents involve R&D demandmanagement, IPD structured process, IPD team operation, IPD review, etc. This hassystematically publicized the overview of IPD and the idea of quality control, andstrengthened the thinking of quality management of all employees.

In order to meet the long-term development and take into account the current needs,the Company has issued a series of supplier management systems and processes, suchas "Supplier Strategy Management Process", "Production Supplier Development andCertification Process", "Supplier Performance Management Process", "SupplierContinuous Improvement Process" and "Supplier Claims Process". We have set up aunified supplier management system within the Company to control the key links suchas supplier development, access, evaluation, grading and auditing.

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Organizational

Contribution

Regulating

Governance

Talent Training

Environmental

Protection

Supplier Classification

Supplier Audit

Audit PlanningAudit ProblemConfirmationEnd

Audit InitiationAudit ProblemImprovement

AuditImplementationAudit ProblemOutput

Supplier Introduction

Supplier AssessmentComplianceQualityIntegrity

EnvironmentalProtection

T

R

QD

CTechnologyService

CostQuality

Time ofDelivery

The Company inspects suppliers from aspects such as supplier company qualification,product quality and production capacity, conducts qualification certification andsample certification for suppliers, and signs the Procurement ConfidentialityAgreement, Environment and Safety Agreement and Integrity Agreement withsuppliers. Integrity, environmental and safety impacts of suppliers are also considered.

The Company conducts regular assessment of suppliers. The TOP suppliers in terms ofsupply quantity and supply amount and the suppliers rated C and below in the previousassessment cycle will be comprehensively assessed from the five dimensions of T, Q, R,D and C. Excellent suppliers are thus compared, identified and consolidated, and theimprovement direction of suppliers is identified; the supply quality is improved througheffective incentive measures.

LUSTER classifies suppliers into Level S, A, B, C, D suppliers according to theirindustry leadership, market competition, cost leadership, and previous cooperationratings. A Level S supplier is a strategic supplier with a leading position in the industryin a specific field, and an important unique value and relative competitive advantage,limited to strategic categories of materials; A Level A supplier is a preferred supplierwith good performance in business, quality, technology and delivery, offering a largecooperation space with the Company, and a high comprehensive score; A Level B is abasic supplier, generally newly certified by the Company and able to meet the basicrequirements and expectations of the Company; A Level C supplier is a limitedoptional supplier with a low score, a small cooperation amount or major problems andpending for improvement; a Level D supplier is an eliminated supplier with a lowscore, significant negative critical events exerting a serious impact, considered to beremoved from the Company's list of suppliers.The Company formulates a supplier audit plan based on the quality performance ofsuppliers in the previous year and the supplier management strategy for the currentyear, and in principle, suppliers are audited annually. A special audit team is set up forthe audit work, and during the audit process, the audit team records the audit problemsand confirms the corresponding problems with the suppliers, and specifies theresponsible parties for the problems and the confirmers.

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Protection

Undertake not to arrange jobs for the Company's purchasing personnel,establish joint ventures for profit, or engage in any other acts that wouldenable the purchasing staff to profit from the procurement process.Undertake not to accept business meetings or trading activities related tomaterial supply, outsourcing subcontracting and other businessesintroduced by the Company's purchasing personnel and their relations.Undertake not to provide money, securities, gifts, food, entertainmentand other disguised financial transmission and improper benefits to theprocurement personnel in any form.

Environmental Protection and Safety

Signing Rate of Transparent Procurement Agreement:

66.3%

Signing Rate of Safety Agreement:

81.3%

Supplier Training

Integrity and Transparent Procurement

Delivery Requirements

Quality StandardProblem Improvement

Number of SupplierAudits in 2023

Number of SupplierTraining Sessions in 2023

The Company adheres to the business rules of equality, openness and fairness in itstransactions with suppliers, and both parties have signed the Transparent ProcurementAgreement, committing themselves to maintaining an open and cooperative attitude, anda mutually supervising, mutually restraining, jointly developing and mutually beneficialrelationship with the partners, so as to establish a clean, open and healthy businessenvironment.

The Company has signed the Safety and Environment Agreement with its suppliers,specifying that the suppliers have two-way responsibilities and obligations to maintaintheir own safety and protect the environment during the supply period. The Companyhas formulated HSE management plans for key construction or high-risk operationprojects, taken effective measures to eliminate potential safety hazards, and activelyparticipated in professional training and obtained qualification certificates for specialoperations. In the supply and construction process, suppliers also actively comply withthe production, transportation, storage and disposal of waste, set up dust removalmeasures for large dust operation projects, and observe the Company's unified safetyand environmental protection system.

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Organizational

Contribution

Regulating

Governance

Talent Training

Environmental

Protection

Responsible BrandsThe Company insists on safeguarding the rights and interests of customers, creating valuefor customers as long-term growth and value enhancement, and winning the support andtrust of customers with excellent and high-level service quality. To this end, the Companyhas formulated the "Pre-sales Sample Making Process", "Sales & Delivery Specifications","After-sales Service Processing Process", "Delivery and After-sales Service Control" andother sales services around a series of systems and norms to ensure the timeliness andeffectiveness of the response to customer needs in the pre-sales, sales and after-sales links.In order to meet the needs of customers, the Company has set up offices and serviceoutlets in dozens of cities such as Beijing, Shanghai, Shenzhen, Chengdu, Suzhou, Wuhan,Hong Kong, and established 21 global branches in overseas markets such as the UnitedStates, Vietnam, India, so as to provide customers with mindful service and ultimatecustomer experience.

Efficiency

Standardization

Safety

?If a problem occurs during equipment commissioning, it should be solved quickly andended after confirming that the commissioning results meet the expectations.?If an exception occurs during the operation of the equipment, the field service personnelshall solve it within 30 minutes, and the exception shall be submitted to the project leaderif it cannot be solved.?Work progress summary and problem summary on the day?Standardize the basic requirements for dress code, scope of activities, prohibited items in

customer service plants?Standardize regulations and standards related to the management of customer sanitation

during the service period?Standardize attendance and work output during the customer service period

?Regularly organize and take inventory of equipment, tools, and materials and conduct potential

safety hazard investigation?Wear appropriate safety gear such as goggles and helmet as required when entering special

workplaces?Establish factory rules and regulations and red line behaviors, and conduct pre-operation training

CanadaThe United

States

Mexico

ColumbiaEcuador

Argentina

BritainNetherlands

Czech Republic

GermanyFranceSpainCroatiaSwitzerland

Hungary

RomaniaSerbiaepublic ofMontenegroTurkeyIsraelEgyptNigeria

SouthAfrica

United Arab

EmiratesPakistan

India

Sri Lanka

South KoreaJapanSuzhou

Taiwan, ChinaMyanmarVietnamThailandCambodia

SingaporeMalaysia

PhilippinesIndonesia

Australia

BeijingZhengzhouXi’anChengdu

Wuhan

Changz

hou

ShanghaiSuzhouNingdeShenzhenHong Kong,

China

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Customer Service Training

Customer Satisfaction

Number of Annual Customer Service Training Courses:

Annual Cumulative Number of Trainees:

1176

(The same trainees may take different courses)

According to the different training content, the Company carries out training in two ways:

online and on-site. The Company's introduction, technology and product popularizationcourses are held online, and equipment maintenance and equipment troubleshooting areheld on-site in combination with physical teaching.

Customer Service Training

Satisfaction Rate in 2023:

90%Satisfaction Rate in 2022:

89%

An Increase of1%in Satisfaction Rate

Product Quality Level

Product After-salesService Level

Overall Impression of Brand Image

Functionality and performance of theoverall operation of the equipmentStability of equipment operation

Operability and ease of useOverall maintainability of equipmentAttitude of service personnelSpeed of response to technical inquiriesEffective and timely problem solvingProfessional competence of service

personnel

The Company offers targeted training courses for the customer service team accordingto the requirements of customers in various industries, business types and producttypes, involving the popularization of the underlying technology of the productcomposition, equipment debugging training, common equipment problem solving toolsand methods, and equipment maintenance. The Company provides basic training onthe underlying imaging, algorithm modeling and operation of machine vision productsand other basic technologies to improve the professional ability of customer servicepersonnel, learn the main points in commissioning and maintenance through productcomposition and main process analysis, and learn project operation norms anddisciplines in combination with specific project customer requirements and factoryspecifications.

In order to continuously improve customer satisfaction and quality management systemaccording to the survey results, the Company has developed the "Customer SatisfactionSurvey and Evaluation" system for a understanding whether the current and future needsand expectations of customers have been correctly understood and met. Throughunderstanding customer needs and expectations, reflection on quality/delivery/service,customer complaints and complaints, review of customer service processes and qualitymanagement processes, the existing processes and systems can be gradually improved,so as to continuously strengthen the loyalty with customers and improve customerexperience.

Corporate

ImageProduct Pre-Sales

Solutions

Product Pre-Sales SolutionsProduct Pre-sales Technical Support

Product Delivery

Related

Training in the application of agingtechnology for equipment installation and

commissioning

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Brand Publicity

The 7th International Summit Forumfor Motion Picture Special Effects

CHINAPLAS 2023ZGC Forum

International Computational

Imaging Industry Forum

China InternationalAudiovisual Conference

VisionChina 2023

China VisionConference

To allow customers better experience the use ofproducts and feel the use of products on the spot,the Company has participated in a series ofindustry and industry exhibitions and activities.At the exhibitions, the star products and newlyreleased products and innovative solutions thatLUSTER has been serving customers andbenefiting the industry were displayed,promoting the transformation of industrialintelligent manufacturing with innovation andsupporting the upgrade of Industry 4.0.

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Organizational

Contribution

Regulating

Governance

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Protection

Digital Operations

IT and Digital System Establishment

Digital Enterprise

Manufacturing Service Platform

BI Analysis

Decision-makingSupport

IntelligenceAnalysis

BusinessControl

Total BudgetManagement

Enterprise RiskManagementEnterprise Management PlatformHumanResourcesManagement(HCM)/EHR

CustomerRelationshipManagement

(CRM)

After-sales

ServiceManagement(CRM/CS)

SupplierRelationshipManagement

(SRM)

ResearchProjectManagement

(PM)

FinancialSharing BPCCost/Budget

Core ERPBI Analysis

ProductionManagement

SalesManagement

FinancialAccounting

ManagementAccounting

ProjectManagement

Basic SupportCompanyWebsite

Mobile APPCollaborativ

e Office

TimelyCommunicationE-mail

KnowledgeManagement

SingleSign-on

Manufacturing Service Platform

Manufacturing

ExecutionWarehousing

MaterialPicking

Equipment/Tool

Management

DispatchingCommand Center

QualityManagement

R&D Service Platform

CAD IntegrationProcessManagement

SimulationService

Integrated Automation Platform

Logistics AGV

Equipment Data

Collection

StereoscopicWarehouse

5G NetworkIntelligent Park

Intelligent Product Platform

Industrial Cloud

PlatformIoT Platform AI

EquipmentManagement System

Online QualityManagement SystemEquipment Internet

Communication

IOT TerminalStand-alone Detection

HMIAutomated Production

LineComplete Equipment

IndividualMachines/Components

?The enterprise management platform centered

on SAP realizes the synchronization andconnection of business flow, data flow andmanagement.?Various IT systems such as marketing CRM,

supply chain SRM, WMS, financial sharingFSSC, capital management, tax controlmanagement, research and development PLM,attendance, business travel, project four-calculation, OA and mobile office have beenbuilt to fully support the management reform,upgrading and efficiency improvement of theCompany's various businesses.

Big Data and AutonomousPlatform Building

?Through independent development and

construction of big data and BI, low code agileimplementation of dual platforms, we support thereform of digital enterprise management andintelligent decision-making support.?Based on big data and BI platform, we realize the

accumulation and decision support of data assetsin various aspects such as enterprise operationmanagement, financial analysis, marketinganalysis, and human resources, and build anintelligent cockpit that can support the corebusiness of business management.

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董事长致辞走

进凌云光2023 年度荣誉可持续发展组织贡献规范治

理人才培养环境优

知识和理性是我们事业腾飞的翅膀

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Take compliance operation as thebottom line for a business that goes far

Take legal compliance as a code ofconduct for LUSTER members

RegulatingGovernance

Corporate GovernanceThe Company is committed to continuously improving its corporate governancestructure. In compliance with the requirements of The Company Law of the People'sRepublic of China, The Securities Law of the People's Republic of China, Guidelineson the Articles of Association of Listed Companies and other laws and regulations, theCompany has continuously improved and implemented the "Articles of Association","Rules of Procedure for the General Meeting of Shareholders", "Rules of Procedurefor the Board of Directors", "Rules of Procedure for the Board of Supervisors" toimprove its corporate governance, and perfect its internal control system and ensurethe effective operation of its corporate governance structure.

