康冠科技：2023年度可持续发展报告(英文版)

Shenzhen KTC TechnologySustainability Report 2023

Shenzhen KTC Technology Co., Ltd.

Stock code: 001308.SZStock abbreviation: KTC

Improving Living Conditionwith Technology

Contents

About this Report 01Message fromthe Chairman03About KTC05

History

GlobalizationCore CategoriesBusiness StrategyProduct CertificationCompany Honors

Sustainability ManagementEnvironmental, Social, andGovernance (ESG) SystemResponse to SustainableDevelopment Goals (SDGs)Stakeholder CommunicationIdentification of Material Issues

Annual ThemesBuilding a Strong R&D InnovationFoundation and DevelopingFuture TechnologiesEnabling Factories for Smart,Green and Flexible Manufacturing

05 A Diverse,Collaborative TeamEmployment Compliance and DiversityEmployee Welfare and CareEmployee Training and DevelopmentOccupational Health and SafetyAppendixQuantitative Data: Performance MetricsGlobal Reporting Initiative (GRI)Content IndexContent Index for Self-RegulatoryGuidelines No. 17 for CompaniesListed on Shenzhen Stock Exchange –Sustainability Report (for TrialImplementation)Reader Feedback04 Industry and CommunityEngagementResponsible Supply ChainFueling Industry DevelopmentBuilding Harmonious Society

01 Stable Operations,Solid Governance33Corporate GovernanceCompliance Management andBusiness EthicsCustomer Privacy and Data SecurityIntellectual Property (IP) ProtectionHuman Rights

03 Empowering Manufacturingwith AI Technology65

Sustainable R&DProduct QualityCustomer ServicesScience and Technology Ethics

02 Green, Smart Manufacturingfor a Low-Carbon Future 53Climate Change ResponseTreatment of Three WastesResource Management and RecyclingBiodiversity Conservation

Report Information DescriptionThis report is the first "Sustainability Report" released by Shenzhen KTC Technology Co., Ltd. The report elaborateson the Company's concepts and policies regarding sustainable development, as well as the efforts made by theCompany in 2023 in areas such as environmental protection, social responsibility, and corporate governance, inresponse to the expectations and concerns of stakeholders.Time Frame

This report covers a time span from January 1, 2023 through December 31, 2023. In order to maintain the continuityof information and enhance the comparability and forward-looking nature of the report, some contents have beenmoderately extended to previous or subsequent years. The information involved comes from internal data of theCompany and publicly available materials.Organizational Scope

The organizational scope of this report covers the main business conducts of Shenzhen KTC Technology Co., Ltd.and its subsidiaries, and is consistent with the scope disclosed in the Company's annual report.

Data InterpretationThe data and cases used in this report are all from the Company‘s official documents and statistical reports.Theoperatingdatadisclosedinthisreportareallfromthe2023AnnualReportofShenzhenKTCTechnologyCo.,Ltd.(the"AnnualReport").Incaseofanydiscrepanciesinthedatalisted,theAnnualReportshallprevail.Unlessotherwisespecified,allcurrencyamountsmentionedinthereportarepresentedinRMB.ReferenceStandardsThis report was written with reference to the following 7 ESG disclosure standards:

?"Reference"standardsoftheGRIUniversalStandards2021releasedbytheGlobalSustainabilityStandardsBoard

(GSSB)?GuidelinesNo.17ofShenzhenStockExchangeforSelf-RegulationofListedCompanies—SustainabilityReport

(Trial)releasedbyShenzhenStockExchange?ESGReportingGuideandGuidanceonClimateDisclosuresreleasedbytheStockExchangeofHongKong?RecommendationsoftheTaskForceonClimate-RelatedFinancialDisclosuresreleasedbytheTaskForceon

Climate-RelatedFinancialDisclosures(TCFD)?TheTenPrinciplesoftheUNGlobalCompact?The17SDGsoftheUN

Notes on Appellations Used in the ReportFor the convenience of expression and reading, in this report：

"Shenzhen KTC Technology Co., Ltd." is referred to as "KTC", "the Company" or "We"."Huizhou KTC Technology Co., Ltd." is referred to as "Huizhou KTC"."Shenzhen KTC Intelligent Technology Co., Ltd." is referred to as "KTC Intelligent"."Shenzhen Horion Intelligent Technology Co., Ltd." is referred to as "Horion"."Shenzhen Horion Software Co., Ltd." is referred to as "Horion Software"."Shenzhen KTC Commercial Display Technology Co., Ltd." is referred to as "KTC Commercial"."Shenzhen KTC Medical Solutions Co., Ltd." is referred to as"KTC Medical".

Report Preparation Process

Based on the ESG practice of the Company, this report is promoted in accordance with the process of “the Board ofDirectors (BOD) deliberating the establishment of the ESG Committee and working rules, collecting materials, preparinga revised report, deliberating and approving by the BOD, and disclosing to the public”. The ESG Working Group activelycommunicates with relevant stakeholders to study and demonstrates the framework structure and content of the report.Reporting Reliability StatementThe Company undertakes that the content of this report does not contain any false records, misleading statements ormaterial omissions, and is responsible for the authenticity, accuracy and completeness of its content.This report is published in both Chinese and English versions. In case of any ambiguity between the Chinese version andthe English translation, the Chinese version shall prevail.Access Channels

This report is released in electronic format and investors can access it through the following channels:

?ShenzhenKTCTechnologyCo.,Ltd.officialwebsite(https://www.ktc.cn/)?ShenzhenStockExchangewebsite(https://www.szse.cn)

Contact InformationIf you have any suggestions or opinions on this report, please contact the Company through the following methods:

?Contact address: No. 4023 WuheAvenue, Bantian Street, LonggangDistrict, Shenzhen?Contact number: [phone]?Fax: [phone]

About This Report

Message from the Chairman

深圳市康冠科技股份有限公司董事长凌斌

Dearfriends,OnbehalfoftheBoard,Iwouldliketoexpressoursinceregratitudetoyouforyoursupport.In2023,despiteaglobalslowdownandincreasedcompetition,KTCshowcaseditsextraordinaryresilienceandinnovativespirit,presentingtheoutstandingstrengthandsenseofresponsibilityofChina'smanufacturingindustrytotheworld.Notonlydowegrowinthefaceofchallenges,wealsounderstanddeeplythatimprovinglivingconditionwithtechnologyinthedisplaydeviceindustryisourunshirkablemission.Behindthismissionisourunwaveringfaithandconfidence.Webelievesustainabilitycreateslong-termprosperity.Whendefiningandachievingourvision,missionandvalues,wearecommittedtoaligningouroperationswithESGprinciples.Throughinnovativebusinessmodels,wenotonlypursueeconomicbenefits,butalsocontributetosocialwelfareandenvironmentalprotectionforaharmonybetweenbusinessesandthesociety.Ratherthanmerelyaproductmanufacturer,theCompanyisasociallyresponsibleorganizationtakinganindispensableroleintheglobalvaluechain.Whileweseekcommercialsuccess,wealsowanttocontributetosocialprogressandenvironmentalsustainability.Low-carbonmanufacturingisapathtogreengrowth.Ledbygreendevelopment,KTCiscommittedtogreentransformationandupgrading,sinceitadherestotheconceptofgreenmanufacturingandlow-carbondevelopmentandembracesthe"dualcarbon"(carbonpeakingandcarbonneutrality)strategy.Throughtheintroductionofinnovativetechnologies,likesolarpowerandwaterstorageairconditioning,wepromoteenergysavingandemissionreduction,

optimizetheenergymix,andcreateharmonybetweenproductionandtheenvironment.Wecontinuetoempowergreenmanufacturingthroughsci-techinnovationtocontributetoglobalgreendevelopmentandasustainablefuture.AIandethicsgohandinhand.KTCtakessci-techinnovationasitsfoundationandupholdsthephilosophythattechnologyimproveslivingcondition.Weareridingthewaveofcutting-edgetechnologysuchasAI.WebelieveAIisnotonlythedrivingforceoftechnologicalinnovation,butalsothekeytoassumingcorporatesocialresponsibilityandpromotingsustainability.Togetherwithourglobalpartners,wecontinuetoexplorenewheightsinsmartdisplayproductstoofferconsumersasmarterandmorepersonalizedexperience.Meanwhile,wearedeeplyawarethattheuseoftechnologymustgohandinhandwithethics.Asaresult,wefollowthesci-techethicsstrictlytoensurethatourinnovationsrespectthelawanduserrights.Inourpursuitofexcellent,weplayourpartincreatingamoreequitableandharmoniouseraofintelligence.Beingemployee-orientedleadstoharmonyandwin-winoutcomes.KTCunderstandsthatitssuccessisinseparable

fromitsemployees.Weupholdthepeople-orientedprincipleandarecommittedtofosteringafair,respectfulandharmoniousenvironmentforemployeestothrive.Whileprotectingtherightsandinterestsofemployees,wealsounlocktheirpotentialandsharesuccesswiththemthroughdiversifiedtrainingandasoundwelfaresystem.AtKTC,wehelpeveryemployeetorealizetheirself-worth,enablingawin-winsituationforboth.China'sintelligentmanufacturingleadstheworld.Lookingahead,challengesandopportunitiescoexist.Adheringtothevisionof"TobecomeaworldtopmodernODMenterpriseinflatpanelproducts",KTCiscommittedtodrivingthetransformationandupgradingofsmartdisplayproductswithcutting-edgetechnologyandinnovativethinking.Wewillcontinuetoincreaseourcorecompetitiveness,consolidateindustryresourcesandstimulatenewgrowthmomentumasweseektobeagloballyinfluentialindustryleaderandcontributetoamoreintelligentandsustainablefuture.

“

”

Ling BinChairman

Company Profile

FoundedinShenzhenin1995,KTCisamongthefirstcompaniesdedicatedtosmartdisplayterminalproductsinChina.Inthenearly30yearsofdevelopment,KTChasfocusedontheR&D,design,andmanufacturingofintelligentdisplays.Itsmainproductsincludesmartinteractivepanels,innovativedisplayproducts,professionaldisplayproducts,smartTVs,etc.Throughtechnologicalinnovationandproductdevelopment,ithasappliedcutting-edgedisplaytechnologyforavarietyofscenariosandneeds.Afterthetransitiontomodernservice-orientedintelligentmanufacturing,itisnowapioneerandleaderinChinesemanufacturing.KTChasestablishedaKDMservicemodelof"threemodes,fourengines,andonepole"foremergingmarketsandbuiltlong-termpartnershipswithlocalkingbrandsinAsiaPacific,LatinAmerica,Africaandotherregions.Itsnetworkspansover100countriesandregions,coveringtheglobaldisplayindustryacrossbusiness,education,healthcareandhomesettings.ItcoversmajorglobalsmartdisplaymarketsliketheEU,NorthAmerica,LatinAmerica,AfricaandAsiawithitsnewtechnicalsupportandservicecenters.KTCispeople-orientedandpaysattentiontoemployeeneeds.TheCompanyiscommittedtocreatingaharmoniousandfriendlyworkingenvironment.Itpromotesthespiritofcraftsmanandanengineeringculturetoattract,developandmotivatetalents.Throughprogramssuchasamentorprogram,anexcellentengineerprogram,andanexcellentmanagerprogram,itinspiresemployeestogrowtheircareervalue.Ithascreatedamutualaidfundtoassistemployeesinneed.Itispublic-spiritedenoughtoparticipateinvolunteeractivities,includingenvironmentalprotection,trafficcontrol,communitysupport,andblooddonation.Itdonatesmoneyandresourcestofurtherconsolidatetheresultsofpovertyalleviation,promoteruralrevitalization,andsupporteducationasitactivelytakesonitssocialresponsibility.

About KTC

Company Strategy

KTCwillcarryonthemissionof"improvinglivingconditionwithtechnology"tofosternewindustries,newmodels,andnewmomentumwithsci-techinnovation.TheCompanywillfocusoncutting-edgetechnologies,suchasaugmentedreality(AR),virtualreality(VR)andAI,toempoweranewgenerationofsmartdisplayproducts.Itwillboosthigh-qualitydevelopmentthroughmeasuressuchasbreakthroughsincoretechnologiesandAIempowerment.Itwillstepupthedevelopmentofproprietarybrandsandhelpthemgoglobal.Byintegratingdigitalizationintocorporategovernance,itwillfurtherimprovecorporateefficiencyandadvanceintelligentandgreendevelopment.Itwillproceedwithmake-to-order(MTO)productiononthejourneytowardsbecomingaworld-leadingprofessionalsmartdisplaymanufacturer.KTCwillcontinuetoinvestintheR&Dandmanufactureofnewproductsinemerging/nichemarketsandfocusonthepromotionofinnovativedisplayproductsandproprietarybrands.Itwillaccelerateglobalizationwithaglobalheadquarters(HQ)center,enhancingforeignoperationsandsecuringmoreoverseasresources.Whilecultivatingnewstrengths,itwillalsoestablishanationallaboratoryandundertakemajorscientificresearchtasks.Itwillusenewtechnologies,suchasAIlargelanguagemodels(LLM),aroundsmartinteractivepanels,innovativedisplayproducts,andsmartTVstofacilitateitsindustrialupgrading.

MissionImprove livingcondition withtechnology

VisionTo become a world

top modern ODMenterprise in flat panel

products

Values

Respecting people,commitment to work,industriousness,innovation

OperationPhilosophy

Honest operation,focus on qualityand service

Character

Honesty,integrity,impartiality andpracticality

Service

Philosophy

Customers our top

priority, deliver

inspiration

1995-

-Future

Future

History

KTC had

beenfoundedand CRTdisplayshad beenput intoproduction.

1995

LCD displayshad been putintoproduction,with saleshavingexceeded 1million units.

2000

ShenzhenKTC Parkhad beencompletedand LCDTVs hadbeen putintooperation.

2005

Huizhou

IndustrialPark hadbeencompletedand put intooperation,and KTC hadlaunched itsown brand -Horion.

2015Commercialdisplays hadbeen put intoproductionand KTC hadbeen listed inthe top 100electronicinformationcompanies inChina.

2010

KTC hadbeen rankedamong thetop 500privatemanufacturing companiesin China, withan annualproductionand sales

volume

havingexceeded 7.8million units.

2020

KTC hadbeen listed onthe MainBoard of theShenzhenStockExchange.2022

NationalManufacturingSingle-ItemChampionand NationalGreen Factory2024

?Focus on cutting-edgetechnologies such as AR,VR, AI, etc., continuetechnological innovation,and empower the newgeneration of display

products.

?Expand the innovative

display map, enhance thedevelopment of proprietarybrands, and accelerate theglobal strategic layout.?Promote the super factorymodel as part of MTOproduction, and build aglobal HQ center.?Construct national level

laboratories to undertakemajor scientific researchtasks.

Future

National-Level

Specializedand Innovative"Little Giant"Enterprise2021

Global operations network

GlobalizationThe Company has developed a differentiated market competitionstrategy, establishing specific market approaches for leading globalbrands in intelligent interactive display products, internationalrenowned smart TV brand in small and medium-sized regionalmarkets, and local leading brand customers in various regionalmarkets. These types of clients exhibit diverse product needs, highcustomization demands, and flexibility. Additionally, well-knownbrands or local leading enterprises in niche markets possesssubstantial revenue scales, strong brand appeal, and robust riskresilience. As the market evolves, concentration is increasinglyshifting towards these enterprises, leading to synchronized revenuegrowth for the Company as downstream clients expand their marketscales and the number of customers increases.The Company's primary clients are overseas, and since 2014, itsmarket share in international markets has been steadily increasing.According to the Company's development plan for technical supportand service centers, it intends to establish multiple centers globally,covering major smart display terminal markets in the EU, NorthAmerica, Latin America, Africa, and Asia. Currently, the Company

has established wholly-owned subsidiaries in Hong Kong, Taiwan,Seoul, Tokyo, California, Mexico City, Dubai, and Warsaw. Thisstrategic layout allows the Company to penetrate various countriesand regions, expanding its business scope and market share.Through the MTOstrategy, the Company can export raw materialsin semi-assembled or unassembled forms to corresponding regionsfor local assembly. This enhances the overall turnover speed of theCompany while reducing storage and logistics costs. Moreover, theMTO strategy improves resource utilization efficiency, allowing forgreater investment in core areas such as R&D, therebycontinuously enhancing the Company’s core competitiveness. Thislayout is conducive to boosting brand influence, expanding marketshare, improving order responsiveness and delivery capabilities,and refining the Company's service network and technical servicecapabilities.

OverseasSubsidiaries:HongKong(China),Taiwan(China),SouthKorea,Japan,America,Mexico,UnitedArabEmirates,PolandOverseasOffice:IndiaOverseasTSC:Mexico,BrazilOverseasCooperativeFactories:Taiwan(China),Vietnam,Thailand,India,Mexico,Brazil,Poland

Global customer presence

Globalization

The Company has consistently focused on the R&D,design, production, sales, and services of smart displayproducts. It has established a development modelcentered on "independent R&D", a production modelbased on "sales-driven manufacturing", a purchasingmodel guided by "production-driven procurement", and asales model primarily based on direct selling.The Company values customer service and develops itsown brand business. At present, the Company's ownbrands are: "KTC" mainly engaged in e-sports display,smart home and other products; "Horion" mainly engagedin intelligent conference tablets and other products; and"FPD" mainly engaged in smart home and other products.

The Company adheres to the principle of integrity in itsoperations, continually enhancing customer servicemanagement and improving employee service awarenessand capabilities. Through customer service hotlines, on-site visits, and follow-up services, it has built a positivecorporate image among its clients.The Company maintains long-term, stable, andcooperative relationships with suppliers at all levels,ensuring a regulated procurement process that protects

suppliers' legitimate rights and fosters a strong reputationboth inside and outside the industry.Additionally, the Company has established internal andexternal channels for complaints and feedback,appointing professionals to conduct integrity supervisionto uphold the Company’s reputation and ensure a faircompetitive business environment.

1112

KTC specializes in the R&D, design, production, and sales of smart display-related products. Our main offeringsinclude smart interactive panels, innovative display products, professional display solutions, and smart TVs. Throughyears of dedicated development in the smart terminal display industry, we have established a unique "KDM" growthmodel.The trend of AI empowering the smart display industry is becoming increasingly prominent. As display terminals serve asvehicles for text, audio, images, and video output, they are naturally suited for AIGC applications. KTCwill deeplyintegrate AI technologies to reshape display terminal products in scenarios such as conference assistance, remoteeducation, telemedicine, and entertainment, thereby providing new momentum for the growing demand in displayterminal products.

Business StrategyLeveraging our advanced capabilities in research, design, and manufacturing, the Company has developed the "KDM"service model, characterized by “three modes, four engines, and one pole", tailored for emerging markets likedeveloping countries. We have established long-term partnerships with local king brands in regions such as Asia-Pacific,Latin America, and Africa.

Threemodes

Fourengines

One pole

Three modes, four engines,

and one pole

KDM service

Four areas

Threedeliverystates:

CBU/SKD/CKD

Four modesofcooperation:

JDM/ODM/OEM/EMS

MTOcooperation(overseascustomers)

Smartinteractiveflat panel

Innovative

display

Professional

display

SmartTV

Two super factories"KTC super factory" model

Threedimensionalintelligent ofcontrol system

Triplecollaboration ofhuman,machine, andnetworkIntelligentmanufacturingIntegratebusiness flow,

information flow,logistics andcapital flow

Realize flexible

manufacturing

mode

Shenzhenfactory

Huizhou

factory

Intelligent service solutions

Core Categories

1314

Intelligent interactive

flat panel

Professional displayequipment

Innovative displayproduct

Smart TV

flatflatflat

Product Certification

National-Level Specialized andInnovative "Little Giant" Enterprise

Provincial-LevelManufacturingSingle-ItemChampionEnterpriseinGuangdong

Company Honors

National-Level Manufacturing Single-ItemChampion Demonstration Enterprise

National Green Factory

Smart Manufacturing Capability

Maturity Level 3

Top100ElectronicInformationEnterprise

inChina

Safety standard and wireless

Green certification (environment

& performance)

Patents and labels

1516

Building a Strong R&D InnovationFoundation and DevelopingFuture Technologies

KTC applies mainstreamtechnologies widely inproducts and innovatesthem for practicality's sake

Mainstreamtechnology

KTC'sfocus onbreakthroughs in coretechnologies gives it a 6-10month lead. It pursuespatent protection for itsinnovative technologies

CoretechnologyKTC developstechnologies of the futureand protects them in theform of proprietary rights

Futuretechnology

Building a Strong R&D Innovation Foundationand Developing Future TechnologiesAsanationalhigh-techenterprise,KTCseestechnologyasitslifeline.TheCompanyfocusesonsci-techinnovationandproductapplications.Throughtheestablishmentofamarket-orientedtechnologyinnovationsystem,itcontinuestoadvancebreakthroughsincoretechnologiestobuildcoretechnologycompetitiveness.WithasoundtechnicalmanagementsystemandR&Dsysteminplace,ithascreatedavirtuouscycleofsci-techinnovationandindustrialinnovation.

Innovationplatform

StandardizeddesignplatformPatentprotection

Customers

StructurelabOpticsplatformStrategiccooperation &licensing

Suppliers

Optoelectronicslab

ElectricalplatformSupplierguarantees

Universities/researchinstitutesPerformance

analysis lab

StructureplatformProprietary

patents

Government/associations

Reliability

labExperimentplatform

Intelligent

platformSoftwarecopyrights/trademarks

Employingscientificandforward-lookingthinking,KTCdivideshightechintothreecategoriesbasedontheir

sophistication:mainstreamtechnologies,coretechnologies,andfuturetechnologies.ItwillimplementcorrespondingdevelopmentandIPstrategiesforthesetechnologies.Withsuchatieredstrategicplan,KTCcaninvestresourcesmoreaccuratelytopromotetheprogressandinnovationoftechnologiesatalllevels.BytheendofDecember2023,theCompanyhad89inventionpatents,417utilitymodelpatents,177designpatents,and525softwarecopyrights.

5 tests3 guarantees

Intelligence:Create a smart life withmultimodal intelligent interactionHigh resolution:Offer a stunning 8Kultra HD experience

Energy efficiency:Feature highefficiency and low standby power

4 drivers

Visual:Display imageAudio: Audio qualityTemperature:

Temperature & humidityElectrical:

Electrical performance

Magnetic: Electromagnetic

compatibility

R&D investmentR&D environmentR&D personnel

Large screen:Cover product sizes

from 8-162 inches

89Inventionpatents417Utilitymodelpatents177Designpatents525Softwarecopyrights377Domestic & foreign trademarks (as of December 31, 2023)

1920

Themes

Enabling Factories forSmart, Green andFlexible Manufacturing

Enabling Factories for Smart, Green andFlexible Manufacturing

KTCadherestotheconceptofgreenandenergyefficiencythroughoutthelifecycleofitsdevelopment.TheCompanyiscommittedtodevelopinglow-power,high-efficiencyproductstominimizeenvironmentalimpacts.Ithascreatedagreendesignandmanufacturingsystem,promotingcleanproduction,cleanenergy,cleanemissions,andenergyconservationtransformationinthepursuitofsustainability.Itisbuildinggreenandsmartmodernfactoriestosupporthigher-qualitygreendevelopmentunderChina'sdualcarbongoals.

KTChaslevel1performanceinthemanufacturingindustry,witharespectiveenergyconsumptionandcarbonemissionof8.56kgceand

42.24kgCO2eperRMB10,000ofoutputvalue.

Clean production

KTC'sdistributedsolarfacilitiesintheHuizhouindustrialparkgeneratedabout6,217.62MWhofelectricityin2023.