Strategy Committee

General Meeting ofShareholders

Board of Directors

Board ofDirectors

Management

Audit CommitteeNominating

CommitteeRemuneration andEvaluation Committee

Held 4 General Meetings of Shareholders and deliberated34 proposalsHeld 4 meetings of the Board of Directors and deliberated

58 proposals

Held 9 meetings of the Board of Supervisors and deliberated

39 proposals

Held 13 meetings of Specialized Committees and deliberated

46 proposals

General Meeting of Shareholders: The General Meeting of Shareholders is thesupreme authority of the Company, exercising its powers according to law. TheCompany has continuously improved the provisions related to shareholders' rightsin the Articles of Association and relevant internal systems to ensure thatshareholders, especially small and medium-sized shareholders, fully exercise theirrights, and to safeguard the equal status of shareholders.

Board of Directors: The Board of Directors is a standing body of the Company,

responsible to the General Meeting of Shareholders, established to implement theresolutions of the General Meeting of Shareholders, to safeguard the interests ofthe Company and all shareholders, and to take charge of decision-making on thedevelopment objectives and business activities of the Company. In order to supportthe decision-making of the Board of Directors, four specialized committees havebeen established under the Board of Directors, proposing recommendations for theimprovement of corporate governance.

Board of Supervisors: The Board of Supervisors is responsible to the General

Meeting of Shareholders for supervising the finances of the Company as well asthe lawfulness and compliance of the performance of duties by the directors andsenior management of the Company.

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Independence and Diversity of Directors

Members of the Board of Directors

33.33%

66.67%

66.67%

11.11%

11.11% 11.11%

Announcements

2023 Annual Investor Exchange MeetingIn May 2023, LUSTER held its Annual Investor Exchange Meeting. TheChairman, Vice Chairman and Secretary of the Board of Directors of theCompany participated in the reception of the Exchange Meeting. The meetingintroduced the Company's development history, annual operating results andfuture development, and exchanged with and responded to investors on thedevelopment of the industry, operating highlights, the competitive environment,strategic development, etc.

The Company currently has 9 members on the Board of Directors, including 4 internaldirectors and 5 external directors (including 3 independent directors). The Companyfollows the principles of pragmatism and diversity to ensure the independence ofindependent directors and to provide efficient and high-quality support for the work ofexternal directors. The diversity and differentiation of the Company's directors in termsof profession, age, educational background and skills are conducive to effective andscientific decision-making by the Board of Directors.

IndependentDirectors

Non-independentDirectors

IndustryInvestmentLawFinance and

Accounting

Below 4040~5050~60

Name

Position Held

AuditCommittee

NominatingCommittee

Remunerationand Evaluation

Committee

StrategyCommittee

Yao Yi

Internal Director

Wang

Wentao

Internal Director

Yang Yi

Internal Director

Zhao Yan

Internal Director

Wu Xi

External Director

Xu Xingren

External Director

XiXiaohong

Independent

Directors

Wang Kun

Independent

Directors

SunFuchun

Independent

Directors

Disclosure of Information

The Company actively fulfills its information disclosure obligations and disclosesrelevant information in a timely and complete manner to all shareholders, investors andpublic groups in accordance with the principles of openness, fairness and equity. TheCompany has established a variety of channels for communication with investors,including meetings, telephone calls, e-mails, and responses to questions, in an effort toimprove the communication channels with small and medium-sized shareholders.

VoluntaryDisclosure Reports

1000+InvestorHotline Calls

E-interactive Replies

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Compliance Operation

In-corruption Risk Prevention

Board of Directors

Business AuditDepartment

Supervision

Office

Operationalmanagement audit

Listing complianceaudit

Fraud preventionmechanism developmentFraud investigationInternal audit workmechanism development

Improve risk andinternal controlmanagement

Fraud caseinvestigationand disciplinaryactionAlert allemployees bycompliancepromotion

Identifiemanagementloopholes byComprehensiveaudit

Total number of trainees in the year:

Total training hours in the year:

hoursNumber of training sessions organized:

Training Topics:

"Audit Compliance System","Fraud Case Publicity" "Anti-corruption Material Publicity".The Company's online platform has offered the courses such as "LUSTER EmployeeBusiness Code of Conduct" and "LUSTER (BCG) Compliance in the Economic Issues ofAccountability" for employees to learn online.

Integrity and In-corruption DevelopmentWith the basic principle of "making the business big based on the bottom line, keepingthe bottom line and promoting the high line", LUSTER has set up an internal auditdepartment to carry out internal audit and fraud supervision. Through the audit andevaluation on the Company's business and internal controls in combination with thespecial investigation of fraud cases, we have achieved anti-corruption, anti-fraud, anti-waste, and promotion of the improvement of internal controls, operational efficiencyimprovement and integrity and self-discipline of all employees. These efforts haveguaranteed the sound and compliance development and long-term value realization ofthe Company.

AuditCommittee

Supervision over theappointment and exerciseof power of cadres

In order to prevent the occurrence of corruption, the Company has issued a series of systems toregulate the behavior of all employees, such as the "LUSTER Employee Business Code ofConduct", "LUSTER (BSG) Compliance in the Economic Issues of Accountability","Transparent Value Procurement Code of Conduct", "Provisions on Employees' IllegalAcceptance of Financial Resources to the Company". These systems are intended forstandardization, constraint and alert from various aspects such as employee behavior, cleanprocurement, punishment for violations.

"LUSTER Employee Business Code of

Conduct (BCG)"

"LUSTER (BCG) Compliance in theEconomic Issues of Accountability"

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Anti-Corruption Reporting

In order to further standardize the business behavior of all employees andenhance the ability of integrity and self-discipline, encourage employees tofollow the code of conduct "seek truth from facts, all for the purpose ofbusiness development of LUSTER", the Company has issued "Notice on theCompany Accepting Reports on Related Matters". This Notice encouragesemployees to be honest and upright, fight against the evildoers andwrongdoings, and report non-compliant behaviors based on facts.

Before going public, thecompany established the selfregulatory principle of " Three-self, one criticism, and fourcommitments" applicable to allemployees, continuously builtand improved the supervisionsystem within the group, andfurther established the basicconcept of "enabling those whodo things to achieve great things,make no or fewer mistakes,have an organization andmechanism to correct errors,and ensure the final result iscorrect" in 2023. A series of keypositions were promoted andtrained accordingly.

Methods of ReportingWhistleblowers can report by phone, e-mail, letter, etc.Whistleblowing hotline: 1781XXX2285Mailing Address: Audit and Supervision Department, Knowledge and RationalityBuilding, Building 7, 13 Cuihu South Ring Road, Haidian District, Beijing, China

Whistleblower Protection

1.The Company shall keep confidential the information of the whistleblower and theinformation provided, and shall not disclose it to the person reported or any unrelatedthird party.

2.It is strictly prohibited for anyone to retaliate against whistleblowers in any form, and

the Company will deal with retaliatory acts strictly and seriously.

3.If an employee voluntarily and truthfully confesses his/her behavior suspected ofviolation to the Company, he/she may be dealt with in a lighter or mitigated manner.Whistle-blowing RewardThe whistle-blower will be given relevant rewards according to the nature of thereport, the importance of the report leads if the violation facts, key leads andrelevant evidence of the person reported are found true after investigation.

1. Acceptance of reported leads

Three-self, one criticism, and fourcommitments

?Consciously abide by rules and regulations?Self reflection and proactive reporting of violations?Voluntarily accept investigations and audits?Unity, criticism, solidarity?Commitment to there shall be no defects in thedelivery of products and services?Commitment to avoid business and financial fraud?Commitment to all employees to avoid corruption

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Accept leads throughvarious channels

2. Screening of reported leads

Examine whether the reportedlead is clear and wellsubstantiated and whether itfalls within the scope of theaudit and inspection

3. Formation of a projectdepartment and opening of acase for investigation

The investigation team may becomposed of audit, supervision,legal affairs professionals, andtechnicians can also be invited.

6. Confirmation of key facts

Confirmation of key facts ofthe audit investigation by theinvestigator and relevantpersons involved in theinvestigation matter

5. Investigation and collectionof evidenceCollect relevant evidenceto maximize the recoveryof fraudulent facts

4. Development of aninvestigation program

Analyze and study the leads,develop a targetedinvestigation strategy, reportit to the senior leadership forapproval

7. Preparation of theinvestigation report

The report should contain a descriptionof the fraudulent act, thecharacterization of the act, theviolation of the Company's rules, therecommendation and basis foraccountability, and therecommendation for optimization ofinternal control

8. Communication ofinvestigation findings

Communicate theinvestigation findings withrelevant parties and clarifyqueries of relevant persons onthe investigation findings

9. Reporting of investigationfindingsStrictly control the targetaudienceKeep the findingsconfidential

10. Archiving of investigationmaterials

All original records(interview records,conversation recordings, etc.),various types of evidentialmaterials in the investigationprocess

Integrity and In-corruption Development

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Information Security Protection

Data Security Guarantee

Network Security System Establishment

?Upgrade and optimize the firewallsystem and introduce advancedintrusion detection and preventionsystems?Improve system security by regular

vulnerability scanning and patching?Ensure data security during

information transmission through

encryption of all R&D critical data

?Encrypted storage andtransmission of sensitiveinformation?De-identification ofspecific data using datadesensitization techniques

Strengthen the informationsystem security protectioncapacity, conduct regular securityaudits and vulnerability detection,and prevent external securitythreats such as hacker attacks andvirus intrusion

Establish a strict data access rights

management system; in case of

change of rights, the OA shall fill

out the "Information System Rights

Application Form" to ensure that

only authorized personnel can access

sensitive information and thus

reduce the risk of internal leakage.

Actively cooperate with the supervision

and audit of competent organizations,

and conduct comprehensive network

security compliance and risk assessment

through third-party professional

organizations to ensure that all business

activities meet the requirements of

network security laws and regulations.

As the Company is a technology company with high R&D investment, informationsecurity is the foundation of corporate survival and development, and continuouslystrengthening the protection of network security and data security is one of theCompany's important initiatives. Thus far, the Company has issued such systems andnorms for network security protection as "Informationization Manual","Administrative Regulations on Computer and Network Use", "Computer RoomAdministrative Regulations", "Network Policy Adjustment", forming the informationsecurity protection system of LUSTER.

Key links of data security

Administrative measures

Data manipulation

?Clarify operator responsibilities?Manage accounts separately?Strictly control the account audit

Data use

?Enhance day-to-day management of general

operating users?Disable the account in case of departure from

the workstation?Regulate the scope and channels of data use

User password management

?Password confidentiality management?Password complexity setting?Maximum password usage management

System password

management

?Segregated management of operating system

passwords and application system passwords?Password user rights management?System settings disabling management?Special password combinations and timeliness

TechnicalprotectionData encryption

anddesensitization

RightsmanagementSystemprotection

Compliance

review

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Network Security Emergency Plan

Type of Incident

Description of Incident

Cause of Incident

Emergency Measures

Category Iincident

Serious damage to servers,damage to optical fibers,application systems not starting(not working) due to forcemajeure or natural factors

1. Power supply fault

2. Fire

3. Water seepage fault

4. Natural disasters

1. Power supply fault: Check whether the power supply is faulty due to short circuit, open circuit,lightning and power protection equipment fault, UPS fault, and take corresponding measures to repairthe damaged equipment and restore the power supply.

2. Fire: Cut off the power supply, use gas extinguishers to extinguish the fire; report the fire to the 119command center for support; save people first if there are people in danger.

3. Water seepage fault: Cut off the power supply, take seepage prevention measures and replace thewater-soaked equipment

Category IIincident

Loss of server data, damage tohard disk, deletion ormodification of data caused byhuman factors

1. Virus outbreaks

2. Illegal alteration ofweb pages

3. Illegal intrusion

4. Denial of serviceattacks

5. Network line fault

6. Data fault

1. Human or virus damage incidents: Disconnect the affected device - disconnect the physicalconnection to the network - determine the source and nature - track the source of damage to the IP -restore the information system

2. Illegal invasion: Isolate the attacked server from the network - analyze the attack site and trace theattack source - analyze operation logs - check data - restore the system

3. Denial of service provisioning: Keep proper records and logs -analyze the attack site and trace theattack source, and modify the security configurations

4. Network line fault: distinguish whether there are loops or redundant lines, whether there is a needfor emergency repair and the line cannot be modified, and make differentiated responses

5. Data fault: Extract data from the data backup server, recover as soon as possible to ensure the fastestsystem operation

Category III

incident

Major information systems notworking

1. Information systemdown

2. Abnormal hardware

1. Find the problem, restart the application system in a timely manner, and reboot the server ifnecessary

2. Troubleshoot the hardware system and repair or replace it in time

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Management ChangeIn order to support the achievement of the company's strategy and business goals, and better serve and meet customer needs, the company further deepened the implementation of the"R&D System IPD2.0" and "Organizational Change" projects to promote and support organizational capacity building through management change in 2023, and made importantprogress in related work.IPD ChangeIn 2022, the company launched the PD2.0 transformation project, which established standardand non-standard product development processes and specifications based on the company'sresearch and development business characteristics, and established SPDT/PDT organizations.In 2023, based on this, the company further deepened its process transformation in theimplementation of projects. Through the HyperTrain8000 project, it successfully deliveredintelligent equipment to major clients, greatly strengthened its strategic cooperation withmajor clients, demonstrated outstanding technical strength, and established a first-classposition as a full line supplier; Through the VisionGLUEV1R1 and PackHEROV1R2 projects,a four layer architecture design was implemented to ensure product reliability, achievingindustry-leading adhesive inspection capabilities with an accuracy of 0.03mm; Byimplementing the zero defect concept, focusing on improving DFx quality, R&D processquality and IPQC, as well as improving TOPN and CIP, the customer complaint density hasdecreased by 25%.

Organizational Change

?The achievement of strategic goals requires strong organizational support. Faced with the rapid

development of the industry, high performance goals, the need for capability transformation, andthe need for organizational efficiency, the company launched an organizational change project in2022, clarifying the decision-making mechanism of the construction group committee and the directionof transformation for the middle platform organization.?In 2023, the company strengthened the division of labor and collaborative construction principles

among the front-end, midstream, and back-end organizations by further adapting business processesand organizational design at the macro and micro levels. The company established a dual wheel drivencombat organization positioning for research and development product lines and market SBU to meetthe company's needs for product reuse and horizontal and vertical expansion in segmented markets. Byestablishing the Group's Product and Solution Department and Customer Service ManagementDepartment, the resource coordination and allocation ability of the middle platform organization hasbeen strengthened, effectively ensuring that high-quality business is equipped with high-qualityresources and high-quality customers are equipped with high-quality services; The backendorganization has strengthened its responsibilities in three aspects: internal control supervision, qualityoperation, and human resource development. It has strengthened the blood transfusion and coachingcapabilities of the frontend business units, achieved effective collaboration in the division of laborbetween the main building and main battle specialties, greatly improved business collaborationand operational efficiency among various business units/BU, and ensured the resources forexpanding into new industries.

IPD customizationprocess

Project applicationimplementation

DFX requirementimprovementZero defect

Customization processes bloom in newproduct development:

Implementing zero defect thinking in productdevelopment and iteration, improving the

functionality, craftsmanship, and quality ofexisting products, and continuously enhancing

product competitiveness

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HyperTrain intelligent equipmentVisionGLUE dispensing all-in-one machinePackHERO equipment

Matching

Process (L1-L2)

Process (L3-L4)

Organization

(1/2-layer)Organization

(3-layer)Responsibilities

Position Held

Macroscopic

MicrocosmicMatching

Role

Responsibilities

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董事

长致辞走进凌云光2023 年度荣誉可持续发展组织贡献规范治理人才培养环境优

知识和理性是我们事业腾飞的翅膀

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Talent is the scarcest resource for sustainable

development of enterprises.Attracting, training and developing talent is a

permanent issue for the Company.

Talent Training

Human Rights Protection

EqualEmployment

Anti-discrimination

Safety andHealth

Respect forPersonality

Compensationand Benefits

PrivacyProtection

WorkingHours

OvertimeCompensation

Measures to Protect Human Rights?Fair Competition: Fair Competition: Recruitment opportunities are open, and therecruitment criteria are based on merit. There is no differentiation based on race,nationality, class, religion, gender, marital status, etc.

?Anti-discrimination against women: Anti-discrimination against women: the

Company does not discriminate against or prevent the employment of married orpregnant women, makes reasonable adjustments to the work of pregnant women,and prevent pregnant women from engaging in work harmful to their health; specialmaternity rooms for new mothers who are still on breastfeeding leave are alsoprovided.

?Company benefits: Company benefits: Company benefits consist of state policy

benefits and benefits provide the Company. In addition to the basic conditionsrequired by laws and regulations to be provided to employees, the Company alsooffers supplementary medical insurance, accident insurance, overseas travelinsurance, meal allowance, communication subsidy, housing allowance, travelallowance and other insurance and subsidies for employees and their relatedrelatives, and provides birthday/marriage/childbirth gift money and seriousillness/family visit funds.

?Working hours: The Company implements the flexible working system of eight

hours a day and five days a week.

?Learning and growth: The Company's training is provided for employees at all levels

with a coverage rate of 100%.

?Vacation management: The Company's vacations consist of statutory and public

vacations, annual leave, marriage leave, maternity leave, bereavement leave andother paid leaves.

?Overtime compensation: Overtime on holidays will be paid in accordance with

national regulations after approval of overtime orders.

The Company attaches full importance to and respects the rights and interests of itsemployees, strictly abides by The Labor Law of the People's Republic of China and TheLaw of the People's Republic of China on Labor Contracts, and is committed tofollowing the strict requirements and regulating its conduct in accordance withinternational conventions such as the Universal Declaration of Human Rights and theUnited Nations Guiding Principles on Business and Human Rights. The Company hasformulated the "Employee Handbook", "Anti-Discrimination, Anti-Harassment andAnti-Forced Management System", "Measures for the Administration on Recruitment","Attendance and Vacation Management System", and "Employee Welfare System" toprotect the rights and interests of the employees in terms of recruitment, promotion, andremuneration and benefits, prevent forced labor, child labor, gender discrimination andworkplace harassment. These systems can also fully protect the rights of the employeesin all aspects, and create a fair, equal, diversified, inclusive, and harmonious workingenvironment.

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A Diverse Team

Coverage Rateof SocialSecurityInsurance:

100%

Coverage Rate

ofSupplementaryMedicalInsurance:

100%

EducationalBackgroundGenderAge

Females: 397

Males: 1,584

Doctors: 1750-60:23Masters: 503

40-50:176

Below 30: 651

Bachelors: 829

CollegeGraduatesand Below:

30-40:1131

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Talent Attraction and Retention

Talent Recruitment

PlanningPrinciplePrinciple ofResponsibilityDecompositionTwo-way SelectionTwo-wayResponsibilityQualificationsPrinciple ofAccessPerson-postMatchingPrincipal

Based on the Company's strategic development plan as the basis of talent planning,the talent strategy is decomposed to each year.Recruitment PlanningThe employing department and the recruiting department work together to completethe recruitment process, examining candidates from different dimensions to ensurethe comprehensiveness and accuracy of the selection process.Establish a two-way choice of the modern concept of talent flow, and candidates forequal and considerable exchanges for two-way inspection and selectionClarify the responsibilities and qualifications of each position and conductinterviews based on the recruitment criteria.Let the right person do the right thing in the right position, and assign the rightperson to the right position

The Company recruited a total of

employees during the 2023 reporting period.

68% aged under 30

56% in Suzhou

20% in Beijing

30% holding anAssociate Degree andbelow

28% aged 30-40

12% in Shenzhen

2% in Zhengzhou

36% holding aBachelor's Degree

4% aged 40-50

1% in Shanghai

1% in Changsha

34% holding a Master'sDegree and above

2% in Chengdu

6% in Xi'an

In accordance with the principle of "two-way selection, two-way responsibility, faircompetition and merit-based recruitment", the Company's talent recruitment takes thejob matching and growth of talent as the main assessment focus, and the internalmanagement mode of dual responsibility system for the selection, introduction andtraining of talents is adopted by the human resources department and the employingdepartment to ensure talent sustainability.

Interviewer Selection Criteria

Value Recognition: Highly recognize the Company's corporate culture andvalues.Professional Qualifications: more than 5 years of continuous service andmore than 2 years in specialized positionsPerformance Requirements: B or better on previous year's performanceappraisal

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Establishment of Talent Training Base for School-enterpriseCooperation

On the afternoon of April 13, Du Guoshe, secretary ofParty Committee, Zheng Xiaodong, department levelorganization member, Li Jie, deputy secretary of PartyCommittee and Qin Hanlin, deputy dean of School ofOptoelectronic Engineering, Xidian University led adelegation to LUSTER LightTech Co., Ltd. This studytour & enterprise visit and position expansion themedwith Light of Hope was joined by the counselors of all

grades and 15 undergraduate, postgraduate and doctoralstudent representatives of the School.

After Ren Xiaowei, General Manager of Xi'an Branch ofLUSTER and Wang Haoyu, R&D Director of Xi 'anBranch of LUSTER Intellectual Rationality ResearchInstitute, introduced the employment situation and R&Dresults of the enterprise to the teachers and students ofXidian University respectively, the inauguration

ceremony of "College Student Social Practice Base"

jointly established by LUSTER and Xidian Universitywas held. Du Guoshe, secretary of Party Committee ofOptoelectronic Engineering, Xidian University, grantedthe license to General Manager Ren Xiaowei.

Mr. Wang Jia of the Intelligent Science and Technology Program at the Beijing Institute of

Graphic Communication led the students to the Beijing Headquarters of LUSTER and

completed a 5-day practical training course from May 29 to June 2. Despite of a shortperiod of only five days, the students gained a lot, not only theoretical and practicalknowledge outside of books, but also reflections on their current learning and the idea of thefuture. Lastly, the students expressed their hope of future opportunities to come back toLUSTER for a longer, more practical and more in-depth practical training course.

At 9:00 am on May 23, 2023, the students of theSchool of Optoelectronics, Beijing Institute ofTechnology, led by associate professors Wang Qingand Zhang Jinying, visited LUSTER Yuanke Vision.With the theme of "Integration of production and

education—Starting the Journey of Meta-universeExploration", this visit led the teachers and students of

Beijing Institute of Technology to a furtherunderstanding of the background, development statusand future prospects of the meta-universe.

Xidian University Unfolded Enterprise Visit, Position Expansion andEmployment Promotion Activity

Practical Training for Intelligent Science and Technology Programof Beijing Institute of Graphic Communication

Beijing Institute of Technology Meta-space Exploration Trip forTeachers and Students

The Company has established close partnerships with colleges and universities all over thecountry, put in place a talent training mechanism through school-enterprise cooperation,taught undergraduate and postgraduate courses, and conducted directed training of talentsneeded by the industry and enterprises. On the one hand, it has shortened the adaptation timefor fresh graduates to fit into the workplace and strengthen professional ability; on the otherhand, it has helped enterprises train a group of corresponding talents in response to thecurrent social needs. Education in learning and integration of learning in practice effectivelyimprove the efficiency and quality of personnel training.

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Remuneration Management

Establish a timely incentive system to drive the achievement of organizationalstrategic and business objectives

Compensation

Incentives

Benefits

FixedCompensation

StatutoryBenefitsCompanyBenefits

FloatingCompensation

TimelyIncentives

Restricted StockIncentives

TimelyIncentiveEvaluation

Drive strategy andmanagement realization

Restricted StockIncentives

Severalmillion

yuan

Timely Incentives

in 2023

?Intellectual property?Government projects?Sales and services?Products and solutions?Operational efficiency

?Awarded to 265 employees?5.29 million shares awarded

?Restricted Shares Awarded?Taking up 1.14% of the total

share capital

In order to establish a core team that can support the long-term development strategic goals, theCompany has formulated the "Salary Management System", "Diversified and TimelyIncentives" and "Employee welfare System" in combination of the long-term incentives andshort-term incentives with the market and other factors such as the compensation level, postvalue, employee's personal contribution and development potential under the principle of valuecontribution as distribution. These systems are to attract, retain, motivate and achieve talents.

Group-level diversified and timely incentivesettings need to be oriented to key tasks thatsupport the achievement of the Group'sstrategic and business objectives, andoriented to customer-centric managementimprovement and organizational capabilityenhancement.

Drive cross-team collaborationand project breakthrough

Undertake company-level important matters,and project tasks with high valuecontribution and cross-team collaborationdifficulty.

Meet SMART and 5W3H

When accepting the award setting, theevaluation criteria must be SMART,complete and fully reflective of the 5W3Hmanagement requirements.

Follow " Execution based onPreset Rules, and Awarding

after Announcement"

The results should be subject to acceptanceinspection in strict accordance with theaward criteria, and the awards should begranted after review and approval of theresponsible award entity and filing by theHuman Resources Department.

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Elite Program

Requirementsfor Application

Service period: The employee's service period in the Company shallnot be less than 3 years.Scope of use: Annual performance assessment results of at least 2

Grade B in the past 2 years; or management with Level 20 and aboveand having moved to and purchased a house in Suzhou

Loan amount: Generally, the loan amount shall not exceed twice the

applicant's annual pay, and the loan period shall not be more than 5years.