Clean energyEnergy conservation transformation

Energy conservation transformation

KTCusespermanentmagnetvariablefrequencyenergy-savingaircompressorstoreducepowerloss,noiseandwaste.Annualelectricitysavingscanreach169MWh.

Clean emissions

KTCinstallsadditionalwastegascollectionandtreatmentfacilitiesfortreatmentofworkshopwastegasesusingwatermembranepurificationandactivatedcarbonadsorptionprocesses.BoththesmokeanddustemissionindicatorsareinlinewiththerequirementsoflocallawsandregulationsinGuangdongprovince.

National Green Factory

National Industrial Product GreenDesign Demonstration Enterprise

National GreenDesign Product

Implement enterprise resourceplanning (ERP) system integrationto enable IT-based and digitalproduction management and allowfor optimized management ofquality, information, technology,and resources

Intelligent production process

Change the traditionalmanagement model, analyzescheduling issues in productionprocess transformation, andreasonably schedule production

Intelligent equipment
management

Provide better data reference for production decision-making through the combination ofenterprise management, product lifecycle management, supplier bidding and other

systems

Intelligent production decision-

-making

making

Automatic backlight module

production line

Light strip production lineSMT production line

Die-cutting production lineDisplay device production line

Machine board production line

Smart display CBU

production lines

Display LCMproduction lines

Machine boardproduction lines

Light bar production lines

Withthecontinuousimprovementofproductionlines,KTChascontinuedtooptimizemodulardesigns,personalizedcustomization,andpersonalizedproductdatabases.Ithasestablishedadata-drivensystemfromR&D,designandproductiontomarketingandsupplychainmanagementtorespondtocustomerneedsquicklyandatlowcost.Currently,ithasanannualproductioncapacityof15millionsmartTVsandsmartinteractivepanels,meetingtheproductionrequirementsfordisplayterminalproductsinsizesrangingfrom8-162inches.

2324

Sustainability

ManagementKTC integrates sustainable development into its overall corporatestrategy, focusing on climate change risks and opportunities,employee rights protection, responsible supply chainmanagement, and business ethics to seize the opportunities ofthe new era.Internally, we continuously monitor leading trends insustainability, benchmark against industry best practices, andenhance our internal management capabilities. Externally, weestablish regular communication channels, actively listen toand respond promptly to stakeholder concerns, and workcollaboratively with businesses and society towards a moresustainable future.

The SDGs addressed in this chapter

Contents for this chapter:

?Environmental, Social, and Governance (ESG) System?Response to Sustainable Development Goals (SDGs)?Stakeholder Communication?Identification of Material Issues

ESG System

KTCappliestheconceptofsustainabilityinpractice.ItembedsESGintotheoperationalfabricandimplementsaninstitutionalizedandsystematicmanagementsystemtoensuretheeffectiveimplementationofthesustainabilityconcept.Aspartofcontinuousimprovementstothetop-downESGmanagementframework,theBODsetupanESGCommitteeinAugust2024andcreatedtheWorkingRulesfortheESGCommittee.CoveringtheCompanyanditssubsidiaries,theESGsystemhasestablishedathree-tierESGmanagementframeworkwithcompletestructure,clearhierarchy,well-definedpowersandresponsibilities,andefficientoperationtoensuretheefficientpromotionofESGwork.TheBODhasauthorizedtheESGCommitteetoberesponsiblefortheCompany'sESGwork,includingformulating

relevantpoliciesandmeasures.TheCommitteeisheadedbyChairmanLingBin,anditsmembersincludeDirectorandGeneralManagerLiYubinandIndependentDirectorYangJianjun.Itmakesdecisionsandoverseestheplanningandimplementationofsustainabilitymanagementmatters.

StakeholderCommunication

KTC focuses more on the coordinated development of stakeholders than expansion of its scale and capabilities. In 2024,the Company has devised its own sustainability concept: SUSTAIN. Based on this concept, it will continue to supportlong-term, stable corporate development through positive and effective sustainability practices while contributing to theenvironment and society.

Sustainability Concept

Governance Framework

Choose eco-friendly

and sustainableproducts to reduceenvironmental harm

Reduce fossil fueldependence andcarbon emissionsthrough the use of

more renewableenergy sources inproduction

Optimize theproduction process toreduce unnecessarylinks, enhanceproduction efficiency,

and minimizeresource waste

Implement effectivewaste managementpractices, includingrecycling, reuse, andwaste reduction

Invest in and developgreen technologies,

such as energy-efficient equipmentand eco-friendlyproduction methods,to boost corporatecompetitiveness in

sustainability

Encourage employeesto participate insustainability initiatives,

and enhance their

environmentalawareness and senseof responsibilitythrough training andrewards, etc

Create an eco-friendly culture withinthe Company, and

incorporate thesustainability conceptinto its values and

code of conduct

Follow and study ESG trends, research, analyze and assess ESGwork, oversee the ESG system's operation across business units,report ESG work regularly to the BOD, and review ESG reports

Decision-making

ESG structure and functionsBODESG Committee

Formulate strategies and policies, examine ESG work plans, and

guide ESG practices

ManagementESG Steering Group

Implement ESG work plans, examine ESG assessment programs,

and prepare annual ESG reports

ManagementESG Working Group

Report work regularly and manage ESG issuesExecution

HQ functionaldepartments

Integrate ESG into daily operations and collect ESG key

performance indicators (KPI)Execution

All units(branches/subsidiaries/production facilities)

2728

LocationStrategy

Mid-term actionobjectives

Performance in 2023

Technology Creates

High-quality Life

Promote intelligentmanufacturing andgreen manufacturingPromote the construction ofgreen factories

Promote the construction of green factories

Huizhou KTC has been awarded the title of "National Green Factory"

Strengthen the HSF hazardoussubstance management system

Strengthen the HSF hazardoussubstance management systemThe Company has passed the QC 080000hazardous substance process managementsystem certification

The Company has passed the QC 080000hazardous substance process managementsystem certificationContinuously expand the scaleof renewable energy use

Continuously expand the scale of renewable energy use

By 2023, the scale of self built photovoltaic power generation reached 6,217.62MWh

Strengthen the qualitymanagement system

Strengthen the qualitymanagement systemEnhance the coverage of qualitymanagement systemcertification

Enhance the coverage of quality management system certification

The Company and all major production bases have passed ISO 9001 quality management system certification

Encourage coretechnology researchand innovation, andpromote the applicationof low

Encourage coretechnology researchand innovation, andpromote the applicationof low

-carbon

technologies

Focus on cutting

Focus on cutting

-edge

technology research anddevelopmentThe Company has accumulated 1,208authorized patents and software copyrights

The Company has accumulated 1,208authorized patents and software copyrightsSeize the opportunity of AIapplication

Seize the opportunity of AIapplication

The Company is continuously integratingcutting

The Company is continuously integratingcutting

-edge technologies such as AR, VR,

and AI into the new generation of displayproducts

Avoid AI application risks

Avoid AI application risks

Industrial Cooperation

Industrial Cooperation

and SocialResponsibility

Promote prosperityamong stakeholdersMaintain a high proportion oflocalized procurement

Maintain a high proportion of localized procurement

In 2023, KTC's localization procurement rate was 80%

The growth rate of fundsinvested in communitydevelopment is greater than orequal to the Company's netprofit growth rate

The growth rate of fundsinvested in communitydevelopment is greater than orequal to the Company's netprofit growth rate

In 2023, the Company's total charitabledonations amounted to RMB6.19 million, withapproximately 220 employees participating incharitable/volunteer activities, and employeesproviding approximately 15,476 hours ofvolunteer community service

In 2023, the Company's total charitabledonations amounted to RMB6.19 million, withapproximately 220 employees participating incharitable/volunteer activities, and employeesproviding approximately 15,476 hours ofvolunteer community service

Talent Developmentand Care

Ensure life, health,and employeedevelopmentThe signing rate of laborcontracts is 100%

The signing rate of labor contracts is 100%

In 2023, all formal employees signed labor contracts

No major human rightsviolations

No major human rights violations

No major human rights violations have been found

Continuously improve the safetyproduction management system

Continuously improve the safety production management system

In 2023, there were no work

-related deaths

among employees, suppliers, and contractorsBuild a diverse, inclusive, andequal workplace

Build a diverse, inclusive, andequal workplaceContinuously promote the scientific and rational

adjustment of salary, improve the promotion

system and mechanism

Continuously promote the scientific and rational

adjustment of salary, improve the promotion

system and mechanismMaintain a 100% coverage rateof occupational disease physicalexaminations for currentemployees

By 2023, the coverage rate of occupationaldisease physical examinations for in

-service

employees was 100%The coverage and duration ofemployee training remain at theforefront of the industry

In 2023, the employee training coverage ratewas 99.69%In 2023, the average training time per personwas 89.88 hours

LocationStrategy

Mid-term action

objectives

Performance in 2023

CorporateGovernance

Enhance the comprehensivegovernance capability of

enterprisesThe proportion of femaleexecutives is steadilyincreasing

The proportion of femaleexecutives is steadilyincreasing

Female executives account for 7.14%

The BOD fulfills its ESG management obligations	Female executives account for 7.14%

The BOD has established a new ESGCommittee in 2024, responsible for managingthe Company's ESG related affairs

The BOD has established a new ESGCommittee in 2024, responsible for managingthe Company's ESG related affairsEstablish a culture of integrityand compliance in businessoperations

Establish a culture of integrityand compliance in businessoperationsMaintain employee businessethics training coverage

Maintain employee business ethics training coverage

100% of employees have received anti

-

corruption training

Communicate the Company'santi

Communicate the Company'santi

-corruption policies and

procedures to all businesspartners100% of anti

100% of anti

-

corruption policies and procedureshave been communicated to business partners

Strengthen managementtransparency andaccountability managementmechanism

Strengthen managementtransparency andaccountability managementmechanismConduct investorcommunication throughvarious channels

Conduct investor communication through various channels	Four regular reports and 165 interim announcements were issued and one results briefing was held.
		The major ESG ratings in the market are steadily improving
			Wind ESG rating is BB

Strengthen the construction ofdata security system

Strengthen the construction ofdata security systemNo customer privacy leakageincidents

No customer privacy leakage incidents

There were no incidents of customer privacy breaches

Strengthen the construction ofdata security governance

Strengthen the construction ofdata security governanceThe Company has obtained ISO 27001information security management systemcertification

The Company has obtained ISO 27001information security management systemcertification

Environmental and

Environmental and

EcologicalProtection

Improve sustainable low

-

carbon development goalsContinuously improve andoptimize the environmentalmanagement system (EMS)

Continuously improve andoptimize the environmentalmanagement system (EMS)In 2023, there were no environmental pollutionincidents

In 2023, there were no environmental pollutionincidents

Explore the development ofgreenhouse gas (GHG)emission

Explore the development ofgreenhouse gas (GHG)emission

reduction targets

that align with the ParisAgreement and match theCompany's stage ofdevelopment

The Company has gradually carried out carbonverification work and will gradually promote theformulation of carbon targets by 2024

The Company has gradually carried out carbonverification work and will gradually promote theformulation of carbon targets by 2024Increase the proportion ofclean energy usage year byyear

Increase the proportion of clean energy usage year by year

In 2023, self

-built photovoltaic power

generation reached 6,217.62MWh, up 52.6%YoYAdvocate suppliers to fulfilltheir environmental and socialresponsibilities

Advocate suppliers to fulfilltheir environmental and socialresponsibilities

KTC is gradually implementing supplier ESGmanagement, and the percentage of newlyadded suppliers using ESG dimensionevaluation in the current period is 100%

KTC is gradually implementing supplier ESGmanagement, and the percentage of newlyadded suppliers using ESG dimensionevaluation in the current period is 100%Enhance the comprehensiverecycling level of resources

Enhance the comprehensiverecycling level of resourcesContinuously optimize theenergy management system

Continuously optimize theenergy management systemIn 2023, the unit revenue electricityconsumption was 30.4 kWh/RMB10000, adecrease of 9.32% compared to 2020

In 2023, the unit revenue electricityconsumption was 30.4 kWh/RMB10000, adecrease of 9.32% compared to 2020Continuously optimize thewater resources managementsystem

Continuously optimize the water resources management system

In 2023, the unit revenue water consumption was 0.1833 m?/RMB10000, a decrease of 12.13% compared to 2022

The scale of recyclingharmless waste is increasingyear by year

In 2023, the total amount of general industrialsolid waste recycling and reuse reached7,420.60 tonnes, and the recycling rate ofharmless waste will continue to improve

Response to Sustainable Development Goals (SDGs)

2930

In 2023, the Company undertook the identification of sustainability issues, along with the assessment and selection oftheir significance. The report provides disclosures and responses regarding the management and performance of the 26identified issues.In the identification phase, the Company integrated international standards (such as GRI and SDGs), significantnational socio-economic issues, industry sustainability trends, and its own development strategy to pinpoint criticalissues that impact both the Company and its stakeholders, thereby establishing a substantial issue database.

During the assessment phase, the Company invited experts and stakeholders from the sustainability field to completequestionnaires on the significance of the identified issues. This input, combined with evaluations from internalemployees, created a two-dimensional assessment of issue importance.In the selection phase, the Company utilized the evaluation results to construct a materiality analysis matrix, resultingin a ranked list of issues based on their significance. High-priority issues were highlighted for in-depth disclosure andanalysis in the report.

KTC ESG Material Issues Evaluation Results

Identification of Material Issues

Substantive IssuesNo.

Corporate Governance

Investor Relations Management

Compliance and Risk Control

Anti Commercial Bribery and AntiCorruption

Anti Unfair Competition

Management of IP

Rights

Innovation Driven

The Ethics of Science

Product Safety and Quality

Customer Service

Privacy and Data Security

Employees' Rights and Interests

Talent Development

Occupational Health and Safety

Supply Chain Security

Common Progress in the Industry

Equal Treatment for Small andMedium Enterprises

Public Welfare and Charity

Rural Revitalization

Energy Utilization

Water Resource Utilization

Waste Disposal

Climate Change Response

Pollutant Discharge

Environmental ComplianceManagement

Circular Economy

StakeholderCommunicationIn 2023, KTC maintained a strong focus on feedback from various stakeholders across society, who expressed diverseexpectations regarding the Company's ESG initiatives. Guided by ESG principles, the Company established regularcommunication mechanisms with stakeholders through multiple channels. Leveraging its extensive industry experience

and deep understanding of ESG concepts, the Company effectively addressed the concerns raised by all parties.StakeholdersTopics of concernCommunication channels

ShareholdersandInvestors

Corporate Governance

StrengthenInvestorRelationsManagement

Management ofIP RightsAntiCommercialBribery and Anti

Corruption

GeneralMeeting of

ShareholdersInformationDisclosure

Performance

BriefingDomestic andInternationalStrategyMeetings

Customers

Innovation-driven

DevelopmentData SecurityandCustomer Privacy

Customer ServiceResponsibleMarketing

Innovationin Scientific

ResearchCustomer PrivacyProtectionMeasures

CustomerService System

Government and

RegulatoryAuthorities

Corporate Governance

Compliance andRisk

ControlAntiUnfair Competition

Public Welfare and

CharityRuralRevitalizationCommonProgressintheIndustry

Supervision and

InspectionReceiving Visitors

PolicyImplementation

Employees

Employees'Rights and

InterestsTalentDevelopment

OccupationalHealth

andSafety

Employee ActivitiesEmployee Assessment

andPromotion

Employee

Training

Suppliers

Supply ChainSafetyAnti CommercialBribery

and Anti Corruption

Equal Treatment forSmall andMedium

EnterprisesCommonProgressin

theIndustry

Cooperation and

TransactionsDaily Communication

ContractExecution

Community andEcologicalEnvironment

EnergyUtilizationWaterResourceUtilizationWasteDisposalCampaign against

Climate Change

PollutantDischarge

Environmental

ComplianceManagementCircular Economy

WasteManagement

System

ConservationManagement System

LowCarbonAwarenessCultivation

AcademicInstitutions

Innovation-driven

DevelopmentTalentDevelopment

Public Welfare and

CharityCommonProgressin

theIndustry

AcademicExchanges

Industry-university-research Cooperation

TalentCooperation

ProjectsVocationalEducation

Stakeholder Communication

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In the context of the Company's proactive globalization strategy, it isencountering unprecedented opportunities and challenges. The governancecapability of the Company plays a crucial role in navigating a complex anddynamic market environment. Consequently, "governance excellence" hasbecome a key metric for evaluating overall corporate strength. The Companyhas meticulously refined its governance structure and risk managementmechanisms to safeguard investors' legitimate rights and interests. Itadheres to high standards of business ethics and compliance requirements,strengthens integrity culture, protects information security, and ensures theprivacy of customers and employees. Furthermore, it emphasizes productquality and R&D, continually enhancing its overall competitive edge.

Stable Operations,Solid Governance

The SDGs addressed in this chapter

ESG Key Performance?In 2023, the Company has had threeindependent directors, accounting for

42.86% of the board members.

?In 2023, the Company held 3

shareholder meetings, 8 BOD

meetings, and 8 Board of Supervisors

(BOS) meetings.?In 2023, the percentage of employees

who received anti-corruption training

was 100%.?In 2023, a dividend of RMB412 million

was distributed, with a dividend payout

ratio of 32.12%.

ESG Mid-term Goals

?The BOD is fulfilling its ESG managementresponsibilities and steadily increasing therate of female executives.?Maintain the coverage of employee businessethics training.?Communicate the Company's anti-corruptionpolicies and procedures to all partners, andregularly engage in investor communication.?Enhance the ESG rating of the Company.?Strengthen the construction of data securitygovernance, with no incidents of customerprivacy breaches.

KTC'sBODiscommittedtosafeguardingthelegitimateinterestsoftheCompanyandshareholders.Itperformsmanagementduties,improvescorporategovernancecapabilities,enhancesBoardindependenceanddiversity,interactswithinvestors,engagesininvestorrelationsmanagement,andstandardizesinformationdisclosure.Management SystemTheCompanycarriesoutstandardizedoperationsinstrictaccordancewithrelevantnationallaws,regulationsandnormativedocuments,suchastheCompanyLawofthePeople'sRepublicofChina(PRC),theSecuritiesLawofthePRC,andtheCodeofCorporateGovernanceforListedCompanies.Ithasestablishedacorporategovernancestructurewithclearrightsandresponsibilities,effectivechecksandbalances,scientificdecision-making,andcoordinatedoperation.Asofthedisclosureofthisreport,theBODhasestablishedfivecommittees,includingtheAuditCommittee,StrategyCommittee,NominatingCommittee,RemunerationandAppraisalCommittee,andESGCommittee,whichprovideconsultationandsuggestionsformajordecisionsoftheBoardtoensureprofessionalandefficientdiscussionsanddecision-making.TheCompanyhasbuiltacorporategovernancestructureincludingtheshareholders'meetings,theBOD,theBOS,andmanagement.In2023,theAuditCommitteeheldfivemeetings,theStrategyCommitteeheldtwomeetings,theNominatingCommitteeheldonemeeting,andtheRemunerationandAppraisalCommitteeheldfivemeetings.

Indicator

Unit202120222023

Number of shareholders' meetings

/433

Number of BOD meetings

/588

Number of

BOSmeetings/488

Corporate governance KPIs

BOD Diversity and Independence

TheCompanyhasahistoryofexploringdiversityintheBoardroom.Byend-2023,three,or42.86%,ofitssevenBoardmemberswereindependentdirectors.Boardmembers,withawealthofknowledgeandexperienceinfieldssuchasindustry,corporatemanagementandfinancialaccounting,helptheBODmakethebestdecisionsandpromotesustainableandhealthycorporatedevelopment.Seethe2023AnnualReportforBoardmemberbackgrounds.AlltheCompany'sindependentdirectorsareprofessionalsinaccounting,legal,technology,andotherfields.TheymeettheindependencerequirementssetoutintheMeasuresfortheAdministrationofIndependentDirectorsofListedCompanies,theSelf-RegulatoryGuidelinesNo.1forCompaniesListedonShenzhenStockExchange–StandardOperationofCompaniesListedontheMainBoard,andtheWorkingSystemforIndependentDirectorsofShenzhenKTCTechnology,includingnotholdinganyotherpositionsintheCompanyexceptindependentdirectors,nothavinganyrelationshipswiththeCompany,itscontrollingshareholderoraffiliatedcompaniesthatmayaffecttheirindependentandobjectivejudgment,andnotreceivinganyextra,undisclosedbenefitsfromtheCompany,itscontrollingshareholderoraffiliatedcompanies.

Corporate GovernanceShareholders'meeting

BOSBOD

StrategyCommittee

NominatingCommittee

Remuneration andAppraisal Committee

AuditCommittee

Management

BOS

BOD

Shareholders'

meeting

?The Company's authoritative body, composed of all shareholders.?Decide on the Company's business policies and investment plans.?Appoint and remove directors and supervisors who are not employee representatives, and decide

on the remuneration of directors and supervisors.?Examine and approve the reports of the BOD and the BOS.?Examine and approve the Company's proposed annual financial budget and final accounts.?Composed of seven directors, including three independent directors. The BOD shall have aChairman and may have a Vice Chairman.

?The Chairman and Vice Chairman shall be elected by a majority of the BOD.

?Convene the shareholders' meeting and report work to the shareholders' meeting.?Implement the resolutions of the shareholders' meetings.?Decide on the Company's business plans and investment plans.?Formulate the Company's proposed annual financial budget and final accounts.?TheBOSconsistsofthreesupervisorsandshallhaveaChairman.?TheChairmanshallbeelectedbyamajorityoftheBOS.?ReviewregularreportspreparedbytheBODandprovidewrittenopinions.?Check the Company's finances, supervise the performance of the Company's duties by directors

and senior managers, and make recommendations for the removal of directors and senior

managers who violate laws, administrative regulations, Company Articles of Association, or

shareholders' meeting resolutions.

ESG Committee

3536

Investor Protection & Sustainable Dividends

InaccordancewiththeCompanyLawofthePRC,theSecuritiesLawofthePRC,theWorkingGuidelinesfortheRelationshipBetweenListedCompaniesandInvestors,theRulesGoverningtheListingofSharesonShenzhenStockExchange,andotherrelevantprovisions,theCompanyhasformulatedtheInvestorRelationsManagementSystemofShenzhenKTCTechnology.ThemoveaimstostandardizecommunicationbetweentheCompanyanditsinvestorsandboostinvestorrecognitionandsupportforitsvaluetoenablevaluemaximizationandinvestorrightsprotection.TheCompanymaintainsclose,stablecontactandcommunicationwithinvestorsinvariousforms,suchasresultsbriefings,strategyconferences,reverseroadshows,theHudongyiplatformoftheShenzhenStockExchangeandtheinvestorhotline,andthroughmultiplechannels,includingtheCompany'sofficialwebsiteanditsWeChatofficialaccount.

IncompliancewiththeRegulatoryGuidelinesforListedCompaniesNo.3–DistributionofCashDividendsofListedCompaniesissuedbytheChinaSecuritiesRegulatoryCommissionandtheArticlesofAssociationofShenzhenKTCTechnology,theCompanyshallimplementacontinuousandstableprofitdistributionpolicythatemphasizesreasonableinvestmentreturnstoinvestorsandtakesitsactualoperatingconditionsandsustainabledevelopmentintoaccount.TheprofitsdistributedbytheCompanyshallnotexceedtheamountofaccumulateddistributableprofitsorundermineitsongoingoperation.TheBOD,theBOSandtheshareholders'meetingshallfullyconsidertheopinionsofindependentdirectorsandpublicinvestorsinthedecision-makinganddeliberationprocessoftheprofitdistributionpolicy.The

Companymaydistributeprofitsincash,stock,acombinationofcashandstock,orotherformspermittedbylawsandadministrativeregulations.Iftheconditionsforcashdividendsaresatisfied,priorityshallbegiventocashdividendsforprofitdistribution.In2023,theCompanypaidRMB411,943,567.80(taxinclusive)incashdividends,withapayoutratioof32.12%.

Director and Executive Remuneration and

Appraisals

IncompliancewithlawsandregulationsliketheLaborLawofthePRCandCompanyrulesincludingtheArticlesofAssociationandtheWorkingRulesfortheRemunerationandAppraisalCommittee,andgivenfactorssuchasindustryandregionalpay,KTC'sRemunerationandAppraisalCommitteeformulatesremunerationpoliciesandplansandperformanceappraisalstandardsaswellasconductsappraisalsforitsdirectorsandseniormanagement.TheCompanyattachesparticularimportancetoissueslikeworksafety,environmentalprotection,compliantoperation,andbusinessethicsandcorrelatesthemwithperformanceappraisal.TheHumanResources(HR)Departmentdirectlylinksperformanceappraisalresultsforgrosslynegligentemployeestochangesintheirpay,bonuses,andpositions.

Prevention of Conflicts of Interest

InaccordancewiththeCompanyLawofthePRC,theRulesGoverningtheListingofStocksonShenzhenStockExchange(2023Revision),theSelf-RegulatoryGuidelinesNo.1forCompaniesListedonShenzhenStockExchange–StandardOperationofCompaniesListedontheMainBoard,theSelf-RegulatoryGuidelinesNo.7forCompaniesListedonShenzhenStockExchange–TransactionsandRelatedPartyTransactions,theArticlesofAssociationofShenzhenKTCTechnology,andotherrelevantprovisions,theCompanyupdatedtheRelatedPartyTransactionManagementSystemofShenzhenKTCTechnologyinDecember2023.

In 2023, four regular reports and 165 interim announcements were issued and oneresults briefing was held.

In2023,theCompany'srelatedpartytransactionswerenormalbusinesstransactionswhichwerecarriedoutbasedonitsnormaloperationsandbusinessdevelopmentneeds.Thesetransactionsfollowedtheprincipleoffairmarkettrading,withfairandreasonableprices.TheCompanyperformedtherequisitedecision-makingproceduresandinformationdisclosureobligationsforthetransactions,causingnoharmtotheinterestsofitsshareholders,especiallysmallerones.

3738

KTC'sprinciples for related party transaction management

Honesty, equality,voluntariness, fairness,openness, and impartiality

Not harm the interestsof the Company andnon-affiliated shareholders

Related shareholdersand directors requestedto abstain from voting

Fair related partytransaction prices

Require the publication ofsufficient information about

related party transactions

Require considerationat a special meeting ofindependent directors

Compliance Management

Atacorporategovernancelevel,KTCadherestothebottomlineofcompliantoperation.Itputsastrictmanagementsysteminplace,unifiesriskcontrolstandards,andbreaksdownriskmanagementcontent,aspartofcomprehensiveandin-depthcompliancemanagementforproductsandservices.Compliance Management FrameworkWhenitcomestothecompliancemanagementsystem,theCompany'sAdministrativeOfficehassetupaRiskManagementDepartment.TheCompanyhasestablishedacompliancegovernanceframeworkconsistingofthreelinesofdefense.Businessunitsconstitutethefirstlineofdefense,responsibleforcontrollingcompliancerisksattheforefrontofbusinessdevelopment.TheLegalTeamoperatesasasecondlineofdefense,conductingcomplianceriskreviewandsupervisionfromalegalperspective.TheAuditTeamactsasthethirdlineofdefense,auditingandevaluatingtheCompany'sbusinesscompliance.

ComplianceManagementSystem

Tostrengthencompliancemanagement,theCompanyhas,inlinewiththeISO37301compliancemanagementsystem,

formulatedpolicyregulationssuchastheCommitmentControlProcedureoftheCompanyandtheManagement

AccountabilityandResponsibilityControlProceduretoformitsowncompliancemanagementsystem.TheRiskManagementDepartmentsystematicallyidentifiesandmanagestheCompany'scompliancerisksbasedontherulesandregulations.

Compliance Managementand Business Ethics

Second & thirdlines of defense

Risk ManagementDepartmentLegal TeamAudit Team

Legal riskcompliance

Business units

Business riskcompliance

First line of

defense

Complianceprofessionalgovernance

Internal control &internal audit

AdministrationOfficeManagement

Execution

IdentificationDiagnosis

High riskMedium riskLow riskSpecialrectification

Majorrectification

Everydayroutine

RectificationmeasuresImplementationconfirmationRetroactiveimprovement

DynamicregulationRisk warning

3940

Compliance Culture DevelopmentKTCiskeenlyawareoftheimportanceofcompliancepublicityindevelopingacorporatecomplianceculture.TheCompanyorganizesregulartrainingsessionsandpublishesspecialissuesoncompliancetocontinuouslystrengthencomplianceawarenessamongemployees.Notonlydoesthisdeepenemployeeunderstandingoftheimportanceofcompliance,italsopromotestheCompany'sinternalcompliancecultureandsafeguardsitssteadydevelopment.TheCompanycontinuestoemphasizetheimportanceofcompliancecultureandcomplianceawarenessindailytrainingsessions,meetingsandworkcommunications.Duringcommunicationswithcustomersandimportantstakeholders,itstressestheemphasisplacedoncompliantoperationsinrelateddocumentsandproductmaterials,andengagesindialoguewithexternalstakeholdersoncompliantoperationstoexploremorewaysofcomplianceculturedevelopment.

Anti-corruptionManagement

TheCompanystrictlycomplieswiththenationallaws,regulations,andstandardsrelatedtoanti-corruptionandanti-bribery.InlinewithinternationalinitiativessuchastheUnitedNationsConventionagainstCorruptionandtheBusinessPrinciplesforCounteringBribery,ithasformulatedtheIntegrityOperationControlProcedureandotherrelevantsystemdocumentstomanageanti-commercialbriberyandanti-corruptionrisks.

Anti-corruptionManagementSystem

Anti-corruptionisanimportantcoreissueincorporategovernance.TheCompanyattachesgreatimportancetothe

constructionofbusinessethics.Companyexecutivesarefullyinvolvedinbusinessethicssupervisionandhaveestablishedacomprehensivesupervisionandmanagementsystemfromfourperspectives,includingcomplianceandintegritymanagement,employeecomplianceawarenesstraining,supplierevaluationandsupervision,andinternalreportingandcorrectiveactions.TheCompanyhasalsosetupasoundsupplierevaluationandsupervisionmechanism,coveringonboarding,performance,supervision,riskmanagementandotheraspects.

Case study｜KTCemployee compliance training

In2023,theCompanyconductedcompliancetrainingandexaminationsforallemployees.Thecoursescovereighttopics,includingcompliancemanagementsystembasicsandanti-trust,dataprivacycompliance,advertisingcompliance,contractmanagement,sealmanagement,legaldisputeresolution,tradesecretprotection,andexportcontrolandeconomicsanctions.

Whenitconfirmscooperationwithsuppliersanddecidestoonboardthem,KTCreachesaTransparentCooperationAgreementwiththem,requiringthemtofollowtheCompany'sregulationsconcerningintegritymanagementandmakeavailablereportingtoolssuchastelephonenumbers,WeChatplatforms,andemails.KTCsignedtheTransparentCooperationAgreementwithallsuppliersin2023.

4142

Establish andimplement an internalmanagement system

Establish an auditsupervisionmechanism

Manage partnerqualification

Protectcustomer/supplierinformation

Establish and improve theCompany's anti-corruptionand anti-commercial

bribery system, andoptimize its financial

processes; organize onlineand offline training

Establish anti-corruptionsupervision and reportingchannels, conductinvestigations, and holdemployees violatingbusiness ethicsaccountable in accordancewith the managementsystem

Develop relevant

management measures forpartners, and check thequalifications and credibilityof new and existingcompanies

Respect the rights andinterests ofcustomers/suppliers, andrefrain from gainingbusiness opportunities orbenefits through impropermeans

Corruption Risk Identification, Assessment & ManagementIn2023,KTCconductedacomprehensive,in-depthidentificationofmajorcorruption-relatedrisks.Procurementpositions,acriticallinkintheflowofmaterialsinandoutoftheCompany,areexposedtocorruptionrisksinrelationtosupplierselectionsandpricenegotiations.Financialpositions,whichareinchargeoftheCompany'sfinanciallifeline,needtostayvigilant

againstcorruptioninfundapprovalandaccounting.Salespositionsareinclosecontactwiththemarketandmayface

corruptionchallengesincustomerdevelopmentandsalespolicyimplementation.Productionandwarehousemanagementpositionsaresubjecttocorruptionrisksinmaterialmanagementandproductionprocesscontrol.

KTCstrictlyadherestorelevantrulesandregulationsandhasclarifieddetailedproceduresforthehandlingofcorruption

cases.Thefivestepsarecarriedoutinanorderlymanner,includinginitiatingtheprocesstolaunchaninvestigationquickly,haltingtherelevantactivitiestopreventfurtherloss,obtainingrelevantevidencetoensurefairhandling,applyingforactionstoenforceaccountability,andimprovingproceduresandsystemstoupgrademanagement.

Start investigationInitiate an investigationbased on anomalies ininternal auditing orcomplaints and reports

Halt relevant activitiesSuspend activities that mayinvolve corruption during theinvestigation process

Obtain relevant evidence

Review the business processes

and data involved; conduct field

surveys and interviews withrelated parties to determine anyviolations of regulations anddisciplines and establish a chainof evidenceApply for enforcement actionsTake punitive measures againstthe employees concerned anddetermine, based on the natureand impact of the case, whetherthere is a need to transfer tojudicial authorities for investigation

Improve procedures and

systemsComprehensively optimize theCompany's systems andprocedures to prevent similarincidents from happening again

KTC'sprocess of handling corruption cases

Anti-corruption Training

Reflectingtheimportanceattachedtoanti-corruptiontraining,theCompanyrequiresemployeestotakeinternaltrainingcoursesandpassexams.Italsoprovidestrainingseminarsfromtimetotimetoexplaintheintegritysystemtokeystaffsuchasprocurementandsales.

Case study｜KTCanti-corruption training for new on-campus hires

Throughaseriesoftrainingoncompliance,integrityandself-disciplinein2023,theCompanyaimstoprepareon-campus-recruitednewemployeesforincorruptibilityandremindthemtomaintainintegrityandself-discipline.Allnewon-campushireshaveparticipatedinthistraining.

Strengthen supplier qualification review and risk assessment, build supplier profiles,and implement an open, transparent tender and bidding systemDevelop a strict procurement process and standards

Implement an internal audit and approval system and create a clear and transparentfinancial systemEnhance the supervision and audit of financial personnel

Standardize the sales process and operations, strengthen sales staff training and supervision,and prohibit collusion with customers and kickbacksEstablish a sound sales management system

Monitor internal control implementation across the Company in line with listed companyrequirements, and carry out risk inspection for its major business processes such as procurement,sales, funds management, and financial reportingImplement internal control management programs regularly

Perform special audits of the Company's high-risk businesses, including after-sales, regional sales,and supply chain operationsCarry out special audit projects from time to time

Both the Company's employees and external partners can make reports by phone/email, throughthe WeChat official account, etc. An audit inspection team is established to investigate reports afterpreliminary screening and reviewEstablish public reporting channels

4344

商业道德与反腐败Case study｜KTCemployee anti-corruption trainingIn2023,theCompanycarriedoutintegrity-themededucationactivities.Inoneinstance,theLonggangDistricteconomicinvestigationunitwasinvitedtoconducttrainingondutycrimes.ThetrainingturnedouttobeproductiveandengagingwiththeuseofQ&As.

Whistleblower ProtectionKTChaspublishedthereportingphonenumberandemailaddressforemployeesandsuppliersonitswebsite.Uponreceiptofreports,eachdepartmentwillrespondandhandletheminaccordancewiththerulesandregulations.TheAuditTeamoftheRiskManagementdepartmentisresponsibleformanagingandhandlingreports,interviewingpeoplerelatedtothecases,recordingrelevantinformation,andinvestigatingandhandlingthecases.TheLegalTeamoffersconsultationandadviceonlegalevidenceandprovidesfullassistancetoinvestigatorsduringtheinvestigationofreportedcases.TheHR,FinanceandInformationManagementdepartmentsprovideassistanceandcooperationduringtheinvestigation,assistintheimplementationofrewardsandpunishmentspost-investigation,andofferprofessionalopinionsandsuggestions.TheRiskManagementDepartmenthasastrictcontrolsystemandproceduresfortheacceptanceandinvestigationofreportsinsupportofasafeandprotectedreportingenvironmentforwhistleblowers.TheCompanyfullyunderstandstheimportanceofthebraveryofwhistleblowersinmaintaininggoodcorporategovernance,andguaranteesnodamagetotherightsandintereststheyshouldenjoy.Itkeepsintactwhistleblowers'lawfulrightsandinterests,whetherintermsofbiddingoremployeeperformance.Tofurtherstrengthentheprivacyprotectionofwhistleblowers,ithasimplemented

morestringentconfidentialitymeasuresforthosewhousetheirrealnameandprovidesolidevidence.Itwilldealwithconfidentialityviolatorsstrictlyandseverelyandnevertoleratethem.Iftheactconstitutesacrime,itwillpursuecriminalaccountabilityinaccordancewithlawtoprotecttherightsandinterestsofthereportingparties.

Anti-unfair Competition

KTCstrictlyobservesrelevantnationallawsandregulations,suchastheAnti-monopolyLawofthePRC,theProvisionsonProhibitingMonopolyAgreements,theProvisionsonProhibitingAbuseofDominantMarket

Positions,theProvisionsoftheStateCouncilonDeclarationStandardsRegardingtheConcentrationofBusinessOperators,theAnti-monopolyComplianceGuidelinesforBusinessOperators,theOverseasAnti-monopolyComplianceGuidelinesforEnterprises,theE-CommerceLawofthePRC,theAdministrativeProvisionsonAlgorithmRecommendationofInternetInformationServices,andtheProvisionsProhibitingAbuseofIntellectualPropertyRightstoExcludeandRestrictCompetition.Itiswell-versedinanti-monopolyrelatedlawsandregulationsacrossitsoperatingjurisdictions.Itidentifiesrisksinanti-monopolycompliancebasedonbusinesspracticesandenhancestheapprovalprocessinriskscenarios.TheCompanydidnothaveanyantitrust-relatedpenaltiesduringthereportingperiod.

Tax Compliance

TheCompanystrictlyadherestolawsandregulationsinChina,liketheEnterpriseIncomeTaxLawofthePRCandtheLawofthePRContheAdministrationofTaxCollection,andapplicablelawsofforeignjurisdictionswhereitoperates.Dailytax-relatedmattersarereviewedbyfinancialandtaxmanagersatalllevels,andrelevanttax-relatedassurancereportsareissuedbyexternalfinancialandtaxintermediaries,effectivelyreducingtax-relatedrisks.FortheCompany,itstaxobligationsinvolvethepaymentofvalue-addedtax,corporateincometax,personalincometaxandothermajortaxtypesincountriesandregionslikeChina,theUS,SouthKorea,Poland,andJapan.In2023,itcontinuedtocooperateandcommunicatewithstakeholdersandpaytaxesingoodfaith.Refertothe2023AnnualReportfor2023taxpayments.Toeffectivelypreventtaxrisks,theCompanycontinuouslyrefinestheinternalcontrolmechanismfortaxrisks.Byestablishingasoundtaxmanagementsystemandprocess,itensuresthestandardizationoftaxmanagement.Itregularlyconductstaxriskself-assessmentstopromptlyidentifyandcorrectpotentialtaxrisks.

4546

KTCattachesgreatimportancetocustomerprivacyanddatasecurity.Byformingamanagementteam,developingspecifications,andestablishingaprocess,theCompanyhasacustomerprivacyanddatasecuritymanagementsysteminplacetoprotectcustomerinformationandsafeguardnetworkinformationsystemsecurity.KTCstrictlycomplieswiththelawsandregulationsapplicabletoallitsoperatinglocations,suchastheCybersecurityLawofthePRC,theDataSecurityLawofthePRC,andthePersonalInformationProtectionLawofthePRC.Toimproveinformationsecuritymanagement,theCompanyhas,inaccordancewiththeclausesofISO27001andAnnexA,establishedadocumentedinformationsecuritymanagementsystem.Ithasestablishednearlyover50rulesandregulations,includingtheInformationSecurityManagementSystemRequirements,theInformationSecurityRiskManagementProcedure,theTradeSecretManagementProcedure,theInformationSystemAccessandUseMonitoringManagementProcedure,theInformationSecurityCommunicationandCoordinationManagementProcedure,theInformationSecurityIncidentManagementProcedure,theComputerManagementProcedure,andtheInformationProcessingFacilityMaintenanceandManagementProcedure,toimplementthecustomer-centricphilosophystrictlyandintegratesecurityawarenessintodailywork.In2023,theCompanyhadnoviolationsrelatedtocustomerprivacyanddatasecurity.

Customer Privacy andData Security

OrganizationalstructuredevelopmentEstablishafunctionalmechanism,includingamanagementcommittee,acompliancechief,complianceliaisonofficers,andacompliancegovernanceteam,andorganizerelevantdepartmentstocarryoutdataprivacycomplianceworkatthedecision-making,management,executionandsupervisionlevels

Businessanddatareview

Sort,classifyandorganizepersonalinformationprocessingrecordsforeachbusinessscenariotoformadata

assetlist.DevelopcompliancegapanalysisreportsandproposespecialrectificationmeasuresandimplementationplansSystemprocessdevelopmentandimplementation

Revise,basedonlegalprovisionsandcorporaterealities,adataprivacymanagementsystemthatisoperationalandcoversallbusinessareas.RelevantmanagementdepartmentsdevelopworkflowandothermechanismstooverseetheimplementationofsystemrequirementsImprovementoflegaldocumentsRevise,basedondomesticandinternationaldataprivacycompliancerequirements,relevantlegaldocuments,

includingprivacyagreements,userinformedconsentforms,dataprocessingagreements,etcImplementationoforganizationalandtechnicalmanagementmeasures

Toensureinformationsecurity,theTechnicalManagementDepartmentdevelops/improvestechnicalmeasuresthroughoutthedatalifecycle,internalcontrolsystemsfordatasecurityprotectionanddetection,systemsandcontrolsfordatasecurityresponseandemergencyhandling,etcCommunicationandtraining

Promotedatacomplianceinternallyandprovidecustomizedtrainingcoursesforgeneralemployees,dataprocessingpositions,andtheITDepartmenttoenhancedatacomplianceawarenessAudit,evaluation,andmonitoringMakecorrespondingsettingsbasedonauditrequirementsfordatacompliance,personalinformationimpactassessments,systemsandmechanismsfortrusteeoversightbydataprocessors,etc

KTC information security management system

KTC'sinformation security management related certifications

Atthemanagementlevel,KTC'smeasuresincludeconductingphishingemailsecuritytrainingandsimulationdrills;standardizingtheprocessofuserinformationextraction;clarifyingtheITaccessapplicationprocess,coveringinternetaccess,instantmessagingtoolaccess,USBaccess,etc;carryingoutsecurityawarenesstrainingandimplementingstrictpermissionmanagement&accesscontrolmeasures;anddesigningcomputerscreensaversforemployees,whichspreadsinformationsecurityknowledgeandreducestheriskofinformationleaks.Atthetechnologylevel,theCompanyusesnetworkisolation,firewalls,documentencryption,internetbehaviormanagement,antivirussoftwareandothermeanstopreventdataleakageintheofficenetworkenvironment.Itsbusinessnetworkenvironmentincludesinternalcomputerroomsandpublicclouds.Theinternalcomputerroomsusein-depthdefensemeasuressuchasfirewalls,webapplicationfirewalls(WAF),dataencryption,transmissionencryption,andantivirussoftwaretoensuredatasecurityandprivacy.Ontopofthephysicalsecuritymeasuresofpubliccloudvendors,thepubliccloudsadoptapplication,network,anddatasecuritymeasuressuchasWAFsandcloudsecuritycenterstoensuredatasecurity.

4748

Asatechnologymanufacturer,KTCseekstoenhanceitssocialvaluebyprotectingIPrightsandrespectingsci-techdevelopments.TheCompanycomplieswiththeTrademarkLawofthePRC,thePatentLawofthePRC,theCopyrightLawofthePRC,andotherlegalprovisionsstrictly.Meanwhile,ithighlyrespectstheIPrightsofothersandfocusesonpreventingtheriskofIPinfringement.Ithasestablishedafull-timePatentTeamtoworkwiththeLegalDepartmenttomanageitsIPwork.TheCompanyarrangesIP-relatedtrainingsessionsonaregularbasis.Therewerefour,fiveandsixsuchtrainingsessionsin2021,2022and2023,respectively,coveringallR&Demployees.

IP Protection

Case study｜2023 IP protection-themed training

In2023,theCompanyorganizedanumberoftrainingsessionsonpatentprotectiontopromotepatentprotectionawarenessamongitsemployees,helpingprotectitscorepatentassetsandpreventunlawfulinfringementofitsIPrights.

Case study｜2023 trademark protection-themed training

In2023,theCompanyorganizedseveraltrainingsessionsontrademarkprotection.Throughtraining,employeescanmastercoreknowledgesuchastrademarkapplications,maintenance,infringementmonitoringandrightsprotection,providingstrongsupportfortheCompanyamidfiercecompetitionandprotectingitsbrandvalueandreputationforthebenefitofitssustainabledevelopment.

Case study｜KTCinformation security management training and culture buildingInlightofinformationsecurityincidents,KTCorganizedanInformationSecurityMonthcampaignonlineandofflinein2023aspartofmulti-dimensional,comprehensiveinformationsecuritymanagementtrainingandculturedevelopmentefforts.

1)InJuly2023,SANGFOR,aprofessionalorganizationintheinformationsecurityindustry,providedacomprehensive,in-depthinformationsecurityawarenesstrainingforallKTCdepartments.Thetrainingaimstostrengthenemployees'attentiontosecurityissuesintheinformationage,improvetheirriskpreventionawareness,andensuretheproperprotectionofcorporateinformationassets.

2)KTChasdesignedcomputerscreensaversthatcoverimportantaspectssuchasdatasecurity,phishingemails,socialengineeringattackprevention,andpasswordsecuritytoguardagainstpossiblerisks.

3)TheCompanyorganizesinformationsecurityawarenesstrainingandexamsforallnewemployeesatleastonceamonth.Informationsecurityteammembersshouldtakejob-relatedprofessionalinformationsecuritytraining,andinformationsecurityemployees(suchassystemadministrators)shouldreceivefurtherprofessionalskillstraining.

4950

TheCompanycontinuestopromotetheinternationalizationofitsbusinessandteam.Employees,regardlessoftheircolor,race,gender,language,orreligion,aswellascollaborativepartners,affiliatedcommunitiesandgovernmentsareallpartofourbusinesscommunityandsharethefruitofourdevelopment.Werespectthehumanrightsofallemployees,affectedcommunitiesandbusinesspartners.Wedonottolerateanyformofdiscrimination,harassmentorretaliationintheworkplace.Wetreatallemployeesfairlyandimpartially,regardlessoftheirnationalities,races,genders,religiousbeliefsandculturalbackgrounds.Throughouroperationsandcorporateculture,westrivetomakeourpartners,contractorsandsuppliersjoinusincomplyingwithinternationallyrecognizedhumanrightsstandards.