Loan rate: Adjusted according to bank interest rate

Theemployeeapplies forTalent Fundwith thedepartment

Recommendation bythedepartmenthead

Preliminary review bytheDepartment HumanResourcesCommittee

Approval by theHR Director,the FinancialDirector, theGeneralManager/theGroup HumanResourcesCommittee

Implementation

In order to ensure the stability of the high-level talent team, improve the employeewelfare system, effectively attract outstanding talents, retain key talents, andcontinuously stimulate the vitality of talents and organizations, the Company provideslow-interest loans with its own funds for the backbone employees with excellentperformance to buy houses or help families with temporary difficulties.

Application

Process

Organizational Performance

Performance AssessmentThe Company takes "educating talents in performance management" and "creatingvalue for internal and external customers" as the purpose of performance management,integrates individual performance into organizational performance, inspires employeesat all levels to work together and contribute to the overall strategic goal, and thusachieves the purpose of motivating and training organizational cadres and continuouslyimproving performance management.

Individual Performance

Formulation of a performance plan: Decode

the annual business objectives according tothe strategic objectives and further break themdown into the individual business units andoperating units

Performance goal setting: The unit supervisorbreaks down organizational goals and setthem into individual key performance, alignstarget tasks with employees, and signsindividual performance commitments.

Performance implementation and coaching:

Analyze the target analysis gap, improve theplan and promote the circular loop closing by themonthly/quarterly performance completion.

Performance coaching: Coach employees onthe results of their phased performance goalsto improve performance results and workenthusiasm

Performance evaluation and feedback: semi-annual review of the overall performanceresults, review and adjust the annual targettasks

Performance evaluation: The supervisor evaluates

the employee's performance contributionaccording to the employee's semi-annual/annualperformance commitment letter, the completion ofannual key events and peripheral opinions

Application of performance results: Theperformance results are applied to the incentiveevaluation of each unit, and the performance resultsof each unit are used as an important basis forevaluating individual performance.

Performance feedback: Direct supervisors give face-to-face feedback on performance appraisal results toemployees and reach a consensus on performance,strengths and weaknesses and problems, and applyimprovement tasks to the next round of performanceevaluation.

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Promotion System

Conditions for Rank Promotion

Employee Development ChannelsManagement ChannelExpert ChannelCorporate SeniorManagement

Corporate Senior

ExpertCorporate Middle

Management

Corporate ExpertDepartment MiddleManagement

Department SeniorBackboneGrassrootsManagement

Department BackboneGrassroots Employee

The Company has put in place a unified employee promotion management process,linking individual ranks with performance assessment and promotion, andimplementing them in accordance with the principle of fairness and justice, guided byresponsibility results and ability improvement.

Annual Appraisal and Commendation

In order to effectively motivate all employees to keep fighting and stay energetic, andlead all employees in such values as "customer oriented, strategy oriented,responsibility results orientated, high quality work, unity, criticism and progress", theCompany annually commends excellent teams and individuals. The commendation isto select the best out of the best and promote excellence.

Individual performance contribution: Review the employee's work achievement

with reference to the past two performance results. An individual performance ratingof C or above is a necessary condition for reviewing the employee's promotion.

Key competencies and qualifications: Before the Company implements

qualifications, the assessment is mainly based on the ability shown in the performancecontribution process of the employee, and the professional contribution of theemployee to the organization.

Individual rank and level review: In addition to assessing the individual rank ofeach employee, it is also necessary to assess the level of the employee; accordingto the level of competency, it can be rated as fully competent, basically competent,temporarily incompetent.

Category ofAward

Name of Award

Award Value

President'sSpecial Award

Company LevelBusiness/TechnologyBreakthrough Award

The Group's highest honor, leadinginnovation and breakthrough, with greatvalue contribution and strategic significance

Gold Team

Award

Best Trailblazer Award

Expanding the scale of operations

R&D Excellence Award

Enhancing product value

Best Operations Award

Improving organizational effectiveness

Golden Medal

Individual

Award

Golden Medal Employee

Excellent responsibility results, solidprofessional competence, and setting abenchmark for employees

Golden Medal Manager

Compliant with corporate values, practicingwhat one preaches, excellent responsibilityresults, and setting a benchmark foremployees

Newcomer

Award

LUSTER New Star

Recognized by the team for excellent overallperformance within one year of joining theCompany and setting benchmark for newemployees

SpecialContribution

Award

Annual SpecialContribution Award

An unconventional award to be given forsignificant events in a special period of timeand for significant contribution to theCompany as a whole

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Employee type

Training direction

Core courses

?Corporate Culture?Basic Systems and Processes?Functional Knowledge

LUSTER in DevelopmentThe Seven Requirements onLUSTER EmployeesBecome the Best You Can BeThe First Lesson in Quality

?Enhancement of ProfessionalCompetence and Quality?Effective Office Tools and

Techniques?Promoting Employee Growth

Professional DevelopmentProject Management PracticeEnhancementHow to Communicate EffectivelyNine Steps to Better Execution

?Management Tools and Skills?Professional Management

Skills?Management Mindset

Transformation

Role TransformationExecution and MotivationTask PlanPerformance Assessment

?Leadership Development?Time Management and

Efficiency?Problem Solving Skills and

Thinking

Talent Planning and DevelopmentOrganizational PerformanceManagementOrganizational Design andCapabilityBusiness Analysis andManagement

?Strategy Management?Business Operations

EntrepreneurshipStrategic LeadershipOrganizational LeadershipTransformational Leadership

Talent Training and Development

Establishment of a Comprehensive Training System

23,946hoursTotal training hours in 2023

Total training hours in 2022

2,068raineesTotal number of trainees in 2023

1,443raineesTotal number of trainees in 2022

The Company provides targeted training for senior, middle and grassroots managersand employees in line with the characteristics and relevance of their respective groups,with the intention of rapidly improving the integration and starting ability of newemployees, the vertical expansion ability of existing grassroots in their positions, andthe comprehensive management ability of management at all levels. Through thedifferent levels of course system and a variety of training programs, we provideemployees and managers with differentiated training to help each employee's growthand progress.In order to activate internal resources and build a learning organization, the Companyhas established a mentor training and certification system, aiming to improve theteaching ability and skills of mentors through mentor training, help mentors transformexperience into knowledge and knowledge into wealth, and realize knowledgeaccumulation, sharing and dissemination.

New employees

GrassrootsEmployee

GrassrootsManagement

MiddleManagement

SeniorManagement

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26,984hours

The Seed Program is aimed at fresh graduates who joined the Company in 2023. Through a series of trainingactions during the probationary period, the Seed Program will help school recruits to successfully transform fromstudents to workers, and stimulate their creative vitality, thereby tapping the potential of newcomers. Therefore,

the design of the training program focuses on the newcomers' career development path, sense of accomplishmentand recognition, so that the newcomers can be better integrated into and more dedicated to the organization.

The program is divided into three stages: the first stage is the learning of what new employees are expected toknow. The rich courses involve systems, processes and culture, primarily in the form of online micro-courses,intended to improve learning efficiency and ensure learning results. The second stage is the new employeeintensive training in the Company. The three-day intensive face-to-face training consists of corporate culture,human resources management, development history and other contents. Executives of the Company are invited towork as lecturers, in order to achieve the most efficient and accurate transfer of information and ideas. The thirdstage is work practice, learning during training, and supplemented by mentoring by mentors to help newemployees quickly fit into the job and start working. In the first half of 2023, the Company held manager trainingon customer satisfaction management concept and practice and solution in Beijing, Suzhou and Shenzhensimultaneously, and the Company's marketing system and R&D system related senior leaders participated in thetraining, covering 157 trainees, and generating a participation rate of more than 70%. During the reporting period,the Company conducted both online self-study and on-site intensive training and teaching for the grassrootsmanagement, and effectively improved the management skills and abilities of grassroots managers throughlearning performance management, team management, etc. The 24 grassroots cadres who participated in thetraining and learning will be a strong support team for the Company's sustainable growth.

In the first half of 2023, the Company held manager training on customer satisfaction managementconcept and practice and solution in Beijing, Suzhou and Shenzhen simultaneously, and theCompany's marketing system and R&D system related senior leaders participated in the training,

covering 157 trainees, and generating a participation rate of more than 70%.

2023 New Employee Training

Specialized System Training

During the reporting period, the Company conducted both online self-study and on-site intensivetraining and teaching for the grassroots management, and effectively improved the management

skills and abilities of grassroots managers through learning performance management, teammanagement, etc. The 24 grassroots cadres who participated in the training and learning will be astrong support team for the Company's sustainable growth.

Grassroots Management Training

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On March 4, 2023, the Company held a seminar on the operation and value distribution of thedelivery company with the theme of "focusing on management, improving performance, gathering

vitality and earning bonuses". This seminar invited external experts to work as corporate mentors,guide the discussion and deliver the 23-year Management and Compensation Incentive Goalsthrough the presentation of the course. The results of this seminar will serve as importantorganizational wealth for the Company.

Learning Seminar for Middle and Senior Management

RMB

1.88

million

Mentor Selection and Training

1 Course Lecturer Certification Application: The training department publicizes theinformation of the certified courses in the course library, and the employee will fill out the"Course Lecturer Certification Application Form" and submit it to the training department.

2 Preliminary Qualification Review of Course Lecturer: The training department develops the

course content according to the requirements and applications of the lecturers, andpreliminarily evaluates the qualification of the lecturers.

3 Trial Lecturing: The lecturer receives the proposed certification course package and starts

trial lecturing after lesson preparation.

4 Lecturer Certification: The expert jury grades the lecturer according to the performance of

the trial lecture and a lecturer with a score ≥80 is considered certified.

5 Certificate Issuance: after preliminary certification, the training department will issue a

Letter of Appointment as per the level of the lecturer determined according to the rank of theapplicant. The appointment period is 1 year.

LUSTERAcademy

Total training costs in 2023

courses

Total training coursesin 2023

?Management of lecturerselection, certification,assessment and motivation,etc.?Training and development oflecturers?Regular update ofinformation in the archives

BusinessDepartments

?Responsible for

recommending lecturers?Assisting in instructor

selection, certification, etc.

Lecturer ReviewCommittee

?Accreditation Review of

Course Lecturers

Number of new mentors in2023

Number of new mentors in2022

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Employee Health and SafetySafeguarding Employee Safety

Work Safety Accountability SystemBoard ofDirectorsGeneral Manager

Human Resources

Department

AdministrationDepartment

Business andFunctionalDepartments

?The Board of Directors authorizes the General Manager to plan,implement and supervise a series of matters related to the Company'swork safety.?The General Manager establishes and improves the Company's total

work safety system, and ensures the effectiveness of the implementation,and takes direct responsibility for the final results.

?The Human Resources Department is responsible for monitoring thesafety responsibilities of each department and the effectiveness of theimplementation, which is an important assessment item.?Responsible for recruiting and supervising the employment of personnel

in accordance with labor regulations.?Provide application elements and post-incident logistical collaboration.?Organize and participate in the formulation of work safety regulations

and operating procedures?Organize and document work safety education and training of the

Company?Regularly check potential safety incidents and put forward suggestions to

improve safety production?Implement the safety responsibilities of the department?This part involves the Quality Management Department, Supply Chain

Management Department, business departments at all levels, etc.?Implement the corresponding work duties of the Company?When there is a risk of safety incident, unfold a timely investigation and

report it to the superior leadership and Administration Department to

prevent the escalation of the situation.

The Company is committed to continuously improving the occupational health and safetymanagement system, and has been certified by the ISO45001 Occupational HealthManagement System in accordance with The Law of the People's Republic of China onProduction Safety, The Law of the People's Republic of China on the Prevention andControl of Occupational Diseases and other laws and norms. On the basis of the originalEHS system, the Company has further improved the system and standardized the rules,revised and released the "Safety Goal Assessment System", "Accident Investigation andPunishment System", "Work Safety Responsibility System", "Management System forExtension Cords and Mobile Electrical Equipment", etc.The Company regulates all kinds of health hazards in production and office operationfrom production process, security, chemical management, special equipmentmanagement, special operation management, safety and emergency management andoccupational health to eliminate hidden hazards.

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Safety Responsibility Goals for 2023

Accident Investigation and Punishment Process

Major equipment accidents and major liability accidents:

Acute poisoning affairs:

Workplace health examination rate:

100%

Regular inspection and maintenance rate of equipment andinstruments:

100%Work safety cost input guarantee rate:

100%

AccidentOccurrence andReportingAccidentOccurrence andReportingAccident AnalysisAccidentReportingAccidentHandling

The Company divides the accidents into three categories according to theaccident injury and accident grade. After occurrence of the accident, therelevant departments shall report it to the Administration Department within theprescribed time and report it to the Company in the form of written materials.