HumanRights

Opinionrecognition

Futureplans

Riskidentification

InfollowingtheUNGPsandrelatedhumanrightsstandards,werequireallprojectstoprogressivelyestablishprocessestoidentifyandmanagehumanrightsrisksandintegratehumanrightsassessmentsintotheirriskassessments.Duringthereportingperiod,wedidnotfindanysignificanthumanrightsrisksrelatedtochildlabor,forcedlabor,orviolationsofthefreedomofassociationandcollectivebargainingrightsattheCompanyoritsmajorcollaborativesuppliers.Intheprocessoffurtherglobalexpansion,wewillpaymoreconsistentattentiontotheCompany'supgradingandoptimizationoftheriskmanagementsystemtoensurethatthereisnopossibilityof

significantriskswithhumanrightsmanagement.

Wefollowinternationallyrecognizednormsandtenetsrelatedtohumanrights,suchastheUnitedNationsGuidingPrinciplesonBusinessandHumanRights(UNGPs),theResponsibleGoldMiningPrinciples,theUnitedNationsUniversalDeclarationofHumanRights(UDHR),andtheInternationalLabourOrganization(ILO)DeclarationonFundamentalPrinciplesandRightsatWork.Ininternationaloperations,welearnaboutlocalregulationsandculturaldifferencestomeetlocalregulatoryrequirementsattheoperationalandmanagementlevels.

Continuouslyfollowuponandstudythehumanrights-relatedlawsandregulationsofthecountries

wheretheprojectsarelocated,tofullyidentifyhumanrightsrisksandimproveoursocialresponsibilitymanagementpolicies,standardsandprocesses.StrengthenspecializedtrainingandcapacitybuildingforprojectmanagementaroundtheESGreviewplantofurtherimprovetheinternalmanagementsystem.Promotetheestablishmentofworkplacesexualharassmentpreventionandpunishmentmechanisms,improvehandlingproceduresforworkplacesexualharassment,addresssexualharassmentreports,andtakeremedialmeasures.Strengthensecurityandhumanrightsinthesupplychainandimprovethecomplaintandgrievancemechanism.

Major human rights issuesKTC'smajor multi-departmental efforts

Eradication of child labor

We

requireallprojectstostrictlycomplywiththeminimumworkingage

requirements

ofthelawsandregulationsofthecountry(place)inwhich

they

arelocatedorILOConventionNo.138,whicheverishigher.Wehave

a

comprehensivehiringscreeningmechanismtoavoidhiringchildlaborby

mistake

.Inaddition,werequirecontractors,suppliersandthird-party

recruitment

agenciestoeradicatetheuseofchildlabor,analyzetheriskof

hiring

childlaborbymistakeandtaketimelymeasures.

Eradication of forced labor

We

followalaborriskassessmentprocessthatpreventsmodernslavery

and

continuouslyimproveshumanrightsriskmanagementinour

operations

andsupplychaintoreducetheriskofforcedlabor.

Collective bargaining

We

supporttheuniontorepresentemployeesincommunicatingwiththe

Company

tosafeguardtheirlegitimaterightsandinterests.Employeesmay

join

andwithdrawfromtheunionattheirownfreewill.Whenthereare

matters

thatmayhaveanegativeimpactontheemployees,suchasmajor

operational

changes,theCompanywillgivetheemployeesadvancenotice

to

minimizesuchimpact.

Anti-discrimination and

anti-harassment

In

followingageneralworkplaceanti-discriminationandanti-harassment

policy,

wereducetheriskofworkplacesexualharassmentthrough

education

andtraining,disseminationoflegalknowledge,establishmentof

a

jointmechanismforpreventingandpunishingworkplacesexual

harassment,

andcreationofacorporatecultureofzero-tolerancefor

workplace

sexualharassment.

Human rights of indigenous

peoples

In

followingtheUnitedNationsDeclarationontheRightsofIndigenous

Peoples,

weadheretotheprinciplesoffree,priorandinformedconsentin

our

communityworkandrespecttherights,interests,aspirations,culture

and

naturalresource-basedlivelihoodsofindigenouspeoples.Duringthe

reporting

period,wedidnotfindanyviolationontherightsofindigenous

peoples

.

5152

Green, SmartManufacturing for a Low-Carbon Future

Green and low-carbon development is a key direction in the new round ofindustrial revolution. In response to China's dual carbon strategy of "reachingpeak carbon emissions by 2030 and achieving carbon neutrality by 2060, " aswell as the calls for "building a beautiful China" and "accelerating full greentransformation of economic and social development, " KTC is committed toenvironmental stewardship. We integrate the concept of green operations intoour production processes, continually promote energy conservation andemission reduction, and effectively execute resource recycling initiatives toenhance our capabilities in green manufacturing. We optimize our EMS throughISO 14001 and ISO 50001 certifications, facilitating our green transformationand upgrade. Additionally, we focus on the research and commercialization ofclean technologies to contribute to the low-carbon and green development ofsociety.

The SDGs addressed in this chapter

ESG Key Performance?In 2023, KTC has self generated6,217.62MWh of green electricity.?In 2023, the Company's electricity

consumption per unit revenue was 30.4

kWh/RMB10,000, down 9.32% YoY.?In 2023, the water consumption per unit

revenue of the Company was 0.1833

m?/RMB10,000, down 12.13% YoY.

ESG Mid-term Goals?Continuously improve and optimize theEMS.?Explore the development of GHG emissionreduction targets consistent with the ParisAgreement, and increase the proportion ofclean energy use.?Improve the energy and watermanagement systems, and increase thescale of non-hazardous waste recycling.?Advocate suppliers to fulfill environmental

and social responsibility.

KTCadherestotheconceptofgreenmanufacturingandlow-carbondevelopmentinitssustainabilitypractices.Inthereportingperiod,itcontinuouslyinvestedintheenergy-savingandenvironmentaltransformationofproductionlinesandparks,andtookenergy-savingandenvironmentalmeasuresinenvironmentalmanagement,production,parkinfrastructureconstruction,andotherrespectsinlinewiththecarbonemissionsreductiongoalandChina'sdualcarbonpolicy.Itstrengtheneditslong-termcompetitivenessthroughgreen,low-carbonorganicgrowth.

KTC'ssubsidiaryHuizhouKTCisthemaindriverofitsgreendevelopment.Along-timeadvocateoftheconceptofgreen,environmentalprotectionandenergyconservation,HuizhouKTCpursuesenergyconservationandcarbonreductionacrosstheentireproductionchain,integratessustainabilityintoqualitymanagement,andpromotescleanproduction,cleanenergy,cleanemissions,andenergyconservationtransformation,tobuildaneco-friendly,qualityandefficiency-orientedenterpriseandsupportthecountry'sdual-carbongoals.HuizhouKTChasbeenrecognizedasanational-levelgreenfactoryandreceivedademonstrationawardforpollutionandcarbonemissionsreductionfromZhongkaiHigh-TechZone.In2023,KTCstatedsupportfortheTCFDinitiative.WithreferencetotheTCFDinitiativeframework,theCompanyhasidentifiedclimate-relatedrisksandopportunitiesthatmayaffectitandtakeneffectivecountermeasures.Itintegrates

ESGconceptsintoitsbusinessoperationsandconsidersclimateandenvironmentalfactorsinitsbusinessprocesses.

Climate Risk Management Framework

In2023,KTCestablishedanESGsystemledbytheBODandincorporatedresponsibilitiesrelatedtoclimaterisksandopportunitiesintotheESGmanagementteamtopromotetheformationofaninitialcompany-wideclimategovernanceworksystem.

ESG Committee

ESG Working Group

?Disclosetheresultsofeffortstoidentifyclimate-relatedrisksandopportunities?AssesstheimpactofrisksandopportunitiesontheCompany'sbusiness?Make green production, green operations, and other related development plans

?Guide the development and improvement of climate-related strategies, and monitorand review the implementation of climate change actions?The Committee is responsible for the identification, assessment, and management ofimportant climate risks and opportunities

Climate Change Response

Climate Risk and Opportunity ManagementKTC attaches great importance to the impact of climate change on its business sustainability. It identifies majorclimate risks and opportunities based on the TCFDframework.

T

TheESGCommitteeundertheBODisresponsibleforexaminingtheCompany'sclimatechange-relatedmatters,includingstakeholdercommunication,riskidentification,andgoalandstrategydevelopment,toensuretheimplementationofthecorporateclimatechangestrategy

Governance

C

IdentifyclimaterisksandopportunitiesbasedontheTCFD'sguidelinesandtheCompany'sbusinessoperations.Gothroughrelatedrisksandopportunitiesbasedontheidentifiedresultstounderstandtheimpactofclimatechange,macropolicies,andmoreontheCompany'sbusiness,strategyandfinancialplanning,aswellasfuturetrends

Strategy

F

Eachriskdepartmentidentifies,screensandevaluatestheclimaterisksthatKTCisfacingormayfaceanddevelopscountermeasureseveryyear.TheESGCommitteereviewsthecontentandproposesadditionalcountermeasuresasneeded.Climaterisksareclassifiedaccordingtotheprobabilityofoccurrenceandimpact.Themanagementimplementscountermeasuresforriskswithhigherimportanceandurgency

Opportunity

D

Setphasedclimategoalsandpromisetoachievecarbonpeakingnolaterthan2030andcarbonneutralitynolaterthan2060

Metrics and Targets

Subsidiaries

Businessunits

?Devise countermeasures for climate risks with reference to the industry's bestpractices and the Company's realities?Identify and conduct basic assessment on climate risks?Examine the Company's carbon emissions

5556

Energy Conservation and Carbon Reduction

Energy Usage Management

To achieve efficient and coordinated management of energy use in production and operation, the Company has obtainedthe ISO 50001 energy management system. The main energy source of the Company is electricity. The Company hasbeen actively responding to the national carbon peak and carbon neutrality strategies, reducing electricity consumptionand further lowering carbon emissions through the construction of photovoltaic power generation projects, the use of moreenergy-efficient equipment, and the implementation of energy management systems.Case study｜Energy saving measures and renewable energy use

1.TheCompanyislayingoutphotovoltaicpowergenerationandstrivingtocreateagreenfactory.KTCbuildings1toAhaveintroducedphotovoltaicpowergenerationsystems,andthecurrentannualpowergenerationhasreached6,000MWh.BuildingB/Chasaddedasecondphasephotovoltaicproject,andtheoverallphotovoltaicpowergenerationoftheCompanyisexpectedtoreach7,000MWh/yearafteruse.

2.Thefirstandsecondphaseofthefactorybuildingwillbeintegratedintothewaterstoragecoolingplan:thewaterstoragecoolingpipelineofBuildingB/Cwillbeintroducedintothefirstandsecondphaseofthefactorybuilding,andtheairconditioningunitsandotherimportantaccessorieswillbecentralizedinthesamemachineroomtoachievecentralizedmanagementofairconditioningcooling.ItisexpectedtosaveRMB1.2millioninelectricitybillsannually.

3.Startingfrom2024,HuizhouKTCwillintroducenitrogenfurnacereflowsolderingequipmenttoimproveweldingquality.Topreventthedirectdischargeofcoolingequipmentexhaustintotheair,whichcancausethermalpollutiontotheworkshopandincreasetheairconditioningload,theCompanyhasestablishedacoldwatercirculationsystem(plateheatexchanger+waterpump+pipeline)ineachworkshop,whichisdirectlyconnectedtotheweldingequipmentthroughwaterpipes,replacingthe

chillerforcooling.ThiscansaveaboutRMB360,000inelectricitybillsperyear.

4.Inordertoimprovetheeffectivenessofexhaustgastreatment,theHuizhouKTCmachineboardworkshoppromptlyupgraded

theexhaustgastreatmentsystem,increasingtheexhaustvolumeby30%andeffectivelyreducingtheelectricityconsumptionofthisequipment.

Indicator

Unit202120222023

Total internal energy consumptionMWh38,503.3538,826.3540,860.98Total electricity consumptionMWh38,494.8038,816.4140,849.62

Total electricityconsumption bysource

Outsourced

electricity

MWh38,494.8034,906.2035,010.60

self-generatedgreen electricity

MWh04,074.016,217.62Electricity consumption per

RMB10,000 of revenue

MWh

0.03240.03350.0304Total gasoline consumptionMWh

8.289.6811.11Total diesel consumptionMWh

0.240.250.27

Risk TypeRisk DescriptionCountermeasuresFinancial Impact

Transformati

on Risk

Policy andLegal Risks

?

?

Failure to meet mandatory ESG reporting

requirements may result in administrativepenalties and legal proceedings

?

The Company has started ESG related information disclosure, closelymonitoring and timely understanding the latest government policies on

ESG information disclosure

Increased non

operating expenses

and rising costs

?

Stricter policies and regulations to mitigateclimate change, as well as the expansion ofChina's GHGemissions trading market, haveled to increased costs

?Actively carry out energy conservation and emission reduction work, and

continuously increase the proportion of clean energy use such as solarenergy.T

he Company generated 6,217.62MWh of self generated green

electricity in 2023

Increased non

operating expenses

and rising costs

Technical

Risk

?

Failed investment in low-carbon technology R&D

?

Strengthen market research, actively engage in low-carbon technologyindustry cooperation, and enhance the Company's R&D capabilities

Cost increase

?

The high power consumption performance of theproduct has led to its low-carbon transformationlagging behind its peers

?

Superior performance display devices can help customers save energyand reduce carbon emissions. The Company's products adopt multipletechnologies to improve their power consumption performance

Cost increase

Market Risk?

?

Failed to effectively meet consumers' demand forgreen and low-carbon products

?

Based on consumer research and demand analysis, the Company's

products are manufactured using non hazardous materials and green

processes, and an ISO 14001 EMS has been established

Income decline

?

Rising costs of raw materials and energy

?

Pay attention to energy conservation and emission reduction work; improveresource utilization efficiency and recycling ratio

Cost increase

Reputation

Risk

?

ESG negative events, or negative feedbackfrom stakeholders due to a lack of green andlow-carbon technologies and products

?

Respond to stakeholder concerns, enhance reporting and informationtransparency, strengthen environmental management and monitoring,and adhere to sustainable development

Income decline

Physical RiskAcute Risk

Acute Risk?

?

Extreme weather can damage factories, officebuildings, and equipment, causing asset losses

?

The Company's core production bases are located in Shenzhen andHuizhou, and the main natural disaster is flood risk. Therefore, theCompany regularly inspects and maintains buildings and equipment,

establishes disaster emergency plans, strengthens monitoring and early

warning, and purchases necessary insurance

Capital expenditures

increase, incomedecreases

?

Due to extreme weather conditions, employees are

unable to work normally and transportation is interrupted,

which affects stable productionChronic

Risk

?Rising temperatures require companies to equip

more refrigeration equipment, increasing

operating costs

?

The Company provides reasonable cooling measures for the

production workshop to reduce production losses caused by rising

temperatures

?

Adjust working hours and working environment appropriately based ontemperature changes and employee needs

Cost increases,revenue decreases

?Employees may not be able to work outdoors forlong periods of time during the high temperature

season, which may affect operational efficiency

Climate

Opportunitie

s

Resource

Efficiency

?Equipment, buildings, and technologies with higher

energy efficiency

?

Supportive policy incentives

?

Use more energy-efficient equipment and materials to improveresource utilization efficiency and reduce energy costs

?

Actively explore the application of new technologies, equipment, andprocesses

?

In response to government supportive policies, increase investment andinnovation in renewable energy and low-

carbon technologies, and assist in

the comprehensive green transformation of society

?

Optimize resource utilization, reduce energy consumption and GHGemissions

?

Collaborate with partners to drive technological innovation

?Reduce dependence on traditional fossil fuels and promote innovation and

development in the energy sector

Cost reduction,

revenue increase

Products &

Services

?

R&D of green and low-carbon products

?

Climate change response solutions within theindustryMarket

?

User preference shift expands green marketdemand

?

Increased demand for comprehensive energyservices

?

Explore new overseas markets

Resilience?

?

Energy substitution and diversification solutions

?

Participate in renewable energy projects

As of the end of the reporting period, thenumber of KTC's production bases orsubsidiaries have obtained ISO 14001EMS certification

As of the end of the reporting period, thenumber of National or provincialgreen factorycertification

New additionsthis year

5758

Green WorkspaceKTCencouragesemployeestoleadalow-carbonlifestyle.Itpromotesagreenofficemodelandadvocatestheconceptofresourceconservation.

Renewable Energy Use

KTCcontinuestoincreasetheproportionofcleanenergyuseinproductionandoperationswithrooftopsolar,waterstorageairconditioningandothertechnologies.In2023,theCompanygenerated6,217.62MWhofgreenelectricity,up

52.6%YoY.Inearly2024,itsawcontinuedgrowthinrooftopsolarinstallations,withanestimatedannualelectricityproductioncapacityof7,000MWh.

Case study｜KTC'sgreening measuresAccordingtothegreenbeltmaintenancecontractsignedwiththeCompany,athird-partygreening

companyisresponsibleforthedailymaintenanceofgreenplants.TheCompanyregularlybuyspottedplants,whichabsorbcarbonfromtheairthroughphotosynthesis,forofficesandtheworkplace.

KTC'sEMScomplieswithrelevantnationallawsandregulationsincludingtheEnvironmentalProtectionLawofthePRC,theLawofthePRConthePreventionandControlofAtmosphericPollution,andtheWaterPollutionPreventionandControlLawofthePRC,andisbuiltonrelevantinternationalstandardssuchastheISO14001.KTCanditssubsidiaries

followtherelevantsystemrequirementsstrictly,andimplementanautonomousenvironmentalmanagementandmonitoringprogramaspartoftheannualplan,coveringwastewater,exhaustgas,noise,etc.TheCompanyregularlyreportsmonitoringdatatothenationalpollutionsourcemonitoringinformationmanagementandsharingplatform.KTChasformulatedaseriesofsystemdocumentsforenvironmentalmanagement,includingtheEnvironmentalFactorIdentificationandEvaluationControlProcedureandtheEnvironmentalOperation,MonitoringandEvaluationControlProcedure.TheCompany'stargetedrulesregulatetheidentification,evaluationandcontrolofenvironmentalfactorsandhazardoussources,withdetailedprovisionsonwastewater,wastegas,noiseandsolidwastecontrolmeasures.Currently,KTCanditssubsidiaries,includingKTCCommercialandHuizhouKTC,haveobtainedtheISO14001EMScertification.In2023,theCompany'svariouspollutioncontrolmeasureswereinlinewithbothnationalandlocalenvironmentalstandards,withnoseriousenvironmentalpollutionobserved.TheCompanyfacednopenaltiesforenvironmentalissues,andhadnomajorenvironmentalaccidents.

Treatment of Three Wastes

KTChasdevelopedtheEnvironmentalOperation,MonitoringandEvaluationControlProcedurein-house.Byclarifyingpollutantcontrolandtreatmentprocedures,theCompanypromoteswasteandcarbonemissionsreduction,andconductsregularsupervisionandinspections.

Pollution emission control

KTChasestablishedandmaintainsasoundISO14001EMS,strengthensemployees'environmentalmanagementawareness,implementssourcecontrolandprocessmanagement,andconductsregularenvironmentalmonitoring.Inlinewithlocalecologicalandenvironmentalrequirements,theCompanyhasdevelopedandupdatedemergencyplansforsuddenenvironmentaleventsandfiledthemwiththeecologicalandenvironmentaldepartments.Ithasarrangedrelevantpersonneltoconductregulardrills.

Environmental emergency management

Wastewater discharge management

KTC'sproductionprocessdoesnotinvolveindustrialwastewaterdischarge.BasedontheEnvironmentalOperation,MonitoringandEvaluationControlProcedure,thesanitarywastewaterdischargedbytheCompanystrictlycomplieswiththewastewaterqualitystandardsfordischargetomunicipalsewers(GB/T31962-2015).TheCompanycarriesoutwaterandenergy-savingpublicityfromtimetotime,impartingtherightvaluesbypostingsignsatfaucetsthatstate“Savewater"and“Reusewater."

AccordingtotheEnvironmentalOperation,MonitoringandEvaluationControlProcedure,KTCputsthewastegasgeneratedinthefilterbox,andtransportsthetreatedgastotheactivatedcarbonadsorptionboxfortheadsorptionoforganiccompounds.Afteradsorption,thedischargedgasissatisfactory.KTChasestablishedanenvironmentalmonitoringsystemtomonitorandmanagetheexhaustgasfromtheproductionprocessinrealtimeandachievecleanandeco-friendlyproduction.Throughtheinstallationofmultifunctionalairqualitytransmittersatthegasoutlet,itmonitorstheparticulatemattersandodorgeneratedinrealtime.AccordingtotheEnvironmentalOperation,MonitoringandEvaluationControlProcedure,ittracksenvironmentaltargetsandmetricsregularly.Forindicatorsthatrequireexternalcomplianceassessment,itengagesexternaltestingagenciestoconductassessmenteveryyear.Allthetestresultsaresatisfactory.Toreduceenvironmentalpollution,KTCchooseseco-friendlyrawandauxiliarymaterials,whichcanreducepollutantemissionsduringproduction.Byachievingcentralizedproductionthroughtheoptimizationofproductionplans,theCompanyavoidsfrequentstartupandshutdownduringproductiontoreducetheexcessexhaustgasduringstartup.

Exhaust gas emission management

TheCompanydisposesofharmlessandhazardouswastesinstrictcompliancewiththeEnvironmentalOperation,

MonitoringandEvaluationControlProceduretoensurethesafetyandeco-friendlinessofwastetreatment.Forhazardouswasterawmaterials,ithastakenspecialmeasures.Thatis,itengagesprofessionalrecyclingagenciesfordoor-to-doorrecyclingtoensurethathazardouswastesareproperlyhandledtopreventpotentialharmtotheenvironmentandhumanhealth.Ithasalsooutlinedmanagementmeasuresforwastereductionasfollows:

Solid waste management

Water Resource ManagementKTC'smainsourceofwaterispurchasedmunicipalwatersothatthereisnoimpactonlocalwateruse.TheCompanyhasestablishedasoundwatermanagementsystemanddevelopedtheWaterResourcesManagementControlProcedure.Itreduceswaterresourceconsumptionandcontinuouslyexploreswater-savingopportunitiesthroughmeasuressuchasregularinspections,waterrecycling,energy-savingtechnologicalimprovements,andwater-savingeducation.

Resource Management and

Recycling

Indicator

Unit202120222023

Water consumption perRMB10,000 of revenue

m?0.20280.20860.1833

Total water consumption

m?241,074241,700246,457

Municipal water source

m?241,074241,700246,457

Water consumption KPIs

6162

Raisewater-saving awarenessamong employees throughpublicity

Install sensor faucets to preventwater loss

Plan plumbing maintenance

and strengthen inspections to

promptly detect water leaks

Use water-saving equipment to reducewater waste. Employee canteens adoptautomatic dishwashers to improvewater efficiency

Providewater-cooled airconditioners throughout the plant,and use circulating water forcooling, with a loss rate of 10%

Company measures to

improve water efficiency

Embracing a paperless officeand reducingthe use of paper,printer ink, toner cartridges,and other office supplies

Classifying and recyclingpackaging materialsto increase reuse

Improving production techniques for higher yieldand pickingout defective products for recycling

KTC'sWRIwater risk assessment

Water resource risks at KTC'sselected production facilities

In2023,KTCusedtheWorldResourcesInstitute's(WRI)waterresourceriskassessmenttooltoevaluatewaterresourcerisksatallproductionbases.FortheCompany'sShenzhenandHuinanfacilities,waterphysicalrisksarehigh.Weusewaterresourcesproperlyandreducerisksthroughmeasuressuchastheinstallationofsensorfaucetsandwater-savingdevices.

Biodiversity Conservation

KTCwillcontinuetomonitorandrespondtothepotentialimpactofbusinessactivitiesonbiodiversity.ItrecognizestheKunming-MontrealGlobalBiodiversityFramework.Instrictcompliancewithrelevantnationallaws,regulationsandpolicies,includingtheOpinionsonFurtherStrengtheningtheProtectionofBiologicalDiversity,theLawofthePRConPreventionandControlofSoilContamination,andtheRegulationonGroundwaterManagement,itconductsriskassessmentandhazardidentification.Inthereportingperiod,itdidnothaveanyproductionbasesoroperationsiteswithinnaturalreservesorrichbiodiversityregions.Itsproduction,operations,productsorservicesdidnotinvolveanylarge-scalelanduseorhaveanymajorimpactonbiodiversity.

Physical

risks quantity

Waterstress

Groundwater table decline

Interannual

variability

Seasonalvariability

Drought risk

Riverineflood risk

Coastalflood risk

Shenzhen

facility

Medium

-

high

(2-3)

Low (<10%)

Negligible

trend

Low

-

medium

(0.25-0.50)

Low

-

medium

(0.33-0.66)

Medium(0.4-0.6)

Medium

-

high(2 in 1,000 to

6 in 1,000)

Medium

-

high(7 in 100,000to 3 in 10,000)

Huinan

facility

Medium

-

high

(2-3)

Low

-

medium

(10-20%)

Negligible

trend

Medium

-

high

(0.50-0.75)

Medium

-

high

(0.66-1.00)

Medium(0.4-0.6)

Low

(0 to 1 in

1,000)

Low

(0 to 9 in1,000,000)

Circular Economy

KTCmaintainsitsdeepunderstandingofthecirculareconomyandturnsthisintofirmaction.Itpromotesproductrecyclingandinternalmaterialrecycling,encouragesconsumerstoreturnusedproducts,andexploresthepossibilityofrecyclinginternalwastematerials.

KTC works with three regularsuppliers to recycle packagingmaterials. The three majorsuppliers recycled 864.53 tonnes,

555.86 tonnes, and 48.86 tonnes

of materials, respectively, in

2023

KTC'ssolid waste recycling for circular economy

KTC repairs defective products inthe production process based onits strict criteria. Products thatcannot be repaired will bedisassembled, and usable parts

will be reused

KTC sends glasses forLCD panels back to LCDpanel manufacturers forrecycling

6364

EmpoweringManufacturing with AITechnology

The Company is grounded in technological innovation and adheres to the philosophythat "technology improves living condition." Its three proprietary brands—"KTC, ""Horion", and "FPD" —target distinct market segments and user needs, offering aunique product range and delivering leading-edge system display solutions. In thefuture, the Company will continue to embrace its commitment to technology andinnovation, staying attuned to market changes and consumer demands whileexpanding its portfolio of smart hardware products. By integrating high-performancechips with AI LLMs, the Company aims to collaborate with global partners to provideconsumers worldwide with superior smart hardware products and services.

The SDGs addressed in this chapter

ESG Key Performance?In 2023, the Company's R&Dexpenditure is RMB617 million,accounting for 4.59% of the operatingincome.?In 2023, the Company has 1,552 R&Dpersonnel, accounting for 21.06% ofthe total number of employees.?The Company has obtained ISO 45001,ISO 9001, ISO 14001, QC 080000, andISO 27001 international managementsystem standard certification.

ESG Mid-term Goals?Promote green factory construction and the

super factory model as part of MTO

production, and build a global HQ center.?Focus on the development of AR, VR, AI

and other cutting-edge technologies to

enable a new generation of display products,

seize AI opportunities, and avoid AI risks.?Improve the quality management system

certification coverage, strengthen the HSF

hazardous substances management system,

and continue to expand the scale of

renewable energy use.

Sci-tech Innovation System BuildingKTCattachesgreatimportancetoadvancesandinnovationinproductsandservicetechnologies.Itiscustomerorientedandhasasitsmissiontoleadindustrialupgrading.Toalignwithdomesticandforeignadvancedtechnologies,itdevelopsandimplementslong-andshort-termtechnologydevelopmentplans.Itfocusesoninnovationandtechnologyaccumulationtobuilditscorecompetitiveness.

TheCompanyattachesgreatimportancetoR&Dsystembuilding.Throughinternaltrainingandexternalintroduction,ithasestablishedastrongteamofengineerswithprofessionalsoftwaredevelopment,hardwaredevelopment,structuraldesign,industrialdesignandothercapabilities.Itworkswithuniversitiesforindustry-university-researchcooperationandbuildsproductpipelinesthroughproductplanning,technicalpre-research,andcutting-edgetechnologyresearch.Currently,ithasR&Dteamsincutting-edgetechnologyfields,includingtheinternetofthings,bigdatatechnologyandalgorithms,embeddedcommunications,sensortechnologyandalgorithms,voicecontrol,andhuman-computerinteraction.

Sustainable R&D

R&DSystemBuilding

Byend-2023,theCompanyboasted1,552R&Demployees,accountingfor21.06%ofthetotal.Ofthem,63employeeshavemaster'sdegrees.R&DspendingamountedtoRMB616.87million,up21.18%YoYandaccountingfor4.59%ofcorebusinessrevenue.

The Company's concept of

R&D sustainability

R&D evaluation process

TheCompanyhasformulatedandimplementedinnovativeincentivesystemdocuments,suchastheKTCRegulationsonManagementofInnovationAwardIncentives,theRegulationsonIntellectualPropertyProtectionandManagement,andtheIntellectualPropertyRewardandPunishmentSystem,toadvancetechnologicalandmanagementinnovationinanall-roundmanner.IthasformulatedsystemdocumentsincludingtheR&DExpenseAccountingRegulationsandtheFinancialBudgetManagementProcedures.Thedocumentshaveidentifiedoptimaltechnicalroutesandmethodsofdoingthis,aswellasinvestmentpriorities.TheyhavealsodefinedtheprocessandresponsibledepartmentsforR&Dexpenseapproval,collection&accounting,andannualaudits,boostingtheCompany'sinnovationcapabilitiesthroughinstitutionalmanagementfortheuse,reimbursement,accountingscopeandaccountingrulesofR&Dexpenses.

1. Quickly adjust product

strategies based on markettrends and customer feedbackand enhance productcompetitiveness

2. Rapidly build prototypes

based on new technologies orpotential market opportunitiesto verify technology feasibilityand business modeleffectiveness

Short term

1. Increase R&D investment in

core technologies to buildtechnical barriers and corecompetitiveness

2. Platformizesuccessful products

so they can be quickly reused andexpanded into new applicationareas

3. Attach importance to talent

cultivation and introduction andbuild a high-quality, diverse R&Dteam

Medium term

1. Continue with R&D and innovation

of smart display products

2. Create a culture and mechanism

that encourages innovation amongteam members

3. Incorporate the sustainability

concept into R&D strategies anddevelop products and technologiesin line with the requirements ofgreen, low-carbon and circulardevelopment while fulfilling socialresponsibilities and contributing tosociety

Long term

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R&DTechnologyResourcesKTCpossessesstrongR&Dcapabilities.Ithasaseriesoftestingandacceptanceequipmentthatenablecomprehensivetestingandevaluationofdisplayproductsonmetricssuchastransmissionsignalquality,overloadingsimulation,componentperformance,reliability,andanti-interferencetoensureexcellentproductqualityandperformancemeetnationalandindustrystandards.Meanwhile,itprovidescompletevalidationdataforproductdesignperformanceindicators.

The Company's R&D equipment (selected)

R&D AchievementsTheCompanyisdeeplyinvolvedinsmartinteractivedisplaytechnology,andattachesgreatimportancetocutting-edgetechnology&productR&Dandresourceinvestment.Bytheendof2023,ithad1,208validauthorizedpatentsandsoftwarecopyrights,including89inventionpatents,417utilitymodelpatents,177designpatents,and525softwarecopyrights.KTCanditsfivesubsidiaries,includingKTCCommercial,KTCIntelligent,Horion,HorionSoftware,andKTCMedical,wererecognizedasNationalHigh-TechEnterprises.KTCwasselectedasaNational-LevelManufacturingSingle-ItemChampionEnterpriseandaProvincial-LevelManufacturingSingle-ItemChampionGnterpriseinGuangdong.KTCCommercialwasrecognizedasaNational-LevelSpecializedandInnovative“LittleGiant"Enterprise.

Technology innovation platform certifications

Signal quality testerElectronic loadComponent performance tester

High and low temperature aging tester

Automatic testerLightning surge generator

Touch

Wireless screen

mirroring

Motion sensing

Infrared touch technology allowsmultiple users to write simultaneously.The line thickness and colors areoptional, and brush strokes are

smooth

Wireless screen mirroring betweendevices, such as phones, pads andcomputers, is smooth in real time,with low latency and high quality

A built-in camera can capture thebody's motion posture and detect itskey bone points. Combine this with

precision calibration technology for

scientific, standardized motion

guidance

The Company's major R&D technologies

(selected)

Optical displayAcoustics

Intelligent color

calibration

High-partition mini backlight designallows for independent control of

each partition. The use ofsophisticated local dimmingcreates contrast and visual

hierarchy

HiFi sound quality, professionalacoustic tuning, and bass boostcreate an immersive experience

Devices are calibrated separately toachieve overall color control. Newcolor calibration technology restores

the colors across scenarios6970

Product QualityAdheringtothebusinessphilosophyofintegritymanagement,KTCiscustomer-centricandtakesqualityaslife.TheCompanyupholdsthequalityconceptofcreatingexcellentperformancewithprocessexcellenceandexceedingcustomerexpectations.Itstrictlycontrolsqualityforcustomers.KTCstrictlyadherestoquality-relatedlaws,regulationsandstandardsinallitsoperatinglocationsworldwide,includingtheProductQualityLawofthePRCandtheStandardizationLawofthePRC.Accordingtointernationalstandards,suchasChinaRoHS,EURoHS,EUREACH,theUSTSCA,EUPOPs,GermanGSPAHs,theEUBatteryDirective,andtheEUPackagingDirective,theCompanystrictlycontrolsthequalityandsafetyofproductmaterials.Asof2023,theCompanyobtainedinternationalmanagementsystemcertificationssuchasISO45001,ISO9001,ISO14001,QC080000,andISO27001andreportednoproductqualityandsafetylawviolations.Toensureproductcompliancewithcustomerneedsandenhancecorporatereputationandproductcompetitiveness,KTChasadocumentedinformationsecuritymanagementsysteminplace.TheCompanyhasdevelopedtheQuality,EnvironmentandSafetyManual,withcorrespondingsystemsfordifferentmanagementprocesses,includingtheProductCertificationControlProcedure,theNon-ConformityControlProcedure,andtheConformityAssessmentProcedureforHazardousSubstanceManagement.

Quality management system related certifications

Green Development, Comprehensive Quality Control

Quality management system related certifications

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?A focus on customers’energy-saving andenvironmental protectionneeds

KTCadherestotheserviceconceptof"Customersourtoppriority,deliverinspiration".Throughtechnologicalinnovationandrefinedmanagement,itensuresthatitsproductsandservicescanmeetdiversecustomerneedsandmaximizecustomervalue.KTChasdevelopedandcontinuouslyoptimizedcustomerservicemethodsandprocessestoensurethatuserssolveproblemsinthefirstplaceandenjoythebestqualityofserviceexperience.Data-driven,systematicanddigitalmanagementenablesKTCtogainaccurateinsightsintocustomerneeds,allowingforreal-timemonitoringandefficientanalysisofserviceprocessestospeedupproblemsolvingandimproveservicequality.Todrivetheimprovementofproductsanduserexperience,KTChassetupanAfter-SalesServiceDepartment,whichservesthedomesticmarketandexpandsinternationallytoensurethatcustomersworldwidecanenjoyitshigh-standardservices.Toallowaccesstoservicesupportmoreconveniently,KTChasestablishedadedicatedservicewindow,includingphonecalls,videochats,emailsandotherinstantformsofcommunication,sothatuserscanchoosethewaytheywanttoaskquestions,providefeedback,orseekhelp.

Customer Services

Tomeetthevariousneedsofusersduringproductuse,KTCoffersavarietyofservicessuchassparepartssupply,depotrepair,andthird-partymail-inrepair.

Case study｜Spareparts services for environmental protection and efficiency

Withgrowingcustomerexpectationsforreliabilityandcontinuedsupport,andinresponsetoenvironmentalcalls,KTCprovidesefficient,eco-friendlysparepartsservicesandrapid,accuratesparepartsreplacementsolutionstoreduceproductdowntimewhileimplementingeco-friendlypackagingandrecyclingprogramstominimizeenvironmentalimpact.Inthereportingperiod,KTC'ssparepartsservicesreducedthewaitingtimeforcustomers,witha30%riseintheaverageresponsetime.Throughitspartsrecyclingprogram,KTChasachievedtherecyclingandreuseofsomeaccessories,reducingwasteandcontributingtotheenvironment.Goingforward,itwillcontinuetoinvestin

technologyandprocessinnovationtoimprovetheefficiencyandenvironmentalperformanceofsparepartsservices.Itwillexplorenewwaysofusingsustainablematerialsandincreasingusedpartsutilizationtostrengthencommitmenttoenvironmentalprotectionandsocialresponsibility.

Case study｜Depotrepair services for sustainability

Oncecustomerssubmitarepairrequest,KTCwillprovidedoor-to-doorlogisticssupporttoensurethattheproductsreachtherepaircentersafelyandquickly.Throughdiagnosis,repairandqualitychecks,KTCensuresproductsarerestoredtooptimalworkingconditions.Inthereportingperiod,KTCrepairedproductsandextendedtheirlifecyclesthroughdepotrepairservices,greatlyreducingtheenvironmentalburdencausedbyproductobsolescence.Basedoncustomerfeedback,thishasboostedcustomersatisfactiongreatlyandenhancedbrandloyaltyandmarketcompetitiveness.Tofurtherimproveserviceefficiencyandcustomerexperience,KTCcontinuestodevelopmoreadvancedmaintenancetechnologyandmanagementsystems.Byusingmoreeco-friendlymaterialsandprocesses,KTCreducescarbonemissionsduringmaintenanceasitcontinuestoadvanceitsenvironmentalachievements.

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Customers candescribe theirproblems in theconsultation andcomplaintsection on KTC'swebsite. TheCompany willrespond as soonas it can.

Message service

Customers cancontact KTConline through itswebsite or socialmedia platformsto get answersquickly.

Online service

KTCoffers on itswebsitea hotlinewhere customerscan call in to getdetailed answersand professionaladvice.

Phone service

Customers canconnect withKTC'scustomersupport teamthrough real-timevideo calls. Videois a moreimmediate andconvenient formof service.

Video service

KTC'scustomer service model

KTC'scustomer service model

Spare parts serviceBased on customer needs and marketfeedback, KTC provides technicalsupport services, such as spare partsinstallation and replacement, andspare parts services

Depot repair serviceKTC offers repair services for thosewho need a parts repair orreplacement. Customers can delivertheir devices to designatedlocations for repair and testing

Third-party mail-inrepair serviceKTC can arrange for a third-partydoor-to-door repair or a mail-inrepair to ensure that its customersare hassle free

Customer Feedback Processing

ForToBCustomersKTChasestablisheddiversifiedcustomercommunicationchannelsthroughouttheuserserviceprocessbasedonbusinessunitstoensuretimelyresponsetouserneeds.FortoBcustomers,ithasformulatedtheProductandServiceControlProcedureandtheAbnormalFeedbackProcessingSpecification,whichclearlydefinekeyelementssuchasthedefinitionofcomplaint,responsibilityallocation,andprocessflow.Itanalyzesindepththecomplaintsreceivedandusestheestablishedinformationfeedbackmechanismtoensuretimelyinformationtransmission,effectivecoordinationandtracking,issueescalation,andprogressandresulttracking.Inthisway,itcreatesacompleteclosed-loopmanagementsystemforhandlinguserproblems.

1. Receive customer feedback

Customerscanlodgecomplaintsviaphone,email,onlinechat,etc.Acomplaintshouldbe

respondedtowithinfourworkinghoursasrequired

2. Record and verify feedback

After-salesandrelevantdepartmentheadsconductpreliminaryassessmentsofcomplaints,determinetheurgencyandnatureofcomplaintsandthedepartmentsinvolved,andrecorddetailedinformationonthecontentandtimeofcomplaints,customercontactinformation,etc

3. Analyze and solve problems

Taketemporarycountermeasuresandremedialmeasuresforproductsintransit/storage,analyzedefectiveproductsandsamples,lookatwhydefectshaveoccurredandnotbeencaught,produceanalysisreports,implementimprovementmeasures,andtracktheeffectivenessofimprovements

4. Follow up and close cases

Providefeedbacktocustomersontheprogressandresultsofincidentanalysis,exploremoresolutions,andadoptpro-sustainabilityresponses

Customer satisfaction:

92.81

ForToCCustomers

Forexample,toCcustomerscancontactHorion,asubsidiaryofKTC,throughitsservicehotline4006-818-999/WeChatofficialaccount/mall/platformcustomerserviceandpurchasechannelsforinquiries,repairs,complaints,orsuggestions.

TheCompanyrequirescustomersupportstafftodeterminetheeffectivenessandtypeofinquiriesandtheTechnicalAfter-

SalesDepartmenttoimplementtheprocessingmechanism.Basedonthetypeofproblemsreported,theCompanyshouldcontactcustomerswithintwoworkinghours,anddispatchtechniciansfordebuggingwithin24hours.TheCompanyshouldcompletegeneralsoftwarefaulthandlingwithin72hoursandhardwarefaulthandlingwithin2-4weeks.TheCompanyshouldkeeptheinquiryclosurerateat100%.

1. Receive customer inquiries

Receivecustomerinquiriesandrecorddetailedinformationonthecontentandtimeofinquiries,contactinformation,etc

2. Perform preliminary assessments

Customerservicerepresentativestrytoprovideasolutionfromtheirend.Iftheycannotfindananswer,thentheycreateaticket

3. Assign tasks

Basedontherules,thesystemdirectscustomerinquiriestocorrespondingafter-salesstaff

4. Develop solutions

Developtargetedsolutionsbasedonfaultproblemsandcommunicatewithcustomersfor

confirmation

5. Implement solutions

Followestablishedplanstoensurethatproblemsareresolved

IndicatorUnit202120222023

Number of inquiries received regardingproducts and services

/8,8399,66618,786Handling rate of inquiries%100%100%100%7576

Complaint response rate andhandling rate: 100%

Complaints about informationleakage: zero

Responsible Marketing

KTCattachesgreatimportancetosafeguardingthelegitimaterightsandinterestsofcustomers.Instrictcompliancewithrelevantlawsandregulations,includingtheAdvertisingLawofthePRC,theMeasuresfortheAdministrationofInternetAdvertising,theRegulationsonControlofAdvertisements,theAdministrativeMeasuresforLivestreamingMarketing(forTrialImplementation),andtheAdministrativeMeasuresforSalesPromotionActsofRetailers,theCompanydisclosesproductioninformationtruthfullyandrejectsfalsemarketing.In2023,theCompanysteppedupadvertisingandpromotioneffortsforitsproprietarybrands,KTC,HorionandFPD.Withinsellingexpenses,itsadvertisingexpenseswereaboutRMB65million,up86.94%YoY.Ithasdevelopedanofficeautomation(OA)processforOnlineInformationPublishingApplications.Foritsproductandservicepublicityefforts,allcontentischeckedbyproduct,marketing,sales,customerservice,andotherdepartments,beforebeingreleasedafterconfirmationbydepartmentmanagers,websiteadministrators,andthemanageroftheboardsecretaryoffice.Forpromotionalmaterialslikeproductdetailspagesandadvertisingpages,itspecifies,amongothers,datasources,informationsources,andrestrictionsinwayssuchasremarkstopreventaudiencemisunderstanding.Itsinternalcontrolauditstherelevantspecifications,processes,projectsandexpenses,andrequiresfollow-upimprovementwithproject-andexpense-relatedissues.Ithasmadeinitialupdatestotherelevantspecifications.IncompliancewiththeMeasuresfortheAdministrationofCertificationCertificatesandCertificationMarksandbasedontheQS02-10DesignandDevelopmentControlProcedure,theQS02-12IdentificationandTraceabilityControlProcedure,theQS02-15ProductCertificationControlProcedure,andtheQS02-29ConformityAssessmentProcedureforHazardousSubstanceManagement,theCompanypromotesgreenandstandardizedproductlabelmanagementforsustainability.

Customer Training Services

To improve customer services in an all-round manner, KTC provides information on how to use products and whatprecautions to take, and offers technical support as well as troubleshooting guidance, knowledge and skills.Customers can gain a deeper understanding of product functions, features, and applications, thereby maximizing thepotential value of products.Case study｜Customertraining services –helping customers grow and succeedInresponsetotheever-intensifyingcompetitionandmorediversecustomerneeds,KTCprovidestrainingservicesforcustomerstohelpthembetterunderstandproductuseandafter-salesmaintenance,improvingafter-salesserviceefficiencyandcompetitiveness.In2023,KTCofferedmaintenancemanualsandtrainingmaterialstodomesticandforeigncustomerstohelpthemgetfamiliarwithproductcharacteristics,mastertroubleshootingskills,andsolveproblemsintheafter-salesserviceprocess.Sincetheprovisionoftrainingservices,customershavereporteda20%increaseinafter-salesmaintenanceefficiency.Goingforward,KTCwillcontinuetooptimizeandexpandcustomertrainingserviceswithmorepersonalizedandinteractivetrainingprogramstoensurethatitcanmeetthechangingneedsofcustomersandgrowtogetherwiththem.

In2023,LLMtechnologyadvancedrapidlyworldwide.Astheintegrationofalgorithmapplicationsandhardwareaccelerates,thetrendofsmartdisplayconsumptionmaylookgoodlong-term.First,smarthomesaremoreintelligentandpersonalized.LLM-basedvoiceassistantscanunderstanduserneedsmoreaccuratelyandprovidepersonalizedservicesandsuggestionstoimproveuserexperience.Second,homeappliancesaremoreconnectedthanever.LLMtechnologyenableshomeappliancesofdifferentbrandsandtypestocommunicatetobuildasmarterecosystem.Userscancontroldevicesthroughaunifiedapp,therebyfurtherimprovingconvenience.LLMsarealsoimportantinthedesignandR&Dofhomeappliances.Usingbigdataanalysisandintelligentalgorithms,companiescancapturemarkettrendsandconsumerpreferencesmorequicklytoshortentheR&Dcycleandaccelerateproductiteration.Theapplicationofintelligentmaintenanceandfaultpredictiontechnologieshasextendedthelifeofhomeappliancesandreducedmaintenancecosts.Amidgreatchangesintheexternalenvironment,KTCtakessci-techethicsmanagementseriouslyinthefaceofnewtechnologyapplicationsandproductiterations.In2023,itadheredtoapragmaticattitude.Itupheldtheprincipleofsteadydevelopment,andbasedonindustrysupervisionandpolicyrequirements,itmovedtolearnabouttheadvancedmanagementmodelsandcompliancedynamicsofinternetcompanies.Italsomovedtokeepupwithtechnology

iterations,learnnewLLMconcepts,andunderstandnewtechnologytrendsfromtheperspectiveofproductR&D.Toensurethattheethicalbottomlineisupheldinthejourneyofsci-techdevelopment,KTChastakentheinitiativetolearnandunderstandlawsandregulationsofimportantguidingsignificance,suchastheInterimMeasuresfortheManagementofGenerativeAIServicesandtheAdministrativeProvisionsonDeepSynthesisinInternet-basedInformationServices.Inthisway,itaimstoclarifyitsresponsibilitiesandobligationsintermsofsci-techethicsandimprovetheinternalmanagementmechanismtopromotetechnologicalinnovationanddevelopmentslikeAI.