The accident is handled according to the "four principles" that the cause ofthe accident should be identified, the responsibility for the accident shouldbe seriously handled, the employees should be educated, and the normativemeasures to prevent the accident should be implemented.

The investigation team shall be formed on the basis of the requiredexpertise and disinterest in the accident investigation.The cause of occurrence/escalation is identified through investigation andanalysis, and then the responsible person is determined.The responsible unit and the investigation team summarizes the cause,responsibility and summary report of the accident.

Safety Training

Forklift Safety Education and Training

Employee safety and safety awareness is an important part of the Company hasalways attached importance to and invested in. The Company has launched a series oftraining programs around safety, and offered online courses such as "Fire SafetyKnowledge", "Hazard Source Identification and Risk Control", "Safety Education andTraining for New Employees" and "Company Traffic Safety Knowledge Training"for all employees. The number of visitors and learners in 2023 reached 2,147.According to the safety risk level, the Company takes the training programs with highrisk registration as the mandatory courses for the relevant departments and personnel,and arranges simulation exercises according to the training content.

Forklift safety education and training is to cultivate the safety awareness and operation abilityof operators by introducing the types of vehicles in the field, clarifying the requirementsbefore forklift operation, and emphasizing the safe driving rules of forklift trucks, andconsolidate the learning effect through typical case study.

Daily Safety Training for External Construction Workers

The Company requires all external construction workers to receive daily safety training forexternal construction workers on work permits, sources of hazards, emergency handlingmethods, protective measures during labor and regulations on rewards and punishments.Safety Training for Working at Heights

Through typical accident cases of working at height, the training is to illustrate the commondangerous practices and correct operation norms of working at heights for the purpose ofadvance prevention and intervention of high altitude risk matters.

Hazard Source Identification and Risk Control Safety Training

By understanding the classification of hazard sources, the trainees can further understand thespread, causes and effects of hazard sources, and further clarify the risk management normsand processes of hazard sources to prevent the possibility of extraordinary hazard sourcesfrom the root.

Fire Safety Knowledge Training

Trainees can learn about the common cases of fire accidents, the basic measures of fireprevention and the common sense of fire prevention in houses and factories and otherscenarios, and further analyze the fire extinguishing measures and prevention and controlmeasures in different scenarios to eliminate fire safety hazards.

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In order to ensure the safety of the Company's property and personnel, and improve theresponse ability of the fire brigade personnel in the event of an emergency, LUSTERunfolded the fire lecture and evacuation drill according to the annual fire training plan onNovember 14, 2023. The Company hired professional lecturers to explain the basic

theoretical knowledge of fire fighting to the fire marshals of various departments and thesupport team marshals. Under the guidance of professional lecturers, the Companyconducted actual fire fighting training with fire extinguishers and outdoor fire hydrantsoutside the factory hall. Through this lecture and drill, employees have gained an in-depthunderstanding of fire safety knowledge, improved the actual fire rescue ability, and helped

strengthen the fire warning and fire safety awareness.

Fire Lecture/Evacuation DrillMajor Injury and In-plant Motor Vehicle Anomaly Drill

In order to prevent the occurrence of major injuries during transportation andunloading of motor vehicles, the Company launched a major injury and in-plantmotor vehicle anomaly drill program in Suzhou Warehouse Area. The drill was

participated by the relevant personnel of supply chain warehousing and plantmanagement. Through this complete drill simulating the emergency and rescuemeasures when major injuries occur in motor vehicles, the Company has strengthenedthe awareness of protection and rescue capabilities for major injuries. FireLecture/Evacuation Drill.

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On July 27, 2023, We unfolded theemployee heatstroke simulation exercisein the warehouse's shipment area. Afterthe warehouse employee suffered fromthe heatstroke, the warehouse cadresimmediately contacted the factory rescuepersonnel and notified the factory EHSto transfer the simulation employee tothe hospital after emergency treatmentby the first aid personnel. TheAdministration Department notified theaccident by email after the accidentinvestigation as a warning and reportedit to the supervisor of the ManagementOffice.

Heatstroke DrillEmployee Health

Prevention ofOccupationalHazards

Reduction ofOccupationalHazards

OccupationalHealthMonitoring

1. The construction projectsthat may cause occupationalhazards shall be entrusted to aqualified third partyorganization for pre-assessment of occupationalhazards and confirmation ofprotective measures.

2. The Human ResourcesDepartment shall clarifyoccupational hazards,consequences and preventivemeasures with employeeswhen they sign labor contractsand engage in work thatendangers health.

3. The site, equipment andpackaging with occupationalhazards shall be provided withwarning signs.

1. The production process shallbe mechanized, automated,closed and remotely controlledas far as possible.

2. Ventilation, detoxificationand dust removal facilities shallbe installed.

3. The maintenance ofequipment shall bestrengthened to reduce airleakage, bubbling, dripping andwater leakage of the equipment.

4. Personal protective measuresshould be implementedaccording to the hazard factors,such as wearing protectiveearplugs for employees in noiseareas during noise preventionand control.

1. The AdministrationDepartment shall providecorresponding occupationalhealth examination accordingto the occupational hazardfactors of each department.

2. Employees in toxic andharmful positions are requiredto undergo occupational healthexamination before taking thejob and after leaving the job.

3. The Company providesphysical examination forworkers working in weldingsmoke and noisy places, andon-the-job physicalexamination for all otheremployees.

4. The Human ResourcesDepartment establishes anoccupational health record forevery employee exposed tooccupational hazards.

Firefighting and

Rescue

Human resources are one of the most valuable resources of an organization, and thesafety of employees has always been the Company's top priority. To this end, theCompany has formulated a series of systems and norms such as the "OccupationalDisease Prevention and Management System", the "Occupational Disease HazardPrevention and Control Responsibility System", the "Occupational Disease HazardDeclaration System", the "Occupational Health Monitoring and file ManagementSystem", the "Occupational Hazard Protection and File Management System", and the"Maintenance and Repair System of Occupational Hazard Protection Facilities", andobtained the ISO14001 Certificate.

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In addition to the establishment of various systems and norms for the protection ofemployees, the Company regularly organizes medical checkups and gratuitousconsultation for employees, and sets up a variety of sports clubs in order to protect thephysical and mental health of employees.

2023 Health Responsibility Goals

Yuanke Vision and Shougang FundBadminton Friendship Match

Occupational disease incidence rate:

Employee occupational health examination rate:

100%

Workplace occupational hazard test rate:

100%

Certified work rate:

100%Stomatology GratuitousConsultation

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Establishment of HarmoniousWorkplace

Creating a Harmonious Environment

Office Environment

Dormitory Environment

Library Environment

Production Environment

A clean and comfortable office and production environment is essential to improvementof productivity. The Company implements 6S management norms in all office spaces,requiring the implementation of the six standards of "organization, rectification,sweeping, cleaning, literacy and safety" on all occasions to provide employees with acozy environment and comfort.

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Advocacy of Combining Work and rest

Employee Benefit ActivitiesHoliday Activities

Department Team Building and

Democratic Life Meeting

In order to enrich the employees' life and strengthen the team cohesion, the Company and various departments organize team building activities, holiday activities and employeebenefit activities in various forms, so that the employees can feel warmth and happiness.

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董事长致辞

走进凌云光2023 年度荣誉可持续发展组织贡献规范治理人才培养环境优

知识和理性是我们事业腾飞的翅膀

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Science and technology innovation products

lead the new ecologyGreen and low-carbon operations practicenew concept of environmental protection

Environmental

Protection

Innovation Driven Green DevelopmentChina is a global manufacturing power, and is at a critical moment of manufacturingreform. How to improve quality, increase efficiency and reduce waste in themanufacturing process is an important part of the reform and upgrading. The Companyadheres to the principle and concept of "promoting the development of the industry asthe responsibility". It's one of the first batch of machine vision enterprises in Chinataking the lead in introducing and learning advanced optical imaging, algorithmsoftware, information acquisition, digital network, big data analysis and othertechnologies. Integrating "light, machine, electricity, computing and software" throughthe use of industrial machines, the Company applies the advanced optical imagingtechnology, software algorithms, precision automation and other technologies to thefield of industrial manufacturing, adapts to the development trend of precisionmanufacturing, flexible manufacturing, intelligent manufacturing, so as to help realizethe transformation from traditional manufacturing to intelligent manufacturing, improveproduction efficiency and reduce production waste.

With the goal of helping customers realize zero defects in manufacturing, the Company'svision systems and intelligent equipment and other machine vision products are used inconsumer electronics, new energy, new display, printing and packaging, transportation,science and other downstream areas. Through the detection efficiency of up to 99% ofdefects in raw materials, manufacturing and factory testing, we have helped manycustomers solve the problem of serious waste of manufacturing resources.

Supporting the Reduction of Production Waste

Big Data AnalysisIntelligent Decision-Making

DigitalNetworking of

Production

Digitization ofInformationCollection

New Products in 2023:

20+High-end Vision Components Supplied:

50,000

Vision Components, Systems and Equipment:

20,000

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The middle frame of the mobile phone is called the "backbone" of the mobile phone,which is the frame that carries the various parts of the mobile phone, and its appearanceaccuracy affects the quality of the finished product to a large extent. In the past, theappearance inspection of the middle frame relied on manual visual inspection, resulting ina high missed detection rate, and a difficult guarantee in product yield. According to thecalculation of back-end product yield, the missed detection rate of manual visual

inspection is as high as more than 10%, resulting in huge waste.

There are about 88 test items for the middle frame of the mobile phone, and the smallest

defect is only 0.5 microns in diameter, which exceeds the limit of manual visualinspection. LUSTER launched the innovative mobile phone middle frame appearanceinspection device which can complete 88 tests in 5.5 seconds and detect defects as smallas 0.5 microns. One device can complete the original workload of 40-50 workers.Compared with the original manual visual inspection, the device reduces the defectdetection time by 97%, and lowers the missed detection rate to 5%, which greatlyimproves the efficiency of the product and the utilization rate of the material.

A Chinese flexible packaging leading enterprise relies on extensive materials and humanresources to support the high-frequency delivery of a large number of business orders ofthe Company, and has maintained a 10% performance growth for three consecutive years.It is generally recognized in the printing and packaging industry that a 3% waste rate will

cause enterprises to lose 30% of their profits. According to incomplete stahtistics, tereare 900 kilometers of wasted materials on the production line every day. Although the

volume of orders and the number of employees are increasing, the lack of systematicquality management, reliance on traditional labor, false alarms, omissions, concealingand other problems continue to erode corporate profits.

Based on years of practical experience, LUSTER applies the core requirements ofautomated labor reporting, loss reduction and quality management to all aspects of theprinting plant. The project combines a variety of data acquisition technologies with 48single-machine online monitoring system to achieve the closed loop of 156 equipment andMES system and quality management system in the customer workshop. With the help ofintelligent algorithms, functional automatic labor reporting is realized, and the dataaccuracy rate is 99%, which in a real sense puts an end to the "omission, concealing and

misreporting" of traditional reporting, realizes "0" error and leakage in material mixing,

and helps customers recover the "wasted" profit.

Artificial Intelligence Version of "Li Zhu"Supports Intelligent ManufacturingSaving RMB 200 Million for A FlexiblePackaging Customer a Year

During Mobile Phone Assembly

The smallest defect is only 0.5 microns in

diameter.

"See the slightest detail" from a greatdistance away

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Under the great pressure of quality and efficiency improvement, the leading photovoltaicglass enterprise (hereinafter referred to as Company A) has worked with LUSTER tobuild an intelligent factory, successfully realizing capacity upgrading and releasing 83%of the workload of visual inspection workers. The intelligent factory has been in stableoperation for more than one year, with no relevant quality complaints.LUSTER has developed the photovoltaic glass original detection and deep processingdetection solution. Through real-time detection and data analysis with the help of thequality management system, automated defect detection and classification has beenachieved. Meanwhile, quality big data has been collected, and the digital model of defectscale and the probability of busting correlation has been built, minimizing the operatingcosts of enterprises in the premise of ensuring the yield rate. Now 16 production lineshave been installed on the customer site, and each production line can reduce the

manpower from 3 employees/shift to 1 employee/shift.