Case study｜KTCholds internal discussions on future technology application and related ethics

KTCattachesgreatimportancetotheuseofnewtechnologiesinsmartdisplaydevices.Duringexploration,KTCisalsokeenlyawareofthesecurityissuesthatmightarise.Giventhis,KTCdiscussescutting-edgetechnologiessuchasLLMs,AI,VR,andARfromtimetotimetotakealookatthetrendsandusecasesofthesetechnologiesandconsiderthepotentialrisksduringapplicationandthesci-techethicalissuesinvolved.

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Science and Technology Ethics

Industry and CommunityEngagementA supply chain management model that balances environmental, social, andeconomic benefits is crucial for enhancing a company's core competitiveness acrossmultiple dimensions. KTC integrates sustainability assessments into procurementdecisions and supplier management, establishing a sustainable supply chainmanagement system that promotes a transition toward high-quality, green, and low-carbon practices. Furthermore, maintaining strong community-enterprise relations isessential for achieving sustainable operations; thus, the Company places significantemphasis on community feedback and needs, collaborating with partners to build aharmonious and healthy society.

The SDGs addressed in this chapter

ESG Key Performance?By the end of 2023, KTC has 1,373suppliers, with local suppliers accountingfor 80%.

?The percentage of new suppliers using

ESG dimension assessment in the current

period is 100%.?In 2023, the Company has invested a

total of RMB 6.19 million in charitable

donations, and 220 employees have

participated in public welfare activities.

ESG Mid-term Goals?Maintain a high proportion of localprocurement.?The growth rate of funds invested incommunity development is greater than or

equal to the growth rate of net profit of the

Company to create harmonious

community relations.

KTCiscommittedtobuildingasustainablesupplychain.Whilemeetingprocurementneedsandfulfillingcontractsinatimelymanner,italsodrivessupplierstoimprovetheirsustainabilityperformance.Itprovidesfullchain/fulllifecyclemanagementfromsupplieronboardingandprocurementtoevaluationandempowerment,withstrictonboardingandmanagementpoliciesforsuppliersintermsofenvironmentalprotection,quality,andbusinessethics.

Governance

TheCompanyhasasoundsupplychainmanagementsystemtoensurealong-term,stablesupplyofgoods,servicesandrawmaterialsrelatedtoitsbusiness.

Responsible Supply Chain

Risk ManagementTheriskofsupplychaindisruptionscanhaveasignificantimpactonourbusinessoperations,soweidentifykeysuppliers(basedonthequantityorimportanceofsuppliedmaterials)topinpointareasofsupplychainriskanddevelopa

riskmanagementstrategy.Forhighlydependentrawmaterials,wehaveintroducedasecondorthirdsuppliertolowertheriskofsinglesupplierdependence.Basedontheinventorystrategy,weadjustinventorylevelsandmaintainappropriatesafetystockforhigh-riskmaterialsincaseofshort-termsupplydisruptions.KTCregularlyevaluatessupplierperformancebasedonindicatorslikeprices,on-timedeliveryrates,companybasics,yields,andonlinedefectratesaspartofsupplierselectionandmanagement.

The Company's supply chain governance framework

BOD

ESG Committee

ESG Working Group

Management

MaterialManagement

Division

Manufacturing base

Execution

Production

Division

Quality Control

Division

Manufacturing baseSubsidiarySubsidiary

(1) Risks related to human rights

(2)Risks related to conflicts

(3) Risks related to governance

(4) Risks related to environmental protection and occupational health and safety

The risk categories that KTC focuses on

Iftherearereasonablegroundstobelievethatasupplierisrisky,wewillimmediatelydevise,adoptandimplementariskmanagementplanwithupstreamsuppliersandotherstakeholdersbasedonitsspecificpositioninthesupplychaintopreventormitigatespecificrisks.Wewillimmediatelysuspendorterminatecooperationwithveryhigh-risksuppliers.Wewillcontinuetomonitorandtracktheimplementationandcompletionofriskmanagementplans,andassessperiodicallytheeffectivenessoftheirimplementation.

Number ofsuppliers1,373AA & AAA-rated

1,236Overseas

1,167

By typeBy geographyA -ratedChina

Distribution of suppliers, 2023

8182

Supply Chain Management System

Basedonthetypeofproductstheysupply,KTCcategorizessuppliersintofourgroups:mainmaterials,devices,structuralparts,andcomponentssuppliers.Basedonthesourceoftheirproducts,itcategorizessuppliersintotwogroups:manufacturinganddistributorsuppliers.Itdevelopsdifferentprocurementmanagementstrategiesaccordingtotheprocurementneedsofdifferentmodules,suchashierarchicalmanagementofsuppliers,eliminationofexclusivesupplyforkeymaterials,supplierassistance,costcontrol,performanceevaluation,etc.Toensuresupplychainsustainability,theCompanyhasestablishedasoundpolicysystemforeachkeylinkofthevalue

chain,mainlyincludingtheTransparentCooperationAgreement,theNewSupplierEvaluationReport,andtheOther

StakeholderRequirements.TheMaterialsCenterisresponsibleforsupplierdevelopmentandmanagement.

SupplyChainManagementProcess

Regardingsuppliermanagement,KTChasestablishedpoliciesthroughouttheentiresupplierlifecyclefortheMaterialsCenter.Itssupplier-relatedpoliciesincludetheNewSupplierAuditReport,theRegulationsfortheManagementofSupplierReassessment,andtheProcurementManagementControlProcedure.Itconductsregular(semi-annual/annual)supplierperformanceevaluations,coveringaspectssuchasquality,cost,delivery,andservice.

Supplier onboarding

KTChasestablishedthesupplierreviewcontrolprocessandproceduresforsupplieronboardingandconductspreliminaryassessmentbasedonthesupplierinformationobtainedfromvariouschannels.First,itwillprioritizeenterpriseswithquality,QC080000,ISO14001,andISO45001certificationsinevaluationandassesstheimplementationbysuppliersoftheResponsibleBusinessAlliance(RBA)CodeofConduct.Second,itwillprioritizesupplierswithgoodproductquality,affordablepricing,soundafter-salesservice,strongsupplycapacity,andtimelydelivery.ItwillsendaSupplierSurveyFormtothesuppliersdeemedappropriateafterevaluationforthemtocompleteandthensendbacktoitsProcurementDepartmentforreview.

Supplier assessmentDuringassessments,KTCfocusesonsupplierperformanceinenvironmentalandsocialriskmanagement,suchasenvironment,quality,andlaborrights,andhasformulatedregulationsliketheSupplierRe-evaluationManagementRegulations,theProcurementManagementControlProcedure,andtheSupplierRatingandPriceComparisonManagement.Suppliersarere-evaluatedeverysixmonthsbasedoncriterialikeprice,delivery,service,RBAcompliance,securetrade&quality,andenvironment&safety.Thefullscoreis100.SuppliersareratedAAA(best)iftheyscore85orabove,AA(secondbest)iftheyscorebetween60-85,andA(general)iftheyscorebelow60.A:ForsuppliersratedAinsemi-annualassessments,theSupplierQualityEngineering(SQE)Divisionrunsasupplierreviewmeetingandprovideson-siteguidanceforimprovement.Suchsuppliersarerequiredtoimprovetheirratingwithinthreemonths.AA:ForsuppliersratedAAinmonthlyreviews,theSQEDivisionrunsasupplierreviewmeetingandfollowsup.

The Company's supply chain management system

Intermsofsupplierdistribution,theCompanyworkswithlocalsupplierstocutlogisticscosts,reduceGHGemissions,maintaincommunityrelations,andpromotelocaldevelopment.Byend-2023,itregistered1,373suppliersandsourced80%ofitsprocurementfromlocalsuppliers.

Local Supply Chain

IndicatorUnit202120222023

Number of suppliers/8131,0561,373Percentage of procurement from local suppliers%75%78%80%8384

?Continuous supply guarantees?Cost efficiency?Flexible response to market changes?Quality control?Sustainability and compliance

Supply chain riskmanagement objectives

?Supplier management?Inventory strategy?Contract management

Specific plans

?Risk assessment?Risk monitoring and reporting system?Business continuity plan

Risk responsemechanism

?Supply chain integration?Technical input?Training and development?Performance evaluation

Measures &implementation results

?Continuous improvement mechanism?Supplier collaboration and development

Continuousimprovements

ConflictMinerals

Currently,KTC'soperationsdonotinvolveconflictminerals.Incaseofchanges,theCompanywillupholdtheUSDodd-FrankAct,theEUConflictMineralsRegulation,andtheChineseDueDiligenceGuidelinesforResponsibleMineralSupplyChains,andpromisenottopurchaseorusethematerialssourceddirectlyorindirectlyfromconflictandhigh-riskareas,includingbutnotlimitedtotin,tantalum,tungsten,cobaltandgold.

SupplyChainESGManagement

KTCrequiresitssupplierstofollowhighstandardsofbusinessethicsandformulateformalbusinessethicspolicies.ThroughtheProcurementAgreement,itcommitsitssupplierstotheprinciplesofconfidentialityandtransparentprocurement.ItaskssupplierstosignaTransparentCooperationAgreement.Thesemovesbolsterintegrityandbusinessethicsmanagementandpreventharmtotheinterestsofbothpartiesforthebenefitoflong-termpartnerships.TheCompanyrequiresitssupplierstoincludesocialresponsibilityclausesintheOtherStakeholderRequirementstoensurethattheyparticipatein,understandandworkwithsocialresponsibilitysystemmanagementandoperations.Itasksitssupplierstoensureasafeandhealthyworkingenvironmentforemployeesandnottouseforcedlabor.Byend-2023,theCompanyhad1,373suppliers.ItevaluatedallofitsexistingandnewsuppliersfromanESG

perspective.

IndicatorUnit202120222023

Number of suppliers with ESG assessment/8131,0561,373Percentage of new suppliers assessed onESG criteria

%100%100%100%

KTCattachesimportancetoproductqualityandR&Dinnovation.Itseekstoprovidecutting-edgehigh-qualityproductsandexploreswaystocommercializeR&Dresults.Ithaspresidedoverorparticipatedintheformulationof17nationalorgroupstandards,liketheminimumallowablevaluesofenergyefficiencyandenergyefficiencygradesfordisplays(nationalstandard),theColorimetry-Part4:CIE1976L*a*b*Colourspace(nationalstandard),thegeneralspecificationfordigitalsignage(groupstandard),andthetechnicalspecificationforWi-Ficonnectionlevelofsmarthomedevices(groupstandard),tocontributetoindustrydevelopment.

Fueling Industry Development

KTC presides over or participates in standard setting

standards

National standards: Specification of green supply chain management

for manufacturing enterprises in electronics information industryMinimum allowable values of energy efficiency and energy efficiency

grades for displaysColorimetry -Part 4: CIE 1976 L*a*b* Colourspace

Smart conference system Part 1:

technical frameworkSmart conference system Part 2:

conference tablet system

General technical requirementsfor information security of Internetconnected consumer appliancesInformation security testing andevaluation requirements forInternet connected consumerappliances—Smart camera

Smart Classroom Evaluation Technical Specifications

Part 1: Interactive all in one machineSmart Classroom Certification Technical Specification

Part 2: Interactive projection systemSmart Classroom Certification Technical Specification

Part 3: Application of the "Three Classroom"Smart Classroom Technical Specification Part 4:

Electronic class panelSmart Classroom Technical Specification Part 5:

Learning terminal

General specification for computer forliquid crystal display deviceGeneral specification for digital signageGeneral technical specification fortouch system of interactive boardTechnical specification for Wi-Ficonnection level of smart home devicesTechnical specification for green-design product assessment—Interactive touch machine

8586

Case study｜University-enterprise cooperationKTChighlyvaluescooperationwithhighereducationinstitutionsandworkstocreateaninnovativeecosystemthatintegratesindustry,academiaandresearch.IthasestablishedsolidpartnershipswithtopuniversitiesinChina,suchasXiamenUniversityandSouthernUniversityofScienceandTechnology(SUSTech),helpingtopromoteproductR&Dupgrades,talentdevelopmentandtechnologicalinnovation.KTC'scollaborationwithXiamenUniversitycontributesnewideasforitsproductupgradingandreinforcesitsinfluenceintheacademiccommunity.Aspartofgraduatetrainingcooperation,KTC'sR&DGeneralManagerservesasaDistinguishedProfessoratSUSTech.SuchacademicexchangeandteachingpracticebuildatalentandtechnologypipelineforKTCinsupportofcutting-edgetechnologyresearch.

Creating Harmonious Society

Case study｜Educationalsupport for vulnerable childrenKTCiswellawareofitscorporateresponsibility,andparticipatesinpublicwelfareactivities,withafocusoneducationandchildren'swellbeing.KTCemployeeshavevisitedlow-incomefamiliesinShenzhen'surbanvillagestounderstand,throughface-to-facecommunication,andimprovetheenvironmentvulnerablemigrantchildrengrewupin.Employeesconveytheirlovethroughcompanionshiptohelpvulnerablemigrantchildrengrow,highlightingthewarmthandresponsibilityofKTC.

In2023,KTCinvestedRMB6,190,100inphilanthropy,up70%YoY.Around220employeestookpartinpublicwelfareactivities,withatotalservicetimeofabout15,476hours.

IndicatorUnit202120222023

Number of employees participatingin public welfare activities

/235352220Volunteer service hours/13,619120,41615,476Investment in philanthropyRMB10,00096.46364.45619.01Social welfareRMB10,00056.4683.54129.97HealthcareRMB10,0003060.92464.5EducationRMB10,000012016.5Poverty alleviationRMB10,000101008.04

8788

Note:InvestmentinphilanthropyincludesmoneyandmaterialdonationsfromtheCompanyanditsemployees,employeefinancialsupportofferedbyitsmutualaidfund,etc.

Case study｜KTCsupports vocational students

KTC'seffortsinsupportingskillseducationdemonstrateitsfar-reachingimpactonsocialtalentdevelopment.With

contributionstotheSpecialEducationDevelopmentFund,KTCsupportsstudentsfromShenzhenXiechuangSeniorTechnicalSchooltohelpthemacquireprofessionalskillsandopenthedoorstoasuccessfulfutureforthem.Througheducationalpublicwelfareactivities,KTCbringsknowledgeandskillstochildren,andsetsthestageforthemtorealizetheirdreams,allowingthemtothrivewithcareandsupport.

Note: Shown in the picture are student representatives of the school, not direct funding recipients.

Case study｜KTCtakes social responsibility and participate in public welfare programs

KTCorganizesemployeestoregularlyparticipateinvolunteerserviceactivitiesinGangtouCommunity,BantianSubdistricttoservecommunityresidents.Throughtheseactivities,Companyemployeeshavecultivateddeepconnectionswithcommunityresidents,promotingcommunitycohesionandresidentwellbeingandcontributingtoabetterenvironmentandqualityoflife.

8990

Case study｜KTCextends love and warms the community

KTCintegratesasenseofsocialresponsibilityandpublicwelfarespiritintoitscorporateculture,andencouragesemployeestoparticipateincharitableactivitiessuchasfreeblooddonation.UndertheCompany'sleadership,employeeshaveparticipatedincommunity-organizedfreeblooddonationcampaigns.Throughsuchactivities,KTCershavedemonstratedtheirsocialresponsibilityandcreatedanenvironmentfullofloveandwarmthwithcommunityresidents.

Case study｜KTC'schapter of saving lives

KTC employees bring us a heartwarming chapter of saving lives. A KTC employee has donatedhematopoietic stem cells to a blood disease patient. From making a commitment in college, to signingup to the bone marrow donor registry, to finally making that donation, he has the full support of hisfamily and KTC. During the process, KTC provided the necessary vacation and care for him to ensurethe donation is completed successfully. His selflessness is an epitome of KTC'sactive involvement insocial welfare. KTC'ssupport for employee participation in public welfare conveys a sense of socialresponsibility and care for employees.

A Diverse,Collaborative TeamAs societal demands for corporate labor rights protection become more stringent,KTC is committed to enhancing talent attraction and fostering a diverse andinclusive workplace. We have established a comprehensive labor riskmanagement system to safeguard employees' legitimate rights and interestswhile focusing on talent development. Our training framework, infused with theunique culture of our company, offers a range of programs on skillsenhancement, leadership, ESG, and other diverse topics. We have alsorefined our compensation, benefits, and performance evaluation systems toshare the fruits of development with our employees. At the same time, weattach great importance to the occupational health and safety of our employees,have established an efficient management mechanism, and are committed toimproving employee safety performance.

The SDGs addressed in this chapter

ESG Key Performance?By 2023, the Company's global workforce hadreached 7,370 people. Female employees hadaccounted for 35.96%; The proportion of femalesenior management employees had been 7.14%,and the labor contract signing rate had been 100%.?In 2023, the Company had continued to increase

investment in employee training, and the average

number of training hours received by employees

had significantly increased to 89.88 hours. The

employee training coverage rate had reached

99.69%.

?KTC, KTC Commercial, and Huizhou KTC had all

obtained ISO 45001 occupational health and safety

management system certification.

?There will be no major human rights

violations, and the safety productionmanagement system will be continuouslyimproved.?Build a diverse, inclusive, equal, andwomen friendly workplace.?Maintain a 100% signing rate of labor

contracts, continuously improve employeetraining coverage, and enhance theemployee development and promotionsystem.

ESG Mid-term Goals

KTCtakespracticalactiontosupporttheUDHR,theInternationalBillofHumanRights,theILOcoreconventions,theUNGPs,andtheResponsibleBusinessAllianceCodeofConduct,aswellasrelevantlawsandregulationsinitsoperatingjurisdictions.ItstrictlyabidesbylawsandregulationssuchastheLaborLawofthePRC,theLaborContractLawofthePRC,theSocialInsuranceLawofthePRC,theSpecialRulesontheLaborProtectionofFemaleEmployees,

andtheRegulationonPaidAnnualLeaveforEmployees.KTChasissuedinternalsystemdocuments,includingtheKTCHumanResourcesManagementManualandtheHumanResourcesControlProcedure,toenableemployeestounderstandtheirrightsandinterestsandoverseetheCompany'sprovisionoftreatmentandconditionsforthem.Instrictcompliancewithbothinternationallaborlawsandlaborstandardsinitsoperatingareas,itseekstocreateadiverse,inclusiveworkplaceandsafeguardemployeerightsandinterests.KTC'soverallemployeedevelopmentstrategyisformulatedbytheBODandimplementedbythemanagementledbytheGeneralManager.TheHRDepartmentismainlyresponsiblefortheCompany'sHRworkandinchargeofemployeedevelopment-relatedmatters,suchascompensation&benefits,diversifiedemployment,laborrights,andemployeetraining.AllCompanysubsidiarieshaveHRdepartmentsorspecialistsinplacetocarryoutrelatedworktoprotectemployeerights.In2023,theCompanyfoundnoviolationsoflabor-relatedlawsandregulations,andall,or100%,ofitsfull-timeemployeessignedlaborcontracts.

Build a Diverse TeamAccordingtointernalpoliciessuchastheKTCHumanResourcesManagementManual,theKTCPromotionManagementSystem,andtheAnti-DiscriminationControlProcedure,KTCmakescleartheprinciplesofdiversifiedemployeerecruitmentandmanagement.Aspartofourrecruitmentprocessandotherinternalactivities,wedonotdiscriminateortreatanyonedifferentlyinareasofemployment,compensation,trainingandpromotionbasedonrace,color,religion,gender,sexualorientation,nationalorigin,age,genetics,disability,maritalstatus,orotherfactorsnotrelatedtothelegitimatebusinessinterestsoftheCompany.

Company employee mix, 2023

Employment Compliance andDiversity

Overview of KTC'semployee policies

Aged <30,45%Aged 30-50, 53%

Aged 30-50, 53%Aged >50,

2%

Aged >50,

2%

30岁以下员工30～50岁员工50岁以上员工

30岁以下员工30～50岁员工50岁以上员工

6,105

6,263

7,370

2,0004,0006,0008,000

2021年2022年2023年

Number of employeess

6,105

6,263

7,370

2,0004,0006,0008,000

2021年2022年2023年

Number of employeess

Respect Workers' Human RightsInstrictcompliancewiththeTradeUnionLawofthePRCandrelatedlawsandregulations,KTCestablishesaunion

andaworkers'congress,anddesignatesCompanyrepresentativesforequalconsultationwithemployee

representativesonmatterssuchasemployeeinterests.Afterapprovalthroughademocraticprocess,aCollectiveContractissigned.KTCprohibitsforcedandchildlaborandprotectsthehumanrightsofworkerswiththeformulationofpoliciesliketheFreeOccupationalChoiceControlProcedureandtheYoungWorkerManagementandControlProcedure.AspertheControlProcedureforPreventionofInhumanTreatment,KTCdoesnottolerateillegalharassmentintheworkplace.Illegalharassmentincludesnotonlysexualharassment,butharassmentonthebasisofrace,color,religion,nationalorigin,ethnicorigin,age,disability,maritalstatus,militaryservicestatus,oranyotherprotectedclassification.KTCstronglyopposesandwillnottolerateharassmentofemployeesbymanagersorsupplychainpartners.Anemployeewhoexperiencesharassmentorbelievesheorshehasbeenthetargetofdiscriminationshouldreportthesituationto

his/hersuperiororasubsidiary'sHRorRiskManagementDepartmentpromptly.In2023,KTCfoundnoviolationsoflaborrights,likediscrimination,harassment,childlabor,orforcedlabor,andreceivednoemployeecomplaints.

9394

Onboarding & offboarding?Conduct fair recruitment in accordance with the KTCHuman Resources Management Manual, the KTCPersonnel Change Management Procedure, etc?Support employees and safeguard their legitimate

rights and interests after they leave according to theEmployee Offboarding Management Procedure

Compensation & incentives?Adjust salaries in the first quarter of each year basedon the annual assessment results in accordance withthe KTC Salary Adjustment Management System?Adjust compensation and incentives according to labor

market & economic conditions, company paystructures, compensation strategies, and employeeperformance

?Implement an eight-hour work schedule in accordancewith the Working Hours Control Procedure and theSalary and Benefits Control Procedure to ensure thatemployees' working hours comply with legal standards?Ensure employees' right to statutory leave and paid

leave, including personal leave, sick leave, work-related injury leave, annual leave, marriage leave,prenatal check-up leave, maternity leave, paternityleave, breastfeeding leave, and bereavement leave

Welfare & care

Male,64%Female,36%

Female,36%

男性女性

男性女性

202120222023

FemaleMale

Employees aged <30

Employees aged 30-50

Employees aged >50

FemaleEmployeeSupport

KTCrespectsandvaluesfemaleworkers,protectstheirlegitimaterightsandinterests,andempowersthemtorealizetheirpotentialandself-worth.Itguaranteesfemaleemployeesequalemploymentopportunitiesandequalpayfor

equalwork.InaccordancewiththeLaborContractLaw,itimplementsthefemalestaffprotectionsystemrelatedtopregnancy,childbirth,andbreastfeeding,includingprenatalcheck-upleave,maternityleave,paternityleave,andbreastfeedingleave,whileorganizingregularcaringactivitiesforfemaleemployeesandpayingattentiontotheirrightsandspecialneeds.KTChastakenmeasurestoensuremorecareandsupporttofemaleemployees.Firstly,onInternationalWomen'sDay(March8),itgivesholidaygiftstofemaleemployeesandorganizescelebrationssuchasmakingcakesandhats.Secondly,ithassetupwell-equippednursingroomstoprovideasafeandconvenientformaternalemployees,allowingthemtobreastfeed,changeclothesandtakecareofchildren.Themoveaimstosupportitsemployeestobalanceworkandchildcareandofferthemafriendlyandconvenientworkingenvironment.Inaddition,ithasinvited

physiciansfromtheCancerHospitalChineseAcademyofMedicalSciences,ShenzhenCenterforlectureson

women'shealth,suchasbreastandcervicalcancer.