As an ecological partner of FII, Yao Yi, Chairman and President of LUSTER, was invitedto attend the Summit Roundtable Forum, and discussed China's Path to the Lighthouse

Factory together with Huang Pei, CEO of E-works Digital Enterprise Network, Wu Tong,

Head of Advanced Manufacturing in Greater China of the World Economic Forum (WEF),Liu Zongchang, Chief Data Officer of FII, and Zhao Yuekai, co-founder of Agile Robots.Yao Yi, Chairman and President of LUSTER, said that LUSTER has set up a joint venturewith FII and developed more than 300 pieces of equipment together. If we want to build100% unmanned chemical plants in the future, advanced optical imaging, software andalgorithms, and automation are essential. Deeply engaged in the industry for more than 20years, LUSTER machine vision has begun to move towards various applications in largequantities. Over the past five years, LUSTER has provided 300,000 sets of visionequipment and 100,000 sets of vision systems for various industries, helping enterprisesliberate the hard-working and dexterous front-line workers.

Together with 20 ecological partners such as LUSTER, FII has launched the LighthousePilot Program, committed to incubating new business models and new industrial ecology,

and realizing sustainable lighthouse piloting benchmarking demonstration.

Photovoltaic Glass Leader Realizes EnergyConservation and EfficiencyDiscussing China's Path to the LighthouseFactory Together

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Sustainable Innovation and Development

The Company regards intellectual property rights as one of the driving forces forinnovation and development, attaches importance to intellectual property protection andR&D innovation, and encourages employees to be creative and creative. The Measuresfor the Administration of Intellectual Property have been formulated to clarify the scopeof intellectual property management, power ownership, management requirements andincentive policies and issuance standards, stimulate employees' awareness of innovation,and lead employees in practice innovation.

Technology Innovation Achievements in 2023

Cumulative Total of Patents:

Cumulative Patents for Inventions:

Cumulative Patents for Utility Models:

Cumulative Design Patents:

Cumulative Software Copyrights:

Cumulative Trademarks:

Total Patents of the Year:

Patents for Inventions of the Year:

Patents for Utility Models of the Year:

Design Patents of the Year:

Software Copyrights of the Year:

Trademarks of the Year:

Cameras & Components

Visual System

Intelligent Equipment

3D camera: The 3D camera based on surface structured optical codec technology and triangulation principle for3D point cloud reconstruction offers a depth measurement range of ± 6mm, a Z repeatability of 0.5μm, 5Mpixels under the frame rate of 3fps, widely used in the 3C electronics industry, semiconductor industry,automotive industry, as well as various types of small and medium-sized parts.

The Company regards product innovation as its core competitiveness. In the face of thedevelopment trend of "multi-mode integration, embedded, and high precision", theCompany continues to invest in underlying technologies such as "advanced imaging,software algorithm, automation" and application products in the industry, launchesmany new products in consumer electronics, new energy, meta-universe and otherindustries. Efforts have also been made to continuously optimize products andsolutions, enhance the competitiveness of the industry, and meet the requirements ofdiversity and differentiation of customers.

Wide spectrum short-wave infrared camera: the camera adopts Sony IMX990 chip andTEC2 refrigeration, offers

a product resolution of 1280x1024, a small pixel size of 5?m and wide spectral range of 0.4~1.7μm and supportsa variety of image processing algorithms, widely used in university scientific research, space opticalcommunication, brain science and spectral imaging and other fields.Solar cell PL detection module: Based on the principle of photoluminescence, the module provides a non-

destructive and contact-free innovative detection scheme for solar cells. The detection accuracy rate is 99% andthe misjudgment rate is < 1% for defects such as hidden cracks, dirt, fog blackness, suction disc mark and beltmark of solar cells.

Glue spot check integrated detection system: easy to install and easy to check: quick installation within 10

minutes and imaging debugging within 10 minutes, this is a great improvement compared to installation in dozensof hours or even days in the past. Meanwhile, the system also provides 999 kinds of scenario formulas, covering70% of the glue inspection application scenarios.The whole plant production management system of loading paper: In view of the untimely and inefficient loading

paper management, the system is launched to realize four closed loops of order, production, quality and defectcontrol. It can display the production process in real time, realize the digitization and transparency of theproduction process, and fundamentally unblock the process.

A new generation of offline quality inspection system: after installing the new software VisionPrint7, the

software upgrades have led to a significant increase in hardware performance, realizing the efficacy of one-keyresolution switching and non-stop modification of template parameters.

Lithium electrode burr full inspection equipment: The self-developed optical focus tracking technology and AI

high-precision image processing are used for inspection, realizing 2 micron defect detection under 150m/minhigh-speed production.

Lithium battery appearance inspection equipment: Through high-precision optical calibration and AI algorithm

support, the common depression defects in the industry are divided into 10 levels, and the accuracy is greater than95%, the detection accuracy can reach 0.01 square millimetre, and the efficiency is increased by 50% and thequality traceability is achieved by AI rejudgment.

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RMB460 million

R&D Investment

number of R&D personnel

Green and Low-carbonOperationsThe Company strictly abides by The Law of the People'sRepublic of China on Prevention and Control of WaterPollution, The Law of the People's Republic of China onPrevention and Control of Environmental Noise Pollution,The Law of the People's Republic of China on Preventionand Control of Environmental Air Pollution, The Law ofthe People's Republic of China on Prevention and Controlof Environmental Pollution by Solid Wastes, The NewEnvironmental Protection Law and other laws andregulations. The Company has further established a systemand control measures on the main contents of the EHS incategories and grades. In terms of environmental protection,we have established a series of systems and norms forinternal environmental control and effective utilization ofresources, such as the Resource and Energy ManagementSystem, the Garbage Classification Management System,the Administrative Regulations on Exhaust Gas,Wastewater and Noise, the Administrative Regulations onWaste, and the Administrative Regulations on Chemicals.In 2023, five enterprises with production qualificationunder LUSTER have been certified by the ISO14001Environmental Management System.

Enterprises Certifiedby the ISO14001EnvironmentalManagement System

Emissions Management

Waste Gas EmissionsSources of Waste Gas?Fume from welding in the spot welding process in the clean room?Unorganized waste gas emissions from the workshop

Preventive Measures

?The fume generated by electric welding is absorbed by the gas collecting device through the activatedcarbon for adsorption and filtration, and the filtered waste activated carbon is sent to a qualifiedprocessor for treatment.?Strengthened workshop ventilation and air exchange measures by the Company?The hazardous factors of the waste gas emission port outside the workshop and the exhaust gas inside

the workshop are monitored every year, and when the emission concentration is found to exceed thestandard, the relevant departments will be called together to analyze and deal with it until the emissionstandard is met.

Emission Standards

The Integrated Emission Standard of Air Pollutants, and The Emission Standard for MalodorousPollutants

The Company's industry does not fall into high-emissions and resource-consumingindustries. Within the existing business scope, the Company makes every effort toreduce the impact on the environment by standardizing the emissions of noise,wastewater, waste, chemicals and garbage generated by production.

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Total Volume of Waste Gas in 2023:

240,000cubic metersTotal Domestic Wastewater in 2023:

6,206tonsTotal Waste in 2023:

3.75tonsWastewater Discharge

Waste Management

Noise Emissions

Sources of Wastewater?Domestic wastewater such as toilet water and cleaning wastewaterPreventive Measures?The relevant departments avoid or reduce the use of facilities and installations that generate wastewater

as far as possible.?Qualified third-party testing is organized every year.?Signs must be posted at all final discharge outlets.

Emission Standards?Pollutant Discharge Standards for Urban Sewage Treatment Plants and Water Quality Standards for

Sewage Discharge into Urban Sewers

Corporate waste is categorized into non-recyclable waste, hazardous waste, andrecyclable waste according to the method of disposal and use.Non-recyclable waste: household garbage or other solid or liquid waste that does not

pollute the environment

Hazardous waste: waste generated by business activities that is toxic, hazardous, and inconcentrations or quantities sufficient to affect human health or pollute theenvironment

Recyclable waste: waste that can be recycled after treatment

Sources of Noise?Drilling machines, lathes, grinders, air compressors, welding exhaust purifiers, etc.

Preventive Measures

?Use low-noise equipment as much as possible, and install soundproof enclosures for equipment that

generates a lot of noise.?The control manufacturing department is responsible for the daily operations and regular maintenance

of the equipment; when the equipment breaks down, it should be repaired as soon as possible.?Close the windows and doors of the equipment as much as possible when the equipment is in operation.Emission Standards?Noise Emission Standards for Factory Boundaries of Industrial Enterprises

WasteRecyclable waste

Non-recyclable

waste

Hazardous wasteTemporary storage in theAdministration DepartmentDisposal by qualifiedprocessorsWaste storage siteRecycling andtreatment plant

Removal by qualifiedprocessors

Waste Classification

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Chemical Management

The Company regulates the management of hazardous chemicals in accordance with the Regulationson the Safe Management of Hazardous Chemicals and the Regulations on the Administration ofPrecursor Chemicals, in order to prevent and reduce safety and environmental accidents of hazardouschemicals and to protect the health and safety of employees.

?The Administration Department investigates the chemicals used by theCompany and establishes the List of Chemicals.?Hazardous chemicals in the List of Chemicals shall be registered on the

local environmental authority website as required by the Regulations.

?The warehouse keeper shall check and verify packaging and labeling

before warehousing.?Chemical supplies shall be stored in storage areas and explosion-proof

cabinets, in which adsorbent cotton, rags and sand for emergency use

should be placed.

?Disposal in accordance with the Waste Management System?Chemical-contaminated items (cloth, gloves, containers, etc.) should be

treated in the same way as chemical waste when discarded.

?Safety precautions and specialized equipment are required, and good

ventilation equipment should be provided.?Individual users must strictly observe all safety systems and operating

procedures.

?Requests for chemicals shall be based on actual usage, and containers of

purchased hazardous chemicals must be clearly labeled in accordance

with national regulations.?For new chemicals, information on Material Safety Data Sheets (MSDS)

should be requested from the supplier at the time of purchase.?Delivery to the Company by the supplier; the Company needs to sign

the Environmental Safety Agreement with the supplier to affect its

environmental safety in the transportation process.

At 13:50 PM on June 20, 2023, asimulated chemical packing leakexercise was conducted at WuzhongMachining Room in Suzhou. Theearly warning exercise involvedchemical operators wearing gloves,masks and goggles, using adsorptioncotton to adsorb the leaked solvent,prevent diffusion, and restore thescene.

Chemical LeakExercise

Establishment of

List ofChemicals

Procurement

Transportation

Storage

Use

Disposal

LUSTEREHS KnowledgeWhat is EHS?EHS is short for Environment, Health and Safety. EHS is theintegration of ISO14001 (Environmental Management System)and ISO45001 (Occupational Health and Safety ManagementSystem). The Environmental & Occupational Health and SafetyManagement System is referred to as the EHS managementsystem.

What are the EHS policies of the Company?Safety Policy: Safety First, Prevention Foremost, EffectiveMonitoring, Cyclic Improvement; Environmental Policy:

Pollution Elimination and Energy Conservation; OccupationalHealth Policy: Safety First, Accident Prevention, Giving back toEmployees and the Society, Compliance with Laws andRegulations, and Continuous Improvement.

What are the EHS goals of the Company?Safety Goal: Zero Safety Accident; Environmental Goal: ZeroEnvironmental Pollution; Occupational Health Goal: ZeroOccupational Health and Safety Accident.

By the Administration Department

EHS Environmental Basics

TrainingTrainees in 2023:

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Energy Management

Board ofDirectors

GeneralManagerAdministration

DepartmentBusiness

Units

Functional

Units

The Company promotes energy-saving measures and concepts at all levels of the office operation, production and employees' daily lives. In corporate operations, we activelypractice green environmental protection, and follow the principle of "use less, frugally and efficiently" when using various types of consumable energy such as water resources,paper, electricity and fuel, so as to minimize the consumption of energy. The General Manager of the Company is responsible for approving and leading the overall energy-savingand consumption-reduction goals; the Administration Department is responsible for coordinating the use and management of energy and resources, and each department sets energy-saving indicators for energy and resources used in the department and supervises the implementation.

ResourceType

Energy Conservation Measures

Monitoring Measures

?Departments and related personnel should pay attention to

the proper amount of water consumption to avoid waste. ?When water can be used intermittently, the valve should beclosed or turned off.?The water valve must be closed after using water.?If a department notices water pipe breakage or infiltration, it

shall immediately notify the Administration Department forrepair.

?The Administration Department

shall conduct a monthlyinspection of water pipes.?We conduct weekly inspections

of all areas to address waterwastage in a timely manner.

?Before printing or copying, documents should be previewed

to prevent printing or copying errors that could result inwaste.?Reduce consumption of paper resources by using telephones,

computers, etc. as much as possible.?Used paper instead of blank A4 paper should be used as draft

paper.?Temporary documents should be printed double-sided on

recycled paper.

?The Administration Department

counts the Company's paper

usage once a month.