Female employee support KPIs

Case study｜KTCcelebrates Women's Day for female staffKTCrespectsandappreciatestheeffortsmadebyfemaleemployees.OnWomen'sDay,itgivesgiftstofemaleemployeestoexpressblessingsandcare,andcelebratesthefestivalwiththemthroughhands-onactivitiestoenhancetheirsenseofhappinessandbelonging.Onitssubscriptionaccount,itsharesWomen'sDaycelebrationpostersandfemaleemployeestoriestodemonstrateitsattentionandcareforfemaleemployeesandencouragethemtorealizetheirself-worthintheirjobs.

Case study｜KTCprovides nursing rooms and organizes lectures on women's healthKTCpaysattentiontotheneedsoffemaleemployees.Ithassetupcomfortablenursingroomstoprovideaprivatespaceformaternalemployees,allowingthemtobetterbalancelifeandwork.Ithasinvitedhospitalspecialistsforlecturesonwomen'shealthtopromotebreastandcervicalcancer-relatedhealthknowledgeamongfemaleemployeesandenhancetheirabilitytocultivatehealthybehaviors.

Holiday gifts

Holidaycelebration

Nursing room

Women’shealth lecture

IndicatorUnit202120222023

Number of employees on parental leave

/228220202

Number of female employees on parentalleave

/12011299

Number of male employees on parentalleave

/108108103

Number of female employees who returnedto work after parental leave during thereporting period

/12011299

Number of male employees who returned towork after parental leave during the reportingperiod

/108108103

Share of female employees returning fromparental leave

%100%100%100%

9596

KTCiscommittedtoimprovingemployeehappiness.Itofferscompetitivesalariesandbenefitsandcomprehensivesocialinsuranceandensuresthatemployeesareentitledtostatutoryholidays,annualleave,sickleaveandspecialleave.Meanwhile,itprovidesinternalandexternaltrainingcourses,learningresourcesandpromotionalopportunitiesforemployeestodevelopprofessionalskillsandcareerplanningandachievepersonalvaluegrowth.Ithasestablishedanemployeewelfaresystemcoveringfood,accommodation,transportationandentertainmentaswellasspecialcaretoeasetheburdenoflifeonemployeesandhelpthemachieveawork-lifebalance.Itsfocusonemployeehealthandgrowthleadstoincreasedjobsatisfaction,loyalty,andoverallhappinesswithintheworkplace.

Overview of employee benefits

Case study｜KTCfamily day 2023In2023,weorganizedthefamilydayevent,invitingfamiliestovisitandexperiencewhatitisliketobeanemployeeatKTC.Employees'familiescanalsogainadeepunderstandingofKTC'sprospects.Reflectingitscorporatecultureandhumanisticcare,KTCconveysamessageofcareandrespectforitsemployeesandpromotesfamilyunderstandingandsupportfortheirwork.

Employee Welfare and Care

KTCpaysattentiontothehealthandwelfareofitsemployees.Itoffersmealallowancesandrefreshmentsaroundtheclocktoensurethatemployeesenjoynutritionallybalanced

mealsduringworkingdaysMealallowances

KTCpreparesbirthdaypresentsforemployees,andoffersgiftstothosewhohaveworked

foracertainnumberofyearstoexpressgratitudeandcareSpecialgifts

DuringtraditionalfestivalssuchastheSpringFestival,DragonBoatFestival,andMid-

AutumnFestival,KTCgivesholidaygiftstoallemployeesandorganizescelebrationsfor

themtoenhanceteamcohesionandcorporateculturerecognitionHolidaybenefits

Life support

Health care

Eachyear,KTChostsbadminton,tabletennisandothersportsevents,organizesteam

buildingactivitiesforyoungemployees,andholdsyear-endreviewsandcelebrations.It

providesfinancialsupportforactivitiesofinteresttoenrichtheculturallifeofemployees

Culturalactivities

Instrictaccordancewithlaborlawprovisions,KTCprovidespaidleavetoensurethat

employeescangetenoughrestafterworkandmaintainphysicalandmentalhealth

Paid leave

Special Activities and Employee CareKTCregularlyorganizesfestivalcelebrationsandrecreationalactivities,likesports,hikingandtravel,andoffersprizesforparticipatingemployeestoincreasetheirsenseofhappinessandbelonging.Ithasalsoestablishedandfundedemployeeinterestclubsandregularlyorganizesclubactivities.Itsemployeescanjointheclubstheywantandparticipateintrainingandactivities.TheCompanyupholdsthepeople-orientedconceptandprovidesspecialemployeeswithcareandsupport.Ithascreatedamutualaidfundtofinanciallysupportemployeesandtheirfamiliesinneedduetoillness,disasters,etc.Also,itoffersmarriageandchildbirthallowancesforemployeesandscholarshipsfortheirchildren.Aspartofitsfamilydayevent,itinvitesemployeefamiliestovisitandgettoknowtheCompanytoenhancefamilyunderstandingandsupportfortheworkoftheirlovedones.Itpayspensioninsurancepremiumsinfullandaccordingtothelawtoprovideprotectionforemployees'retirementlife.Case study｜TheCompany's sports club activities

KTC offers a variety of cultural activities, like sports events and travel-based team building, so that employees canget more exercise and develop hobbies outside of work to achieve work-life balance.

KTCprovidesemployeeswithwell-equippeddormitoriesforfree,talenthousingat

preferentialrents,andhousingsubsidiestoreducetheirlivingburden

Aspartofitscareforthephysicalandmentalhealthofemployees,KTCarrangesregular

healthcheckups,purchasesmedicalinsurance,andorganizeshealthlecturesandfitness

activitiesforemployees

9798

TalentisthecoredrivingforceforKTC'ssustainabledevelopment.Asaresult,theCompanyhasformulatedtheAnnualTrainingPlan,theTrainingAssessmentManagementSystem,theInternalLecturerManagementSystem,andtheExternalTrainingManagementRegulationsinaccordancewithitsdevelopmentstrategy,creatingatrainingsystembased

onitstieredplanforcorporatetalenttraininganddevelopment.KTCmaintainsclosecooperationwithuniversitiesinandoutofGuangdongprovincetopromotetalentprojects.Withthehelpoftheindustry-university-researchmodel,theCompanyworkstogetherwithuniversitiestocultivatehigh-qualitytalentsthatmeetenterpriseneedsthroughtheestablishmentofanemploymentbaseandscientificresearchcooperation.

Employee CommunicationTobettersafeguardemployeerightsandinterestsandpromotecommunicationwithemployees,KTChasestablishedaunionandregularlyconvenesworkers'congressmeetingsinaccordancewithregulations.Itattachesgreatimportancetothevoicesandneedsofemployees.Throughvariouschannels,itregularlycollectsemployees'opinionsandsuggestionstounderstandtheirvoicesandsatisfaction,layingasolidfoundationforprovidingsustainablesupport.

Case study｜Companysurvey on employee physical examination satisfaction (2023)InFebruary2023,KTCcarriedouttheemployeephysicalexaminationsatisfactionsurveyfor2022tounderstand

employees'thoughtsandfeelingsonphysicalexaminationarrangementsandsuppliersatisfactionandimprovetheirhappinessandoverallexperience.Thenumberofemployeeswhoparticipatedinthesurveywas2,285,withaparticipationrateof100%.Basedonananalysisofthesurvey,employeeswerehighlysatisfiedwiththephysicalexaminationsin2022.Especiallyemployeesatisfactionreached92%.Themajorityofemployeesweremostsatisfiedwiththephysicalexaminationcenter'senvironment&facilities,services,physicalexaminationprocesssmoothness,andphysicalexaminationpackagesettings.Buttheywantedshorterwaitingtimesforcomputedtomography(CT)andB-ultrasoundexaminations.

Case study｜KTC's4th Trade Union Committee held the 1st session of the Workers' Congress In 2023

OnJune13,2023,KTC's4thTradeUnionCommitteeheldthe1stsessionoftheWorkers'Congress.ThemeetingcoveredsuchtopicsastheCompany'soperationalreport,theunion'sdutyperformancereviewandplanning,theelectionofunioncommitteemembers,thereviewofEmployeeHandbookrevisions,andthechangestotheemployeerewardandpunishmentsystem.Throughemployeeparticipationandfeedback,KTCcouldpromptlyadjustitsstrategicdirectionandoptimizeitsmanagementstrategiestoensurethatitmaintainsitscontinuedleadershipamidintensecompetition.

Employee Training andDevelopment

Employee training system

99100

Employee Training and Growth

KTCcreatesanannualtrainingplanforallemployeesandincreasesinvestmentinemployeetraining.Itiscommittedtounlockingthepotentialofemployeesandimprovingtheirskills,encouragingthemtopursuethedevelopmentpathsthatsuitthemforpersonalvaluerealization.KTCcontinuedtoincreaseitsinvestmentinemployeetrainingin2023,whenspendingtotaledRMB542,800.The

employeetrainingcoverageratereached99.69%.Totalemployeetrainingtimecameto660,359hours,withanaverageof89.88hoursperemployee.

All-staff Training SystemToachievesustainabledevelopmentandensuretalentpool,KTChasdevelopedacomprehensiveandsystematiclearningframework.Theframeworkincludestrainingforemployeesatdifferentstages,likenewemployees,coretechnicalpersonnel,andmanagement,andcoverskeyareassuchasprofessionalskillsimprovement,leadershipdevelopment,industryknowledgeupdates,andpersonalcareerplanning,aimingtoprovideemployeeswithdiversifiedgrowthpaths.

KTCadvocatesfullparticipationinthistrainingsystemtoensurethateveryemployeecankeepupwithindustrydevelopmentsandenhancetheirskillsandquality.

Employee training investment

(RMB10,000)

Employee training

Overview of employee training programs

NHO

Annualtraining

plan

Key talent

training

Externaltraining

Fornewhires,theHRDepartmentarrangestheoreticaltrainingandexamsontheCompany'sprofile,managementsystems,systematicmanagement,etc.Fornewproductionlineemployees,theProductionDepartmentprovidestrainingonproductionskills,safetyproductionknowledge,electrostaticdischarge(ESD)protection,anti-terrorismawareness,etc

Ateveryyear'sbeginning,eachdepartmentcreatesaregulartrainingplanfortheyearbasedontrainingneeds.Meanwhile,theydeveloppublicandsystematictrainingaccordingtotherequirementsoftheCompany'smanagementsystemstoformanannualtrainingplanformonthlyimplementation

TheCompanyconductsspecialtrainingforkeytalentsbasedoncoretechnologies,workproblems,andtalentdevelopmentplanstoimprovetheirprofessionalskillsandcomprehensivequalitytoadapttocorporatedevelopment

TheCompanyprovidesexternaltrainingopportunitiesandtrainingsessionstoimproveemployeequalityandskills.Theseformsincludevisitstoprofessionalinstitutionsorothercompaniesforskillslearning,engagementinsymposiums,participationinexternaltrainingoropenclasses,invitationoflecturerstolectureon-site,etc

27.84

49.99

54.28

202120222023

101102

Special Training ProgramsKTChasdevelopedspecialtrainingprogramsinthreedirectionsbasedondifferentemployeecharacteristicstoimprovetheskillsandknowledgeofemployeesatdifferentstages.Itstrivestohelpbothnewandsenioremployeesgainthelatestindustryknowledgeandprofessionalskillsthroughtrainingsoastoimprovetheirworkefficiencyandquality.TheCompany'sspecialtrainingprogramsfocusonteamworkandculturalintegration.Throughteamworkandinteractivelearning,employeescanimprovecommunicationandcollaborationandenhanceteamcohesion.Specialtrainingprograms,asanimportantchannelforconveyingcorporatecultureandvalues,alsostrengthenemployees'senseofbelongingandloyaltybypromotingadeepunderstandingandrecognitionofcorporateculture.

Case study｜Summaryof the Company's training programs in 2023In2023,KTCorganizeddiversifiedandsystematicemployeetrainingprograms.TheCompanyhascarefullydesignedspecialtrainingprogramsforemployeesatdifferentlevels,frommanagementskillstrainingfornewlypromotedmanagersandsupervisorjobtrainingforsupervisorstoPCBdesigntrainingfortheElectricalDepartmentandNHOfornewemployees.Throughthesetrainingprograms,theCompanyhopestodevelopahigh-quality,efficientteamtolayasolidfoundationforitslong-termdevelopment.

Special training programs for employees

Special trainingprogram

ParticipantsProgram description

Newly promotedmanagers andsupervisors

Managers andsupervisors

New employees

Manager jobtraining

Management skillstraining

NHO

Aprogramondailymanagementskillstraininghasbeendevelopedfornewsupervisorsandabove.Itfocusesonleadershipdevelopmentandaimstofostereliteleadersofthefuture

Theprogramisdesignedtoimprovetheoverallqualityofmanagers.Throughcasestudiesandpracticalexercises,ithelpsmanagersmasterpracticaloperationskillsandsupportcontinuedindividualandteamgrowth

Theprogramaimstohelpnewemployeesunderstand

KTC'ssystemsandcultureandgetintegratedintotheCompanyandtheworkplaceasquicklyaspossible.ItofferssystematicandcomprehensivetrainingcoursesandactivitiestogetnewemployeesfamiliarwithCompanyculture,businessprocessesandindustryknowledge

Vocational Skills SupportKTCconductsregularapprenticeshiptrainingandexaminationstoprovideagoodplatformforemployeestoimprovetheirprofessionalskills.Withthismechanism,itcanaccuratelyassesstheprofessionalskillsofemployeesandprovideclearguidancefortheircareerdevelopment.In2022-2023,theCompanycompletedintermediatetrainingforLCDmanufacturingworkersunderthenewapprenticeshipprogram.Atotalof49staffcompletedallcoursesandobtainedcertificates.In2024,thenewapprenticeshipprogramwillcontinue.

103104

Employee Promotion and IncentivesTheCompanyhasformulatedtheKTCPromotionManagementSystem.Ithasestablishedsoundemployeepromotionchannelsandimplementeddiversifiedincentivemeasurestohelpemployeesachievepersonaldevelopmentgoalsandprovidestrongsupportfortalentretentionandtalentteambuilding.

Talent RetentionKTCconsistentlyadherestothecorporatevaluesof"Respectingpeople,commitmenttowork,industriousness,innovation".TheCompanyimplementsmeasurestostrengthenitselfwithtalentsandfocusesontalentintroduction,traininganddevelopment.Besidesthenewhirementorprogram,ithasalsodevelopeddifferentiatedincentiveprogramsbasedonitsstagesofbusinessdevelopmenttoensuretalentstability.Differentiatedincentiveprogramsaremainlyformanagement,corepersonnel,keypositions,andkeyproduction&researchstaff.ForkeyR&Dtechnicalstaff,theCompanyadoptsadifferentiatedstrategytoattractandretainthesecriticaltalents.Tothisend,ithasformulatedtheKTCKeyR&DPositionManagementSpecification.ThisSpecificationmayincludemorecompetitivepay,broaderpromotionspaceanddevelopmentopportunities,andmorepersonalizedcareerdevelopmentplansandtrainingprograms.Toenhanceemployeeengagementandsatisfaction,theCompanyhasfurtherstrengthenedcorporateculturepromotion.

Itcreatesapositive,harmonious,andfriendlyworkenvironmentthroughavarietyofemployeeactivities,suchaswomen'scare,teambuilding,andculturalexchanges.TheCompanystabilizeskeytalentswiththeimplementationofequityincentiveplans.Itstimulatesemployeeenthusiasmbyaligningthepersonaldevelopmentofemployeeswithlong-termcompanygoals,whichhelpstoenhanceteamcohesionandcollaborativespiritandinjectvitalityintolong-termcorporatedevelopment.

Percentage of employees receivingregular performance and career

development reviews

Number of employees receivingregular performance and career

development reviews

100%100%100%0%20%40%60%80%100%120%2021年2022年2023年

2,309 2,329 2,650 3,796 3,934 4,720 05001,0001,5002,0002,5003,0003,5004,0004,5005,0002021年2022年2023年女员工男员工

（替换图片）

105106

Employeepromotionmethods

Pass talent assessments

and performancereviews, and undergoemployee qualificationassessments and jobsuitability assessments

Management

Undergo professionaltests, practicaloperations or debriefingsbased on job categories

Professional &operational

202120222023202120222023

FemaleMale

KTCadherestotheLawofthePRConWorkSafety,theLawofthePRConthePreventionandControlofOccupationalDiseases,andtheRegulationonWork-relatedInjuryInsurance,aswellaslawsandregulationsinitsoperatingregions.Throughtheintroductionofinternationallyadvancedoccupationalsafetystandards,itcontinuouslyimprovestheinternalmanagementprocessandenhancesemployees'safetyawarenessandoperationalskills.

WorkSafety

KTChasestablishedasoundworksafetyaccountabilitymechanism.ItsSafetyManagementTeam,composedofenvironment,healthandsafety(EHS)relatedpersonnel,isresponsibleforapprovingHazardIdentificationandRiskAssessmentRecords.ItsEngineeringDepartmentworkswithitsvariousdepartmentstoidentifyhazardsandassessrisksandtogeneratecompany-levelHazardIdentificationandRiskAssessmentRecords.In2023,KTCanditssubsidiarieswereactivelyinvolvedinsafetystandardization.KTC,KTCCommercial,andHuizhouKTCpassedlevel3worksafetystandardizationacceptancetestsandformulatedcontingencyplansforworksafetyincidents.Byend-2023,KTC,KTCCommercial,andHuizhouKTCreceivedtheISO45001occupationalhealthandsafetymanagementcertification.Meanwhile,KTCreportednosafetyaccidentsabovegenerallevelornegativeworksafetyevents.

Occupational Health and Safety

Case study｜TheCompany's safety culture building

In2023,KTCadopteddiversemeasurestobuilditssafetyculture.Itcontinuedtoimproveemployees'safetyawarenessandskillsthroughsafetytrainingsessions,fireemergencydrills,safetyknowledgepromotions,andhands-onfirstaidtrainingcourses.EspeciallytheCPRtrainingitprovidedcombinesprofessionalknowledgeandpracticalexperience.Morethan100ofitsemployeeshavepassedtheassessmentandobtainedcompletioncertificates.

Case study｜KTC'swork safety emergency drillsToimproveemployees'abilitytorespondtoemergencies,KTCattachedgreatimportancetoandregularlyorganizedemergencyexercisesin2023.Immersedinsimulatedemergenciessuchasfires,employeescouldlearnandmastertherightemergencyresponseskills.Throughregularexercises,employees'emergencyresponsecapabilitieshaveimprovedsignificantly.Employeesareabletorespondrapidlytoemergencieswiththerightactions.

107108

KTC,whichpromotesoccupationalhealthandsafetymanagementsystemcertification,iscommittedtoestablishingasoundoccupationalsafetymanagementsystem.Reflectinganemphasisonemployeephysicalhealth,ithascarriedoutemployeehealthtrainingactivities,likelecturesonwomen'shealth,cardiopulmonaryresuscitation(CPR)training,andmentalhealth.Itshealthhub,equippedwithadvancedall-in-onehealthmachines,providescomprehensivephysicalexams,includingbloodpressure/bloodoxygen/bloodglucose/uricacidtests,electrocardiogram,heightandweight,toenableconvenienthealthmonitoringforemployees.Someofitspantriesalsohavebloodpressure,bloodglucose,bloodoxygen,andweightmeasuringinstrumentssothatitsemployeescantakealookattheirhealthduringbreaks.Ithasplacedfourautomatedexternaldefibrillators(AED)intwoparksandmadegreatereffortstopromotefirstaidknowledge.

Duringthetyphoonwarningperiodin2023,itenabledemployeestotaketimeoffandadjusttheirhoursbasedonactual

conditionstoensuretheirsafety.

KTC'sworkplacesafety measures

Annual workplacesafety work plan

Regular EHSmeeting

Work productionmanagement training

Annual EHSaudit

Workplace safetywork summaryand incentives

IndicatorUnit202120222023

Number of participants in safetyeducation and training

/

6,0816,2397,347Safety education and training

coverage

%

99.61%99.62%99.69%

Number of employees missing work

due to work-related injuries

/222514Number of work-

related fatalities for

suppliers or contractors

/

Number of work days lost to work-related injuries at suppliers or

contractors

/

Work safety KPIs

Third-party Safety ManagementKTCisconcernedabouttheoccupationalhealthandsafetyofsupplychainworkers,inadditiontoitsownemployees.Whenselectingsuppliers,itviewslaborhealthandsafetyasanimportantindicator.Itevaluatessupplierperformanceinlaborrightsprotection,workenvironmentimprovementandsafetymanagementthroughduediligence,on-siteaudits,andthird-partyverification.Itpreferssuppliersthathaveestablishedaproperlaborprotectionmechanismandarewillingtomakecontinuousimprovements.

Case study｜Third-party safety management system

Management and onboarding

Safety risk assessment

?Measure suppliers on criteria like social responsibility, information security, human rights protection, quality, environment, safetyrequirements, occupational health & safety, and ESD systems based on the New Supplier Audit Checklist. Clarify the definition ofsafety for suppliers and develop relevant safety requirements?Conduct on-site inspections of suppliers and track their safety-related performance in accordance with the New Supplier Review

Record and other documents

On-site EHS inspection for suppliers

On-site EHS inspection for contractorsOccupational health &safety management

EMS certification

Hazardous substanceprocess management

ESD protectionmanagement

Constructionmanagement safety

Construction

worker safety

Site safety

Hazardous area

identificationRoad safety

Electromechanicalequipment safetyTemporary housing safetyOther unsafe acts

KTC attaches great importance to the work safety of stakeholders. It has a third-party safety management system in place for suppliers toensure safe production.

KTCanditssupplierpartnershavedevelopedtheOtherStakeholderRequirements.Theruleexplicitlyoutlinesthesafetyresponsibilities,obligationsandexpectationsfortheCompany'sstakeholders(suchassuppliersandserviceproviders).

For suppliers

KTChasimplementedstrictsafetymeasurestomanagecontractorsenteringitspremises.First,itasksallcontractorstosignasafetyagreementbeforeenteringthepremisestosetoutsafetyresponsibilitiesandobligationsforboth.Second,ithasestablishedasupervisionandworkpermitissuancemechanismfordangerousoperations.Beforecarryingoutdangerouswork,itscontractorsarerequiredtosubmitworkplansandsafetymeasures,andcanonlyproceedafterobtainingworkpermits.Itassignssafetysupervisorstoconducton-sitesupervisiontoensuresafetyduringtheoperation.

For contractors

KTChasformulatedtheVisitorManagementSystem.Ontheonehand,theSystemclarifiestheconditions,proceduresandrequirementsforvisitorstoenterKTC'spremises.Visitorsmusthaveanappointmentandregisterbeforevisiting,andundergoidentityverificationandsecuritychecksandabidebytheKTCsafetyregulationswhenarrivingon-site.Ontheotherhand,theSystemestablishesthebehavioralnormsandresponsibilitiesforvisitorsinKTCpremisestoensurethattheirbehaviorwillnotposeasafetythreat.