?The air conditioner in the area should be turned off in time

during the noon break or before getting off work.?The lights should be turned off when employees leave, and

local lighting should be used for local work.?Promptly turn off power to equipment and appliances not in

use?The indoor temperature should not be lower than 26°C in

summer or higher than 20°C in winter.

?Enhanced maintenance of

equipment and electrical circuits?The Administration Department

verifies the power consumption

once a month.

A Message fromthe Chairman

About LUSTER

2023 Honors

SustainableDevelopment

Organizational

Contribution

Regulating

Governance

Talent Training

Environmental

Protection

Knowledge and Reasons are Our Arms toEmbrace the World!

Energy Conservation Promotion

Total corporate water consumption of the year:

19,018 tonsTotal gas consumption of the year:

81,632 m3Total corporate power consumption of the year:

4.06 million kWh

In order to publicize the awareness of energy conservation and emphasize the concept ofenergy conservation, the Company played the "Proposal on Diligence and Frugality” on thepropaganda screen on a loop on each floor in 2023, calling for "energy conservation andemission reduction, energy consumption reduction, total involvement, and opposing waste",classifying daily life and office operation according to the use of energy scenarios andlisting energy conservation measures. Meanwhile, the Company posted energy conservationsigns in various places such as air conditioners, light switches, water dispensers, hand washsinks, and printers, and installed Bull timing sockets on each floor to lead energyconservation, popularize energy conservation measures, and minimize the consumption ofresources.

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About LUSTER

2023 Honors

SustainableDevelopment

Organizational

Contribution

Regulating

Governance

Talent Training

Environmental

Protection

Giving back to the Communitywith LoveBuilding Industrial Ecology

Formulation of Industry Standards"White Paper on Industrial Intelligence"

Industry Sharing Activities

In June 2023, LUSTER Industrial Artificial Intelligence Innovation and Development Summitwas successfully concluded in Wuzhong, Suzhou. Industry pioneers, partner customers andbusiness elites from the manufacturing field gathered to talk about the new ecological prospectsof intelligent manufacturing industry and draw a new chapter of intelligent manufacturing.At the summit, Yao Yi, Chairman of LUSTER, Zhao Yan, CTO of LUSTER, Lou Yangbing,Chief Scientist of AIMS, and Shi Zhe, Chief Digital Officer of Foxconn, respectively made akeynote speech on the development of artificial intelligence. They talked about the new trend ofintelligent manufacturing, discussed the development status, main problems and solutions ofintelligent manufacturing, conducted an in-depth analysis on the importance of digitization of thewhole process elements such as high-quality data, zero defects and man, machine, material,method, and environment in intelligent manufacturing, and explored the development possibilitiesand future application directions of artificial intelligence technology.

2023 Global Artificial IntelligenceTechnology Conference

Promoting the development of the industry as the responsibility has always been one ofthe business principles of the Company. The Company actively participates in theconstruction of the industry, builds industry standards and industry ecology throughjoint collaboration, promotes the construction, co-prosperity and sharing of theindustry as a whole, and creates a better society through science and technology.

The preparation of "White Paper on IndustrialIntelligence" is led by the China Academy of Informationand Communications Technology and participated by anumber of organizations, including LUSTER LightTechCo., Ltd.(stock code: 688400). The "White Paper onIndustrial Intelligence" focuses on the latest progress anddevelopment trend of industrial intelligence application,and provides a detailed introduction to the scenarios ofmachine vision industrial inspection, intelligent factorymanagement, robot-assisted manufacturing, etc. Itconducts an in-depth research on the integration andinnovation application of industrial intelligence in theindustry from the dimensions of system connotation,technology, application, and industry, which will guidethe direction of the industry to realize the leap in theeffectiveness of intellectual manufacturing."2023 Research Report on Metaverse Industry Mapping"On September 22, 2023, "Trusted Metaverse Development Conference" was successfully held inBeijing. It was hosted by the Cloud Computing and Big Data Research Institute of the China Academyof Information and Communications Technology, and organized by Metaverse Innovation ExplorationMatrix and TC602 of the China Communications Standards Association. At the conference, Wei Kai,deputy director of the Cloud Computing and Big Data Research Institute of the China Academy ofInformation and Communications Technology, released the "2023 Research Report on MetaverseIndustry Mapping", and LUSTER was one of the participating units.

The Company's business spans the two directions of machine vision and culturalmetaverse. In these two fields, the Company led the "Industrial Artificial IntelligenceInnovation and Development Summit" and "2023 China metaverse Conference" andother industry conferences in 2023, sharing the path and key technologies of thedevelopment of China's artificial intelligence and metaverse, and promoting thecommon development and progress of the industry.

Summit in Taihu Lake: Discussing the New Trend of

Intelligent Manufacturing

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On December 23, CMC 2023 China metaverse Conference, part of the 2023 ZGC Forum activities,was successfully held in the Curling Hall of Shougang Park. This conference was guided by theZGC Forum Office, co-sponsored by the Chinese Association for Artificial Intelligence and thePeople's Government of Shijingshan District, Beijing, and co-organized by CAAI Meta-universeTechnology Specialized Committee, China Mobile Migu, LUSTER, Yuanke Fangzhou, andShoujian Investment. In the spirit of open and diversified communication and cooperation, thisconference gathered resources from all walks of life to talk about new insights and trends of meta-universe industry, share the latest academic researches on meta-universe and practice of cutting-edge application scenarios. It provided useful reference for the promotion of future industrialtechnological innovation and integration development, and made positive contributions topromoting the steady development of China's metaverse industry and accelerating the integration ofdigital economy and real economy. Next efforts will be made to further strengthen cooperation andlinkage, implement cooperation results, and fully promote the construction of metaverse industrialclusters.

2023 China metaverseConference

Science and Technology Benefit the Society

In the program "Mountains, Rivers and Poems of

Chang'an" at the Spring Festival Gala, Yuanke

Vision, a wholly-owned subsidiary of LUSTER,

utilized the FZmotion optical motion capturesystem to provide stable and accurate motion data

support for the animated performance of "Li Bai"in the AR scene of the mobile terminal. The

combination of motion capture technology andreal-time animation rehearsal can promptly adjust

the performance status of action capture actors tomeet the requirements of animation roles, achieve

"what you see is what you get", and improve thequality and efficiency of the overall projectdelivery of the Spring Festival Gala!In the creative dance "Koi", the real-time rendering

virtual system provided by Yuanke Vision, a

wholly-owned subsidiary of LUSTER, brought theaudience a fabulous visual feast combining humanand scenery, vividly restored the graceful posture

of koi in the water, and perfectly presented the

good wishes of richer and richer and good luck.

Built a Digital Intelligence Creative Stagefor the Spring Festival Gala

Since 2023, the company has helped create a large number of programs, film andtelevision works and other typical works through cooperation with CCTVHeadquarters, Migu, film and television producers, and successfully "reproduced" thegrand view of Tengwang Pavilion with digital technology to create a number of lifelikeimages. Through cooperation with China Media Group, Migu, film and televisionproducers, the Company has created a large number of programs, film and televisionworks and other typical works since 2023, and successfully "reproduced" the grandview of Tengwang Pavilion with digital technology, and presented a number of lifelikeimages.

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Contribution

Regulating

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Talent Training

Environmental

Protection

During the Two Sessions in 2023, the specialpioneer dialogue program "Wonders of China"hosted by C launched three live broadcasts,talking about the Milky Way of the universeand the rapid development of science andtechnology, analyzing the increasinglyvigorous national instruments, and interpretingthe hot artificial intelligence ChatGPT. CCTVnetwork virtual anchor C worked withLUSTER and brought a hardcore interviewlive experience of XR virtual reality fusion.

Joined Hands with Virtual Anchor C to Empower theLive Broadcast of the Two Sessions

The New Technology of Virtual Shooting in the GoldenRooster Venture Capital Science Fiction Film

On the afternoon of November 25, 2023, the opening ceremony of the Cultural Festival of theRepublic of Kazakhstan and the launch ceremony of the China-Kazakhstan Youth Friendship DigitalFigures were held in Beijing. During the event, the short video film "Just like You" was officially

released, marking the debut of China-Kazakhstan Youth Friendship Digital Figures. The technicalsupport of digital figure construction is provided by the optical field common technology platformunder the guidance of Beijing Municipal Science and Technology Commission and ZhongguancunAdministrative Committee. The platform construction is led by LUSTER and Migu.In the debut video, the two digital young people show their indomitable spirit in the face of setbacksand confidence on their hobbies, bravery to break traditions and seek innovative thinking modes. The

image of China-Kazakhstan youth friendship figures symbolizes the profound friendship between theyoung people of the two countries, and the two young figures will also start their own digital life.

High-quality Belt and Road Cooperation

Yuanke Vision, a wholly-owned subsidiary ofLUSTER, was invited to participate in theGolden Rooster Venture Capital Conferencein 2023 as a virtual shooting technicalsupporter for the Top 5 Science fiction FilmProjects.

The production of this pilot concept film issupported by the virtual shooting technologyof Yuanke Vision, which allows the director

to give the rein to his unique science fictioncreativity and imagination in the project, and

is realized by virtual shooting, providing the

creator with greater creative freedom and

greatly improving the production efficiency.

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Care for the Elderly

In order to start the Nursing Home Reconstruction Project, the cornerstone layingceremony of the Nursing Home led by the local government was held. The President Officeof the Company attended the cornerstone laying ceremony of Xichong County QingshiTown Nursing Home on behalf of the Chairman.

Cornerstone Laying Ceremony ofthe Nursing Home

Produced by the State Key Laboratory of the China Media Group in cooperation with LUSTERYuanke Vision, the cultural tourism metaverse promotional film with Wang Bo as the maincharacter story—"Return of Wang Bo" was released at the 2023 World Conference on VRIndustry. The three-minute short film reproduced the style of Wang Bo, the head of the FourGreat Poets in the Early Tang Dynasty. With the help of large-scene intelligent light field

reconstruction technology, the magnificent vigor of the ancient building—Tengwang Pavilionwas reproduced on a scale of 1:1. People were amazed at the beauty of the architecture featuring

"cornices and brackets towering in the clouds, carved beams and painted buildings throughoutthe ages"!In the short film, LUSTER Yuanke Vision vividly reproduced the poet "Wang Bo" who wasamazed at the beautiful view in the pavilion based on UE5.2+Rivermax ST2110 new XR&VP

architecture.

"Reproduced" the Grand View of TengwangPavilion with Digital Technology

Dr. Yao Yi, Chairman of LUSTER, donated to the nursing home for two consecutiveyears, showing his care and blessings for the elderly. The donation of RMB 1.5 millionmade in his personal name was intended to rebuild the nursing home in 2023, so thatthe lonely elderly could have a home and embrace love.

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Organizational

Contribution

Regulating

Governance

Talent Training

Environmental

Protection

Appendix I Key Performance Data

Sub-item

Indicator

Unit

2023

2022

EconomicPerformance

Direct economic value

RMB million

2,641

2,749

Total assets

RMB million

5,085

5,014

Cash dividends

RMB million

Basic earnings per share

RMB/share

0.35

0.46

GovernancePerformance

Number of training sessions on anti-corruption

session

\

Number of employees participating in anti-corruption training

person

\

Total hours of anti-corruption training receivedby employees

hour

\

Number of internal corruption reports received

session

\

Anti-Corruption projects

project

\

Total number of confirmed incidents ofcorruption

incident

\

Legal proceedings for confirmed incidents ofcorruption

proceeding

\

Environmental Performance

Emissions

Total greenhouse gas emissions

Ton

Scope 1 greenhouse gas emissions

Ton

Scope 2 greenhouse gas emissions

Ton

Total amount of exhaust gases

10,000 m

Tin and its compounds (ND)

mg/m

1.7*10-5

1.8*10-5

Non-methane hydrocarbon

mg/m

0.35

1.2

Total domestic wastewater

Tons

6,206

5,187

PH

Dimensionless

7.4-7.5

7.4-7.5

Suspended solids

mg/L

CODcr

mg/L

Ammonia nitrogen

mg/L

24.6

30.9

Sub-item

Indicator

Unit

2023

2022

EnvironmentalPerformance

Total phosphorus

mg/L

3.61

3.14

Total waste generated

Ton

3.747

1.503

Total non-hazardous production waste

Ton

3.56

1.5

Cardboards

Ton

1.30

0.3

Plastics

Ton

0.76

0.4

Pallets

Ton

1.50

0.8

Density of non-hazardous production waste

T/RMB 100 million of

revenue

0.13

0.55

Total hazardous solid waste produced

Ton

0.187

0.003

Waste activated carbon filters

Ton

0.006

0.003

Waste packaging drums

Ton

0.01

\

Waste rags and circuit boards

Ton

0.171

\

Intensity of hazardous solid waste

T/RMB 10,000 of revenue

0.007

0.0001

Use of resources

Total electricity consumption

KWh

Power density

kWh/RMB 100 million of

revenue

15.37

14.33

Total natural gas consumption

m

81,632

102,040

Density of natural gas consumption

m3/RMB 100 million of

revenue

3090.95

3711.90

Total water consumption

m

19,018

17,103

Density of total water consumption

m3/RMB 100 million of

revenue

720.11

622.15

Employment

Number of employees hired

person

1,981

2,060

Classification by gender

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Organizational

Contribution

Regulating

Governance

Talent Training

Environmental

Protection

Sub-item

Indicator

Unit

2023

2022

SocialPerformance

Male

person

1,584

1,628

Female

person

Classification by type of employment

R&D personnel

person

Production personnel

person

Sales personnel

person

Financial personnel

person

Procurement personnel

person

Administrative personnel

person

Technical support personnel

person

Classification by age

30 and below

person

31-40

person

1,131

1,069

Above 40

person

Classification by educational background

Associate Degree and below

person

Bachelor's Degree

person

Master's Degree

person

Doctorate Degree

person

Employee turnover rate

%

22.17%

20.83%

Turnover rate by gender

Turnover rate of males

%

22.79%

21.83%

Turnover rate of females

%

19.78%

17.11%

Sub-item

Indicator

Unit

2023

2022

SocialPerformance

Turnover rate by age

30 and below

%

26.64%

22.60%

31-40

%

19.27%

20.80%

Above 40

%

21.33%

11.76%

Talent Training and Development

Amount of training investment

RMB10,000

Total training hours

hour

22,946

26,984

Annual training hours

hour

22,946

26,985

Total number of trainees

person

2,068

2,534

Number of online participants

person

1,443

2,016

Number of offline participants

person

Number of trainees by employee rank

Senior management

person

Middle management

person

Ordinary employees

person

1,500+

1,100+

Number of new trainers during the year

person

New trainers by gender

Male

person

Female

person

Total number of training courses

course

Employee Health and Safety

Percentage of employee social security

%

100%

100%

Percentage of employees with supplementarymedical care

%

100%

100%

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SustainableDevelopment

Organizational

Contribution

Regulating

Governance

Talent Training

Environmental

Protection

Sub-item

Indicator

Unit

2023

2022

SocialPerformance

Number of occupational disease cases

Case

Work-related deaths

Case

Management of industry chain related parties

Percentage of suppliers signing anti-corruptionagreements

%

66.3%

47.8%

Supplier Training

supplier

Customer Complaint Density

Complaint/Uni

t

0.07

0.09

Complaint Closure Rate

%

100%

100%

Customer Satisfaction

%

Number of Product Quality Improvements

improvement

1,462

1,650

Number of Product Quality Closed-loops

closed-loop

1,345

1,435

Closure Rate for Product Quality Problems

%

92%

87%

R &D Innovation

Amount of R&D Investment

RMBmillion

R&D Expense Ratio

%

22.33%

13.67%

R&D Headcount

persons

Proportion of R&D Headcount

%

39%

40%

Proportion of R&D Headcount by Educational Level

Proportion of Undergraduates and Below

%

52.90%

58.62%

Proportion of Postgraduates

%

45.69%

39.32%

Proportion of Doctors

%

1.42%

1.57%

Number of New Patents

patent

Total Number of Patents

patent

Sub-item

Indicator

Unit

2023

2022

SocialPerformance

by Patent Type

Patents for Inventions

patent

Patents for Utility Models

patent

Design Patents

patent

Software Copyrights

copyright

Trademarks

trademark

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Appendix II Index of GRI Indicators

Instructions for UseThe information cited in this GRI Content Index is reported by LUSTER with reference to the GRI Standards from January 1, 2023 to December 31, 2023

GRI1 UsedGRI 1: Foundation 2021

GRI Standards

Disclosed Item

Index Section

Index Page

GRI2: General Disclosures 2021

2-1

Organizational Details

About LUSTER

2-2

Entities included in the organization's Sustainable Development Report

About LUSTER

2-3

Reporting Period, Frequency of Reporting and Contact Person

About This Report

2-4

Restatement

Key Performance Data

67-69

2-6

Activities, Value Chains and Other Business Relationships

A Responsible Supply Chain

Responsible ProductsResponsible Brands

18-26

2-7

Employees

Talent Training

24-39

2-9

Governance Structure and Composition

Corporate Governance

28-29

2-10

Nomination and Selection of the Highest Governing Body

Corporate Governance

28-29

2-12

Role of the highest governance body in overseeing the management of impacts

Corporate Governance

28-29

2-13

Delegation of responsibility for managing impacts

Corporate Governance

28-29

2-14

Role of the highest governance body in sustainability reporting

About This Report

2-17

Collective knowledge of the highest governance body

Corporate Governance

28-29

2-22

Statement on Sustainable Development Strategies

Sustainable Development Analysis and Actions

Sustainable Development Goals

12-13

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GRI Standards

Disclosed Item

Index Section

Index Page

2-23

Policy commitments

Organizational Contribution

Regulating GovernanceTalent TrainingEnvironmental Protection

18-65

2-24

Integration policy commitments

Organizational ContributionRegulating GovernanceTalent TrainingEnvironmental Protection

18-65

2-25

Procedures for remedying negative impacts

Stakeholder Communication

2-26

Mechanisms for seeking advice and raising concerns

Stakeholder Communication

2-27

Compliance with laws and regulations

Corporate GovernanceCompliance Operation

28-31

2-29

Approach to stakeholder engagement

Stakeholder Communication

GRI3: Material Issues 2021

3-1

Process for Identifying Material Issues

Analysis of Material Issues

3-2

List of of Material Issues

Analysis of Material Issues

GRI201: Economic Performance 2016

3-3

Management of Material Issues

Key Performance Data

67-69

201-1

Direct Economic Value Generated And Distributed

Key Performance Data

201-2

Defined Benefit Plan Obligations and Other Retirement Plans

Human Rights Protection

GRI202: Market Performance 2016

3-3

Management of Material Issues

Talent Attraction and RetentionResponsible ProductsResponsible Brands

18-25

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GRI Standards

Disclosed Item

Index Section

Index Page

GRI205: Anti-Corruption 2016

3-3

Management of Material Issues

Compliance Operation

30-31

205-1

Operations Assessed for Risks Related to Corruption

In-corruption Risk Prevention

30-31

205-2

Communication and Training about Anti-corruption Policies and Procedures

Anti-Corruption Reporting

205-3

Confirmed Incidents of Corruption and Actions Taken

Anti-Corruption Reporting

GRI 206: Anti-competitive Practices 2016

3-3

Management of Material Issues

Building Industrial Ecology

63-64

GRI302: Energy 2016

3-3

Management of Material Issues

Energy Management

61-62

302-1

Energy Consumption within the Organization

Energy Management

61-62

302-3

Energy Intensity

Key Performance Data

302-4

Reduction of Energy Consumption

Energy Management

61-62

GRI303: Water Resources and Wastewater 2018

3-3

Management of Material Issues

Green and Low-carbon Operations

58-60

303-1

Interactions with water as a shared resource

Emissions Management

58-60

303-2

Management of water discharge-related impacts

Emissions Management

58-60

303-4

Water discharge

Wastewater Discharge

303-5

Water consumption

Emissions Management

58-59

GRI306: Waste 2020

3-3

Management of Material Issues

Green and Low-carbon Operations

58-60

306-1

Waste generation and significant waste-related impacts

Waste Management

306-2

Management of significant waste-related impacts

Waste Management

306-3

Waste generated

Green and Low-carbon Operations

306-5

Waste diverted from disposal

Green and Low-carbon Operations

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GRI Standards

Disclosed Item

Index Section

Index Page

GRI308: Supplier Environmental Assessment 2016

3-3

Management of Material Issues

A Responsible Supply Chain

20-22

308-2

Negative environmental impacts in the supply chain and actions taken

A Responsible Supply Chain

20-22

GRI 401: Employment 2016

3-3

Management of Material Issues

Talent Attraction and Retention

38-42

401-1

New employee hires and employee turnover

Talent RecruitmentKey Performance Data

67-68

401-2

Benefits Provided to Full-Time Employees that are Not Provided to Temporary orPart-Time Employees

Human Rights Protection

401-3

Parental Leave

Human Rights Protection

GRI 402: Labor/Management Relations 2016

3-3

Management of Material Issues

Human Rights Protection

GRI403: Occupational Health and Safety

3-3

Management of Material Issues

Employee Health and Safety

46-50

403-1

Occupational Health and Safety Management System

Safeguarding Employee SafetyWork Safety Accountability System

403-2

Hazard Identification, Risk Assessment, and Incident Investigation

Accident Investigation and Punishment Process

403-3

Occupational Health Services

Employee Health

49-50

403-4

Worker Participation, Consultation, and Communication on Occupational Healthand Safety

Employee Health

49-50

403-5

Worker Training on Occupational Health and Safety

Employee Health

49-50

403-6

Promotion of Worker Health

Employee Health

49-50

403-7

Prevention and Mitigation of Occupational Health and Safety Impacts DirectlyLinked by Business Relationships

Employee Health

49-50

403-9

Work-Related Injuries

Employee Health

GRI 404: Training and Education 2016

3-3

Management of Material Issues

Talent Training and Development

43-45

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GRI Standards

Disclosed Item

Index Section

Index Page

404-2

Programs for Upgrading Employee Skills and Transition Assistance Programs

Establishment of a Comprehensive Training System

43-45

GRI405: Diversity and Equal Opportunity 2016

3-3

Management of Material Issues

A Diverse TeamTalent Recruitment

405-1

Diversity of Governance Bodies and Employees

A Diverse Team

GRI 406: Anti-Discrimination 2016

3-3

Management of Material Issues

Human Rights Protection

GRI 408: Child Labor 2016

3-3

Management of Material Issues

Human Rights Protection

GRI409: Forced or Compulsory Labor 2016

3-3

Management of Material Issues

Human Rights Protection

GRI413: Local Communities

3-3

Management of Material Issues

Giving back to the Community with Love

63-66

413-1

Operations with Local Community Engagement, Impact Assessments, andDevelopment Programs

Giving back to the Community with Love

63-66

GRI414: Supplier Social Assessment 2016

3-3

Management of Material Issues

A Responsible Supply Chain

20-22

414-1

New Suppliers that were Screened Using Social Criteria

A Responsible Supply Chain

20-22

414-2

Negative Social Impacts in the Supply Chain and Actions Taken

A Responsible Supply Chain

20-22

GRI416: Customer Health and Safety 2016

3-3

Management of Material Issues

A Responsible Supply ChainResponsible Products

18-22

416-1

Assessment of the Health and Safety Impacts of Product and Service Categories

Responsible Products

18-22

416-2

Incidents of Non-Compliance Concerning the Health and Safety Impacts ofProducts and Services

Quality Management System

18-19

GRI418: Customer Privacy 2016

3-3

Management of Material Issues

Information Security Protection

32-33

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About This Report

Report Statement

Scope of ReportThe scope of the Report covers LUSTER and its subsidiaries forthe period from January 1, 2023 to December 31, 2023.

Reference StandardsThis Report has been prepared with reference to the United NationsSustainable Development Goals and the GRI Sustainability ReportingStandards, and in conjunction with the Rules Governing the Listing of Stockson Shanghai Stock Exchange STAR Market.

Data Source

The information and data used in this Report are obtained from relevant internaldocuments, statistical reports and financial reports. The data of the Financial Reportis consistent with the data of Audited 2023 Annual Report.

Review and Approval

This Report was reviewed and approved by the Board of Directors on April 26,2024.

Release of Report

The electronic version of this Report is available on the LUSTERInvestor Relations official account and the website of Shanghai StockExchange (www.sse.com.cn).Our contact information is as follows:

LUSTER LightTech Co., Ltd.Address: Knowledge and Rationality Building, Building 7, 13 Cuihu SouthRing Road, Haidian District, Beijing, ChinaE-mail: BODoffice@lusterinc.comFax: 010-52348666Tel: 010-52349555

This is the Environmental, Social and Governance ("ESG") Report of LUSTERLightTech Co., Ltd. (hereinafter referred to as " LUSTER" and the "Company"),which provides a comprehensive overview of the Company's sustainabledevelopment concept, work plan and practice progress in 2023.

Knowledge and Reasons are Our Arms toEmbrace the World!

A Message fromthe Chairman

About LUSTER

2023 Honors

SustainableDevelopment

Organizational

Contribution

Regulating

Governance

Talent Training

Environmental

Protection


  附件:公告原文
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