For visitors

109110

Note: Statistics for suppliers or contractors are in areas under the Company's jurisdiction.

Occupational Health ManagementKTCattachesgreatimportancetoenvironmentalandpersonnelhealthandensuresthattheoccupationalsafetyandhealthenvironmentmeetsnationalstandards.Itconductsregularenvironmentalandpersonnelmonitoringtointegrateoccupationalhealthintopractice.Itcarriesoutoccupationalhazardsitedetectioneveryyear,occupationalhazardevaluationandresultspublicityeverythreeyears,andoccupationalhealthexaminationforemployeesexposedtooccupationalhazardseveryyear.Also,itprovidesoccupationalhealthandsafetytrainingforallemployeesannuallytoallowthemtounderstandthehazardstheyfaceandtakegoodpersonalprotection.

Occupational health management system

Case study｜KTCfree clinic: A collaboration with Shenzhen Hospital of Beijing University of Chinese Medicine (BUCM)Tocareforthephysicalandmentalhealthofemployeesandimprovetheirhealthawareness,KTC'sPartybranchandtradeunion,inpartnershipwithtraditionalChinesemedicineexpertsfromShenzhenHospitalofBUCM(Longgang),hostedafreeclinicatKTCBantianParkonNovember8,2023toscreenfordiseasesandproviderecommendationsandplanstoemployees.

Case study｜KTC'soccupational health examinations for employees in 2023In2023,KTCorganizedpre-job,on-the-job,andpost-joboccupationalhealthexaminationsfor214employeesexposedtooccupationalhazardsandhadresultsproperlymanaged.Itprovidesregularorirregularoccupationalhealthexaminationsforemployees,withtheaimofensuringtheirphysicalhealthandenhancingtheircohesionandworkmotivation.

IndicatorUnit202120222023Number of employees exposed to

occupational health hazards

/137283214Employee occupational diseasephysical examination coverage

%100%100%100%

Occupational health KPIs

KTChasbeenawardedISO45001,ISO14001andRBAcertifications.

KTCconductsoccupationalhealthtrainingforallemployeeseveryyear,occupationalhazardsitedetectioneveryyear,andoccupationalhazardevaluationandresultspublicityeverythreeyears.Itprovidesemployeesexposedto

occupationalhazardswithpre-job,on-the-job,andpost-joboccupationalhealth

examinationsannuallyanddistributesprotectiveequipmentfordifferentpositionstoreduceoravoidoccupationalhazards.

In2023,KTCprovidedwork-relatedinjuryinsuranceforallregularemployeestosafeguardtheirhealth.TheCompanyhasinformedemployeesofthepossibleoccupationalhazardsandtheirconsequences,occupationalprotectionmeasures,andjobtreatmentstoensurethatemployeesmakecareerchoicesbasedonfullinformation.Initsannualtrainingplan,KTChasdevelopedworksafetyandoccupationalhealthtrainingcourses.Employeetrainingcoverageis100%.Examinationsareorganizedtoensurethatemployeesgainfullunderstandingofoccupationalhealth-related

knowledge.

KTCorganizesoccupationalhealthknowledgepopularizationactivitiesandfreeclinicsincollaborationwiththeunionandhospitalsfromtimetotimeeveryyear.

111112

Occupational health risk identification and

management process

Monitoring and evaluationof occupational diseasehazard factors

Occupational healthcheckupsOnce a year

Occupational health

knowledge trainingOnce a year

Occupational hazardproject declaration

Updated every year

Comprehensiveoccupational hazardrisk assessmentOnce a year

TheCompanyadherestotheprincipleof"QuantificationandConsistency"indisclosingthequantitativeperformancemetricsthatreflecttheeffectivenessofitssustainabilitymanagement.

Statistics Scope During the Reporting Period

Unless otherwise specified, the statistics scope of governance and economic reporting is consistent with that of theCompany's consolidated financial statements.

Economic Performance

Indicator

Unit202120222023

Number of BOD Members

/

Number of IndependentDirectors

/

Proportion of IndependentDirectors

%

42.85%42.85%42.85%Numberof BOD Meetings/

Number of ImportantSubstantive Issues Conveyedto the BOD

/325047

Business Ethics

Indicator

Unit

202120222023

Operating IncomeRMB10,0001,188,874.511,158,704.381,344,665.51

Net Profit Attributable to Ownersof the Parent Company

RMB10,00092,306.73151,559.82128,258.65

BVPSRMB7.4511.3110.12EPSRMB2.562.961.88Employee Salary and WelfareExpenses

RMB10,00075,339.8094,095.59103,316.13Interest ExpenseRMB10,0001,168.76783.423,614.30

Total DividendsRMB10,00030,186.5645,416.6941,194.36

Retained EarningsRMB10,000179,790.13301,163.39384,005.35

Government Subsidy AmountRMB10,00010,430.7720,632.8814,886.07

Costs Incurred from MeasuresTaken to Address ClimateChange Risk Management

RMB10,000

68.0482.675.04

Indicator

Unit202120222023

NumberofEmployeeswhoHaveReceivedAnti-corruptionTraining

/

6,1056,2637,370

PercentageofEmployeeswhoHaveReceivedAnti-corruptionTraining

%

100%100%100%Number of CorruptionIncidents Confirmed by theCompany

/

Quantitative Data: Performance Metrics

Corporate Governance

Indicator

Unit202120222023Number of R&D Personnel

/

1,3101,4411,552R&D Expenses as aPercentage of OperatingRevenue

%

4.00%4.39%4.59%Number of Authorized Patentsand Software Copyrights

/8161,3721,208--Including: Number ofOverseas Patents

/

R&D Innovation

113114

Employee TrainingIndicatorUnit202120222023

Total Expenditure on Employee TrainingRMB10,000

27.8449.9954.28EmployeeTrainingCoverageRate%

99.70%99.60%99.69%AverageNumberofEmployeeTrainingHours/

13.0466.8589.88AverageNumberofEmployeeTrainingHoursbyGender

Male/

13.0466.8589.88Female/

13.0466.8589.88AverageNumberofEmployeeTrainingHoursbyJobLevel

Middle Management/

27.4036.1546.27Grassroots Employees/

13.2367.9890.89NumberofEmployeeswhoRegularlyReceivePerformanceandCareerDevelopmentEvaluations

/

6,1056,2637,370

NumberofEmployeeswhoRegularlyReceivePerformanceandCareerDevelopmentEvaluationsbyGender

Male/

3,7963,9344,720

Female/

2,3092,3292,650

NumberofEmployeeswhoRegularlyReceivePerformanceandCareerDevelopmentEvaluationsbyJobLevel

Senior Management/

222424

Middle Management/

748484Grassroots Employees/

6,0096,1557,262

Employee Composition

IndicatorUnit202120222023Number of Employees

/

6,1056,2637,370NumberofEmployeesbyGender

Male/3,7963,9344,720

Female/2,3092,3292,650NumberofEmployeesbyAge

AgedUnder 30/2,9092,8183,326

AgedBetween

30 and 50

/3,0693,2993,870

Aged Over 50/127146174EmployeeGrowthRate%

9.78%2.59%17.68%EmployeeGrowthRatebyGender

Male%

9.21%3.64%19.98%

Female%

10.74%0.87%13.78%EmployeeGrowthRatebyAge

AgedUnder 30%

8.95%-3.13%18.03%

AgedBetween

30 and 50

%

9.69%7.49%17.31%Aged Over 50%

36.56%14.17%19.86%

115116

Occupational Health and SafetyIndicatorUnit202120222023Number of Employees ReceivingSafe Education and Training

/

6,0816,2397,347Coverage Rate of Safety Educationand Training

%

99.61%99.62%99.69%Number of Employees who SufferWork-related Injuries and Miss Work

/

222514Death Toll of Suppliers or Contractorsdue to Work-related Reasons

/

Number of Days of Work-relatedInjury and Loss of Work for Suppliersor Contractors

/

Number of Employees Exposed toOccupational Health Hazards

/

137283214Coverage Rate of Occupational

Disease Physical Examination forEmployees

%100%100%100%

Support for Female Employees

IndicatorUnit202120222023Number of Employees on Parental Leave

/

228220202Number of Employees onParental Leave by Gender

Female/

12011299Male/

108108103Number of Employees whoReturned to Work During theReporting Period After the Endof Parental Leave by Gender

Male/

12011299

Female/

108108103

Share of Female EmployeesReturning fromParental Leave

%100%100%100%

Energy use

IndicatorUnit202120222023

Total Internal Energy ConsumptionMWh38,503.3538,826.3540,860.98Total Electricity ConsumptionMWh38,494.8038,816.4140,849.62Total ElectricityConsumption bySource

OutsourcedElectricity

MWh38,494.8034,906.2035,010.60self-generatedgreen electricity

MWh04,074.016,217.62

Electricity Consumption PerRMB10,000 of Revenue

MWh0.03240.03350.0304Total Gasoline ConsumptionMWh8.289.6811.11Total Diesel ConsumptionMWh0.240.250.27

Water Resource UtilizationIndicatorUnit202120222023Total Amount of WaterIntake

m?241,074241,700246,457Total Drainage Volumem?229,020229,615234,134Circulating WaterConsumption

m?101010Total Water Consumptionm?241,074241,700246,457Water Consumption PerRMB10,000 of Revenue

m?0.20280.20860.1833

Emissions and WasteIndicatorUnit202120222023Chemical Oxygen Demand(COD)

tonne0.100.130.16Volatile Organic Compounds(VOCs)

tonne0.530.510.51Total Amount of GeneralIndustrial Solid WasteGenerated

tonne14,658.5014,890.5015,262.60General Industrial SolidWaste Disposal Volume

tonne14,658.5014,890.5015,262.60Total Amount of GeneralIndustrial Solid WasteRecycling and Reuse

tonne6,713.506,984.507,420.60Total Amount of HazardousWaste Generated

tonne15.3419.7635.08Hazardous Waste DisposalVolume

tonne24.1818.5438.62

117118

GHGIndicatorUnit202120222023Total GHG EmissionstCO2e4,634.584,959.715,920.59Scope 1 GHG EmissionstCO2e109.9684.26111.06Scope 2 GHG EmissionstCO2e4,524.624,875.455,809.53

Indicator annotation:

(1)The cost incurred by the measures taken by the Company to address climate change risk management mainly refers to the amountof property insurance purchased to cope with climate risks, that is, the amount of property insurance investment.

(2)The average number of employee training hours is equal to the total number of training hours provided to employees divided bythetotal number of employees.

(3)The statistical scope of suppliers or contractors is within the scope of the Company's jurisdictional work area.

KTChasreportedinaccordancewiththeGRI(Foundation2021)StandardfortheperiodfromJanuary1,2023toDecember31,2023.

GRI Standards and Disclosure ItemsLocation

GRI 2-1Organizational detailsAbout KTCGRI 2-2Entities included in the organization's sustainability reportingAbout this ReportGRI 2-3Reporting period, frequency and contact pointAbout this ReportGRI 2-4Restatements of informationQuantitative Data: Performance MetricsGRI 2-5External assuranceNoneGRI 2-6Activities, value chain and other business relationships

Globalization, Core Categories,Business StrategyGRI 2-7Employees

Employee Rights, Employment Compliance and

DiversityGRI 2-8Workers who are not employeesEmployment Compliance and DiversityGRI2-9Governance structure and compositionCorporate GovernanceGRI 2-10Nomination and selection of the highest governance bodyCorporate GovernanceGRI 2-11Chair of the highest governance bodyCorporate Governance

GRI 2-12

Role of the highest governance body in overseeing the

management of impacts

Environmental, Social, and Governance (ESG)

SystemGRI 2-13Delegation of responsibility for managing impacts

Environmental, Social, and Governance (ESG)

System

GRI 2-14Role of the highest governance body in sustainability reporting

Environmental, Social, and Governance (ESG)

SystemGRI 2-15Conflicts of interestCorporate GovernanceGRI 2-16Communication of critical concernsStakeholder CommunicationGRI 2-17Collective knowledge of the highest governance bodySeethe 2023 Annual Report for detailsGRI 2-18Evaluation of the performance of the highest governance bodyCorporate GovernanceGRI 2-19Remuneration policiesCorporate GovernanceGRI 2-20Process to determine remunerationCorporate GovernanceGRI 2-21Annual total compensation ratioNot Disclosed, involving confidentiality requirementsGRI 2-22Statement on sustainable development strategy

Environmental, Social, and Governance (ESG)

System

GRI 2-23Policy commitmentsSee each chapter for detailsGRI 2-24Embedding policy commitmentsSee each chapter for detailsGRI 2-25Processes to remediate negative impactsSee each chapter for detailsGRI 2-26Mechanisms for seeking advice and raising concernsStakeholder CommunicationGRI 2-27Compliance with laws and regulationsSee each chapter for details

GRI Standards and Disclosure ItemsLocationGRI 2-28Membership associations

Product Certification, Fueling Industry

DevelopmentGRI 2-29Approach to stakeholder engagementStakeholder CommunicationGRI 2-30Collective bargaining agreementsEmployee Welfare and CareGRI 3-1Process to determine material topicsIdentification of Material IssuesGRI 3-2List of material topicsIdentification of Material IssuesGRI 3-3Management of material topicsSee each chapter for detailsGRI 201-1Direct economic value generated and distributedQuantitative Data: Performance MetricsGRI 201-2

Financial implications and other risks and opportunities due to climate

change

Climate Change Response、QuantitativeData: Performance MetricsGRI 201-3Defined benefit plan obligations and other retirement plansEmployee Welfare and CareGRI 201-4Financial assistance received from governmentSee the 2023 Annual Report for detailsGRI 202-1

Ratios of standard entry level wage by gender compared to local

minimum wage

Not Disclosed, involving confidentiality

requirementsGRI 202-2Proportion of senior management hired from the local communityNot trackedGRI 203-1Infrastructure investments and support servicesBuilding Harmonious SocietyGRI 203-2Significant indirect economic impactsBuilding Harmonious SocietyGRI 204-1Proportion of expenditures on local suppliersResponsible Supply ChainGRI 205-1Operations assessed for risks related to corruptionQuantitative Data: Performance MetricsGRI 205-2

Communication and training about anti-corruption policies and

procedures

Quantitative Data: Performance MetricsGRI 205-3Confirmed incidents of corruption and actions taken

Compliance Management and Business

EthicsGRI 206-1

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

practices

Compliance Management and Business

EthicsGRI 207-1Approach to taxTax ComplianceGRI 207-2Tax governance, control, and risk managementTax ComplianceGRI 207-3Stakeholder engagement and management of concerns related to taxTax ComplianceGRI 207-4Country-by-country reportingNot disclosedGRI 301-1Weight or volume of materials usedQuantitative Data: Performance MetricsGRI 301-2Recycled input materials usedResource Management and RecyclingGRI 301-3Recycled products and packaging materials Resource Management and RecyclingGRI 302-1Energy consumption within the organizationResource Management and RecyclingGRI 302-2Energy consumption outside of the organizationNot trackedGRI 302-3Energy intensityResource Management and RecyclingGRI 302-4Reduction of energy consumptionResource Management and RecyclingGRI 302-5Reductions in energy requirements of products and servicesResource Management and RecyclingGRI 303-1Interactions with water as a shared resourceResource Management and RecyclingGRI 303-2Management of water discharge-related impactsResource Management and RecyclingGRI 303-3Water withdrawalNot involvedGRI 303-4Water dischargeNot involved

Global Reporting Initiative(GRI) Content Index

119120

GRI Standards and Disclosure ItemsLocation

GRI 403-5Worker training on occupational health and safetyOccupational Health and Safety

GRI 403-6Promotion of worker healthOccupational Health and Safety

GRI 403-7

Prevention and mitigation of occupational health and safety impacts

directly linked by business relationships

Occupational Health and SafetyGRI 403-8

Workers covered by an occupational health and safety management

system

Occupational Health and SafetyGRI 403-9Work-related injuriesOccupational Health and SafetyGRI 403-10Work-related ill healthOccupational Health and SafetyGRI 404-1Average hours of training per year per employeeEmployee Training and DevelopmentGRI 404-2

Programs for upgrading employee skills and transition assistance

programs

Employee Training and DevelopmentGRI 404-3

Percentage of employees receiving regular performance and career

development reviews

Quantitative Data: Performance MetricsGRI 405-1Diversity of governance bodies and employees

Employee Rights, EmploymentCompliance and DiversityGRI 405-2Ratio of basic salary and remuneration of women to men

Not disclosed, involving confidentiality

requirementsGRI 406-1Incidents of discrimination and corrective actions takenEmployment Compliance and DiversityGRI 407-1

Operations and suppliers in which the right to freedom of association and

collective bargaining may be at risk

Employee Welfare and Care, Responsible

Supply ChainGRI 408-1Operations and suppliers at significant risk for incidents of child laborNoneGRI 409-1

Operations and suppliers at significant risk for incidents of forced or

compulsory labor

NoneGRI 410-1Security personnel trained in human rights policies or proceduresNot involvedGRI 411-1Incidents involving violations of indigenous rights Not involvedGRI 413-1

Operations with local community engagement, impact assessments, and

development programs

Building Harmonious Society

GRI 413-2

Operations with significant actual and potential negative impacts on local

communities

Not involvedGRI 414-1New suppliers that were screened using social criteriaResponsible Supply ChainGRI 414-2Negative social impacts in the supply chain and actions takenResponsible Supply ChainGRI 415-1Political donationsNot involvedGRI 416-1

Assessment of the health and safety impacts of product and service

categories

Product QualityGRI 416-2

Incidents of non-compliance concerning the health and safety impacts of

products and services

Product QualityGRI 417-1Requirements for product and service information and labelingCustomer ServicesGRI 417-2Violations related to product and service information and labelingNoneGRI 417-3Violations related to marketing communicationsNoneGRI 418-1

Substantiated complaints concerning breaches of customer privacy and

losses of customer data

None

GRI Standards and Disclosure ItemsLocationGRI 303-5Water consumption

Quantitative Data: Performance Metrics

GRI 304-1

Operational sites owned, leased, or managed by the Company in or near

biodiversity-rich areas, inside or outside protected zones

Not involvedGRI 304-2

Significant impacts of activities, products, and services on

biodiversity

Not involvedGRI 304-3Protected or restored habitatsNot involvedGRI 304-4

Species in habitats affected by operations listed in the IUCNred list and the list of state key protected wild animals

Not involvedGRI 305-1Direct (Scope 1) GHG emissions

Quantitative Data: Performance Metrics

GRI 305-2Energy indirect (Scope 2) GHG emissions

Quantitative Data: Performance Metrics

GRI 305-3Other indirect (Scope 3) GHG emissionsNot tracked

GRI 305-4GHG emissions intensityNot disclosedGRI 305-5Reduction of GHG emissionsNot disclosedGRI 305-6Emissions of ozone-depleting substances (ODS)NoneGRI 305-7Nitrogen oxides (NOx), sulfur oxides (SOx), and other significant air emissions

Quantitative Data: Performance Metrics

GRI 306-1Waste generation and significant waste-related impactsWaste ManagementGRI 306-2Management of significant waste-related impactsWaste ManagementGRI 306-3Waste generatedWaste ManagementGRI 306-4Waste diverted from disposalWaste ManagementGRI 306-5Waste directed to disposalWaste ManagementGRI 308-1New suppliers that were screened using environmental criteriaResponsible Supply ChainGRI 308-2Negative environmental impacts in the supply chain and actions takenResponsible Supply ChainGRI 401-1New employee hires and employee turnover rate

Quantitative Data: Performance Metrics

GRI 401-2

Benefits provided to full-time employees that are not provided to temporary or

part-time employees

Employee Welfare and CareGRI 401-3Parental leaveEmployee Welfare and CareGRI 402-1Minimum notice periods regarding operational changes

The Company notifies in accordance

with national laws and regulationsGRI 403-1Occupational health and safety management systemOccupational Health and SafetyGRI 403-2Hazard identification, risk assessment, and incident investigationOccupational Health and SafetyGRI 403-3Occupational health servicesOccupational Health and SafetyGRI 403-4

Worker participation, consultation, and communication on occupational health

and safety

Occupational Health and Safety

Global Reporting Initiative(GRI) Content Index

121122

DimensionNo.IssueLocation

Environment

Campaign against Climate Change

Climate Change Response, QuantitativeData: Performance Metrics

Pollutant DischargeWaste Management

Waste DisposalWaste Management

Ecosystem and Biodiversity Protection

Climate Change ResponseResource Management and RecyclingBiodiversity Conservation

Environmental Compliance Management

Climate Change ResponseWaste Management

Energy UtilizationResource Management and Recycling

Water Resource UtilizationResource Management and Recycling

Circular EconomyResource Management and Recycling

Society

Rural RevitalizationBuilding Harmonious Society

Social ContributionsBuilding Harmonious Society

Innovation-driven DevelopmentSustainable R&D

Technology EthicsScience and Technology Ethics

Supply Chain SafetyResponsible Supply Chain

Equal Treatment for Small and Medium Enterprises

Responsible Supply Chain

Safety and Quality of Products andServicesProduct Quality

Data Security and Customer Privacy ProtectionCustomer Privacy and Data Security

Employees

Employment Compliance and Diversity

Employee Welfare and CareEmployee Training and Development

Occupational Health and Safety

SustainabilityDevelopmentand RelatedGovernance

Due Diligence

Stakeholder CommunicationIdentification of Material Issues

Stakeholder CommunicationStakeholder Communication

Anti Commercial Bribery and AntiCorruption

Compliance Management andBusiness

Ethics

Anti-Unfair Competition

Compliance Management and Business

Ethics

DearReader,ThankyouforreadingtheSustainabilityReport2023ofShenzhenKTCTechnologyCo.,Ltd.Toprovidemorevaluableinformationtoyouandotherstakeholders,andtoeffectivelyenhancetheCompany'sabilityandperformanceinfulfillingcorporatesocialresponsibility,wesincerelylookforwardtoyouropinionsandsuggestions.Pleaseratethefollowingquestionsonascaleof1to5(1beingthelowestscore,5beingthehighest):

1.Howwouldyouratethisreport?

□1□2□3□4□5

2.HowwelldoyoubelievetheCompanyisfulfillingitseconomicresponsibilities？

□1□2□3□4□5

3.HowwelldoyoubelievetheCompanyisaddressingitsenvironmentalresponsibilities？

□1□2□3□4□5

4.HowdoyouevaluatetheCompany'sperformanceincorporategovernance？

□1□2□3□4□5

5.HowwouldyouratetheCompany'sperformanceintermsofemployeeresponsibility？

□1□2□3□4□5

6.HowwouldyouthinktheCompanyhandlesitssocialresponsibilities？

□1□2□3□4□5

7.Howwouldyouratethelevelofinformationdisclosureinthisreport:

□1□2□3□4□5

8.Howwouldyouratethequalityofthewritinginthisreport:

□1□2□3□4□5

9.Howwouldyouratethedesignandstyleofthisreport:

□1□2□3□4□5

10.Whichtopicsinthisreportstoodouttoyouthemost?__________________________________

11.Doyouhaveanyadditionalopinionsorsuggestionsforthisreport?

__________________________________Pleaseleaveyourcontactinformation:

Name:Phone:

Email:Organization:

Content Index for Self-Regulatory Guidelines No. 17for Companies Listed on Shenzhen Stock Exchange–Sustainability Report (for Trial Implementation)

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